ELECTRICITY SUPPLY CORPORA TION, FALMOUTH (CHARGES) (Hansard, 25 May 1944)

§ Mr. Petherick (Penryn and Falmouth)

The matter which I am raising is one which will, I am sure, not be of general interest to the House. It is largely a local matter, but there is a principle involved in it. I have raised it not only because it is of interest to a number of my constituents—and we are here, after all, to represent the interest of the people of our constituency—but also because of the question of principle to which I have referred, and because I fear there may be a number of other cases of a similar nature arising in some other parts of the country. The matter started last December when, in Falmouth, the local Electricity Supply Corporation raised its charges to the consumers and, in doing so, sent out a document to them saying that the charges were raised because of the cost of a refuse destructor which, for various reasons, placed a heavier burden upon the Electricity Supply Corporation. This 10 per cent. increase the electricity consumers thought to be entirely due to the increased cost of the refuse destructor, whereas I understand, as a matter of fact, part of the increased charge which the consumers had to bear was due to the ordinary increase in costs as a result of the war.

The short history of the matter is this. In 1903 the Electricity Supply Corporation in Falmouth had an Order in their favour, and in 1904 an agreement was made with the Falmouth council, which was a part of the consideration on which the Electricity Supply Corporation was allowed to sell electricity in the borough of Falmouth. This agreement had a very curious clause in it, providing for the 1057 destruction by the Electricity Supply Corporation of all the refuse of the town of Falmouth sent to it by the borough council. The borough council were not obliged to send all the refuse to be destroyed; it was an optional clause, and it was designed obviously to benefit all the ratepayers and townspeople of Falmouth. In fact, it was a clause which was, I think, agreed to by the Electricity Corporation as a sort of quid pro quo. All this worked well until 1938 and then there were complaints, and when this 10 per cent increase was imposed last December, it was the subject of a serious complaint. My constituents have been extremely patient since then. They have not complained at all, although I have conducted many and arduous negotiations with the Minister of Fuel and Power.

After the war had been going on for some time the Government decided to institute a salvage scheme, as we all know, and the borough of Falmouth was ordered by the Government not to send all its refuse to the destructor, as it had done before, but to collect it and sell it. This they did and they are now making £1,300 a year out of it. All the refuse did not go to the destructor, and owing to the lower fuel content of the remainder of the refuse costs went up, with the result that the company had to raise their charges to consumers. The Electricity Supply Corporation—and I have interviewed the chairman—recently claimed that their costs have gone up and that unless they were to go into bankruptcy they must, in some way, be recompensed. They asked the Minister of Fuel and Power for authority to raise their charges and he gave them that authority. But it will be seen from the little I have said that the bargain which was made by the Electricity Supply Corporation proved to have been a bad bargain.

The consumers of electricity in Falmouth cannot go elsewhere; they are obliged to buy it from the Supply Corporation, and it is not their fault that owing to the bad bargain made 30 or 40 years ago they should now be charged more for their electricity. It may be said that the increased charges should be borne by the borough of Falmouth, acting on behalf of the ratepayers, but, on the other hand, the Falmouth Borough Council have said as they were perfectly entitled to say, "No, we made a con 1058 tract on behalf of the ratepayers 40 years ago and we propose to stick to it." The only people who are being ground between two millstones, as it were, are the consumers of electricity per se. As ratepayers they have another function. As consumers it was not their fault either that the Electricity Supply Corporation 40 years ago made a bad bargain or that 40 years later the Falmouth Borough Council decided to keep the Supply Corporation to that bargain. The party which was in no way responsible for the increased costs is being asked to pay, and I hope the Parliamentary Secretary will tell me that he can now order what I have been urging the Minister of Fuel and Power to order, the holding of a local inquiry.

§ The Joint Parliamentary Secretary to the Ministry a Fuel and Power (Mr. Tom Smith)

Although the question of the electricity supply of Falmouth has been the subject of Question and answer in this House, and of a good deal of correspondence, we certainly welcome the opportunity which has been afforded to us to explain what is exactly the position. It is true that 4o years ago a contract was made between the Electricity Supply Corporation and the Falmouth Borough Council whereby the Corporation erected and equipped a destructor for consuming the refuse of Falmouth. This went on all right until the salvage campaign was started. Then it was found that the better part of the refuse was, rightly, being salvaged, and the quantity and quality of what was left for the Electricity Supply Corporation was almost negligible in heating value. The company, therefore, were not able to generate as much electricity as formerly and were incurring a loss. They then asked the council for a modification of the contract and, on this being refused, for an adjustment of prices. My right hon. and gallant Friend was advised that the circumstances warranted an increase of 10 per cent. in the tariff. The council were perfectly in order in refusing to modify the contract and my right hon. Friend had no power to intervene with regard to that. It was made 40 years ago when no one could have foreseen the exceptional circumstances that a war like this would bring about. The issue seems to be a very simple one. It was a matter entirely between the company and the Falmouth Corporation. It would appear that there 1059 was room in the exceptional circumstances for some revision because, in addition to the negligible heating value of the lesser amount of refuse, there were other costs involved, such as labour costs, and the fact that, for security reasons, the refuse could only be burned in daylight. On the whole, balancing one thing against the other, my right hon. Friend felt he was justified in granting the increase of 10 per cent. and he did it. I cannot promise the hon. Member that my right 1060 hon. Friend will sanction the removal of the increase. We have gone into the matter very thoroughly. There has been a great deal of correspondence and discussion, and I feel that my right hon. Friend was justified in what he did on the information and advice given him and, while it may not be satisfactory to the hon. Member, I regret that there is nothing that I can add.