HC Deb 25 June 1947 vol 439 cc447-56

3.53 p.m.

Colonel Clarke (East Grinstead)

I beg to move, in page 54, line 27, at the end, to insert: but so however that taking one year with another the terms and conditions shall be such as will not result in a financial loss to the Central Authority or the Area Board as the case may be. This Clause deals with the supply of electric current to railways which, we understand, are about to be nationalised, and I would like, first, to point out what is the present position. Under Section 4 of the Electricity (Supply) Act, 1935, which, of course, is to be repealed by this Bill, it is required that while bulk supplies of electricity from the Central Electricity Board to the railways may be given at special rates, such arrangements must comply with a rule, and that rule is that they must not result in financial loss to the Central Electricity Board. This Amendment will ensure that that rule remains in force, even though the law is repealed. We feel that in future, in transactions between a nationalised electricity supply and a nationalised railway system, there may be temptation for an unsuccessful transport system to get a hidden subsidy from a successful electricity board. It is essential that the financial success or otherwise of all these nationalised undertakings should be clear to the country. It is not a matter of party politics. Under private enterprise, if a -company fails to act with financial prudence, and if it incurs financial losses, sooner or later it becomes bankrupt. That will not happen with a national monopoly. There is a danger that there will be continual internal financial bleeding, if I may so call it, which will result in the slow debility of the economic state of the country. The principle of this Amendment is already laid down in Section 4 of the Electricity (Supply) Act, 1935, which forbids the Central Electricity Board contracting a supply to any railway company unless they satisfy the electricity commissioners that such supply will not result in financial loss to the Board. I believe this Amendment is' necessary and will be helpful.

Mr. Nigel Birch (Flint)

I beg to second the Amendment.

The Minister of Fuel and Power (Mr. Shinwell)

I am unable to find any point of difference between the Opposition and myself on this issue. As I said during the Committee proceedings, it is not our intention to provide for subsidies, whether concealed or otherwise, but I thought this matter might be arranged by regulation rather than by making a specific stipulation in the Bill. However, as there appears to be no objection to the principle embodied in this Amendment and the succeeding Amendment, if hon. Members will leave the matter with me I will see whether I can find a suitable form of words and arrange the matter in another place. The right hon. Member for Southport (Mr. R. S. Hudson) will observe how anxious I am to make concessions at this early stage in our proceedings today, and no doubt he will respond by assisting me to expedite the proceedings.

Mr. R. S. Hudson (Southport)

We are obliged to the right hon. Gentleman. I do not think he can complain about the expedition with which we concluded our proceedings in the early hours of this morning. There is one question I would like to ask. There are three Amendments which, to some extent, overlap. They are, the Amendment which we are at present considering, and the Amendments in page 54, line 30, to leave out from "used," to end of line 34, and insert: also for the lighting of vehicles, but shall not be used for any other purpose: Provided that, with the consent of the Electricity Commissioners, and subject to such limitations and conditions, if any, as they may prescribe either generally or in any particular case, the electricity supplied under this Section to a railway company at any point may be used partly for such purposes as aforesaid and partly for other purposes of the undertaking of the owners of the railway, being purposes for which such owners are entitled to use electricity, but the Electricity Commissioners shall not in any case give any such consent until notice of the application for the consent has been given by advertisement or otherwise in such manner as the Electricity Commissioners may direct, and an opportunity has been given to any person who appears to the Minister to be affected of making representations thereon"; and in page 55, line 11, at end, insert: (7) In exercising their functions under this Section the Minister and the Secretary of State shall ensure that Electricity Boards shall not supply electricity to any railway undertaking otherwise than upon terms and conditions designed to ensure that, taking one year with another, such supply shall not have the effect of subsidising the railway undertakings at the expense of other consumers, nor result in a financial loss to any Electricity Board. I think they all cover a variation of the same idea. I would like to know whether the assurance which the right hon. Gentleman has just given covers all three Amendments, or whether he would prefer to have a short discussion on the other two.

Mr. Shinwell

What I said related to the Amendment which has been moved by the hon. and gallant Member for East Grinstead (Colonel Clarke) and the Amendment to page 55, line 11. The other Amendment, to page 54, line 30, is not so covered

Mr. Hobson (Wembley, North)

In view of the Minister's statement that his remarks apply also to the Amendment in Page 55'line11 I feel constrained to make one or two observations. I do not think it is sufficiently realised that while railway companies possess power stations which are not statutory undertakings, regulations have been made by the Electricity Commissioners with regard to the provision and financing of new turbine sets, whereby the frequency has been standardised at 50 cycles as against 33⅓ cycles, and a situation may arise whereby the railway companies can, and do, feed back to the grid. Therefore, it would appear that it might be of advantage to the area boards to give a specially reduced tariff in a given area in order to have a similar agreement with a railway generating station in another area. It is one of the difficulties which are bound to arise, because under the Bill we have excluded all statutory undertakings, irrespective of the fact that they are standardising with regard to frequency. Therefore, I think the Minister is limiting and committing himself to an agreement which, in certain circumstances, will be disadvantageous to the electricity consumer.

Colonel Clarke

In view of the satisfactory assurance that the Minister has given, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

4/' p.m.

Sir Arnold Gridley (Stockport)

I beg to move, in page 54, line 30, to leave out from "used," to the end of line 34, and to insert: also for the lighting of vehicles, but shall not be used for any other purpose: Provided that, with the consent of the Electricity Commissioners, and subject to such limitations and conditions, if any, as they may prescribe either generally or in any particular case, the electricity supplied under this section to a railway company at any point may be used partly for such purposes as aforesaid and partly for other purposes of the undertaking of the owners of the railway, being purposes for which such owners are entitled to use electricity, but the Electricity Commissioners shall not in any case give any such consent until notice of the application for the consent has been given by advertisement or otherwise in such manner as the Electricity Commissioners may direct, and an opportunity has been given to any person who appears to the Minister to be affected of making representations thereon. Subsection (3) applies to electricity supplied to any railway undertaking for the purpose of haulage or traction, and it states that a supply may be provided on the same' terms and conditions for any other purpose. I wish to call attention to the width of those words any other purpose. In the Standing Committee I pointed out this matter, but I was incorrectly reported in HANSARD as saying that the current might be supplied for 4d. per unit instead of 4d. The difference was in one of those "damned dots" that a famous statesman referred to, and that are capable of creating a great deal of misunderstanding. That price may be satisfactory for traction and haulage purposes, but if the railway undertakers are allowed to use electricity at the same price in their hotels, those hotels will be put into a position of undue preference in competition with thousands of other hotels in this country. That would be most unfair.

It may be said that, under the existing regulations which permit the railways to use the supply for certain purposes, they already have power to use it in their hotels, but we are now dealing with a state of affairs which may shortly result in a great acceleration of railway electrification. We all hope that it might do so and that before many years are past most of the railways will be electrically operated. There will be a far greater number of railway hotels in that case which might be given an unduly cheap supply of electricity, if the provisions of the Subsection were allowed to stand. For that reason the first part of the Amendment proposes to leave out certain words. In order not to make the Subsection too restrictive we add a proviso which widens the possible use of the Clause. The wording of the proviso is precisely similar to the existing provisions of the Clause regarding railway supplies.

I do not consider that the proviso is unreasonable in saying that if supplies are given by the Area Board at 4d. or 5d. per unit, that supply should be allowed to be used in such places as railway workshops, locomotive shops and shunting yards. I would not like to see any restriction of that kind, but that must be left for the suppliers of the current to agree about with the Central Board. In the absence of the Electricity Commission we have worded the proviso so as to leave the position very much as it is to-day. If the Commission are to go, there ought to be some other means of referring provisions to some body which would be able to settle any difference of view as to the terms and conditions upon which electricity would be supplied for traction purposes, and for any other purpose.

Mr. Bowles (Nuneaton)

When the hon. Gentleman was referring to the report of his speech in HANSARD, I think he talked about some Labour leader who had spoken about "damned dots."

Lieut.-Colonel Elliot (Scottish Universities)

I think my hon. Friend said "an English statesman."

Mr. Bowles

I thought he said a Labour statesman.

Colonel Clarke

I beg to second the Amendment.

Mr. Hobson

The Amendment would make the situation worse than it is at the moment for traction and lighting. What about the current required for heating and the compressing of brakes? Is it to be measured? Are we to have regulations on such matters as that? When the hon. Member was dealing with special tariff for hotels he qualified it in relation to the provision of electrical energy for railway workshops. Railways already have current there on similar terms as for traction. If we are to make regulations every time, those who profess an abhorrence for regulations, will find the industry saddled with a lot of red tape. So far as special terms are concerned, they are common at all times. It is unfair to read into the Bill that railway hotels are to have some kind of preferential tariff.

Sir A. Gridley

I do not think that the hon. Gentleman can have read the proviso, which leaves it open for the current to be used partly for such purposes as aforesaid and partly for other purposes of the undertaking.

The Solicitor-General (Sir Frank Soskice)

In view of the assurance which my right hon. Friend gave a few moments ago I think the hon. Gentleman who moved the Amendment will agree that some, at any rate, of the point of the Amendment is taken away. What remains really is that he would seek to substitute by the Amendment, and in particular by the proviso, the consent of the Electricity Commissioners for the consent of the Central Authority. If the supply is to be used for any other purpose than haulage and traction Subsection (3) lays down that it must be with the approval of the Central Authority. The hon. Gentleman would say that for "central authority" must be substituted "Electricity Commissioners." That is the effect of the proviso. I agree that it also sets up certain machinery. The long and the short of it is that the hon. Gentleman seeks to change one consenting authority for another. I would join issue with him on that proposal, but before I give reasons for doing so I would say that we think that the words on the same terms and conditions should be reconsidered. Both the hon. Gentleman and my hon. Friend, impliedly in what they said, pointed out the restrictive character of those words. We want to look at those words to see whether we cannot give the Central Authority some more discretion with regard to the terms and conditions which it authorises. That, I think, would meet the point made by my hon. Friend.

With regard to the question whether it should be the Central Authority or the Electricity Commissioners, we feel that we must adhere to the position we have taken up. After all, what are the circumstances? The circumstances are that the Central Authority has imposed upon it, under Clause I (1, c) the duty of coordinating the distribution of electricity by area boards, and exercising a general control. Surely, this matter is one which falls plumb within the scope of that duty? Secondly, it is also under a duty, by Clause 1 (6, c), of avoiding any undue preference. My right hon. Friend has said that he does not intend that there should be anything in the nature of a secret subsidy to railways. In addition to that, then, the Central Authority is under a specific duty to see that there is no undue preference shown to any particular type of consumer. Railway companies using current for purposes other than haulage and traction would come within the scope of that provision. Therefore, we think that the appropriate authority in whom to vest the power of giving or refusing consent, or specifying the terms upon which the current may be used for other than haulage or traction purposes, should be, as it is now under the Bill, the Central Authority.

It is, I think, relevant to remember what has been said earlier in cur discussions on this Bill on the question of financing. We are no longer dealing, or will no longer be dealing when this Bill becomes law, with the position in which one has a number of separate undertakers, each watching out, quite naturally, in order to preserve its own area. We have substituted the area boards; and we have substituted for the principle of individual undertakers the overriding principle that what we are really striving at is to improve the sufficiency of supply to consumers. That is a change; and that does, of course, take away a good deal of the reason for the provisions which the hon. Member for Stockport (Sir A. Gridley) has embodied in this Amendment, and which previously found their place in Section 4 {2) of the Electricity Supply Act, 1935. I would say, in passing, that the hon Member for Stockport was not quite accurate in saying that the wording of that Section was identical with the wording of this Amendment. There is a noticeable difference. Section 4 of that Act prescribed the Minister of Transport as the person who should give consent. The hon. Member has substituted the Electricity Commissioners. However, that is by the way.

As has already been said during our Debates, it is not necessarily thought that the area boards should run, year in and year out, without' any loss, so long as the overall undertaking which is under the control of the Central Authority, taking an overall view of it, balances its budget. Therefore, a good deel of the reason which made it necessary, under Section 4 of the 1935 Act, to set up the rather elaborate machinery which was there set up, has gone. In substituting the Central Authority, charged with the duties in Clause I to which I have referred—that is to say, the duty of exercising an overall co-ordinating control, and the duty of seeing that there is no undue preference extended to any particular consumer—as the authority which is to have the power of giving or refusing consent to the supply of current being used for other than haulage and traction purposes, we feel we have taken the right course.

Therefore, in so far as the Amendment seeks to substitute the Electricity Commissioners for that Authority, we must ask the House to reject the Amendment. But, as I said earlier, we might be able to reconsider the words "on the same terms and conditions," to meet partly the point made by the hon. Member for Stockport and partly the point made by my hon. Friend, that there should perhaps be some more flexibility, more scope for discretion in the terms upon which the Central Authority could give or withhold its consent to the user by railway companies of current for other than haulage and traction purposes. That is, however, set against the background that my right hon. Friend has said, which has to be considered, that there must be no hidden subsidy veiled in the terms upon which railway companies are allowed to avail themselves of electricity.

4.15 p.m.

Sir A. Gridley

With the consent of the House, perhaps I might put a question to the learned Solicitor-General. I did not, of course, pretend that the Central Authority should decide the terms upon which the railway companies should get their current. If I understand Clause 43(I) correctly, is it not the fact that the Central Authority itself has the duty of providing these supplies to railway undertakings? If that be so—and I think it is—they are to be the suppliers. Surely, they cannot then state the terms of the supply? If there should be any difference between them and the railway undertakings there must be some means of referring the difference to arbitration. It is quite true that in Subsection (2) the terms and conditions for haulage and traction purposes are to be determined by regulations made by the Minister and the Minister of Transport jointly. But, with all respect to those two Ministers, I doubt very much whether they know a sufficient amount about the cost of producing and distributing electricity to be able to decide what are the proper terms to be agreed between them, and I should be very sorry if the two Ministers differed because of that. The point of my question is: Is it not the fact that the Central Authority is responsible for supplying current to railways? That being so, surely they should not be able to decide what the terms should be.

Colonel Clarke rose—

Mr. Speaker

The hon. and gallant Member cannot now speak. He has forfeited his right by seconding the Amendment.

Amendment negatived.