ELECTRICITY SUPPLY INDUSTRY.

HC Deb 25 November 1936 vol 318 cc435-95

3.53 p.m.

Mr. R. J. TAYLOR

I beg to move, That this House, believing that the national ownership and control of the electricity supply industry is an essential step in a programme of nationally-planned economic development, is of opinion that electricity generation and distribution should be brought under national ownership and control and that there should be established a national electricity authority responsible for securing the efficient direction and management of the industry, subject to such ministerial and other direction as may be provided for by statute. I make no apology for moving this Motion. To-day we have electricity as one of the most potent and essential elements in our national life, and I believe that, as the result of the wonderful invention that has come about with its introduction, the possibilities of a higher standard of life for our people are immeasurably greater to-day than they have been over a period of any thousand years to which we may go back. In my lifetime there has been tremendous improvement both in regard to its production and its application. The possibilities of the production of electricity have increased enormously by the skill of the technician, by the international exchange of science and invention and by the very high standard of the engineers and technicians of our own country. The people who have been responsible for this beneficent power when used correctly have not been the shareholders of any company. They have been the working men who have been successful in advancing their education along certain very well-defined lines which have carried them to the development of electricity.

In regard to its application, it is not so very long ago—1881, I believe—that we had the first town lighted in this country, and at that time the country thought that that largely covered the possibilities of electricity. But since then we have moved on until we have been able to apply electricity not only to lighting but to heating, to cooking and to power generally, and our towns have been beautified in this sense that, as we have increased the use of electricity, we have taken from the towns, to a very considerable extent, the terrible smoke nuisance. If we could remove it from London, probably we should not have hanging over us the fogs which we have been experiencing in the last few days. To-day we are manufacturing cloth and providing food for the people and we have been becoming gradually more and more dependent upon electricity. One of the most beneficent aspects of it is in the home, where working women spend their lives, and I am sure that one of the most deadly enemies of health, namely, dirt, could be almost eliminated if our people were able to procure electricity in their homes at a price that they were able to pay. To me, the most important consideration is this. Men go to their work, and earn probably or £2 or 10s. a week if they are lucky. Some are earning considerably less, but because their earnings are at that level they are living in little homes—homes for all that—some with large families, and the wife of that worker has from marriage to live a life of drudgery. I am thoroughly convinced that if we could bring to our working women the benefits of electricity at the working man's economic price, the lives of our working mothers in the homes of England would be brightened and, most important, they would have some leisure to enjoy. For that reason I am very pleased to move this Motion.

What is the reason why we are not able to supply electricity at these economic prices? The reason seems to me to be this: When we began the use of electricity we thought its possibilities were limited; and private enterprise never comes in if it cannot see a gilt-edged security. I know that it is said sometimes that if the rate is high enough they will take a risk, but I think I can prove my statement by saying that the first Act that was passed to deal with electricity was passed in 1882 and that in every Act, with the exception of one, that has dealt with electricity, provision has been made for the public authority to take over the control and supply and distribution of electricity. In the very first stage it was the local authorities who blazed the trail for electricity. Private companies, the private shareholders, came along when they had seen the possibility of it and when they recognised it as a gilt-edged security. They are hanging on to-day like limpets on a rock, because they know the possibilities of electrical development and that we are only just on the fringe of that development.

As I said, 1882 was the date of the first Act dealing with electricity. Under that Act 639 Provisional Orders were issued giving authority for the supply and distribution of electricity. Some of the 639 Orders were not taken up 'out 354 were granted to local authorities and only 164 to private companies. I make that statement because I believe that we are indebted to the local authorities for the cheap electricity that we get in this country to-day. Then there is power. When the Act was passed which enabled power companies to supply and in some cases to distribute electricity, we got the Electricity Commissioners. It seems a great pity that at the outset we did not nationalise this industry. The hon. Member for South Croydon (Mr. H. G. Williams), who is to move an Amendment to my Motion, I see smiling, laughing. His hilarity is based on his interest in the electrical industry. Mine is not; my interest is centred on what I want electricity to do for me and for all the people of the country equally. I believe that this should be a great public service.

I have dealt to some extent with electricity for lighting. The possibilities of electricity for heating and power were clearly recognised during the Great War. I have had occasion to look up the report of the Coal Conservation Committee, which was presided over by Lord Haldane. That report states: In the factories put down for the production of munitions during the War 95 per cent. of the machinery is driven by means of electricity, and it is only a question of time for all power to be applied in this way. There has been a tremendous increase in the use of electricity. The increase since 1922, in lighting and heating and cooking, has been about seven times, and in power about three times. That increase has occurred in spite of the tremendous limitation that the majority of the people of this country are unable to purchase electricity when they want it. Let me recall again the report of the Coal Conservation Committee. That committee made some very practical suggestions as to the situation of plants for generating electricity. We coal miners are largely interested in electricity. I have a figure or two that I want to quote in order to show the bearing that electricity has on the coal industry, but more particularly the bearing that the coal industry has on electricity on account of the cheapness of coal. The Coal Conservation Committee suggested that, if the generating stations were placed in the coal-mining areas, where the coal was, high tension mains could carry the current to the place where it was needed. In spite of that we went on as before because there was no national planning. No one seems to have thought about national planning until the Labour party came along and said that we ought to plan electricity supply. Take the case of Northumberland, which I know best. An enormous quantity of Northumberland coal comes into the London market to generate electricity, and the cost of conveying that coal from Northumberland to London must be added to the cost of generating the electricity. It seems to me that it would have been a much wiser arrangement, especially now that we have had a grid system, to light up the whole country, to have generated the electricity from a place like Northumberland and to have brought the juice down here instead of bringing the coal here.

I have mentioned Northumberland only, but my remarks are applicable to every area where it is necessary to place a generating station in order to get a full and sufficient service of electricity. In the Midlands generating stations are placed in the middle of towns. That is all wrong. It would have been a good deal better had we reversed all this process. We are now at another stage in electricity development. We have reached the stage when we have another report issued dealing with electricity. It is the report of an inquiry which has been carried out in the light of the operation of the grid system, now complete. What that inquiry found is that, although the grid has made certain things possible in the supply of electricity, the current is still not coming to the consumer, because there is a dam somewhere. They say that it is because of the small undertakings, and they suggest that undertakings which are distributing less than 10,000,000 units a year shall be compulsorily put out of existence. Those that are distributing more than 10,000,000 units may go in the same way.

I had not the slightest expectation that my Motion would have created as much interest as it undoubtedly has created. The interest is remarkable, especially on the part of local authorities. The local authorities appear to be nervous as to what is to happen to them. Personally I have no wish that they should go out of existence until at least I can be assured of national control and ownership. Then I think that in the larger interests they would be prepared to go. I say that because I believe that at the present time prices are altogether in favour of the local authorities. The Minister of Transport will correct me if I make a mistake, but I will give one figure, and it is units at a charge of 3d. I find from this report that 61 per cent. is to the credit of the local authorities and only 17 per cent. to the credit of private enterprise. Therefore, if we lose the local authorities we shall be handed over to those who will exploit us.

I said that I would say something about the coal industry in relation to electricity. From the figures of 1934–35, I find that the capital expenditure of companies at the end of the year was £177,754,197, and the gross surplus £15,299,814. In respect of public authorities the capital expenditure was £271,054,807, and the gross surplus £21,650,542. The interest charges of the public companies amounted to £2,716,000, and the dividends were £6,213,950. In other words, dividends represented roughly 40 per cent. of the gross surplus. The average cost of coal, including handling, and 2 per cent. for coke, was 14s. 10d. per ton. I believe that if we could have this industry nationalised, instead of all this keen cutthroat competition in the coal industry, it would be much easier to find an economic price that would ensure a decent wage for the miner. We are not making electricity with white power yet, but with coal. I can assure the House that we in the mining industry do not want the wages paid by public authorities to be reduced, but we should be delighted if our men could have the same amount of wages. If we are finding the raw material that generates the electricity, surely, as the prime producers, we ought to be guaranteed a decent wage for mining the coal. If we had a single authority, or authorities in the regions under national control it would be so much easier to find the economic price, and for that reason, if for no other, I move this Motion.

It has been said, and I think it is quite true, that with the modern development of electricity less coal has been used. I believe that there has been a reduction of 17½ per cent., which has been brought about largely, I suppose, by the electric motor, the grid and various other technical improvements. But there is bound to be a point at which we reach finality in regard to improvements in that respect. There is sure to be an increasing use of electricity, and as that increase continues, the use of coal will be considerably extended. There is much that needs to be said in regard to the chaotic state of prices in the common uses of electricity. It is most amazing that, as things are at the moment, on account of being able to distribute in watertight areas and by an alteration of the boundaries of local authorities, you can have anomalies arising in the situation. A man told me yesterday that in the backyard of his house a certain price obtains for electricity because it is under one authority, and that at the front of his house, which is under another authority, there is a difference in the price of 3d. or 4d. a unit.

I will give an illustration in regard to prices to show that, as things are with the grid, we have not solved the problem. Some time ago in the North of England an education authority built an elaborate school, and in Durham they have some magnificent institutions under the education authority. They made application for a supply of electricity and were told that the price would be 4d. a unit, but as an education authority under the Durham Labour administration who put efficiency with economy first, they could not see their way to pay that price. There is no one who can say that, as far as Durham is concerned, efficiency and economy have ever been sacrificed for profligacy, such as can be charged against some industries in the North of England. There men have received 3d. after a lifetime of saving as the share which they expected was to provide an annuity for them in later life. These are men who have invested their money in private enterprise. But as I have said, the education authority were not prepared to pay 4d. a unit. They went to another local authority and obtained a connection at 2d. a unit, and when they made inquiries they found that that local authority was taking their supply from the people who wanted to charge 4d. Surely, that is a sufficient illustration of the chaotic state of the affairs of the industry. I have had other letters. Here is one that has come from a part of Yorkshire: The supply of electricity and its price is now a matter affecting practically every individual industry, and it is felt that these matters cannot now be left in the hands of concerns whose primary object is that of making dividends for shareholders. That is from an authority. I will read another portion of it because probably every hon. Member speaking to the Amendment will be interested in it: My association feel very strongly that, unless something drastic is done, places like the West Riding are not going to get much, if any, advantage from the grid scheme, which has been laid down at great expense, owing to the fact that Section 21 of the Electricity Supply Act, 1926, relates to charges for electricity supplied by power producers and not to distributors. The Electric Distribution, Yorkshire, Limited, get their supplies from the Yorkshire Electric Power Company, and both these concerns, it is understood, are owned by the same people. It is obvious, therefore, that so long as a good profit is made, it is immaterial whether it is made by the power company or the distribution company, and my association considers that this Box and Cox arrangement should be put an end to as speedily as possible.

Mr. H. G. WILLIAMS

Will the hon. Member say what association wrote those letters?

Mr. TAYLOR

I have exceeded my time, and I am very sorry. I want to make an appeal to the House. We have been talking a great deal about unification lately. We want to unify the coal fields. When we talk about it outside we say "nationalisation." The coal-owners throw up their hats, and although they have not joined up with the miners, they will be pleased about it. Why cannot we do that with this industry? Until we nationalise this concern, the poorer areas will not get electricity. The wires are now laid on, and we should nationalise the industry as we did the Post Office. I know of some districts in England where the postman goes to the farmer twice a day, and often all he takes is the morning paper. We do not begrudge that service, and do not say that he should pay 6d. The service is the same in the village as in the town. If we could have this kind of unification, or nationalisation, or national ownership, there would be such an impetus given to the electricity industry that we should be able to have the various things of which I originally spoke, which would be amenities in the home and would lift the standard of life of our people. We could have them in such increasing quantities that we could establish light industries in the depressed areas.

Take one instance. If electricity had been cheap enough, every little working-class home that is being built by councils; and private enterprise could have had a permanent refrigerator installed, which would have preserved food and would have been a valuable contribution to our health services. Instead, in all those little homes the milk one gets in the morning has turned by night. Electricity is the power responsible for providing the current to wireless sets. If we can control what we want the people to hear and, by television, what we want them. to see, surely the power that enables the people to hear and see in this way ought to belong to the people.

4.31 p.m.

Mr. RIDLEY

I beg to second the Motion.

There will be common agreement that it is an important problem with which we have to deal, and I make this assertion and assumption that one of the most interesting economic and political phenomena in the world to-day is, that public ownership is being applied in practice by people who profess not to believe in it in principle, because it is the only solution of the problem which immediately confronts us. My purpose in following the excellent speech of my hon. Friend is to show that whatever hon. Members opposite profess to believe, they must, in order to find an adequate, satisfactory and permanent solution of this chaotic problem of electricity generation and distribution, apply to it the principle of public ownership. If an element of humour is to be found in this Debate, it is that some hon. Members opposite who pride themselves on the belief in private enterprise and in the fine qualities of individualism, have themselves, in the terms of their Amendment, a little timidly and hesitantly, crawled to the penitent form. Even the McGowan Report very timidly and tepidly says that public ownership is ultimately the only solution for the chaotic problem with which we are concerned this afternoon.

When the House was discussing the Opposition Amendment to the Address, the Home Secretary said that he had no particular desire to live in a Socialist commonwealth, but he was disposed to consider whether there was an argument for applying public ownership to industries to which the principles of public ownership had not been applied. I am sorry that the right hon. Gentleman is not in his place in order that he might he persuaded to our point of view in this connection. The situation with which the Motion deals may be regarded as a triumph of historic Liberalism; as the sort of triumph which hon. Members below the Gangway spend their political time in attempting to repair and repudiate. In the words of one writer: The present chaotic situation arises out of the widely accepted view that a system of competitive private enterprise without monopoly results in the best service to the public. In other words, it has resulted in unrestrained laissez faire. It has not resulted in the best service to the public, and successive Committees of this House and successive Ministers have constantly considered how the industry can be rescued from its present chaos. Each successive Committee appointed has, without exception, including the McGowan Committee, seen that public ownership is the ultimate solution. The real difference, therefore, between the Motion and the Amendment is the difference of time. There has been an unhealthy delay and procrastination which has been largely responsible for creating the present chaotic position.

The report of the Williamson Committee, which was translated into the terms of a Bill in 1919, suffered a most unfortunate fate, because it received the attention of hon. Members like those who are supporting the Amendment to-day. The recommendations of the Williamson Committee, had they been translated into the terms of an Act of Parliament, would have given in regional areas generation and distribution under public ownership and public control. The Bill left this House for another place almost in the condition in which it was presented to the House, but, in the language of the McGowan Report, the Bill was emasculated in another place. I remember the Lord President of the Council, in a moment of prescient sagacity several years ago, saying that whoever was in office in the House of Commons, the Tory party was in power elsewhere. The Bill came back to the House of Commons from the other place stripped of all its authoritative and compulsory powers. It authorised the appointment of Electricity Commissioners with nothing more than persuasive authority to attempt to do a job which needed for its purposes compulsory authority The commission did not succeed in its job, and the Weir Committee, therefore, had to be appointed in order to find a new way out of what had become an intolerable situation, but there was delay which ate away six or seven very valuable years.

The Act of 1926 created the Central Electricity Board. It has always been a little amusing to me to reflect that the Central Electricity Board was the biggest extension of public control in British politics that British political life had so far seen. It was piloted to the Statute Book by a Minister of Transport who was at the same moment the President of the Anti-Socialist Union. The Central Electricity Board has made a great step forward in the control, organisation and generation of electricity, but it has only been able to achieve the result that is now to its credit because it has been able to co-ordinate the generation of electricity with compulsory powers, and because over a very wide area, with public credit behind it, it has been able to spend for the time being public money to the tune of £18,500,000 in order to standardise generating frequency. The Act which created the Central Electricity Board, an accomplishment of which I have no doubt hon. Members opposite are proud, suffered the same opposition in this House from exactly the same quarter that is opposing the Motion to-day. If hon. Members opposite would care in an idle moment of a busy life to spend half an hour in running through the OFFICIAL REPORT of those debates, they would find that the Bill found its way to the Statute Book against opposition from the Government side because of the support it received from this side of the House. Therefore, the pride of hon. Members opposite in the appointment of the Central Electricity Board is a tardy pride, and they need not be too proud about it.

The Central Electricity Board, not possessed of that sort of public ownership power that would have given it complete authority over generating stations, such as nationalisation would give it, has been completely unable to deal with the other very important side of the industry—the distributive side. The distributive side to-day presents a situation of such appalling chaos that ever, the Amendment indicates a desire to do something in regard to it. There are between 600 and 700 entirely unrelated, non-co-ordinated distributing authorities. There are some using one type of current, some using another and others using both. There is a variety of policies which add themselves to what would otherwise be a state of chaotic confusion, and there is a wide variety of policies through public authorities or private companies in the matter of assistance to would-be electricity customers. There is just as wide a variety in the matter of tariffs and prices as was the case with frequencies, and is still the case with voltages.

I live in a London borough which is curiously divided. It is one of those boroughs that has had its boundaries flung wide by suburbanisation in the last seven years. I refer to the borough of Ealing. Part of the old borough is supplied by a public authority, the Ealing Borough Council. The other part—the extended part—is supplied by the Metropolitan Electric Supply Company. In Ealing the local authority are charging 3½d. a unit while the outside area covered by the Metropolitan Electric Supply Company has to pay 4d. or 5d. per unit. If we take the general tariff standard, the price variation is still substantially in favour of the local authority. Taking a typical £20 rated house consuming 2,400 units of electricity per year the local authority's total charge for that consumption would be £7 12s. ld., while the Electric Supply Company's charge would be £10 16s.

Unification of the industry on the distributive side would give us a number of things. It would give us order in the place of chaos. It would give us standardisation of voltage. Voltages will not standardise themselves if they are left to do the job themselves. We get to-day a continual extension of non-standardised voltages, and as long as the House delays a radical solution of the problem, and the more it procrastinates, the worse the problem becomes, because of the continued extension of non-standardised voltages. The standardisation of voltages would result in the standardisation of equipment, the standardisation of bulbs, fires, wireless sets, cleaning apparatus, and every other kind of appliance that can be harnessed to electric power. It would simplify tariffs and prices not only in the sense that it would make them one but, in a much more important sense, that it would make them easily understandable from the point of view of the ordinary householder. It would enable us, on the basis of the best practice, to standardise the kind of assistance now provided by the best sort of public authority for wiring non-wired houses and to facilitate the acquirement on the instalment plan of the sort of appliances that the householder desires to use.

We are, or we can be, at the beginning of a tremendous development in the use of electrical power not only for industrial and productive purposes. I agree with my hon. Friend that electricity can be the handmaiden of our working women. I take some pride in the fact that I am a thoroughly domesticated animal. I enjoy using an iron in my home, but I only enjoy it because it is an electric iron. If I had to use, as many of our women friends have to use on a hot July day, the old fashioned flat-iron, with a roaring coal fire snaking things horribly uncomfortable I should take no delight in the process. It is ironical that hon. Members opposite—[Interruption]—well let me say a curious thing—who can afford domestic assistance in their establishments are also able to provide them with all these modern appliances, while the wives of our working people who cannot have the advantage of domestic assistance are also deprived of the advantage of this handmaiden which might rescue them from eighteenth century drudgery. In ironing, cooking, cleaning, washing, and heating, electricity, reduced to a price which our people can afford to pay, would be the handmaiden of the working woman.

Let me put before the House one or two considerations in regard to public ownership and control. In the first place, public ownership would enable us to have in terms of electrical development long-term expansions. I submit that you cannot have in this developing service long-term expansions within private enterprise. In the nature of things private enterprise—I do not say this in criticism of it—must have its 5 per cent. next year for its primary investments. Hon. Member opposite know that you cannot raise money on the Stock Exchange for any industrial development purpose unless you can promise a return on the money at the end of the first financial year. A public authority is in a different position. It can afford to have a time-lag on its investments and, therefore, you can only have a long-term expansion in the matter of electrical development under public ownership and control, because of the inherent financial restrictions from which private enterprise inevitably and historically suffers.

The advantages of a long term expansion can be summarised in this way. The larger the area of the authority the more it can afford to engage specialists, publicity experts, and special general staff, which will assist the popularisation of this great and growing industry. The larger the area of unification, the more you spread your load of electrical consumption, the more you keep your plant working all round the clock, reduce your overhead charges and thus have the possibility of cheaper electricity. Unification under public control will enable us for the first time to have some sort of planning for relatively larger areas. I see no reason why a public authority owning electrical power should not be able to encourage industries on some specially considered terms, and develop them in the distressed areas. I agree most cordially with my hon. Friend that the prosperity of this industry should help to throw some ray of sunshine into the darkened lives of those who win for it its raw material. It is a shocking thing that the men who go down into the bowels of the earth and win the raw material for this great industry should suffer poverty and privation, and that the immediate conversion of coal to electricity and gas, and other by-products, however profitable it may be, still leaves this uncomfortable fact, that no shadow of that prosperity finds its way into the life of the miner. I contend that it is desirable not only to unify this great industry under public control but to bring it more closely into relation with the industry which provides its raw material, and thus spread its prosperity in order to relieve those in distress.

There are two desirable things about public ownership and control. Private enterprise has never displayed the enterprise which private enterprise thinks it does display. In 1900 354 electricity licences were issued, of which only 164 were issued to private companies. The obvious fact is that private enterprise waited to see whether the market was good, but when the market had been made good, when public authorities had pioneered and blazed the trial, private companies came in and tried to skim the cream off the milk. Private enterprise is really not enterprising at all. I suggest that public ownership and control in terms of electricity produces electricity at a lower cost than private enterprise. I call as evidence Sir John Snell, chairman of the Electricity Commissioners, who in giving evidence before the Coal Commission in 1925 said: If you ask me whether local authorities' costs compare with the distributive companies costs, the answer is 'yes.' Local authorities' costs are markedly lower. Obviously then prices are also lower. If you turn to the report of the London Joint Electricity Authority you will find in their Statistical Review, No. 9, for 1936, some interesting facts. In 1934–35 for the provision of lighting, heating and cooking the Metropolitan borough councils sold at an average of 1.76d., the London companies in the same year sold at 2.32d., the extra London local authorities sold at an average of 1.80d. and the extra London companies sold at an average of 2.29d. If hon. Members will turn to the McGowan Report they will find, on page 94, that 60 per cent. of the local authorities sold for lighting, heating and cooking at less than 3d. and only 19 per cent. of the private companies. Forty-two per cent. of public undertakings sold electricity for power at under 1d., and 20 per cent. of the private companies. Private companies' costs are higher and their charges are higher than those of public authorities. I have no doubt that hon. Members opposite know more about Stock Exchange prices than I do and will be able to translate these higher costs and higher prices into Stock Exchange figures.

I suggest that the case for unification under public ownership and control is complete and conclusive. I do not want to be impertinent, but I think I must warn hon. Members opposite not to be too sanguine as to the popularity of the McGowan Report. From responsible documents already in the possession of hon. Members it is quite clear that local authorities are not going to have the report, for two very different reasons. In the first place, local authorities object to the possibility indicated by the report of their undertakings being transferred to private enterprise. There is some pride in local authorities and they object to the transfer of publicly owned undertakings which they have built up to private companies. They also object very seriously to the differentiation in terms of compensation between the proposals to be applied to a public authority undertaking acquired by a private enterprise and the proposals to be applied to a private company when acquired by a public authority. Whatever half-hearted Bill the Government might produce on the basis of that report there will be no satisfactory solution of this growing problem except on the basis of complete public ownership and control.

4.58 p.m.

Mr. H. G. WILLIAMS

I beg to move, in line 1, to leave out from "House" to the end of the Question, and to add instead thereof: believes that the best basis for the reform of electrical distribution is contained in the report of the committee on this subject, and expresses the hope that, as soon as Parliamentary time is available, the Government will introduce a Bill based on this report. I understand that the hon. Member for Clay Cross (Mr. Ridley) has on a previous occasion addressed the House; otherwise I should have been delighted to have congratulated him on the clearness with which he has stated his case. Having indulged in that polite comment may I proceed to a measure of criticism? The hon. Member is privileged to live in the attractive suburb of Ealing, not very far from where I live, and he has told us that one part of Ealing is lit by the municipality and another part by private enterprise. He led the House to believe that it was much more uneconomic to buy the juice from the private company than from the municipality. Not being an electrical engineer himself the hon. Member may not know that they generally call it juice. I find that in Ealing the price for heating and cooking and lighting, as far as the municipal undertaking is concerned, for the year ended 31st March, 1935, was 2.47d. The hon. Member selected this example himself.

In the report of the Electricity Commissioners, on page 560, are some particulars of the activities of the Metropolitan Company, which is, I think, the company the hon. Member mentioned, and which supplies the areas of Acton, Greenford, Hanwell, Paddington and certain other districts. I think Hanwell was the district which the hon. Member had in mind, celebrated as the area of a big asylum. In Hanwell you can do rather better. The amount is 2.15d. as against 2.47d. charged by the municipality. In the whole area of the district supplied by the Metropolitan Company their average revenue per unit is 2.27d. The hon. Member quoted a set sum of about 3½d. a unit. I imagine he was comparing certain scales of charge, and there is a great variety of scales of charge which give consumers—

Mr. RIDLEY

I was comparing my own experience with that of friends who live in another part of the same district. I live in a house which is wired for lighting and I pay 3½d. a unit for electricity, whereas friends of mine who live outside the area catered for by the local authority, and whose houses are similarly wired, pay 5d. a unit.

Mr. WILLIAMS

That may be so. We are not considering what is the maximum charge somebody may pay if he does not know his own business, but the charge at which he can buy electricity if he knows his own business. Nearly all wise people take the two-part tariff, which is a fixed charge and a small unit charge. I have not the slightest idea of what amount per unit I would pay on the flat rate, but I pay a fixed annual charge and a small rate per unit. In the case selected by the hon. Member, one can, in fact, buy current more cheaply on the average from the company than from the muncipality. The hon. Member for Morpeth (Mr. R. J. Taylor), in moving the Motion, very carefully avoided reference to his own constituency, which is supplied by a company. The hon. Member hinted that I had some con- nection with the industry. It is not as close as I would like it to be, for the industry is moderately prosperous. I rather gathered that the hon. Member considered that connection not quite proper, although he later indicated that he had some connection with coal mining, his chief object being to sell coal at as high a price as possible to the electricity supply industry with which I am connected. The less hon. Members opposite talk about interests the better, for the Labour party is one gigantic organisation of vested interests. Hon. Members opposite come here to repreesnt the trade unions, they grind the trade union axe, and they do it rather well; but they must not be high-minded on the subject.

The hon. Member for Morpeth was curiously reluctant to discuss his own constituency, which is rather well treated from the point of view of electricity. One of the most efficient companies in the world operates in the hon. Member's constituency. The constituency is a rather scattered one, but 72 per cent. of the houses in it are connected up. That is not bad. Every village, with the exception of one tiny hamlet, is connected up by a most progressive private company. Therefore, I am not in the least surprised that the cases which the hon. Member selected did not conic from his own area, and that he went to a place of which he did not know so much. He mentioned a mysterious local authority in Durham—he did not say which one—which asked for a quotation from the same company as supplies his own constituency, and he said the company wanted to charge 4d. a unit. I do not think that is the full story, and I would like to have a, full account of that transaction, because it may be that that was the charge on the flat rate, but that an alternative was given.

Mr. R. J. TAYLOR

Is the hon. Member suggesting that there is a two-part tariff where I live in my constituency?

Mr. WILLIAMS

I do not know where the hon. Member lives in his constituency, but I am certainly suggesting that there is a two-part tariff in his constituency.

Mr. TAYLOR

May I point out to the hon. Member that one of the charges we made and one of the charges in the McGowan report is that the two-part tariff is not brought sufficiently to the notice of the people. I have not heard of a two-part tariff in my constituency.

Mr. WILLIAMS

The hon. Member wants to know whether there is a two-part tariff in his constituency. There is a two-part tariff of a very interesting character, and perhaps the hon. Member will pass on the news. It is a two-part tariff graduated according to the size of the house—from four rooms to 15 or more—and between summer and winter. It has not the normal appearance of a two-part tariff because the proposal is to sell the first few units at a relatively high charge of 4½d.; the next units at 3d.; the next at 1d. and the remainder at five-eighths of a penny. That has the same result as is sometimes achieved by asking one to pay a substantial sum, whether or not one uses any current. It is merely another method of arriving at what is known as a two-part tariff. Does the hon. Member still suggest that there is not a two-part tariff in operation in his constituency? I gather that the hon. Member is now satisfied, and that his interruption was based on a misunderstanding of the situation.

Mr. KELLY

He has not said he is satisfied.

Mr. WILLIAMS

He has not said anything. Apparently the hon. Member would like to see all electricity generated in the coalfields, but one of the troubles about generating electricity is that far more water is needed than coal. The problem of condensing is a much more serious problem than that of fuel supplies. In a great many cases it is, in fact, dearer to send electricity along a wire than to send coal in a truck on a railway. Electricity does not travel for nothing along a wire; it dissipates part of itself in unnecessary warming up of the wire. There are a number of factors of that sort which would not be in the briefs supplied from Eccleston Square—or do they come from Transport House? I gather that the hon. Member's friends are not too sympathetic towards the idea of building power stations in the coalfield. A well-known London borough, Fulham, which is controlled at the moment by a Socialist majority, has put up a very large power station, which is sure to be one of the objects of the next air raid, for it is one of the great features of the River Thamse. The borough of Fulham has not put up this enormous power station in Durham or Morpeth, but in Fulham. The Socialists in Fulham do not agree with the Socialists in Morpeth, and they say that if they have a power station they will build it in their own borough, and buy coal and fetch it by water.

Mr. RIDLEY

How could Fulham have put up a power station in Morpeth?

Mr. WILLIAMS

The Socialists in Fulham, in association with fellow conspirators in other Socialist constituencies, might have arranged it. In fact, nobody suggested that they should do it in Morpeth. Such talk as that of the hon. Member for Morpeth is plain nonsense, and why should we not say it is nonsense?

Mr. T. WILLIAMS

Surely the hon. Member is now talking plain nonsense. He knows that the Fulham power station has been erected within the existing chaotic society, and not in a nationally controlled and nationally organised society.

Mr. H. G. WILLIAMS

Why, if you think something is chaotic, should you make it more chaotic? After all, why build a station at all? Why not get the electricity from the grid? Surely it is plain nonsense. It only deceives great masses of people in the distressed areas when they are told that it is an economic proposition to do as the hon. Member suggested, and one thing we ought not to do is to deceive people who live in the distressed areas. A general attack was made on private enterprise because profits are earned by it. Under the existing system, even if it were nationalised, interest would still be paid on the money, unless it is proposed to abolish interest—I am not clear whether that is the proposal. Neither the Mover nor the Seconder indicated whether there is involved the proposition that interest would no longer be paid on the money.

Mr. RIDLEY

Of course that is not the proposition.

Mr. WILLIAMS

Interest is to be paid. Therefore, all we have to consider is the difference between the rates of interest that may be paid. The proposal is that the industry should still be run with capitalist capital. Is that right? Even this nationalised enterprise would be run with capitalist money. The curious thing is that even if there were no rate of interest on money, no capital interest to be paid, the capital charges would be hardly different. Whether interest was paid or not would make little difference to the electricity supply industry. Its capital charges consist fundamentally in the replacement of the capital that has been put into it. The industry is dominated by the vast amount of capital that is necessary. Capital charges, such as buildings, plant, overhead cables and so on, dominate the situation, and they would hardly be affected if private ownership were completely abolished in this country. Therefore, hon. Members are again only deceiving the public if they pretend that profits make very much difference in any event, assuming an equal efficiency, to the ultimate costs of electricity.

The Motion is, I presume, a proposal for a reform. There would be two justifications for a reform. One would be that the existing scheme was so bad that any change was worth trying, and the other would be that the reform proposed could be proved to be better than the existing scheme. Does any hon. Member say that the situation of the electricity supply industry is so bad that any change is justifiable? Does any hon. Member deny that the electricity supply industry has made more progress during the last 15 years than any other industry in this country? Is that denied by the hon. Members who moved and seconded the Motion. Is there any industry which has increased its number of customers more rapidly? Is there any industry which, going back to 1882, has been more hampered by legislation? I would like to give the House one or two figures. The number of units sold last year was three times as great as the number sold ten years ago. I think any long-established business that has trebled it output during the last ten years has achieved very remarkable results. What has happened in the case of prices The average price charged for electricity during the last ten years has been reduced by one-half and the number of consumers is four times as great. That is very remarkable for an industry which the seconder of the Motion constantly described as chaotic. He wanted reorganisation, co- ordination and all the other words that end with "ation". Supposing hon. Members co-ordinated to their heart's content—would what is being done in Morpeth really make much difference to a man living at Clay Cross?

Mr. RIDLEY

I am not accustomed to the practice of the House, but does the hon. Member expect me to reply to all the questions he is asking me? If he likes, I will give him answers, but he has no right to ask questions to which I shall have no opportunity of replying.

Mr. WILLIAMS

I should be only too willing to give way when necessary.

Mr. HERBERT MORRISON

They are rhetorical questions.

Mr. WILLIAMS

The right hon. Gentleman the Member for South Hackney (Mr. H. Morrison), who has not had as much experience in this House as I have, knows that questions are often not rhetorical. They are sometimes asked on the other side of the House in the hope that the hon. Member to whom they are addressed will not seek to reply.

Mr. MORRISON

The hon. Member must not think that I was attacking him. I was only trying to interpret the spirit, of the hon. Gentleman to my hon. Friend in order to help him to understand what is going on.

Mr. WILLIAMS

I am not concerned with what the right hon. Gentleman was thinking. The industry has suffered from a variety of disabilities, many of them explained in the Report of the McGowan Committee. The 1882 Act discouraged private enterprise because it gave such short franchise that many people were unwilling to take the risk. The hon. Member who seconded the Motion hinted that all the pioneers were municipalities, but he is quite wrong. The pioneers in electricity supply in this country were private individuals and not municipalities. The first private individual started his business only three-quarters of a mile from this House; it was the late Mr. Gatti, who started the first electricity supply undertaken in the world. Those people had great difficulties which hindered them. The hon. Member who seconded the Motion suggested that there are too many voltages and that if we had only had a national supply every- thing would have been all right. Supposing we had started off with the unification of voltages, what would have been the position to-day? I imagine that every undertaking would have had as a basis 100 volts, and it would have been necessary to scrap the whole lot.

Does anybody to-day know what is the right voltage? I do not and nobody else does, but striking the balance of advantages the industry is settling down to a voltage of 230 volts alternating current with a frequency of 50 cycles per second. Considering the position a few years ago and having regard to the then existing development of apparatus and the means of insulating cables; taking into consideration the safety of human life and all other factors, and the fact that those responsible were proceeding only on a basis of rough justice and without any ultimate theoretical considerations to guide them, is it anybody's fault that there was a large number of voltages? Nearly all the original voltages have had to be changed because they were found to be too low. I am not saying that there is anything theoretically perfect about the voltage which I have just indicated but I am glad to say, from the point of view of the standardisation of apparatus, that about 75 per cent. of the people of this country are drawing their supplies on that voltage at the present time. There is still a variety of other voltages but they affect only a small minority of the population.

Let us draw a contrast between the electricity supply which we are now considering and another electrical service. We have in this country a nationalised electrical service which distributes from a central station by wires to people's houses. We call it the telephone service and it has been completely nationalised since 1912. Presumably there is none of that chaos in the telephone service to which the Seconder of the Resolution referred. It has been under one authority for the whole of the United Kingdom since 1912. The figures which I am about to quote relate to 1913, the first year after it was nationalised and they are convenient because they happen to be in the current number of the Statistical Abstract for the United Kingdom. The average revenue for each telephone call in 1913 was about 2d., that is for local calls, taking the standing charge and the charge for each call. The average charge to-day is about 4d. These figures are approximate but, speaking generally, the charge to-day is about double what it was in 1913. Take the other industry which hon. Members opposite are condemning, when they talk about the anarchy of competition and all the rest of it. I am now going back to the days when I was an apprentice in an electrical engineering works, just before the metallic filament lamp came into use. Taking into account the improvement in apparatus and the reduced charges for electrical energy, I could light this Chamber to-day for one-fiftieth of what it would have cost in those days, 30 years ago.

It is rather startling but it is the case that the cost of the telephone has doubled while the cost of illumination is only one-fiftieth of what is was 30 years ago. Talk of anarchy. Is there any political party or any industry or any enterprise at all which can point to results so amazing? I have made an estimate of what it would cost to light this Chamber at the moment. I think we pay ¾d per unit to the Westminster Electric Supply Company after paying the standing charge. If we pay more, the First Commissioner of Works must be incompetent and I do not think that he is. There is also a standing charge for the telephone. There is a standing charge in both cases but in the case of the telephone it is so oppressively high that no working man in this country has a telephone.

Mr. EDE

I have.

Mr. WILLIAMS

I do not regard the hon. Member as a working man. He is mere adequately described as chairman of the Surrey County Council and a very good chairman he is, I am glad to say, of that very conservative body. The cost of lighting this Chamber, from a rough calculation which I have made, for 12 minutes, is the same as the cost of a local telephone call which lasts six minutes. It is twice as expensive to have local telephone calls as to light this Chamber. What has happened then in regard to the number of consumers? The number of consumers of electricity is increasing six times as rapidly as the number of people who are being connected with the telephone. The number of new consumers of electricity in the last 3½ years is equal to the total number of people who are linked up with the telephone. One is nationally managed and the price is double what it was a generation ago, whereas in the case of the other, the price—where you use the supply efficiently—has been reduced to the extent just indicated. I am not talking about the person who uses a tiny quantity and pays a flat rate. Electricity differs from almost everything else in that production and consumption take place simultaneously. There is no storage. If a person wants to turn on the light for one hour out of the 24, he has to bear the same capital charge as the person who has it on all round the clock.

I have tried to work out the cost in the case of my own house and to compare it with what a consumer would pay in Morpeth. I have a standing charge based on the number of rooms in the house and then a charge of ½d. per unit. In Morpeth they have a more elaborate and apparently more complicated system than in Putney. I am under a company and the hon. Member opposite is under a company. I find that on the same number of units for lighting, in a house of approximately the same size, the charge in Morpeth is approximately the same as that in Putney. I am content with what I pay and as the hon. Member has not grumbled about what he pays, we may take it that there are at least two companies who are satisfying their customers, and I do not own any shares in either of them.

As regards the system of charging, which is a matter of great importance—on account of these capital charges which run all round the clock and all the year round, the right system is to have a charge, first, based on the maximum demand likely to take place, and secondly, a subsidiary charge based on actual consumption. That may be expressed in many ways. You might have a machine which would register the maximum demand in any period of the year. That is not a very convenient arrangement in the case of domestic consumption, though it may be a good arrangement for factories and cinemas and large shops and so forth. For the domestic consumer, the fixed charge is sometimes based on the number of rooms and sometimes on the floor area of the assessable rooms and in other cases on the rateable value. None of these methods is theoretically perfect. They are all indirect attempts to discover what is likely to be the maximum demand of the consumer.

I notice that the McGowan Report plumps for rateable valuation. The justification for that is that it is already used for water rates, police rates, street lighting charges and other municipal service charges. It is a measure of rough justice and it is a system which is convenient. Under it some people may pay more than they ought to pay and others less, but no system is perfect. Incidentally a good deal of the stuff which is talked both in the industry and outside it about chaos in the system of charging is not of much importance. All a person is concerned with is the charge made by his own undertaking. It does not worry a man in Putney to know that in Morpeth they have a more complicated system of establishing their two-part tariff than we have here. What the supplying authority has to do is to offer its service on such terms as will make it as easy as possible for people of moderate means to take advantage of it and for that reason, according to the different needs of different districts, there may be a strong case for different systems of charges. The idea that you can have a simple plain uniformity is based on no theoretical consideration of any kind.

I have said little, so far, about my Amendment and I will deal with it briefly. I do not commit myself to blind support of everything in the McGowan report. That would be stupid. But three very competent gentlemen have prepared in that report a very interesting document and they are entitled to the gratitude of the House and the country for the ability with which they have stated the case. They make certain recommendations, some of which are purely technical but they make one big recommendation which is simple. They say that it is absurd to distribute electricity on the basis of boundaries which have been drawn purely for political or municipal purposes. The boundary for electrical purposes, they say ought to be drawn on technical considerations which have nothing to do with politics. Those boundaries may not be theoretically perfect but anyone who studies the map will see at once that a particular undertaking should not extend beyond a certain point because of some obvious physical barrier, while you do not want to have too great a divorce between the consumer and the undertaking.

In other words, the case against undertakings being too large is very strong. Those directing an enterprise ought to be familiar with the greater part of the district over which it operates. One finds that the leading men in the supply industry to-day are men who have intimate knowledge of their own districts. Much of the success of their undertakings will be found to arise from the fact that they and their staffs are intimately acquainted with the district in which they are working. On the other hand, the undertakings must not be too small. If you want to give fair terms to the whole of the population you must have a reasonable diversity in the load factor, that is to say, the domestic load, the power load, the rural load and so forth ought to be well mixed up together. If you completely divorce the countryside from the towns in this matter, the countryside, or some parts of it, will have to wait a long time for a supply. You want to secure the maximum utilisation of your plant, whether the plant for generation or the plant for distribution, and for that purpose you require areas of substantial size so drawn that they incorporate a good mixed load.

I hope that we are not going to approach this question on grounds of political prejudice—on the ground that we are in favour of or opposed to nationalisation on municipal trading. The true approach should be on the ground that we want whatever will produce the best results. I think everybody is convinced that there must be a measure of consolidation and that a large number of undertakings are too small to be efficient. On the other hand, it would be easy to have organisations which were too big. The moment you accept the conclusion that there are organisations which are too small and that you are going to apply a measure of coercion, which none of us like, you will have resistance. You will have the resistance of the personal pride of those who have built up these undertakings, of the chairmen of electricity undertakings in municipalities, of the borough electric engineers, and of the boards of directors of companies. I am not now considering the terms of purchase and I think the recommendations of the report will call for modification but if you adopt the central idea of the report you are going to see municipal undertakings buying up other municipal undertakings and buying up companies and you are going to see companies buying up other companies and buying up municipal undertakings. You have to accept existing facts; you have to accept that there is in this country a large number of undertakings of substantial size and of very high efficiency which you have to use as the basis for your development, and to deny that fact for purely theoretical considerations seems to me very unwise.

My Amendment is not an unqualified approval of every suggestion in the McGowan Report—that would be stupid—but their central idea seems to me thoroughly sound. It is the idea that you have an existing situation which is the best basis on which to build up a better situation, and, for the comfort of those who think that ultimately it should be under some form of popular control, it is suggested that in 50 years' time, or thereabouts, the whole situation should once again be reviewed. In the meantime it is much more important that we should have a rapid extension of electricity supply throughout the country, though that extension has been amazing already, and 750,000 new connections in a year is not bad going, but it wants accelerating, particularly in the rural districts. You want to give the housewife opportunities that she is apparently denied, though a housewife who has not got an electric iron to-day does not require a Socialist majority in this House to supply it. You can to-day buy an electric iron for 4s. 11d., and if the hon. Gentleman's relatives and dependants have not discovered that, and he will consult with me, I will explain how he can get an electric iron with the greatest comfort and relatively on the cheap. They have it at Hanwell on terms which are most economical. You can iron in Hanwell for a long, long time for a penny, and indeed I can visualise some of the ladies in that part never stopping ironing, it is so cheap.

Seriously, however, I ask this House not to endorse the original Motion merely on the ground that the hon. Member has had some difficulty in persuading ladies of his acquaintance to make adequate use of the bountiful facilities provided. There are very few now who are denied this great opportunity which he described with such lucidity and eloquence. He is not the only hon. Member in this House who has used an electric iron. Many years ago I used one, and I think I own four electric irons at the moment. I do not use them all myself, but it is useful to have more than one in a house, because periodically they fuse. I hope this House will not socialise the electric lighting industry of this country merely because of the personal difficulties of the hon. Member for Clay Cross in regard to the heating of the irons of his relatives. I think there are more substantial reasons why we should confirm in power those who have achieved the most amazing results in the last 10 or 15 years. Why the industry should be criticised in the way it is amazes me, because in the last 10 or 15 years it has achieved results which no other industry in this country can show. For these reasons, and for a great many others which I must leave time for other lion. Members to advance, I move the Amendment.

5.24 p.m.

Sir ARNOLD GRIDLEY

I beg to second the Amendment.

I cannot deal with this question with the same forcefulness as my hon. Friend the Member for South Croydon (Mr. H. G. Williams), who has just sat down, but I should like to put myself in proper location with the House. I have been associated with this industry for something like 35 years, and I well remember the bitter struggle of the early days which the pioneers had to face. I was a little surprised that the Mover of the Motion seemed utterly oblivious of the fact that for the first 16 or 18 years of the early development period of this business the shareholders in many of the undertakings had no return on their capital whatsoever, and it was not until the War gave a tremendous impetus to the growth of our industry that struggling undertakings were at last put on their feet; and they have never looked back. I want to bring the House back to the Motion on the Paper, because I think we have hardly touched upon it since the Debate opened. It says: That this House, believing that the national ownership and control of the electricity supply industry is an essential step in a programme of nationally-planned economic development. Why is it an essential step? Is electricity supply not available to-day in 90 per cent. of Great Britain? If not, we cannot believe the official report that has been put before us. Nor can we claim for a moment that industry in any part of the country is handicapped because it has not available a cheap supply, not only for domestic but for industrial purposes. Even in Jarrow, to which Members in all parts of the House are desirous of seeing new industries attracted, there is no handicap in regard to electricity supply, for Jarrow is part of the area served by the great company a part of whose area the hon. Member for Morpeth (Mr. R. J. Taylor) inhabits. It is between mid-Northumberland, where the hon. Member resides, and Jarrow, in the lower county of Durham. In Jarrow you can get a supply as cheaply as you can in any other part of the highly industrialised Tyneside area. The same applies to South Wales. I should be surprised if any hon. Member who sits for any constituency in the South Wales industrial area could point to any district there in which there is not, not only an adequate, but a cheap supply available for industrial purposes. Therefore, I ask the House to agree with me in saying that there are no grounds whatsoever for asking this House to believe that the national ownership of electricity supply is an essential step for economic planning.

Mr. KELLY

Does the hon. Member apply that remark to the South-West of the country?

Sir A. GRIDLEY

No, I do not call the South-West an industrial area. Now I come to my second point, and I note that nationalisation is to apply both to generation and to distribution. Speaking as one who has had a long and close association with the industry, I should be surprised to find anyone who could suggest how the generation of electricity in this country could possibly be improved upon. There are now a few very economical and very large power stations located where they ought to be, where there are ample supplies of condensing water, and the connection of these stations with the great transmission grid has enabled these further economies in generation, namely that wherever water power in this country or in Scotland exists, it is being made full use of, and not only water power, but the waste heat that used to be discharged uselessly into the air from coke ovens, blowing engines, and such like. These waste forms of energy are now harnessed in comparatively small but nevertheless efficient stations, and they are all linked up with the great transmission grid. Therefore, how it is possible by nationalisation to improve upon what I consider is as perfect a generating system as one could possibly have in this country, I fail to understand.

When you come to the distribution part of the Motion, I agree that you are on firmer ground. I am prepared to admit that, great as is the performance of this industry and those associated with it as a whole, we do not claim that the organisation throughout the country can be called perfect in any way. There is room for reforms to be made, but that is not what we are discussing this evening. This Motion suggests that we should either nationalise the industry or that we should not, and I do not think the Mover or the Seconder of the Motion made any case whatsoever for the nationalisation either of generation or of distribution itself. I would like to put to those hon. Members opposite who support the Motion these questions: Would you nationalise the electricity supply of the country and leave the great gas industry to go on as it is? Can you point to any other public service that has been nationalised or put under any form of national ownership which has not been monopolistic?

Those of us who day by day are concerned with the administration and development of electricity supply undertakings know full well that at this moment we are experiencing competition from the gas industry more fierce—I will not say more unscrupulous, but certainly much more vigorous and active—than we have experienced for many years past. It is the activity, possibly, of a dying industry, although that was said 40 years ago, and gas seems to be as vigorous to-day as, if not more vigorous than, it was when we used it to a far greater extent than we do now in our houses. Would you leave that active, vigorous, competitive industry to compete with a nationalised electricity supply? I very much doubt it. We have the analogy of what happened in Canada with one great railway system publicly owned and the other under private ownership and management. Neither of these systems pays and probably neither will, until in some form or other non-competitive combination is brought about.

Mr. KELLY

We would do better than that.

Sir A. GRIDLEY

Very likely, but would you like to buy up and put under national control the London and North Eastern Railway system and leave the London Midland and Scottish Railway to go on competing with it for the traffic between London and Glasgow? One has only to put out these parallels to convince Members opposite of the foolishness of the suggestion to nationalise the electrical industry while leaving the vigorous gas industry to fight against it. From whom comes the demand for the nationalisation of this industry? Does it come from the consumers, that is, the public? If so, what overwhelming volume of evidence is there that there is a demand for the nationalisation of this service? Does it come from the employé? In what industry are the employés paid better than in the electrical industry, which because they are so well off, is rightly looked upon as one of the sheltered industries? There is no demand for nationalisation or change in the form of their employers from the employés. Does it come from the great municipalities? I think that question has been answered from the opposite benches today. There will be a great deal of opposition from the municipal undertakings before we get through whatever proposals may be laid before the House by the Government based upon the McGowan Report.

We on this side consider that the Motion is premature because of the fact that there is this report, which is the work of a committee set up by the Government, and which has, no doubt, already received a good deal of consideration, but the views of the Government have yet to be expressed to the House. The Motion shows almost a lack of courtesy, certainly a lack of patience—which may be justified—with the Government because they have not yet disclosed how they propose to interpret the recommendations of the McGowan Committee. I want to make it clear that in the Amendment I underline emphatically my view that the report is a basis, and only a basis, upon which the reform of electricity distribution should be carried out. We must, I suggest, wait until we see what lines this proposed new legislation will take, and although I accept my share of responsibility for the Amendment, I fully expect that when I see the shape which new legislation will take I may share with Members opposite grounds for opposing it not dissimilar from theirs.

This is not an urgent matter for my hon. Friend has already told us what an enormous advance has been made by this industry in recent years, and I would like to add one or two figures to those with which he astonished the House. In 1935 we installed in this country more electric cookers than were installed by every other country in Europe. That does not sound as if gas competition had very much stood in the way of electrical expansion, but it proves that electricity is, in an enormous number of homes, available at a price which justifies its use for cooking purposes. So great is the present demand for increased supplies of electricity that there is under construction in the workshops of this country, authorised by the Electricity Commissioners, something like 2,000,000 horse-power of electrical generating plant. These being the facts and performances of the men who have directed and engineered our great electrical enter-prices, both municipal and company, and who have established in recent years a record of electrical expansion with which no other country in the world can compete, I ask the House to approve the Amendment.

5.54 p.m.

Mr. H. MORRISON

I cannot pretend to speak from a closeness of association with this industry such as that of the two hon. Gentlemen who have just addressed the House. The hon. Member for South Croydon (Mr. H. G. Williams) has a good deal to do with the industry as the honorary executive director of the Incorporated Association of Electric Power Companies. The hon. Member who seconded the Amendment is a director of electrical supply companies. I have not their experience, therefore, but I have taken a great interest in the industry for many years and I have given some attention to its development. I am a little surprised at the arguments which have been advanced by the Mover and Seconder of the Amendment, and particularly at the somewhat irrelevant observations of the hon. Member for South Croydon. For some reason which it was not easy to fathom he made a comparison between telephones and electricity supply. Although he was moving an Amendment generally approving the proposals of the McGowan Report, he did not tell us much about the report.

He made comparisons between the cost of telephone calls and the price of electricity, but I could not see the connection. He compared the average cost of telephone calls, totally ignoring the fact that, owing to the progress that the Post Office has made, the use of toll and trunk calls has very much increased during the period. Consequently, he was not comparing like with like. If he had taken telephone progress during the years when the service was under the National Telephone Company and the progress in the same number of years under the State, he would have got some disconcerting results. Perhaps one of my hon. Friends behind me will be sufficiently industrious to put some questions to the Postmaster-General based on the statements of the hon. Member in order that we may have the pleasure of seeing a Tory Postmaster-General giving information that undermines the Tory Member for South Croydon.

There is no connection necessarily between telephones and electricity supply. If the hon. Member will make a comparison between the number of grape fruit that were consumed in Great Britain when they first came along and the number that are now consumed, he will find an even more interesting comparison between grape fruit, telephone calls and electricity supply, but when he has done it, I cannot see what it has to do with this case. If he will get from the brewing industry the figures of the consumption of lager beer he will find that there has been an amazing increase since the War.

Mr. H. G. WILLIAMS

Does not the right hon. Gentleman realise that the telephone system is a system of electricity distribution? Therefore, the analogy is a close one.

Mr. MORRISON

I do not accept the view that there is an industrial and commercial comparison between telephones and electricity. It is true that they both use electric current, but that is all there is in it. He might as well bring in the railway industry, but. it would not help his comparison. I invite the hon. Member to look up the progress of the telephone industry and he will find some interesting results. We have had the right hon. Gentleman who is now the Minister of Health, and we have had his successor singing the praises of the British telephone system and telling the country that it is the most efficient in the world, and they may well be right. They take credit for it, and why should they be thrown over by the honorary executive director of the Incorporated Association of Electric Power Companies.

I agree with the hon. Member for South Croydon that this subject is not really a matter of politics at all; it is a matter of business. I join with him in asking this House to consider it as essentially a matter of business organisation and of the best way in which the industry should be organised. It is not conclusive to put up the argument, as it has been put up by the hon. Member for South Croydon and the hon. Member for Stockport (Sir A. Gridley), that this industry has made great progress and that therefore its organisation must be all right. That is not evidence; that is not proof. I am aware that this industry has made very great progress, but we claim that the most enterprising part of the industry as a whole is the municipal side. The municipalities have been definitely more progressive and have shown more initiative than the company undertakings.

I do not say there are not enterprising companies, because there are some enterprising and very efficient companies, but there are many very unenterprising and inefficient ones. There are a large number of very efficient municipal undertakings, though, to be fair about the matter, there are some municipal undertakings whose efficiency could greatly be increased. But taking the company and the municipal undertakings together, and looking at their history, certainly the municipalities as a whole have been the more progressive. I do not think there is the smallest doubt about it. If it comes to free wiring, to the two-part tariff and to the development of sales' organisations, it is undoubtedly true that the municipalities have been the more progressive, and as about two-thirds of tale electricity output, two-thirds of the industry, is already socialised—publicly owned—it follows that when the hon. Member for South Croydon and the hon. Member for Stockport point to the great progress of this industry they are, as to two-thirds of their argument, paying a very great compliment to the public ownership of the electricity supply industry. I warn them, therefore, to be careful About their argument, because it is coming back at them.

This industry started on a local basis, with local government areas and municipal areas. Some of the undertakings became company undertakings and some municipal. At the moment we have more than 600 separate electricity supply undertakings. We suggest that for a relatively small country like ours that is an absurd number of separate undertakings, and I want to impress upon the House the consequences of having so large a number of separate undertakings. It really illustrates the misfortune of allowing the industry to develop as it has instead of planning it from the beginning. It has meant that we have a wide variety of voltages throughout the country, a wide variety of frequencies and a wide variety as between alternating current and direct current supplies. The result is that when a consumer moves from one district to another he may find the apparatus he used in the old district utterly useless in the new district. It also means that the difficulty of linking up undertakings is increased, and that the physical and technical difficulties of co-ordination are increased. It means, also, that the manufacturers of electrical appliances and utensils are put at a disadvantage, because they have to manufacture for different systems of supply, different voltages and different frequencies. Therefore, the possibilities of standardisation are made additionally difficult.

Tariffs vary enormously. It is a fact that some undertakings have had to be pushed into granting the two-part tariff. That ought never to have been the case. I think it is the case that some have not the two-part tariff even now. Further, some of the charges are atrociously high. Some of the company undertakings, a fair number of them, are charging prices for energy which are needlessly high and are lacking in enterprise and in service. Why is that? Because they are making easy, comfortable, handsome, profits, without having to shake themselves up; they are running their undertakings for easy, comfortable profits and not in the public interest or in the interests of consumers. When I was Minister of Transport I had a case before me from the western side of extra-London in which a company was charging a flat rate of 8d. a unit when municipalities inside the London area were down to charges of 4½d. and 4d. and even lower. The consumers in that district, amazing as it is, actually petitioned the Minister of Transport for an inquiry. I say "amazing" because the extraordinary thing is that although 20 consumers—I should like to post this on every hoarding—can nearly force the Minister of Transport to institute an inquiry, and any local authority can do so, the public have got into the habit of thinking that it is no good arguing with private companies and so they continue to pay.

I want every citizen who thinks he is charged too much for his electricity to get 19 others to join with him in petitioning the Minister of Transport for an inquiry. I should like to keep the Minister and the Electricity Commissioners busy. I should like to congest them with business, because that would make them face up to the magnitude of the problem. Before the inquiry to which I have referred 8d. a unit was the charge in that beautiful residential area on the western side of London, a cream of areas for domestic supply, where there was a nice, middle-class population with a bit of money with which to buy appliances and such as like labour-saving devices in their homes. It was a lovely area at 8d. a unit. The thing was positively ridiculous. What was the explanation. It was that the company were doing very well. I have no doubt their officers were doing well. It may be that the officers would have been more progressive if the directors would have permitted it. It may be that the officers said: "Well, the directors are asleep and why should we worry ourselves? Let us have an easy time, too." That is one of the terrible consequences of incompetent capitalist directors, that they infect the staff with incompetence as well. It is the Tory mind in industry. That is a very bad thing, and we must get rid of it as quickly as we can. As a result of the inquiry in that district the price was knocked down from 8d. to 5d. per unit at one blow. Much the same thing, though not quite so bad, happened in the Borough of Wandsworth, possibly including Putney, where the hon. Member for South Croydon lives. I was petitioned by Tory borough councillors who had been running the borough council for years, and who could have had a municipal undertaking there years ago if they had been alive. There, again, we had to bring the price down with a bang.

It is agreed that there are too many undertakings in the industry—we are all agreed about that—and the question on this point of amalgamation and the simplification of distribution is this: Shall we adopt the proposals in this report, which suggests that we should have minor amalgamations, so as to eliminate the smaller undertakings, or shall we make a clean job of it on a national basis? That is the issue with which the House is faced. The report proposes that power companies shall have certain powers of amalgamation with distributing undertakings within their area; that the larger company undertakings shall absorb the smaller municipal undertakings; and, if the hon. Member for South Croydon and the hon. Member for Stockport permit it, because they have their reservations about this report, the larger municipalities may he able to absorb the smaller companies.

Let us be practical politicians. Does anybody in this House think that is an easy political operation? Does anybody think that when we start the process of forcible minor amalgamations there is not going to be a first-class row? Every municipality affected would fight, and every hon. Member on this side of the House would support it in the fight—every one of us. The companies may or may not fight. They will be well protected financially by the energies of their friends, they will be well looked after, but many of them will fight, because they will object to forcible amalgamation and transfer, especially transfer to a municipality. What will be the result? That we shall be doing a miserable job of minor local amalgamations and incurring the maximum of political friction and difficulty in doing it, just as much trouble as if we made a clean job of the whole thing on a national basis. I say to the Minister of Transport that if he wants to be on a really big job of work and make himself famous for ever—not day by day, but for ever—this is the job he ought to love, and I would envy him the task.

I beg the Minister not to waste his time on this Report. The Chairman of the Committee was a big man connected with Imperial Chemical Industries, a very able man, Sir Harry McGowan. He is chairman of Imperial Chemical Industries; he knows how to do things in a big way. His company have trustified—practically—the chemical industry of Great Britain, they have achieved the national administration of a great industry; but when it comes to electricity Sir Harry McGowan "funks it," runs away from it, and says: "Let us amalgamate some little concern with something else." That is not worth the attention of the House, it is not worth the energies of the Government, and those who advised that. Committee to do this are people whose minds are not big enough for the running of this industry in the way it ought to be done—unless they knew that Government have the wrong frame of mind and would only do the little thing. Then I can understand them saying: "It is no good giving this Government big advice, give them small advice and they may take it." We have got into the habit of saying "Yes, we know that is the right thing to do, the big thing is the right thing to do"; yet the British Parliament never does the right thing if it is the big thing. We have a principle on which we act. We take "a further step," we take "the middle course "—or not even the middle course; we find some minor compromise.

I beg the House, if it is going to handle this problem, to handle it properly, and if there is a good, clean-cut national solution let us take it instead of playing about with this industry in the way we have been playing with it in the past. We have been playing about. We have been playing with it ever since the eighties of the last century, setting up local undertakings with no proper national control and no proper co-ordination. After we got through the War the Coalition Government, in 1919, brought in the Electricity Supply Act, but when their Lordships had done with it nearly all the powers of the electricity Commissioners had gone. A few years later we gave the Electricity Commissioners a little more power. Then we got one Joint Electricity Authority in the London and Home Counties, and a Joint Board somewhere else—or perhaps there were two. There was nearly a revolution in their Lordships' house as to whether any should be permitted to exist, but as a result of that legislation we got about three of these joint authorities. I do not know the others very well, but the London and Home Counties Authority is a fifth wheel to the coach. It is not its own fault, but it cannot properly do the job it is supposed to do.

In the Statute of 1926 the Government of that day established the Central Electricity Board. They did not transfer the generating undertakings to a national authority. Generating authorities' undertakings still remain the undertakings of local companies and municipalities; but they did put under the Central Electricity Board and the Electricity Commissioners a fairly complete national control of generation and they took power to coerce the companies and the municipalities to co-operate, to take and give bulk supplies and to control the price. In the field of generation we have substantially completed the job. There remains, as the hon. Member for Stockport admitted, the equally serious problem of distribution. Out of the price which the consumer pays for a unit of electricity, the minor part goes in generation and the larger part goes in distribution costs. If you have a large number of small undertakings, the capital cost of distribution equipment, in relation to the output of units, must clearly be unduly high, and just as we have effected great economies in generation by consolidation, which economies are still being effected, there remain a great number of economies to be effected in the field of distribution. Clearly, therefore, we ought to consolidate distribution.

The next question is, should we consolidate it upon a local basis or a national basis? Let us face what we are doing. If, in the West of England, Corn- wall, Devonshire and so on, the number of supply undertakings is reduced from—I do not know what they actually may be—from, say, 60 to six, we have not solved the problem. We shall, still have inequalities of charge and of policy among those six undertakings, and we shall certainly have grave inequalities between price charged and standard of management in the West of England and places like Manchester and Birmingham. All you will have done will have been to reduce the number of undertakings, but you will have preserved, deliberately, differences of charge, policy and standard of management throughout the country. We suggest that ultimately—it cannot be done to-morrow—just as I can post a letter to the hon. Member for South Croydon for 1½d., either to Putney—a place like that ought to cost more, but it does not—or to the North of Scotland, the ideal in electricity supply is that, irrespective of where a person lives, there ought to be a common tariff.

Mr. H. G. WILLIAMS

When you are posting letters, the cost in terminal charges of transport over long distances is trifling in comparison with distribution charges. It is quite easy, therefore, to run letters on that basis; but if the right hon. Gentleman is ever again Minister of Transport and tries to run electricity on that basis, he will land himself in the neighbourhood of Carey Street.

Mr. MORRISON

I was not proposing to do so. I was not proposing that the person who uses 100 units should get them for the same price as the person who uses five units, but if the Post Office letter delivery and carrying services were run by the railway companies of England, we should not get a letter sent to the Shetland Islands for the same price. It is the result of collective organisation. The same argument about the cost of terminals might be applied to the railways themselves. It does cost more to get to Scotland than to get to Putney. One ought to have that suggestion in mind.

Our suggestion is that the 600-odd electricity supply undertakings should be abolished. The Central Electricity Board should be abolished. The Electricity Commissioners should be abolished. We might need some technical people to take their place. We would scrap the lot. We would transfer the generating and distributing undertakings to a national corporation, a business concern, appointed by a Minister on grounds of competence and ability to run the industry, and we would have the whole ownership of the industry, right through the nation, under that national electrical corporation. We agree that it cannot all be run from London, or from one common centre. Therefore, we would establish, under the national board, regional boards for appropriate regions, but they ought to be subject to the policy of the national board itself.

There would be, in charge of each region, a first-class electrical engineer and a first-class sales manager and service manager. One of the problems is that a good electrical engineer might be a first-class technician but at a loss in the field of salesmanship. These regional bodies would each have, not only first-class electrical engineers, possibly one for generation and another for distribution, or the same man would do both jobs, but a first-class sales manager to look after commercial policy and service and to see that consumers had plenty of service from the organisation. We would clothe those regional bodies with consultative committees, in order that they might be kept in touch with public opinion. It is only by such methods that you will iron out the inequalities of charge and the differences of voltage, frequency, and systems of supply. It is only by that method of a national organisation on a large scale, with regional organisations, that you can command an equality of first-class technical and commercial service to get this industry running vigorously and competently, in a really aggressive business way. We believe that it is essential for that to be done. The gas industry has beaten electricity because the gas industry is run better than the electrical industry. Gas has had a hard and very difficult fight, but I never cease to express my admiration for the fight which the gas people have put up for the preservation of their industry. [Interruption.] An hon. Member says that that is private enterprise; it may be. I am talking about industries at the moment. If a large number of electrical industry people had been as competent, and had shown as much grit, enterprise and go, as the best of the gas people, the elec- trical industry would be doing even better than it is at the present moment.

Those are the views which we put to the House. We suggest that it offers a basis upon which this industry ought to be reorganised. I know that the bigness of the thing and the national scope of it, with the big regional organisations, may frighten the timid minds of hon. Members opposite, but as sure as we are debating this subject to-day, that solution will come. I believe hon. Members will say: "That will come some day, and we believe you are right, but let us take the next step; let us compromise." I would beg of the Minister and the Government not to think about the inevitability of patching-up, midway courses and compromise, but to look at the industry. It is a lovely industry, and it can be the brightest jewel in the British industrial crown. It really is a fine industry that can be made very much finer. I beg of them to look at it and to say to themselves: "If we were starting again, how should we run this industry?" Let them decide how they would run it. I believe that they would run it our way. Having so decided, let us turn our minds not to the miserable compromise which would involve the maximum of trouble with the minimum of result, contained in the report of these very hard-working gentlemen, but let us take hold of this industry, organise it for the national service, make a clean job and produce a first-class electrical supply industry for the people of Great Britain.

6.26 p.m.

The MINISTER of TRANSPORT (Mr. Hore-Belisha)

The right hon. Gentleman always speaks informatively and with assurance. He does, however, upon occasion, make errors, and the error which he made in the course of his speech was in describing my hon. Friend the Member for South Croydon (Mr. H. G. Williams) as the honorary secretary of the Power Association. He is not the honorary secretary; he is the secretary. His services, as the House will recognise in the brilliant speech which he made this afternoon, are far too valuable to be given gratuitously.

The right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) will not mind my reminding him that this is not the only occasion during the last seven days on which we have had an opportunity of considering the merits of nationalisation. He accused me of looking at life from day to day, whereas he had his eyes fixed upon some distant scene. That is not quite the case, as he will, I am sure, admit. We have just introduced a Bill to take over 4,500 miles of trunk roads. I shall not readily forget that I was prudently warned by the right hon. Gentleman not to expect too much from nationalising the roads. If to-day I inform him that the Government are not attracted by his proposition immediately to nationalise electricity, he will bear that information with less surprise and with as much fortitude as I bore his admonition. But let not this paradox of the right hon. Gentleman detract from the value of the Debate initiated by the hon. Member for Morpeth (Mr. R. J. Taylor) with so much enthusiasm. It will give us an opportunity of considering the views of hon. Members in advance of any proposals which it may be our fortune to lay before the House.

We are not considering generalities and desiderata this afternoon, but we are concerned with a precise Motion. I do not think there is any distinction or difference in any part of the House as to what we desire to see achieved, but this is a definite Motion raising a definite principle, and we must consider it closely. I shall divide what I have to say, as hon. Members have done and the Motion itself does, into two parts—generation and distribution. In 1926 Parliament, realising that, so long as the generation of electricity was dispersed among a multiplicity of isolated power stations, we could not obtain the full advantages of this form of energy, decided to establish a central board with the duty of making a grid interconnecting the more important and efficient of these stations among themselves and with the principal distributing centres. Before this linking up could become complete, it was necessary to substitute, for the varying cycles produced by different under-takers, one standard frequency. The Act of 1926 was accordingly passed, the board has been established, and supply has been concentrated in selected stations, those which are superfluous—100 already—having been eliminated; interconnection has been effected, so that all distributing centres in the country can now depend upon their requirements being met directly or indirectly through the mains of the Central Electricity Board, and by next year there will be one single frequency prevailing.

Previous to these reforms—and it seems to me that the speech of the Mover of this Motion was addressed rather to that era than to this—the reserve plant in generating stations, representing many millions of invested money, was 83 per cent. in excess of the aggregate demand upon it. To-day, although the process is not yet concluded, it has been found possible, by the pooling of resources, to reduce this reserve to no more than 40 per cent., thus liberating much capital, otherwise held idle, for revenue-earning purposes. In the result, the cost of a unit of electricity delivered wholesale through the medium of the board now averages less than ½d., whereas 10 years ago, before there was this interdependence, it was about ld. To have reduced the cost of generation by one-half in 10 years is surely an achievement. Such benefits as have been secured have been secured with the good will, and not only with the good will, but largely at the cost, of the industry itself. The organisation which is doing this work is, under the terms of this Motion, to be expropriated—swept away, as the right hon. Gentleman said. £50,000,000 borrowed by the board would have to be acquired—for I do not presume that there is any suggestion of confiscation—by the State; all the capital now invested in the generating stations, amounting to £147,000,000, would have to be transferred; and the board itself, now uninfluenced except by commercial principles, would have to be abolished or absorbed into some Government Department.

Mr. H. MORRISON

No.

Mr. HORE-BELISHA

I do not think the right hon. Gentleman will quibble; I am following very closely the suggestion of the Motion. The Motion says that this industry is to be owned by the State and controlled by the State, by a management subject to ministerial control or such other control as may be required. Therefore, I represent accurately the terms of the Motion.

Mr. MORRISON

There is some confusion here. Just as it is ridiculous to talk about the taking over of the roads completely from the municipalities, under whom they are already publicly owned, as if it were transferring private undertakings, it is really absurd to talk about Whitehall management or ministerial management of a public corporation. It is already ensured by the Central Electricity Board. We are proposing substantially the same relationship between the Minister and the new electrical corporation as exists between him and the Central Electricity Board at the present time.

Mr. HORE-BELISHA

I quite agree with the right hon. Gentleman that the proposal that there should be ministerial control of this industry is ridiculous, but I am not making it. As there is in existence a Central Board apparently fulfilling all that the right hon. Gentleman desires, and enjoying freedom, cannot explain to myself why the Motion is on the Paper at all. If the present situation is satisfactory, then cadit quœstio, and we might have spent the afternoon in an even more pleasant way—and we agree that this one is pleasant—than we have. [Interruption.] The right hon. Gentleman is evidently touched on some sore point. I am dealing with the Motion, and perhaps, as I did not bear any resentment at what he said, and what he has frequently said on previous occasions, he will allow me to proceed with the decorum which should characterise our Debates.

The House will be perplexed as to what improvement could possibly accrue as a result of the carrying of this Motion, and all the more so as the municipal corporations, many of them Socialist boroughs, are responsible, on behalf of the ratepayers, for nearly two-thirds of the capital invested in the electricity supply industry to-day. We have been told by the Mover of the Motion of two advantages that would accrue, the one being that the power stations would all be moved to the coalfields—where many of them are now—and the other that the wages of the coalminers could be increased to a proper scale. I recognise that those were two reasons—not very economic ones, I thought—which he put forward to justify this change. Here, then, without real rhyme or reason, without real cause or justification, it is proposed to do away with a system which has produced beneficent results, to take away from the Central Electricity Board its independence—I will put it no higher than that—and for no very clearly defined purpose. I hope in the circumstances that the supporters of the Motion, having heard this discussion, will not seek to commit themselves in advance to a hidebound solution of these problems before they have had an opportunity of seeing and studying the plan of the Government. The right hon. Gentleman complained about bringing the Tory mind into industry. Surely it is equally unpleasant to bring the Socialist mind into industry. This question, I hope, will be studied on its merits and the proposals of the Government given fair consideration without being subjected to the anticipatory threats that were levelled against them by the right hon. Gentleman.

So much for generation. But one must be candid, and the fact that we have created a system of making electricity economically available to all authorised distributors does not mean that we have discharged our task of making it available to all potential consumers, or even of making it available cheaply and on a uniform system and voltage to all actual consumers. I shall now confirm almost everything that has been said on this point this afternoon. We are still left with would-be purchasers, largely in great rural areas, who have no recourse to any local supply. I am informed that distribution mains are not yet within reach of some 25 per cent. of the population. In many cases the high tension transmission lines themselves pass—and this is a cause of bewilderment to those who do not understand the technical reasons why they cannot tap them—through their own homesteads and farms. To actual consumers, tariffs vary very widely in their basis and amount, and give rise to the confusion and discontent that has been described by several hon. Members. While the grid now supplies standard alternating current, some of the older distributors, owing to the date when they were established, have to convert this into direct current, and that may add to the cost.

Further, just as there were numerous different frequencies, which affected generation, so there are numerous voltages of supply which affect distribution. Consumers moving from one district to another—I only confirm what has been said already—find that they are unable to use in their new homes the electrical fittings which they have purchased. This is a serious cause of complaint in many parts of the country, and particularly in London, where actually on opposite sides of the street different systems, different voltages, and different forms of charge may prevail. It was the consciousness of all these difficulties, which exasperated the citizens, that caused the Government to invite Sir Harry McGowan and his Committee to investigate the whole problem, to bring under review these anomalies and others, and to make recommendations. The Committee took widespread evidence from all parts of the industry and from consumers, and, after a comprehensive study of the subject, they drew a clear distinction between the problem of generation and main transmission on the one hand and that of distribution on the other. They concluded that the fact that it has been found possible to vest the control of generation and main transmission throughout the United Kingdom in the Central Electricity Board is not in their opinion conclusive evidence that the distribution of electricity should be organised on a similar basis. This, apparently, is where the right hon. Gentleman opposite and his friends part company with the Committee.

The reason for the distinction is plain. Generation and main transmission are highly technical problems. There is no physical reason why electricity generated in Glasgow should not be made available in Southend. The type of machinery, the lay-out of plant, like the remedy for a failure in a circuit, are matters for the attention of specialists, and the concern of the board must be to obtain the best technical assistance available on a country-wide scale. Distribution, on the other hand, is mainly salesmanship, and complete centralisation of distribution will not necessarily produce the best conditions for local buyers. Here you must deal promptly and agreeably with persons and firms within properly defined territorial limits. Drawing this distinction, the Committee made recommendations which would have the result of creating quite a different type of organisation for distribution from that which had previously been established on the generating side, and in which the national point of view dominated as contrasted with the regional. Here the Committee recommended that local interest should be retained and the best business enter- prise encouraged by absorbing into the more efficient distribution units in each area those which by reason of their size and characteristics were considered less capable of doing the urgent work of expanding supplies, and they definitely rejected, for the same reason, stereotyped national or regional boards, which they said would dislocate an established and expanding industry.

A further reason for retaining the businesslike features of the present system was the important one that on the whole it would be more likely to retain the co-operation of the industry as a whole, whether local authority or company, and that in itself, if you are going to make reforms, is a desirability. A justification for proceeding if possible by accelerated evolution rather than by drastic transformation, as suggested in the Motion, is emphasised by the progress made despite the existing disabilities, which the Committee proposed to remove. My hon. Friend the Member for South Croydon, in that speech which so much informed and delighted the House, told us that there had been an increase. in the sales in the last ten years amounting to, I think, about 200 per cent. in the sale of units. It remains significant, on the other hand, that distribution costs per unit sold have remained practically constant during the last 11 years. The Committee's proposals are largely directed to reducing these.

I only deal with the proposals of the committee in so far as they are related to this Motion and, in so far as they are related to the Motion, they definitely prefer the local to the national type of organisation, and they definitely prefer, in the province of salesmanship, to retain the kind of commercial enterprise that now prevails. The Motion discards completely the McGowan inquiry. The hon. Member who moved the Motion did not mention it at all, and it is framed in such a way as to light incense on the altar of a theory without regard to practical considerations. If it be a question of choosing between the Motion and the Amendment, the Government would prefer to see the Amendment carried. I cannot at this stage exceed what was said by the Prime Minister answering the hon. Member for South Shields (Mr. Ede) who, even when he does not address the House I am glad to see occupies its attention. He was asked whether it is proposed to find time during the current Session for legislation dealing with the distribution of electricity? The PRIME MINISTER: The hon. Member will have noticed that a full programme of legislation is already promised for this Session, and I cannot undertake at present that it will be possible to add to it. But the Government are alive to the importance of the recommendations made by the committee for the reorganisation of the supply of electricity and have the matter closely before them."—[OFFICIAL REPORT, 9th November, 1936; col. 500, Vol. 317.]

I cannot exceed that but, if the Amendment should be carried, we should deem ourselves free, as the hon. Member for South Croydon desired, to construct the edifice of the future after due consideration of the recommendations of men who looked at this problem merely from the point of view of finding the solution that was best in the interests of the nation as a whole without any political prejudice.

Mr. H. MORRISON

Have the Government formed any opinion on the McGowan Committee's report at all? That is what the House wants to know. The report is dated 8th May.

Mr. HORE-BELISHA

The right hon. Gentleman has spoken from the Front Bench and I am conscious that I am doing the same. It is a Private Member's day, and that is why I cut my remarks extremely short. The right hon. Gentleman, having been a Minister much longer than I have been, knows that it is not the practice of any Government to deal piecemeal with what is in a Bill. We shall produce our Measure as a comprehensive whole when it has been discussed and considered by the industry. In advance of that I am not prepared to say more than I have done.

6.52 p.m.

Mr. de ROTHSCHILD

I welcome the last remarks that fell from the lips of the Minister inasmuch as they not only show great regard for the traditions of the House in respect to the rights of private Members, but also because they show that the Government have some intention, at what period we do not know, of implementing some of the recommendations of this report. I gathered from his speech, although it was couched more or less in the same academic way as all the speeches that have been delivered to-day, that he did not welcome the discussion very much, and I can well understand it. Indeed, if the Government were not prepared to take some sort of action shortly, the Debate may not have been very welcome. I agree with the Mover of the Motion that ultimately a public utility corporation must be the objective of our policy in electricity matters. In this matter I also agree with the McGowan report, which asks us to deal with the matter step by step. Fifty years, which is the limit that the report seems to fix to the term when a great utility concern will be handling the electricity of the country, may be seeing too long ahead. We must not forget that there are many elements which enter into this problem. In the next 50 years it may well be that scientific developments may make public ownership less attractive even than hon. Members above the Gangway think it at present. If the internal combustion engine were developed it might easily create a new state of affairs in all the factories and mills of the country. The railways had a monopoly of transport, and it was urged that public control should be applied to them, but what happened? Motor transport revolutionised transport on the roads, and we had to bring in Measures to strengthen and support the railways versus road motor transport.

As regards electricity, there can be no doubt that, whatever its future, it must at least, as far as the human eye can see, always play a great part in our national life, and therefore it must be considered as a national service, and the policy with regard to it must be a policy based on a national principle. The hon. Member for South Croydon (Mr. H. G. Williams) was very full of praise for the way private enterprise had been conducting industry. I should have liked to draw his attention, had he been here, to one paragraph in which Sir Harry McGowan arid his colleagues point out that in the area of one of the existing companies there are 32 unauthorised undertakers, which exist quite legally, and that these are operated without statutory powers, and supply as many as 29,000 consumers and 5,000 public lamps. Of course, a condition of that kind is not one that should be encouraged. It certainly is not one that can be praised, and it does not redound to the credit of the statutory company itself. There is no doubt that cheapness and efficiency have been achieved in certain districts, but in many cases it has been done only by undertakings which have been confined in densely populated areas, and which have left the surrounding districts totally unprovided for. Authorised undertakings have concentrated on urban areas because they promise more remunerative business, and rural development has not unnaturally been ignored. Cheapness and efficiency in these conditions are not very difficult to obtain. What we must aim at—I hope when the Minister brings in his comprehensive Bill he will fulfil this object—is cheap electricity for the whole country, and this can be achieved only by comprehensive amalgamations, as is proposed by the McGowan report.

It is futile to think of scrapping, as the late Minister of Transport put it, the 600 undertakings. It is useless to set up a national board. Let him remember what happened 20 or 25 years ago when the telephone service was taken over. Let him remember the tremendous difficulties that occurred and the tremendous expense that was involved. Does he consider that at one stroke of the pen he could do for this very much more complicated industry what it was impossible to do for the telephone in those days? I agree with the McGowan Report—step by step. Possibly when there has been a series of amalgamations if the right hon. Gentleman is in office he may find it easier to achieve his object, but when he was in office the last time he shirked the issue altogether and did not touch it at all.

Mr. KIRKWOOD

It was for lack of support by the House.

Mr. de ROTHSCHILD

I did not say the right hon. Gentleman was not able to put it through. I said he did not even put it forward. The difficulty that we are considering, the developing of the electrical industry throughout the country side, is that the urban consumer may have to pay for the consumer in the country. There is no doubt that electricity in the country must be more expensive than it is in the towns. The price disparity will not be so great if urban and rural districts are developed at the same time. To develop rural areas alone, as different entities from those in the towns, would mean simply duplication, a duplication of capital works, mains and services, and therefore more expense. It is hoped that when this amalgamation takes place the districts will be well assigned and that urban and rural districts will be developed together. As the Minister has pointed out, the grid has reduced the price of generation very much—as the Report says, by 46 per cent.—but the cost to the consumer has not diminished.

With regard to the question of electricity in the rural areas, which is of great importance to my constituency, I do hope that the Minister of Transport will enter into closer communication with the Minister of Agriculture, and I hope that both of them—they are both young men who have just been put into the Cabinet—will rise to the great opportunities which are before them in this field. Indeed, the Minister of Agriculture can investigate the economic possibilities for electricity on the farm and he can provide authoritative information for the farmers. Also he can encourage large consumers to use electricity. That this is a matter of great importance has been shown in Chester and the surrounding districts, where it has been possible to develop the electrical industry in the rural areas because in Chester there are a considerable number of big users of electricity. In my own constituency there are possibilities of the same kind, and I hope that in this connection the Minister will be able to do something. The large pumping stations in the Fens are potential large consumers. At present some use oil and some steam, but the use of electricity should be encouraged, and if the pumping stations throughout the Fens use electricity it will enable juice to be sent throughout the country to all the different farms and villages which need it so much. There is hardly any industry which would revive more than the farming industry under the impulse of electrical power.

After all, what is needed at present is a policy of cheap home-grown food and better nutrition. Electricity for ploughing, electricity in the byre, and electricity on the poultry farm would make the industry of the farmer cheaper. Also it would enable the farmer to produce milk under healthier conditions, and conditions which are better for the mothers and children of this country. As regards the amenities in the countryside, those Members of the House who, as I have been, have been through an election campaign in the winter in rural areas know what the conditions are. Night after night one goes into village halls and schoolrooms where one can see nothing but two miserable paraffin lamps, and one feels that one is in a prehistoric cave addressing a lot of troglodytes, with only a few resinous torches to light up the place. Then we wonder that there is an exodus from the country to the towns and we wonder that people prefer even the glare of the neon lights to the dreary penumbra of their own homes. I hope that the Minister will realise that there is a great task lying before him, and that he will bring electric light and heat to the farm worker's cottage. If he does that he will bring happiness and contentment to a great number of worthy citizens of this country. After all, the Electricity Committee which sat in 1928 found that rural electricity was no more expensive than oil—even at one shilling a unit.

The development of rural electricity is a national question and I hope that the Minister will take that view. Let us increase home-grown foods, and to do this let us have cheap power and good rural roads. But these developments will not come about without energetic action on the part of the Minister. Companies must be induced to show enterprise in the rural areas. Some public authorities have shown initiative; one has only to look at Chester, Bedford, Norwich and Aylesbury. But I regret to say that most of the supply companies have little interest in rural areas. So much is that so, that the farmers themselves have often to take the initiative. They have to go round themselves and find the customers; they canvass friends of theirs who will unite to ask for electricity. I hope that the industry will avoid nationalisation, but if it really wishes to avoid nationalisation it must show the virtues of commercial enterprise in dealing with the country consumer.

I hope that the Government will accept the broad conclusion of the McGowan Committee—the re-grouping of distributive undertakings. This is needed even if compulsion must be applied. The Government should not be deterred by the interests of private companies. I do not think that these should stand in the way of the national interest. If amalgamation schemes produce anomalies these must be solved by equitable terms of purchase. The terms of purchase which are recommended by the McGowan Committee show in one respect more sympathy with the companies than with the public authorities. They propose that when a company is acquired the purchase price should be based on the cost of the undertaking, less depreciation, plus an addition for future profits of the company. But they propose that when a local authority is acquired the purchase should be on cost, less depreciation only. It is most important that the Government's intention with regard to this point should be made known as soon as possible.

An instance has arisen in my own constituency. The Wisbech Corporation contemplates acquiring an undertaking now owned by a company. It would have to acquire it on an ordinary commercial basis; it would have to take into account that the undertaking is a profitable concern earning a 10 per cent. dividend. But if the McGowan proposals are adopted as they stand at present it may happen that the Wisbech Corporation would be compelled to sell out in a few years to a large power company, and at a price which would take account only of the original costs of the plant, less depreciation. The uncertainty of the Government's intentions in this respect presents a difficulty to many local authorities who contemplate acquiring undertakings. The example of Wisbech shows another anomaly. If this undertaking is now acquired by the Corporation the regional undertaking which is to be set up under the scheme with powers to acquire undertakings within its area will have to pay less for it, less than if it remained in the hands of the company. That is a very striking anomaly.

But even if the Government are not prepared to adopt the major recommendations of this report, other of its proposals must be adopted. These include the recommendation that the Electricity Commissioners should be empowered to require undertakings to carry out schemes for undeveloped areas; and the plea for greater uniformity in the system of supply and voltages and in tariffs and methods of charge. Let us pay the greatest attention to those paragraphs which are devoted to holding companies, because even if the major conclusions of this report are not adopted something should be done in re3pect, of these abuses. I will give an example. I will not give any names, because obviously I do not wish to single out any company as particularly deserving of censure.

This is a case in which four companies are involved. The first company, the actual supplier, supplies two boroughs, four urban districts and six rural districts, with electricity. This company in 1935 paid a dividend of 8 per cent. It placed to reserve 7½ per cent. of its capital, or £15,000. In addition, this company paid interest of 5.7 per cent. to an associated company on a loan of £74,000. The share capital of this company is £200,000. That is all right. But let us come to the second company. The second company owns £187,000 of the capital of the first. It also owns or controls a certain number of other small companies and it acts as a contracting company for the first company. This second company itself has a capital of £100,000 preference shares and £250,000 ordinary shares. In 1935 this second company paid 10 per cent. on ordinary shares, a 10 per cent. cash bonus, it placed to reserve £35,000, or 14 per cent. of its ordinary capital, and, looking at it from a different point of view, the net profit for the year, before making provision for Income Tax, amounted to £109,000, or over 30 per cent. on its total capital. Of this £109,000, £30,000 is derived from investments in subsidiary and associated companies. There remains a balance of £79,000. This balance is derived from trading on its own account, and the capital expenditure upon fixed assets—that is to say, the freehold property, plant, machinery, etc., of this company—stands at less than £20,000. These figures are taken from Garcke's Manual.

Let me sum up the position. The assets of this company consist chiefly of investments in subsidiary and associated companies. Thirty thousand pounds is derived directly from revenue in dividends and. interest, and £79,000 remains to be accounted for. This profit is made from relationship with the subsidiary companies, and—this is my point—is ultimately derived from the consumer of the electricity supplied by the subsidiary companies, and that at a flat rate of 8d. per unit. Of course, the chain of holding companies does not stop there. The capital of the second company is almost entirely held between the third and fourth companies, one of which holds the controlling interest in the other. Such intricate and interesting company finance is no doubt quite legitimate and not uncommon, but when companies operate under statutory monopoly, the profits should be clearly ascertained or at an events they should be clearly ascertainable, especially when prices to the consumer are so high.

A similar situation has arisen in my constituency. There the company shows a balance of £1,130 on its ordinary share capital of £280,000, but it pays £20,000 as interest to an associated company upon a 5 per cent. loan of £400,000. The company to which I am alluding serves the town of March and the surrounding villages of Doddington and others. In March the rateable values have lately risen, and, of course, electricity charges are about to follow suit. The company has been asked to revise its tariff, but it claims that it cannot do so because it shows no profit. No wonder there is to be a protest meeting in March next week because the consumers are not prepared to accept the explanation of the company that they are not showing a profit. They point out that the holding company pays a dividend of 8 per cent., and has made two capital bonuses in the last 12 years amounting to 66 per cent. each. If high charges are justified on the ground of low profit, then the profits of holding corn-panics must be taken into account. The flat rate for lighting in the urban district of March is 9d. per unit, although there are 11,000 inhabitants, and they are using overhead cables, which is the cheapest method of distribution, as the House well know.

I trust that the Minister, whatever he does, will at least implement the McGowan recommendations for compulsory amalgamation of associated and subsidiary companies when desirable, for an official audit of accounts of these holding companies, and for taking holding companies' profits into consideration when inquiring into the prices of a subsidiary company. The McGowan Report strongly emphasises the importance of financial considerations and of financial administration. Sir Harry McGowan points out that one per cent. saving in capital charges would permit a 6½ per cent. reduction in charges to the consumer.

I regret that the hon. Gentleman the Member for South Croydon is not here at the present time, because that would contravert at least some of his assertions on the point of interest in this matter. But we must aim at cheaper electricity over the country as a whole. That is entirely in the hands of the Minister. He has just been raised to the high status of a Cabinet Minister. Let him divest himself of his own interest at the present time and look at this question from the whole national point of view and impress upon the other Members of the Cabinet the importance of what has to be done. I dare say that we all have been pleased to see him raised to this high ministerial status, because we have thought that he would electrify some of his somnolescent and obsolescent colleagues, but we also hope that he will devote his energies to electrifying the countryside.

7.22 p.m.

Mr. EDE

I heard the speech of the Minister of Transport this afternoon with a feeling of great disappointment. I had hoped that he would have been able at least to give some broad indications of what the lines of Government policy would be. No one can be better aware than he is of the state of mind of the people in the electricity supply industry while they are awaiting the decision of the Government on this important matter. I regretted to hear the way in which he suggested that amalgamations were not to be too big, because I think that one can still have very wide regions in this country, such as were advocated by my right hon. Friend the Member for South Hackney (Mr. H. Morrison) and preserve the amount of local drive and push which is necessary to secure the salesmanship to which he alluded. The hon. Gentleman the Member for Hampstead (Mr. G. Balfour) and myself are the only two Members of the House who gave evidence before the McGowan Committee, and I do not imagine for a moment that our evidence was on the same lines. I am bound to say that when I read the report I imagined that we were both equally disappointed with the result of our evidence. If we were cancelled out in our own minds, we appear also to have been rather cancelled out in the minds of the Committee.

I should like to draw the attention of the Minister to one very striking example given in the report of the effect of a big amalgamation as far as population is concerned. The London and Home Counties Joint Electricity Authority amalgamated six companies which had been operating in South Middlesex and in Surrey. They now control 200 square miles of mixed urban and rural territory. They have only two tariffs for the whole of that area, and they have very nearly reached the stage when, I hope, there will be one tariff for the people on the Sussex border of Surrey and in the Northern part of Surrey and in South Middlesex. It is very striking that in that area for two successive years that authority has been the undertaker which has put out the most new cookers to consumers in the whole country. That is some indication of what can be done. I am sure that what has been said by the hon. Gentleman the Member for the Isle of Ely (Mr. de Rothschild) with regard to the desire of the country people for electricity can be proved out of the records of every undertaker really striving to meet the rural demands. In the rural district one is not in competition with gas so much as in competition with the Valor Perfection Stove and similar anachronisms of that nature, and I do not think that even in the town one is so much in competition with the gas company as with the can-opener. There are still a number of women who, when they come home from the bridge party consider that it is somewhat quicker to get their husband's supper ready by producing a can-opener and opening a tin than to provide him with something fresh, but in the rural districts we are only in competition with the Valor Perfection Stove. The advantages there are too easily demonstrable ever to be missed by the housewife.

The London and Home Counties Joint Electricity area consists of 1,841 square miles, and in that area there still remain 82 separate undertakers. No one can defend a position like that, and the sooner steps are taken by the Government to deal with the improvement of that part of the country the better. I should like to draw the attention of the Minister and of the House to the working of electricity distribution in that area. The local authorities have a total capital expenditure of £45,800,000, and their capital charges amount to £3,300,000, or about 7.18 per cent. The companies in the same area have a total expenditure of £78,000,000, and are paying interest of over £7,000,000 a year, with a capital charge of 9.09 per cent. Actually, if the areas of the companies were financed for their capital on the same basis of the municipalities, there would be a saving to the consumer of £1,500,000 a year. The Joint Electricity Authority, although it has only been operating for some four years, has in that time, in the way of

reduced charges, actually left in the pockets of the consumers in that 200 square miles in which they directly distribute over £2,500,000 which would have been abstracted from their pocket had the companies remained private concerns. I hope that the Minister will very shortly be able to announce the decision of the Government upon the McGowan Report and the problems which are raised with regard to electricity distribution generally.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 114; Noes, 173.

Division No. 16.	AYES.	[7.30 p.m.
Acland, R. T. D. (Barnstaple)	Hayday, A.	Richards, R. (Wrexham)
Adams, D. (Consett)	Henderson, T. (Tradeston)	Ridley, G.
Adams, D. M. (Poplar, S.)	Hicks, E. G.	Riley, B.
Adamson, W. M.	Hills, A. (Pontefract)	Ritson, J.
Alexander, Rt. Hon. A. V. (H'lsbr.)	Hollins, A.	Roberts, Rt. Hon. F. O. (W. Brom.)
Ammon, C. G.	Hopkin, D.	Robinson, W. A. (St. Helens)
Anderson, F. (Whitehaven)	Jagger, J.	Rowson, G.
Banfield, J. W.	Jenkins, A. (Pontypool)	Salter, Dr. A.
Batey, J.	John, W.	Sanders, W. S.
Bellenger, F.	Jones, A. C. (Shipley)	Sexton, T. M.
Benson, G.	Kelly, W. T.	Shinwell, E.
Bevan, A.	Kennedy, Rt. Hon. T.	Short, A.
Brooke, W.	Kirkwood, D.	Silkin, L.
Brown, Rt. Hon. J. (S. Ayrshire)	Lansbury, Rt. Hon, G.	Silverman, S. S.
Buchanan, G.	Lathan, G.	Simpson, F. B.
Burke. W. A.	Lawson, J. J.	Smith, Ben (Rotherhithe)
Charleton, H. C.	Leach, W.	Smith, E. (Stoke)
Chater, D.	Leonard, W	Smith, Rt. Hon. H. B. Lees- (k'ly)
Cluse, W. S.	Leslie, J. R.	Sorensen, R. W.
Clynes, Rt. Hon. J. R.	Logan, D. G.	Stewart, W. J. (H'ght'n-le-Sp'ng)
Cripps, Hon. Sir Stafford	Lunn, W.	Strauss, G. R. (Lambeth, N.)
Dagger, G.	Macdonald, G. (Ince)	Thorne, W.
Dalton, H.	McEntee, V. La T.	Thurtle, E.
Davies. R. J. (Westhoughton)	McGhee, H. G.	Viant, S. P.
Day, H.	Maclean, N.	Walker, J.
Dobbie, W.	Marshall, F,	Watkins, F. C.
Ede, J. C.	Mathers, G.	Watson, W. McL.
Edwards, Sir C. (Bedwellty)	Messer, F.	Wedgwood, Rt. Hon. J. C.
Frankel, D.	Montague, F.	Welsh, J. C.
Gallacher, W.	Morrison, Rt. Hon. H. (Ha'ka'y, S.)	Whiteley, W.
Gardner, B. W.	Noel-Baker, P. J.	Williams, E. J. (Ogmore)
Gibbins, J.	Oliver, G. H.	Williams, T. (Don Valley)
Green, W. H. (Deptford)	Paling, W.	Wilson. C. H. (Attercliffe)
Greenwood, Rt. Hon. A.	Parker, J.	Windsor, W. (Hull, C.)
Griffiths, G. A. (Hemsworth)	Parkinson, J. A.	Woods, G. S. (Finsbury)
Griffiths, J. (Llanelly)	Pethick-Lawrence, F. W.	Young, Sir R. (Newton)
Groves, T. E.	Potts, J.
Hall, G. H. (Aberdare)	Pritt, D. N.	TELLERS FOR THE AYES.—
Hall, J. H. (Whitechapel)	Quibell, D. J. K.	Mr. Tinker and Mr. R. J. Taylor.
NOES.
Adams, S. V. T. (Leeds, W.)	Cazalet, Thelma (Islington, E.)	Culverwell, C. T.
Agnew, Lieut.-Comdr. P. G.	Channon, H.	Dawson, Sir P.
Albery, Sir Irving	Chapman, A. (Rutherglen)	Denman, Hon. R. D.
Aske, Sir R. W.	Chorlton, A. E. L.	Denville, Alfred
Barrie, Sir C. C.	Clydesdale, Marquess of	Doland, G. F.
Beauchamp, Sir B. C.	Colfax, Major W. P.	Donner, P. W.
Beaumont, Hon. R. E. B. (Portsm'h)	Colman, N. C. D.	Drewe, C.
Blindell, Sir J.	Colville, Lt.-Col. Fit Hon. D. J.	Duckworth, W. R. (Moss Side)
Boulton, W. W.	Cook, T. R. A. M. (Norfolk, N.)	Dugdale, Major T. L.
Bowater, Col. Sir T. Vansittart	Cooke, J. D. (Hammersmith, S.)	Duggan, H. J.
Briscoe, Capt. R. G.	Cooper, Rt. Hn. T. M. (E'nburgh. W.)	Duncan, J. A. L.
Brocklebank, C. E. R.	Craven-Ellis, W.	Dunne, P. R. R.
Burgin, Dr. E. L.	Cross, R. H.	Eastwood, J. F.
Campbell, Sir E. T.	Cruddas, Col. B.	Eckersley, P. T.
Edge, Sir W.	Latham, Sir P.	Samuel, Sir A. M. (Farnham)
Edmondson, Major Sir J.	Law, Sir A. J. (High Peak)	Samuel, M. R. A. (Putney)
Ellis, Sir G.	Leech, Dr. J. W.	Scott, Lord William
Elliston, G. S.	Lees-Jones, J.	Seely, Sir H. M.
Elmley, Viscount	Lennox-Boyd, A. T. L.	Selley, H. R.
Emmott, C. E. G. C.	Liddall, W. S.	Shaw, Major P. S. (Wavertree)
Errington, E.	Little, Sir E. Graham-	Shaw, Captain W. T. (Forfar)
Erskine Hill, A. G.	Licwellin, Lieut.-Col. J. J.	Sinclair, Col. T. (Queen's U. B'lf'st),
Evans, Capt. A. (Cardiff, S.)	Lumley, Capt. L. R.	Smiles. Lieut.-Colonel Sir W. D.
Everard, W. L.	MacAndrew, Colonel Sir C. G.	Smith, Sir R. W. (Aberdeen)
Flides, Sir H.	MacDonald, Sir Murdoch (Inverness)	Somerset. T.
Findlay, Sir E.	McEwen, Capt. J. H. F.	Somervell, Sir D. B. (Crewe)
Fox, Sir G. W. G.	McKie, J. H.	Somerville, A. A. (Windsor)
Furness, S. N.	Maitland, A.	Southby, Comdr. A. R. J.
Gledhill, G.	Makins, Brig.-Gen. E.	Stanley, Rt. Hon. Lord (Fylde)
Graham, Captain A. C. (Wirral)	Mander, G. le M.	Storey, S.
Gretton, Col. Rt. Hon. J.	Margesson, Capt. Rt. Hon. H. D. R.	Stourton, Major Hon. J. J.
Griffith, F. Kingsley (M'ddl'sbro, W.)	Markham, S. F.	Strauss, H. G. (Norwich)
Grimston, R. V.	Mason, Lt.-Col. Hon. G. K. M.	Stuart, Lord C. Crichton- (N'thw'h)
Gritten, W. G. Howard	Mayhew, Lt.-Col. J.	Stuart, Hon. J. (Moray and Nairn)
Hacking, Rt. Hon. D. H.	Mills, Major J. D. (New Forest)	Taylor, C. S. (Eastbourne)
Hamilton, Sir G. C.	Mitcheson, Sir G. G.	Touche, G. C.
Hanbury, Sir C.	Morris-Jones, Dr. J. H.	Train, Sir J.
Hannah, I. C.	Munro. P.	Tree, A. R. L. F.
Hannon, Sir P. J. H.	Nall, Sir J.	Turton, R. H.
Harbord, A.	Orr-Ewing, I. L.	Wakefield, W. W.
Harris, Sir P. A.	Peake, O.	Walker-Smith, Sir J.
Haslam, H. C. (Horncastle)	Penny, Sir G.	Wallace, Capt. Rt. Hon. Euan
Heneage, Lieut.-Colonel A. P.	Petherick, M.	Ward, Lieut.-Col. Sir A. L. (Hull)
Hepburn, P. G. T. Buchan-	Pickthorn, K. W. M.	Ward, Irene (Wallsend)
Hepworth. J.	Pilkington, R.	Warrender, Sir V.
Herbert, Major J. A. (Monmouth)	Plugge, L. F.	Waterhouse, Captain C.
Holmes, J. S.	Rathbone, J. R. (Bodmin)	Wedderburn, H. J. S.
Hope, Captain Hon. A. O, J.	Reed, A. C. (Exeter)	White, H. Graham
Hopkinson, A.	Reid, W. Allan (Derby)	Wickham, Lt.-Col. E. T. R.
Hore-Belisha, Rt. Hon. L.	Rickards, G. W. (Skipton)	Williams, C. (Torquay)
Howitt, Dr. A. B.	Robinson, J. R. (Blackpool)	Willoughby de E-esby, Lord
Hudson, Capt. A. U. M. (Hack., N.)	Ropner, Colonel L.	Withers, Sir J. J.
Hunter, T.	Ross, Major Sir R. D. (L'derry)	Womersley, Sir W. J.
Jackson, Sir H.	Rothschild, J. A. de	Wright, Squadron-Leader J. A. C.
Jones, H. Haydn (Merioneth)	Rowlands, G.	Young, A. S. L. (Partick)
Keyes, Admiral of the Fleet Sir R.	Russell, A. West (Tynemouth)
Kimball, L.	Russell, R. J. (Eddisbury)	TELLERS FOR THE NOES.—
Lamb, Sir J. Q.	Russell, S. H. M. (Darwen)	Mr. Herbert Williams and Sir Arnold Gridley.
Lambert, Rt. Hon. G.	Salmon, Sir I.

Question proposed, "That the proposed words be there added."

Several HON. MEMBERS

rose—

It being after Half-past Seven of the Clock, the Debate stood adjourned.