HC Deb 24 June 1947 vol 439 cc382-9
Sir A. Gridley

I beg to move, in page 45, line 14. to leave out Subsection (I) and to insert:

  1. (1) The prices to be charged by the Central Authority for electricity supplied by them to Area Boards shall be in accordance with such tariffs as may be fixed by the authority from time to time, and approved by the Electricity Commissioners.
  2. (2) The tariffs shall be so framed as to include as part of the charge and show separately—
    1. (a) a fixed kilowatt charges component;
    2. (b) a running charges component, and for this purpose the fixed kilowatt charges component and the running charges compos 383 nent shall be ascertained in accordance with such principles as may be approved by the Electricity Commissioners; or the tariffs may be framed in such other manner as may be determined by an order of the Electricity Commissioners, but such an order shall not come into force until it has been laid before each House' of Parliament for a period of not less than thirty days on which that House has sat, and if either House of Parliament before the expiration of that period presents an Address to His Majesty no further proceedings shall be taken thereon.
    3. (3) The tariffs fixed under this section shall be such as taking one year with another will not result in a financial loss to the Central Authority as respects any area and accordingly may if the Central Authority think fit, be different for different areas."
We have the strongest objection to the provisions of Subsection (I) as it stands at present. I want hon. Members to look at this Clause and see exactly what it does. It is not always the case that hon. Members opposite are following the Clauses we are discussing. This Clause provides that the prices to be charged by the Central Authority for the supply of electricity to the area boards shall be in accordance with such tariffs as may be devised by the Central Authority from time to time. In other words, the Central Authority can say to the 14 boards, "You are to take all the current you require in bulk from us at prices or tariffs we shall decide." That seems to me to be a most extraordinary position for the area boards to be put in. These area boards will, presumably, have upon them responsible men to take control, together with officials, engineers and first-rate technicians. Are they to have no say whatever in whether the bulk supply terms are satisfactory or sound, or a commercial proposition, or not? That is the primary objection we have to Subsection (1) as it now stands.

What we want to know is if there is any difference between the area boards and the Central Authority on bulk supply terms, who is to settle such a dispute? There is no provision in the Bill for dealing with a dispute on what, after all, is a vitally important matter to the area boards—the price of the current they are to distribute. In this Amendment we suggest that if there are any differences the tariffs shall be settled by the Electricity Commissioners, but if the Commissioners are to go, there must be some other body or tribunal to whom the matter in dispute can be referred for arbitration. The Clause as drawn is, of course, silent as to how the tariffs to be imposed are to be framed and, therefore, our Amendment suggests how that shall be done—the fixed kilowatt charge plus a running charge. That has been the practice sponsored and approved by the Electricity Commissioners for many years and we desire—and I think every electrical engineer in the industry desires —to see that this method of framing tariffs is continued.

There is often much misconception when talking about tariffs. What we mean here is that we are endeavouring to reach, as far as possible a standard form of tariff and not a standard price. A standard form of tariff and a standard form of price are not necessarily alike. In fairness to the consumers, a standard form of tariff is right. We had discussion on this matter in Committee, and I think then the Parliamentary Secretary quite agreed that this was a proper form of tariff to adopt, and, therefore, we want to see it written into the Bill. We also want to secure this safeguard, if we can against the risk of subsidization, the Central Authority subsidizing the area boards or vice versa, and we' want to secure when the tariffs are settled that there will be no question of one board subsidising another.

Major P. Roberts

I beg to second the Amendment.

I do so particularly on the ground of monopoly. Speaking from the point of view of the industries of Sheffield, I feel most strongly on the matter. We are here having the producer of electricity fixing the tariffs the boards will have to pay. In the past, under the 1926 Act, and other Acts, there were safeguards, and I am not at all satisfied that the consumer councils will be strong enough to deal with the Central Authority in this matter.

12.45 a.m.

Mr. Gaitskell

Here, again, we are discussing something we went into fairly thoroughly upstairs, though, of course, I make no complaint of that; but I would like to point out that in attempting to introduce some sort of outside arbitration into this matter of the tariffs charged by the Central Authority, the hon. Member is applying a false analogy. He is thinking in terms of the position that ruled at the time of the 1926 Act—the terms the Amendment are very largely taken from that—wmhen one had the Central Electricity Board, and a very large number of distributing units, some of them companies and some municipalities. There was no financial tie-up between the Central Electricity Board and the various distributing units and it was no doubt natural to provide for arbitration at that time.

But the position under this Bill will be wholly different. The Central Authority is financially responsible to the Minister, and, through him, to Parliament, for the whole business. It is, in fact, in precisely the same position—and the hon. Member used this analogy himself on an earlier Amendment—of a holding company in relation to subsidiary companies. Surely, he is not suggesting that the terms on which a holding company may dispose of electricity to a subsidiary should be subject to outside arbitration? I know him too well for that. It would never be dreamed of, and there is no more occasion for it here than there would be in cases of that kind. Supposing the Central Authority were to charge a particular area board a tariff which appeared high, we must not overlook the fact that sitting on the Central Authority in rotation are chairmen of the various area boards, and they will no doubt make their weight felt. If they were charged too high, the reserve funds of the area board would be affected, but in any case the Central Authority is responsible, and I cannot see that any serious consequence is likely to arise.

About laying down the form of tariff, what I said in Committee was that, by and large, the form of tariff enacted in the Amendment is the common one. But is it not rather unwise to tie ourselves down in the Statute to a particular tariff? I have not the experience of the hon. Member in the industry, but I have friends in it, and I have often heard from them that in the matter of tariffs there is room for a great deal of experiment. If he is right, and engineers think that this form of tariff should be adopted, there is little doubt that the Central Authority will adopt it, but I would prefer to leave the matter as it is.

The last point is on the position of area boards, and the tariffs not resulting in any loss. There is also the point, to which I do not think the hon. Member made any reference, that the tariffs might be different for different areas. In response to the wishes of the Opposition, we have put down an Amendment specifically providing for that, which I will move in due course. As regards the Central Authority fixing a tariff which would involve it in a loss with the area board, I do not think we should be too dogmatic. I agree that we ought to know what is happening, and I am all for the greatest possible publicity —no proper comparison can be made without it—but I do not think it is right to rule out this method. Let us remember that if we did adopt this, and the Central Authority was tied down not to make a loss on any tariff, it would have to go to immense pains to ensure that it did not do so, and would almost certainly overcharge the area boards, because it would be afraid of making a loss. I suggest that it is much better to leave it to the common sense and experience of the men who will be running the concern.

Amendment negatived.

Mr. Gaitskell

I beg to move, in page 45, line 17, at the end, to insert: and different tariffs may be fixed for different area boards. I mentioned in the course of my remarks on the previous Amendment that we had put down this Amendment which provides that different tariffs could be fixed by different boards. I do not think it needs any further explanation.

Amendment agreed to.

Mr. Deputy-Speaker (Mr. Hubert Beaumont)

I suggest that the next two Amendments, in page 46, line 23, and page 46, line 26, be taken together.

Lieut.-Colonel Elliot

I beg to move, in page 46, line 23, after "persons," to insert: and shall not exercise any undue discrimination against any person or class of persons. The second Amendment is in page 46, line 26, at the end, to insert: 8. Subject to the provisions of the Electricity (Supply) Acts, 1882 to 1935, every person shall on application be entitled to a supply of electricity on the same terms as those on which any other person in the same area or part of an area is entitled under similar circumstances to a corresponding supply. These Amendments provide that there shall not be discrimination against any person or class of persons. It arises out of the fact that the Bill before the House is repealing so many of the rights" by which consumers have hitherto been protected. The consumer is at present pro- tected by Section 22 and the Schedule to the Electricity Supply Act, 1922 and we can see no reason why that should be repealed. It is not so very long since the provisions were inserted, and in fact they have been found valuable up to now. We do not believe that the mere fact that this large public authority is subject to the remote control of Parliament is sufficient protection to the consumer. Therefore, we suggest that these words should be written into the Statute here and now as set out in the Amendment.

It was suggested we should also discuss the Amendment in page 46, line 26. This, again, is a still older provision of protection which goes back as far as 1882—that is, to Section 20 of the Electric Lighting Act, which is being repealed by this Bill. The Bill provides that in future, tariffs are to be used except when they are not appropriate. Therefore, we make reference to tariffs in the Amendment. Frankly, it seems to us that the general contention of the Government in all this matter that no one need fear the loss of statutory protection—because the whole thing can come under the review of Parliament and the Minister can be subjected to questions in the House—does not make up for the loss of statutory protection which Parliament thought worth while to provide. These matters have been under the control of a Statute, though many of the bodies which were operating were public bodies. The onus, I think, is on those who desire to secure a change. In the extensive repeals asked for, we think it right to ask—what is the justification for these extensive repeals and by what protection do the Government intend the user to be covered over and above the illusory protection of an occasional question in Parliament and the "beat up" of a Minister once a year on a Supply Day?

The Solicitor-General

The right hon. and gallant Gentleman argued his case for both these Amendments, although technically he only moved the first one. He said that the protection afforded to consumers was illusory and we had put them in a much worse position than before, but it is specifically provided in Subsection (7) that area boards shall not show undue preference to any person or class of persons. The protection previously afforded is specifically reproduced in Subsection (7). The right hon. and gallant Gentlemar seeks to add and shall not exercise any undue discrimination against any person or class of persons. and I should have thought that, as a matter of course, the words "show undue preference" would have covered the converse case. If you exercise any undue discrimination against any person, you are offending against the express words of Subsection (7). While I do not think they add anything to what is already in the Bill, I am quite prepared to accept them. I am the more ready to do that because there is some slight doubt raised by the case of the Attorney-General v. Wimbledon Corporation, decided early in the war. The second Amendment has technically not been moved, but as it has been argued, perhaps I may say that we cannot possibly accept it. We reproduce in this Bill the relative provisions of the Electric Lighting (Clauses) Act, 1899, the Schedue to which has hitherto regulated the right of consumers to a supply of electricity. Section 27 of the Schedule is specifically incorporated in this Bill, and the consumer, under the terms of this Bill has the same right to demand a supply of electricity as he had under the terms of the 1899 Act.

Lieut.-Colonel Elliot

Does it cover non-statutory consumers as well?

The Solicitor-General

It distinguishes between statutory and non-statutory consumers and gives statutory consumers, that is, consumers occupying premises within 50 yards of a supply main, a right to demand a supply, and creates a penalising provision against the area board which now supplants the statutory undertaking if it does not supply them. We have extended the right of the statutory consumer in this way. Hitherto the statutory consumer was one who occupied premises within 50 yards of a distribution main, and it had to be laid down under the request of any six persons along a street. We have widened the expression "street" to include any other route. Thus the area board is obliged to lay down a distribution main along routes or ways— unidentified streets, shall I say ? That was an obligation statutory undertakings were not under in the terms of the 1899 Act. We have placed the area boards under that obligation. In point of fact, the statutory consumer is in a better position than hitherto. The second Amendment seems to extend that point further and to cover the hitherto non-statutory consumer. We see no case for that. We leave the statutory consumer in the same position as before, subject to the extended right to which I have referred. We cannot see the case for covering everybody who, hitherto, would not have ranked as a statutory consumer.

10. a.m.

Lieut.-Colonel Elliot

We are grateful to the Government for accepting the first Amendment. As the learned Solicitor-General has pointed out, it is from everybody's point of view a good thing that the first Amendment is accepted. As regards the second Amendment, it would be ungracious to press the Government unduly, but Section 20 of the Electric Lighting (Clauses) Act was intended to cover the non-statutory consumer and we thought that some provision for the nonstatutory consumer should be included here. We shall look at the Solicitor-General's remarks again, and all the more so because of his drawing our attention to this provision for the right of demand, not only along streets, but also along routes. Does the learned Solicitor-General mean routes such as have in the part of the country where I live? Over the border there are routes far from any habitable place. Does this mean that anybody with a bridle path or field route has the right to have a main laid under it? I think the Solicitor-General will find he has accepted a far-reaching responsibility, but we are grateful, and thank him for the concession that is made.

Amendment agreed to.