GAS AND ELECTRICITY

HC Deb 09 November 1954 vol 532 cc1044-156

3.35 p.m.

The Minister of Fuel and Power (Mr. Geoffrey Lloyd)

I beg to move, That this House takes note of the latest Annual Reports and Statements of Account of the Gas and Electricity Industries. In our recent coal debate I drew attention to the great increase that has taken place this year in coal consumption, following on the increased pace of industrial expansion. The same is true of gas and electricity, only more so. In the first half of this year industrial consumption of gas has increased by 8 per cent. overall, and some boards have had increases in the industrial areas ranging from 10 per cent. to 15 per cent, In the case of electricity, the consumption of electricity for industrial purposes has been running recently at a rate 14 per cent. higher than in the same period last year.

This, of course, follows from the record levels of industrial activity. Generally, industry is running at a higher level than last year, and some of the big industries —for example, motor manufacturing and chemicals—are putting up really spectacular records. In fact, it is true to say that there is a new atmosphere of hope and confidence in the country, and there is a feeling that, after long years of weary grind in which we seemed only just able to keep our heads above water, there is now an opportunity to make real progress and to get real benefits for the country out of it.

This feeling was crystallised by my right hon. Friend the Chancellor of the Exchequer when he set before us the target of doubling the standard of living in a generation. In my comments today on the Annual Reports of the gas and electricity industries and on the present state of the industries, I should dwell particularly upon the contributions that these industries may be expected to make to this national objective, but first I want to make a few general observations.

This afternoon we are considering not only two great industries, but two great nationalised industries. I think I should not be far off the mark in saying that in recent years there has been a significant change in the attitude to nationalisation in various quarters. Of course, I cannot speak on behalf of the Opposition but, even there, I sense a change. It is natural. After all, nationalisation was to them once a dream and now it is a fact in certain industries.

Would I be going too far if I said there was not quite the same general enthusiasm for nationalisation as there has been in the past? [HON. MEMBERS: "No."] Then perhaps I had better say that the honeymoon is over. With regard to the middle sections of opinion, putting it moderately I think it would be true to say that there is today a greater sense of the dangers of monopoly, and a good deal less confidence that those dangers can be avoided simply because the monopoly is publicly owned.

Now I come to the attitude of the Conservative Party. This has been summed up by my right hon. Friend the Prime Minister, when he said—[An HON. MEMBER: "Which year?"] In the debate on the Address in 1953. He said: We abhor the fallacy, for such it is, of nationalisation for nationalisation's sake. But where we are preserving it, as in the coal mines, the railways, air traffic, gas and electricity, we have done and are doing our utmost to make a success of it, even though this may somewhat mar the symmetry of party recrimination."—[OFFICIAL REPORT, 3rd November, 1953; Vol. 520, c. 23.] How have we carried out this policy in relation to gas and electricity? I would remind the House that our general economic policy has been first to control inflation and then to free the economy and encourage healthy expansion. We have done this not only in relation to private industry, but also in regard to gas and electricity. Thus I have approved long-term expansion plans for both industries, after considering them in relation to each other and in the light of the prospects of the national economy and of the policy of my right hon. Friend the Chancellor of the Exchequer.

For example, I have agreed with the Gas Council a figure for capital expenditure this year of about £61 million, which is rather more than double the rate of expenditure five years ago. As to electricity, I can make the point without worrying the House with masses of figures by quoting from the Press conference that was given by Lord Citrine on the publication of the Annual Report.

A questioner said to him: You have not made this year your usual complaint about capital development. Lord Citrine, after mentioning the slowing up effect of the past shortages of steel, replied: Next year, I think we will be fairly lucky if we get the 1,600,000 kilowatts. We have substantial capital authorisation for that and since our last meeting here, the Government have authorised us for 1959, 1,950,000 kilowatts, which is bigger than we have ever had before, so I am not making any complaints at the moment. Secondly, the Government have decided to encourage these two nationalised industries to compete with each other as actively as possible and with the oil industry. This is a natural corrective to the disadvantages of monopoly and we should make full use of it. These industries, moreover, are historically competitive and we should take full advantage of that fact. I have, therefore, restored to them their freedom to advertise and to develop fully their promotional and service facilities. I have been glad to see in the columns of the Press recently that people going into new houses have been pleased and surprised at the way in which they have been approached by both industries, offering their services in competition.

I come now to a rather difficult subject. The Government want to encourage the boards to conduct their businesses with enterprise and, in proper cases, with a spirit of adventure. This is specially important in connection with the better use of coal and in finding other supplements for coal. But let us look at the difficulties which are inherent in the position of these boards as compared with great private companies.

First, they have statutory responsibilities and they make detailed reports to me, which I lay before the House and on which we have debates as we have today. Next Session we hope that when the new Select Committee comes into being the reports will be subjected to even more detailed examination, with a view to our having even more interesting debates in the future. Then the boards are checked by consumers' councils with statutory powers. They are also subject to directions from me as Minister of Fuel and Power, and lastly, the members of the boards are appointed by me for a period not exceeding five years.

All this is a necessary part of the system of nationalisation and of public accountability and I am not objecting to it, but are we not asking rather a lot of these men when we expect them, in these circumstances, to be enterprising and venturesome? Is there not a tremendous danger that instead of looking ahead they will be looking over their shoulder? As I want to be helpful, I want to make it clear, as Minister of Fuel and Power, that it is in the national interest that these boards should be enterprising and indeed venturesome. I shall give full weight to this in my relations with the boards and in appointing members to the boards. Further, I recognise that not every venture can be successful. There are bound to be mistakes. In such cases, when decisions have been taken on sound and enterprising lines, I shall consider it my duty to defend the boards.

Mr. Gerald Nabarro (Kidderminster)

My right hon. Friend has referred at great length to all the disabilities under which the senior and executive control of the nationalised industries are alleged to labour Would he not put the matter in correct perspective by saying that they have the inestimable advantage of raising the whole of their vast capital with Treasury guarantee and on preferential terms which such competitors as the oil industry, of course, do not enjoy?

Mr. Lloyd

I am grateful to my hon. Friend, but I am trying to deal constructively—

Mr. Philip Noel-Baker (Derby, South)

Would not the right hon. Gentleman agree that what the hon. Member for Kidderminster (Mr. Nabarro) has said illustrates one of the very greatest advantages of nationalisation and that without nationalisation some of these industries, particularly the coal industry, might have found it extremely difficult to secure the capital which they need?

Mr. Lloyd

I hope the House will allow me to continue, because I am trying to put a connected case.

I was saying that in the very nature of the position of the nationalised boards we cannot give them the same flexibility and freedom as private enterprise enjoys. But, in part, the difficulty is psychological and I believe that if hon. Members will support me in the line which I have taken this afternoon we can do something to encourage the boards to be enterprising and venturesome.

The contributions which the gas and electricity industries can make to increasing the standard of living of the country fall under three heads: first, their own efficiency as industries; secondly, in regard to services in the home; and, thirdly, the contribution which they can make to the efficiency of industry as a whole. By their very nature as secondary fuel industries, the most important factor in their own efficiency is their economical use of primary fuel.

In this field, these two industries, both before and since nationalisation, have a fine record. At present, with the other big industries such as steel, sugar refining and chemicals, they occupy a leading position. Last year, the electricity industry saved 1 million tons of coal as compared with the previous year, which is the largest saving they have ever made, and the gas industry saved 250,000 tons.

When the Government took office I met both the British Electricity Authority and the Gas Council and asked them to make all possible administrative economies. Since then a great deal of special work has been done by the various boards and they have conducted investigations in various ways into their organisations and methods. Hon. Members may be interested in the detailed comparisons of the relation of administrative costs to output in the various Reports. Favourable progress has been made, but this is a matter on which firm pressure should continue to be maintained.

On the broader question of the organisation and efficiency of the British Electricity Authority, the House will recollect that the Government came recently to the conclusion that the time was ripe to set up an independent committee under Sir Edwin Herbert. The work of that committee is now proceeding. Gas was nationalised later and, in due course, we shall appoint a similar committee for that industry as well.

Turning to the contribution to the standard of living that has been made by services in the home, may I say that I am a firm believer in the help that gas and electricity can give in raising the real standard of life of the country by the amenities they can give in the home. I am not so much referring to heating as to the wide range of automatic appliances that are now becoming available. The House may be a little surprised to learn that I am a firm believer in washing machines.

Members of Parliament know a great deal about washing day because it is one of the best days for canvassing, as one can be sure of talking to the ladies when their husbands are not around. I can remember some very pleasant conversations by the copper in Birmingham, 25 years ago. The activity and work done by women round the coppers is, broadly speaking, still considerable, but I think there is a change just over the horizon and I should like to tell the House why. Five years ago there were only 300 washing machines in use in the country. Today, there are 2 million.

Mr. Noel-Baker

Three hundred?

Mr. Lloyd

I am sorry, 300,000 five years ago and 2 million today, that is, one for every six or seven homes in the country. From my inquiries in Birmingham my information is that they are not yet being widely used by the workers. Only a few of the higher paid workers are beginning to go in for them, but I think the time will come when more will be used. More women are going out to work these days than used to be the case, and we want a rising standard of living not only for the men but for the women as well.

Mr. James Hudson (Ealing, North)

There will not be room for them in the smaller houses the Government are building.

Mr. Lloyd

I do not think that that is quite relevant.

Lastly, and most important, most fundamental, is the contribution which these two industries can make to the increasing productivity of industry in general. The rôle of electricity in production is now a commonplace; practically every machine tool is driven by it. I am told that one can almost measure the increase of productivity by the increase in the consumption of electricity per head of the workers in the factories.

Gas also possesses a wide variety of advantages for many refined heat processes, particularly in the metal industry. Both lend themselves to automatic control, which is important not only from the point of view of increasing the quantity of products but, as time goes on, is becoming even more important from the point of view of increasing their quality.

One could sum up by saying that at present coal is carrying the massive fuel load of the country as a whole, but that gas and electricity form, so to speak, the cutting edge by which industry advances its productivity. That, no doubt, is the reason why less and less coal—proportionately—is being used in the raw state by industry and more and moreproportionately—is being used in the form of gas and electricity.

I should like to pass in review—first with regard to electricity and then gas—some of the main issues affecting the fuel policy of the Government. This is not only to get more coal, but to use it better and to supplement it with other fuels as may be necessary to support the expansion of the economy and increase productivity at the fastest possible rate.

First, I wish to say a word about our oldest and largest industry, agriculture. The House is familiar with the need for more electricity on the farm, both from the points of view of production and of maintaining a contented labour force on the land. When the Government first came into office, in difficult circumstances, we even then eased capital restrictions on investment. Last year, in improved conditions, and with the agree-of the Chancellor of the Exchequer, I announced a notable increase in the amount of money which will be spent on this work. I also approached the British Electricity Authority and told it of the change of policy and said that the Government desired a real drive on rural electrification.

The Authority and boards have responded and, last year, brought electricity to 13,000 more farms—the largest increase ever recorded in a single year. They now plan to carry on this good work on the basis of a five-year programme and intend to spend £50 million with the object, at the end of that period, of bringing electricity to 70 per cent. of farms and 80 per cent. of rural houses.

Before I come to the question of atomic power, I wish to say a word about oil. I have kept the House in touch with our plans to bring a new flexibility into the fuel supply position of the British Electricity Authority by converting a number of power stations to dual firing so that they may burn either coal or oil. That policy is new in Britain, but it is encouraging to find that it has already been followed and is being followed in other countries and is not at all novel technically. There is an interesting parallel on the eastern seaboard of the United States where output and consumption of electricity happen to be roughly comparable with that of this country.

In the last six years electricity output in that region has increased so much that the coal requirements would have gone up from 37 million tons to 44 million tons—that is an increase of 7 million tons of coal. But in that region one-third of the thermal power stations are equipped for dual firing and, in fact, the use of coal has not increased at all; the whole of the increase has been effected by using more fuel oil—that is, to the tune of 7 million tons of coal equivalent. The oil, incidentally, is imported from Venezuela and the Dutch West Indies.

Mr. Albert Roberts (Normanton)

Would the right hon. Gentleman say what is the proposed maximum consumption of oil in generating stations?

Mr. Lloyd

Present plans are to convert power stations to dual firing so that they could burn either coal or oil up to a figure of 10 million tons a year.

Mr. Noel-Baker

I am sorry to interrupt again, but is the right hon. Gentleman considering small oil engine stations for remote rural areas?

Mr. Lloyd

That is quite a different problem; what I am considering is the question of the massive use of oil as a supplement at power stations owing to the shortage of coal.

I now turn to the question of atomic energy. First, I think it is appropriate to recall that the tremendous industrial developments in atomic energy all derive from the pure scientific work done by Sir J. J. Thomson, Master of Trinity, and Lord Rutherford in the Cavendish Laboratories at Cambridge. It is important for us to realise that, so far as anyone can foresee at present, in order to receive atomic energy in the future it will be necessary for the homes and factories of this country to be connected with the ordinary electricity supply system. That is the only way in which they will be able to receive it. Thus the expansion of the electricity supply system, and all the work that is being done on the grid and the super grid are, in fact, preparing the way for atomic power.

As this subject is so new, and, indeed, still so mysterious, it might be helpful if I attempted to clear our minds a little on just exactly what nuclear power can do and what it cannot do for the electricity supply system. At present, we have the coal furnace which raises the heat which makes the steam for the steam turbines which turn the generators for making electricity. In an atomic power station the only difference in principle is that the heat is provided by a nuclear furnace. Thereafter, everything is the same, and the current flows out through the ordinary transmission network. I deliberately said "in principle," because, of course, it is not really so easy as that. There are a number of practical difficulties which have to be overcome.

For example, take the difference between a nuclear furnace and an ordinary coal or oil furnace. The coal furnace, in essence, produces heat from a chemical change, namely, oxidation. A nuclear furnace produces heat from a physical change, namely, nuclear fission. The problem is to control the rate of that change and to take away the useful heat without getting the dangerous radiations. That is why at present in the experimental atomic power stations steam generation is not close-coupled with the furnace. It is not one homogeneous unit as it is in the normal power stations. It is separated, and a special substance, such as carbon dioxide, is used to transfer the heat from the nuclear furnace to special steam generation equipment. Otherwise, we should have not only nuclear water—radioactive water—and steam, but radioactive turbines as well.

Then there is the problem of nuclear fuel. Even when the pure uranium has been extracted from the ore only 7 per cent., that is less than 1 per cent. of it, is capable of the nuclear reaction. One hopes that it is typical of the rapid progress of science in this field that scientists have already found ways of turning the uranium into plutonium. That is a manmade element, not found in nature, which is capable of nuclear reaction, so that, in the end, most of the uranium can be usefully used as fuel. It is this discovery which has put the future of nuclear power into a new setting. I would only add that, mysterious as this new knowledge is to us all, and mysterious as some of the atomic installations appear—as hon. Members who have visited them will agree—I have been struck, in my discussions with the engineers of the British Electricity Authority, by the practical way, one might almost say the routine way, in which they are setting about their work in this new field.

I have told the House before that the British Electricity Authority has set up a nuclear power branch in its engineering department. I can now say that their engineers have started to attend training courses at Harwell, and that there will be a steady stream of electrical engineers attending these courses from now on. The Authority is collaborating closely with the Atomic Energy Authority, and also with the plant manufacturers, in the design of experimental nuclear power stations by making freely available all its experience regarding turbines and power station construction generally.

All this shows what powerful competition the gas industry will have to face in the future. Yet onlookers have often prophesied the end of the gas industry and have been wrong. They have been wrong because gas has fought back with entirely unexpected vigour, based on new discoveries. Gas was once saved by the discovery of the incandescent gas mantle. Again, under the leadership of Sir David Milne-Watson and Sir Harold Hartley, the industry survived the crisis of the 'thirties by its intensive concentration on the production of coke and chemical by-products.

Today, the gas industry, with my encouragement, is hard at work along several new lines. First, it is carrying on research work into the question of using inferior and cheaper coals than those now used. Secondly, it has found a successful process of making gas from fuel oil alone, without using any coal at all, and 16 new plants are being erected throughout the country. I am sure that the search for natural gas in this country is right, even though we cannot be sure of success at present.

Geophysical work and boring is going on, particularly in South Yorkshire and Lincolnshire. I am told that there are good prospects of success for moderate finds, of the magnitude of those recently discovered in Holland and Germany, but for massive quantities of natural gas it will be necessary to consider the importation of liquid methane, about which I told the House recently.

On this, I would make three points. First, the project is in its very early stages of consideration. I commend the gas industry for its enterprise in sending a technical mission so quickly to the United States of America to find out more about this new method. Secondly, it seems likely from a technical point of view that the success of the project will turn on the efficiency of the refrigerated tankers which would have to be constructed. Thirdly, the project will only be attractive to the gas industry and to this country if it makes possible markedly cheaper gas than at present, and so enables the gas industry to compete on better terms with electricity in the service of the consumer.

The House will see that the gas and electricity industries are hard at work on a wide variety of technical projects which range from the better use of coal to the momentous development of atomic power. They all aim at lessening the cost and increasing the quantity of the power available to industry. I am sure that it will all be needed, for British industry is now on the march and the motto is, "More power behind the worker."

Let me give a concrete example which I consider the best method of illustration. The most highly mechanised factory that I know is the Austin factory of the British Motor Corporation, at Birmingham. Here are the figures. Between 1939 and 1954 the use of electrical power per worker in that factory has increased by 95 per cent. In the same period the consumption of gas per worker has increased by 180 per cent., and output has trebled. I think it true that the motor industry is leading the way in intensive mechanisation. I foresee that increasingly other industries will follow this lead and that the motor industry itself will push much further along the same path.

Already there are in use the so-called transfer machines which do the job of about a score of ordinary machine tools. Not only that, but they transfer the article under production from one operation to another. The next stage will be for a score or so of these big transfer machines to be linked together in series and controlled automatically by an electronic brain. That is, in fact, already happening. The results of such developments will be far-reaching. One of them will be the continually increasing demand for electric power and automatically controllable fuels, such as gas.

Thus, as time passes, two of the dominant factors in industry in the future may come to be nuclear energy and automatic production, as complementary large-scale producers and consumers of power. Each, in its own way, would be bound up with the future of the electricity and gas industries. Together, they may prove to be a sovereign force for raising the material standards of mankind. Let us hope that in both developments it will be this country that takes the lead.

4.20 p.m.

Mr. Alfred Robens (Blyth)

We have just listened to an amazing speech by the Minister. It was one which we were very glad to hear. It was very different from the snarls and the howls from the then Opposition when we were the Government who were nationalising the industries and when we were bringing reports before the House from year to year.

Everything the Minister said about this great challenge to our economy, about the tremendous contribution that gas and electricity can make and about their ability to go into these new fields on a grand scale, has been made possibly only by the decision of the Labour Government to nationalise the industries. Had these two industries been left as they were without integration, running on their own, there would have been no rural electrification of the character mentioned by the right hon. Gentleman. Private companies refused to develop rural electrification.

Mr. Anthony Hurd (Newbury)

Nonsense.

Mr. Robens

The hon. Gentleman should wait. Later, I will produce figures to show that they did not do it, whether the hon. Gentleman says "Nonsense" or not.

I repeat that private companies refused to do rural electrification on anything like the same scale, because it did not pay. I do not complain. I merely say that the circumstances in which these industries were organised made it impossible for them economically to do anything like the task that the Minister has now excited the imagination of the House by describing.

Mr. Nabarro

Just as a matter of statistical accuracy, perhaps the right hon. Gentleman would be interested to know that on vesting day for the electricity authority, 1st April, 1948, there were 91,000 farms connected, and on 31st March, 1954, the figure had risen to 150,000. There was, therefore, more than 50 per cent. of the present scale of rural electrification on vesting day.

Mr. Robens

We shall come to some figures later which will prove that the hon. Gentleman has made an inaccurate conclusion from those statistics. He has drawn the wrong deduction. It had taken a long time to reach the stage which had been reached on vesting day. I will come to the figures and show that more progress has been made with rural electrification in the short period since nationalisation than was accomplished before under the private companies. The facts are irrefutable. I do not make this as a party political statement.

The right hon. Gentleman twitted us at the beginning of his remarks. He would have been wise not to have done that and then I should have not said this. He twitted us about having lost our enthusiasm for nationalisation. He said, "The honeymoon is over." What does he, as a bachelor, know about honeymoons? He does not know whether they are nice or not. I wonder what he meant by asking whether we felt that the honeymoon was over. Perhaps he will explain on some other occasion why he should particularly choose the honeymoon period.

The right hon. Gentleman said that he had met the electricity and gas industries when he became Minister and told them that it was important that they should cut administration costs. He would not disagree that they had been doing all they could to do that, and that the cuts did not begin when he went to Lord Citrine and his colleagues and asked them to consider the matter. The fact is that when the industries were nationalised they had to bring together all sorts of undertakings, some efficient, some very inefficient and some middling. They had a big job of organisation to do and, having got the industries together and working reasonably well, they began to make the administrative changes. Annual Report after Report shows economy in administration.

Therefore, while I support the right hon. Gentleman in urging all the time that there should be economies in administration, I would say that he must not take to himself praise for having discovered that they should be made. He should not think that all the economies were due to the fact that when he was appointed Minister he went to Lord Citrine and, presumably, to Sir Edgar Sylvester and asked them to make economies in their industries. They have been doing that the whole of the time, with great success.

We recognise that less and less coal should be used as a raw fuel. It is important that we should have a lot more coal. My hon. Friend the Member for Normanton (Mr. A. Roberts) asked whether there is to be a maximum figure for the use of oil in power stations. That reflects a feeling of anxiety—and, coming from a mining area, I understand it—as to whether the Minister's policy of pressure upon the electricity industry and other industries was likely to reach a stage when the requirements for coal would not be so great. I am sure that that is not so and that, as far as we can see ahead, the coal requirements will be for as much as the miners can dig at any time even with more manpower than they have today.

I hope that the Parliamentary Secretary will take the opportunity later to underline that statement and to make it clear that all the plans about nuclear energy and the search for natural gas, the use of oil in gas works and the use of dual-fired boilers, in no way mitigate against the continued prosperity of the coal mining industry. The coal will be required and even more manpower will be needed. I hope that the Parliamentary Secretary will say something like that, or it may be taken that there will be a smaller demand for coal. If that impression were to get among the miners it would be a bad thing.

Mr. Geoffrey Lloyd

On the last occasion when we had a coal debate I made it absolutely clear that, as far as any of us can see ahead, the country will depend completely upon the mining industry. I did not bother to repeat it today, but I welcome what the right hon. Gentleman has said.

Mr. Robens

One saw from the interjection by my hon. Friend that the anxiety was there.

It is our task today to throw the searchlight of public opinion upon these Reports. It is an impossible task. There are 26 area board reports, there is the Report of the British Electricity Authority, the Report of the Gas Council and two reports from the Minister of Fuel and Power himself. It really looks as if the mountain has produced the mouse.

There is a wealth of information in these documents. They are very well written and it is a pity that none of us has the time in this busy life to examine them in detail. The Minister should take action to interest the community at large in these documents. I do not think that it is necessary for Parliament to spend a lot more time looking through the Reports. The Minister indicated that Select Committees will be looking at some of them, and presumably they will look closely.

I see no reason why, after the Reports have been laid before Parliament, the area boards should not convene conferences of local authorities in their areas. They are the elected representatives of the people, and at the conferences they could discuss their own reports. A local government conference could deal with these matters. For instance, the Yorkshire Electricity Board Report could be considered and the conference could spend a very useful afternoon on it. Locally-elected people would be able to talk to those who are running the areas, who could receive the kind of comment and criticism which can be made locally but which cannot be made in the House. It seems to me, therefore, that the Minister might discuss with the two industries whether local authorities might be brought into the question of consumer representation and might consider the area board's reports. I know that the industries do a good deal by means of publicity, through their employees and in other ways, to bring their work to the attention of consumers.

After reading the Reports of the Gas Council and the British Electricity Authority, I would say that by any test—profitability, efficiency, their prices in relation to overall prices outside, particularly in view of the rise in the cost of their raw materials—taking any measure, any objective survey, both industries have done very well indeed. The Gas Council's Report is particularly interesting this time because it outlines in Part I the work of the first five years.

There are some interesting paragraphs which I am sure the hon. Member for Kidderminster (Mr. Nabarro) found fascinating. They prove beyond doubt, not by Labour Party statements, but by objective report from the people elected to run these industries, the value of integration. Of course they do not go into the political controversy as to whether integration should be under public or private ownership—it would not be right for them to do so—but they clearly indicate the value of integration.

I refer hon. Members to page 25 of the Gas Council's Report, where they give one instance in which a large works extension planned before vesting day was found to be unnecessary in the anew conditions, and capital charges of £33,500 a year were thus avoided. They go on to say that cancellation of contracts placed before vesting day took place to the value of £4¾ million. There was an indefinite deferment of another project which had been estimated to cost £541,000. They indicate how two authorities with adjacent areas were both about to build large gas undertakings. Vesting day came along, and immediately both of those big projects were abandoned in favour of a single large project. The direct saving was £196,000. Those are a few, presumably the outstanding, examples of the savings on the capital side which, through integration, the area boards have found it possible to make.

They were also able to close a large number of uneconomic plants. One of the great values of integration was that they were able to get busy on providing a gas grid. A large number of plants were not economic from the point of view of the price at which gas could be produced, and they were uneconomic, too, to the country because they were wasting coal instead of making the best use of it, and it is interesting to see that 192 of these enterprises, these smaller undertakings, were closed because they were uneconomical.

If we look through these pages on the progress of integration, it is remarkable to see that in the Isle of Wight one station will do the work of six, when it is completed, and will save certainly not less than £30,000 a year as a result. It is also interesting to see that two area boards, which are nameless in the Report, show that they made net capital savings as a result of integration, Board A a net capital saving of £160,000 and Board B a net capital saving of £2,848,000.

Those are remarkable figures which show the advantage of integration and the wisdom of integrating these fuel and power industries immediately after the war, when it was so necessary to build up the country's economy. The Minister has already indicated that there is a gradually improving efficiency in the use of coal in both the electricity and gas industries, with a result that several million tons of coal have been saved and are continuing to be saved.

The hon. Member for Kidderminster referred to the number of farms which have been connected with electricity, and his figure of 90,000 farms connected in April, 1948, was quite correct. It represented 32 per cent. of all farms. Where were they? They were in those rural areas nearest to the distribution point. In other words, in the further rural areas, where schemes would be more costly, the linking schemes had been left. On vesting day the most economic rural development had been done. What was left to be done was to link the remainder, and by March, 1954, 62,000 further farms had been connected.

Thus, from the time when electricity first began to be taken out to the rural areas, which was probably 40 years or more earlier to vesting day, 90,000 farms had been connected; and in the six years after vesting day 62,000 farms were connected. It is estimated in the Report that by 1963 85 per cent. of all farms will be connected. In addition, of course, hundreds of thousands of houses in rural areas will receive a supply. The suggestion in the Report is that it may well be uneconomic to connect the other 15 per cent. of the farms and that other methods will be used to provide these farms with power.

The work of these industries is placing a tremendous strain on coal production. The difficulty is not only in the quantity of coal, but also in the quality of coal. Both industries have indicated their anxieties about the coal situation. Neither the Minister nor anyone else can determine the quality of the coal to be mined. That is a natural geological fact which no one can alter. But a good deal of work can be done on research in relation to blending. That, of course, is taking place, with the National Coal Board in association with the gas and electricity industries. In my view, it is very important that a good deal more research work should be done in that direction. If not, we shall make it even more difficult for the gas and electricity industries.

After all, their function is to take coal to the consumer in a way which is better than delivering it in a sack. We are here talking about the transfer of energy from the coal, the transfer of power from the coal, and the best way to deliver that energy is obviously other than by delivering the raw material, which is wasteful, smoky and, when millions of tons are used, has a deleterious effect upon buildings and the health of the people.

This means that both the gas and electricity industries are turning to other means. The Minister interested us very greatly with his description of the use of nuclear energy. It was a graphic description which held the attention of the House and we are grateful to him for taking the time to go into what is a very complicated subject and to put it into words which were simple for all to understand—and that is not easy when we are dealing with such a highly scientific subject as nuclear energy. I appreciate what he has to say about it, but it does show that electricity will have to turn more and more to that field. One of the reasons, of course, is the problem of coal supplies.

It is said in the Report that it would probably be a decade before we have a large nuclear power station feeding into the electricity grid. Why should it take 10 years? Is it a lack of money, or is it a lack of scientists, or is it a bit of both? I know that scientific research is a very long and painful process, but I should have thought that the Government would have tried to ascertain what the bottlenecks were. I am a little surprised to think it should be 10 years before we shall be able to build a power station which will use nuclear energy to feed electricity into the grid.

If we are to take 10 years, the Americans will beat us hands down, because they will do it more quickly than that. I was in the United States not very long ago and I was very interested in the development taking place there. I came away with the impression that we should beat the Americans in this field. It is important for our export trade, and for our prestige as a great industrial nation, that we should be the first nation to feed electricity from a nuclear power station into the grid. Ten years is too long. If it is lack of money, then money should be provided; if it is a matter of scientists and experts, then the Minister must move the Ministry of Education to see that appropriate technical education is provided soon enough.

There are many young people who, given the opportunities of technical education, ought to be entering this field and are willing to do so. Therefore, I hope the Minister will take this matter very seriously. We cannot wait for the United States to beat us. We have first-class people and it is one of the things that could help this country enormously in our export drive and add to our industrial prestige abroad. Unless we can do it in much quicker time than 10 years, we shall be beaten to it and there is no need for that to happen.

I agree with the Minister that the search for natural gas is right. I see that the Gas Council has been prepared to put £1 million on one side to spend on this project. If it does not find natural gas and loses that £1 million there will be no grumbles from this side of the House. We shall not adopt the attitude adopted by hon. Gentlemen opposite when we tried to institute great developments schemes to do with food from overseas for example. We shall not grumble if it fails because of circumstances which cannot be foreseen. We shall back the Minister, although he will probably be stabbed in the back by some of his hon. Friends.

This £1 million is well worth spending. It really looks as though some of the borings have been encouraging. We would like the Parliamentary Secretary to tell us whether there is any more to be said about what is being done in the Ashdown Forest area. According to the Report, the drillings have shown some gas at various depths—they are only about half way down to the limit of boring—but as this Report was published a considerable time ago the Parliamentary Secretary may be able to tell us whether further borings have proved more successful.

Does the Minister believe that sufficient money is being spent on research in these two industries? I have just had a glance through the accounts, and I admit I have only taken these figures out of accounts headed "Consumer Services." These show that the gas industry spent directly —and I have taken both the area boards' accounts and the Gas Council's accounts —£229,000, in round figures, on research, but spent £914,500 on publicity. The electricity industry spends £242,900 on research and £968,000 on publicity.

Have the Reports been wrongly printed and these figures put in the wrong columns? How much of the money which is spent on publicity is of value to the consumer? How much is just reckless competition between the two industries? I must take up the complaint with the Minister. If he will refer to the Electricity Report presented by his Department, he will see that he says, at the bottom of page 5: Consumers should be encouraged to develop the use of electricity in such a way as to create an economic load; I agree with that— it was therefore agreed by the Minister after discussions with the industry that the former restrictions on publicity and advertising which the industry had accepted were no longer appropriate and should cease to apply. If he had asked me about this before he went to see them, I would have told him they had been straining at the leash to get off the restrictions we placed upon them. As one who had a small committee which was attended by friends from both industries, I spent some time on this. Quite frankly, you can get advertising mania and it is contagious. The gas industry spends nearly £1 million and the electricity industry will spend nearly £1 million. Mark my words, if the electricity industry next year spends £1½ million the gas industry will do the same.

I believe that publicity and information are very important. I believe it is necessary to spend money on indicating to consumers the services that can be rendered and I agree with the Minister we should do all we can to lighten the housewives' burden in the home. But the manufacturers come into this, the people who make washing machines and carpet cleaners and things of that kind. They are spending enormous sums of money in advertising and I am not sure it is necessary for money belonging to nationalised industries, which are for the purpose of providing the consumer with their products to be used, to sell privately manufactured goods. That is the manufacturers' task and they do it very well.

I hope that the Minister will look into the question of advertising. In the Minister's Report on the gas industry he says, on page 5: Following discussions with the Gas Council the Minister agreed that the former restrictions on publicity and advertising which the industry had accepted were no longer appropriate and should cease to apply. In all this the poor solid fuel industries, with nothing like the money which these two giants have, are trailing along levying a penny a ton on what the coal merchants sell to keep up with this fantastic chasing of customers.

I agree there should be consumer choice, but I do not agree that there should be senseless and wasteful competition, or wasteful publicity and advertising. I am satisfied that in this case, because of the lack of a co-ordinated fuel and power policy which the Government have not really faced—and there are many difficulties about it—these two giant bodies are behaving in exactly the same way as they were before vesting day. These industries are publicly-owned, and they are the instruments for developing the economy of the country. There must be a change of mind on the part of the people who are running these industries, so that they should understand that they are part of a service to the community.

It is not now a question of senseless competition between gas or electricity, but within the range of consumers' freedom of choice there is an economical way of dealing with fuel and power. I suggest to the Minister that he might give consideration to the consumers in this matter. Why is it necessary to have all the various electricity and gas showrooms, all staffed with highly efficient people, all brightly lit, and so on, but all puzzling, instead of helping, the consumer?

The housewife goes to the electricity showrooms, where she is assured that she really will be best served by certain appliances. She goes to the gas showroom, where she is shown a similar type of instrument, and is again assured by charming gentlemen that that is the appliance she needs. Against that, the position of the housewife may be expressed like this, "I live in a certain place, rural, urban or highly industrial. What is the best and the most economical instrument for me to use for the purpose for which I require it?" It is the answer to that question which she should be given, and not the quick-fire salesmanship which she so often receives.

The right hon. Gentleman might consult the industries—I am not saying that he should impose it upon them—to see whether they could not give a very much better advice service to consumers if their gas and electricity showrooms were amalgamated, and if the staff were prepared to give service to the community instead of slick salesmanship.

Mr. Peter Roberts (Sheffield, Heeley)

Is there not a Coal Utilisation Council doing practically the same thing?

Mr. Robens

I have already mentioned the Coal Utilisation Council, and I have said that it has very little money in comparison with these two giants.

I do not want to put too much on the shoulders of the right hon. Gentleman, but, once the gas and electricity showrooms are amalgamated, we must do something about solid fuel appliances. If the right hon. Gentleman went along now to an electricity showroom, and argued for solid fuel against electricity, he would be thrown out on his ear; and I do not want that to happen to him.

We must take this development in easy stages, but, once we have the gas and electricity industries using the same showrooms which are staffed with first-class salesmen, it seems to me that something will have been accomplished for the consumer's benefit. Let us have competition, information and publicity, but let us also have advice and other services for the consumer, which are more important than some of the advertising we see in the newspapers. Therefore, I should like to see these figures reversed—£900,000 on research in the gas industry and only £200,000 on publicity, and, in the case of electricity, nearly £1 million spent on research and only a quarter of a million on publicity.

I hope that the right hon. Gentleman, when he speaks to the chairmen of these two industries, will take up these matters with them; but they will, no doubt, read HANSARD tomorrow and will probably ask the right hon. Gentleman what he himself thinks about it. I hope he will be as courageous as he has been today in describing the benefits of nationalisation, in taking one step further, and, taking no notice of the deep-voiced cheering from his hon. Friend the Member for Kidderminster, go on and do a good job. If he does he will find that we shall give him plenty of cheers on our side, so that he will not miss those from his own back benchers.

There is another small point which I must mention, and it concerns the rather interesting paragraph in the Gas Council's Report which says that the Council is supporting the British Standards Institution in trying to standardise many of its fittings, and so on, and that it is working in liaison with other nationalised industries in trying to standardise the stores in common use between those industries. That is a really fine piece of work. Anyone who has studied production in America, where they get enormous productivity and a cheaper end-product, despite higher wages, because of the enormous through-put, knows that it arises largely because of the large orders which can be given to manufacturers.

There is now an opportunity for cooperation between the nationalised industries and the manufacturers of those various commodities, whatever they may be, which are in common use between them, and of which they are very large buyers, to achieve further economy and efficiency by standardisation. They could move a step further and integrate some of the buying of the things in common use. I say that because it seems well worth considering whether bulk buying would not be of great advantage to these industries.

The Reports before us today are very good Reports. We have got away from the politics of this matter, and no one today would deny, I think, that integration was right. We have had our quarrels and arguments, and we have debated the matter in public and in private for years, but these industries are now under public ownership and it is our job to make them work efficiently. I hope that those who are running the nationalised industries will never feel that if many of us in the House are critical in discussing the Annual Reports it is ill-natured criticism, because it is not. It is only intended to do the job which Parliament imposed upon this House—to submit the Reports of these industries to the searchlight of public opinion and make our criticism as constructive as we can. I hope that it is in this spirit that the debate will be continued today.

4.47 p.m.

Mr. George Lambert (Torrington)

I agree with the right hon. Gentleman the Member for Blyth (Mr. Robens) when he says that there is too much advertising by the gas and electricity industries, and I also agree that these two industries should be working together for the benefit of the consumer. The right hon. Gentleman also said that the gas industry was forming a national grid and going in for more integration. In my part of the world, the gas industry is closing down many small gasworks, and, in order to take gas to various small towns, they are digging up miles and miles of road. One wonders whether it would not be better for the two industries to get together to see whether electricity could not take the place of gas in some of these small towns.

I should like to turn from the major aspects of the Reports of the British Electricity Authority and the Gas Council to deal with the Report of the South-Western Electricity Board. The chairman and members of that board have every reason to be satisfied with the past year's results. They have converted a loss of £149,000 in 1953 into a profit of £98,000 for this year, in spite of the very great difficulties with which they had to contend. In the South-West, they have the lowest population density of any area board, the fewest consumers per mile of mains, and the smallest industrial loads.

Again, the board is much more forthcoming with information than is the British Electricity Authority. When the British Electricity Authority talks about rural electrification and the extension of the electricity supply, it does not mention the number of farms which had electricity before vesting day. The South-Western Electricity Board has been able to do very much better than the country as a whole, though the problems in their part of the country are greater. In fact, we have just doubled the number of farms from 6,330 at vesting date to around 12,000. I am not prepared to admit that it has come more quickly as a result of nationalisation.

Mr. W. R. Williams (Droylsden)

Can the hon. Member tell us who the other fellow is? He has referred several times to "we."

Mr. Lambert

I am sorry. In talking about "we" I meant the South-Western Electricity Board.

Mr. Robens

Is it not a fact that the South-Western Electricity Board has been able to do the things which the hon. Member has described because it has been getting special financial assistance from the British Electricity Authority, contributed by the other area boards in part—which is one of the benefits of integration?

Mr. Lambert

No, the right hon. Gentleman is not right in that statement. I was talking of the period up to March, 1954. The South-Western Electricity Board was only notified after that date that it would get a contribution of £250,000. Those things were done before the central authority made it known to the board that it was to get this extra money.

Mr. Robens

The Ministry of Fuel and Power have been working on this particular problem, and the chairman of the board had indicated that its job could not be done unless assistance were given, without losing a lot of money. The argument has been going on for many years. I am glad that the Minister has taken action in that direction.

Mr. Nabarro

Is it not clear that as the result of the policy of my right hon. Friend the Minister of Fuel and Power, two-and-a-half times as much money for capital development for electricity in rural areas is being provided this year as was provided during the last year of Socialist Government?

Mr. Lambert

I quite agree. My right hon. Friend made it known to the central authority that he put a high priority on rural electrification, and because of that we in the South-West received this extra contribution. I would draw the attention of the right hon. Member for Blyth to the fact that the whole area of the South-Western Electricity Board could have been electrified in 1945 for £11 million, and that in 1951 it would have cost £17 million. Had the Socialist Government allowed the board to get ahead, the whole countryside could have been electrified much more cheaply than now?

Mr. Robens

Much as I like the hon. Gentleman, I cannot allow him to get away with that statement, which is absolute nonsense. In 1945, men, materials and technicians were not available for that work.

Mr. Lambert

No, but it would have been possible to do it between 1945 and 1952 if the party opposite had not spent capital on all sorts of wild-cat schemes. [HON. MEMBERS: "Oh."] "I am doing my best to agree with the right hon. Member for Blyth. I want to make suggestions to try and promote the efficiency of the various gas and electricity undertakings. I think it will prove to be almost impossible to bring down the cost of gas or electricity, but I believe that a very great deal can be done to reduce administrative expenses.

Before my right hon. Friend made his statement in June, 1953, giving as high a priority as possible to rural electrification, the cost of extending the mains had virtually brought the extension of electricity in the South-West to a standstill. Under the new policy of help from the central authority, the South-Western Electricity Board has been able to plan to connect no fewer than 5,000 farms and 24,000 other rural premises within the next five years. It is more than ever essential that the board is allowed to carry on with the programme and be given every encouragement. Owing to our economic situation, it is essential that this country should produce more food. Farmers can now afford to buy machinery for use with electricity, as this is becoming available. Ten years ago such machinery was not even designed.

In deciding which area is to be provided first with mains, the South-Western Electricity Board is guided by the number of potential consumers in an area. The village in which I live has been considered for mains electricity. Oddly enough, that particular village was to have had mains electricity in 1939, and would have had it, I understand, had the war not intervened. We have had now to wait nearly nine years to get it.

I have therefore had the opportunity in my own village of seeing how the board sets about getting new consumers. Its methods leave great room for improvement. Suddenly, without notice, two sets of canvassers in cars descended upon the village. They went round the village, canvassing the same people many times, until virtually everybody had been persuaded to take mains electricity. These precise results were then sent to the district office at Okehampton, from there to the sub-area at Bideford, and finally to the head office at Bristol. One cannot help thinking that by far the better way would have been to put a notice in the Press informing the villagers about the new programme for rural electricity and announcing that a meeting would be held and a demonstration given. People could have come to see the various electricity appliances and ask questions. After that, one canvass only should have been carried out. The local manager would have been able accurately to assess the potential number of consumers. The local managers have been in the area for a long time, working under private enterprise and then under nationalisation.

Mr. Arthur Palmer (Cleveland)

Surely the hon. Member, as a practical politician, knows the advantages of persistent canvassing.

Mr. Lambert

I am trying to show that the cost of getting new consumers could have been reduced. If there is unlimited money and labour, no doubt the best way is persistent canvassing, but if it can be done equally effectively, a simpler and less expensive method is preferable. I hope that the authorities in the South-West will take note of my right hon. Friend's speech and will see that he desires them to be more venturesome and not insist on precise details.

I now wish to deal with the contracting and sale of fittings side of the South-Western Electricity Board's activities. During the past year, its turnover went up by no less than 19 per cent. and is today about £2 millions a year. The loss made by the board in 1953 was £35,000. Today, that loss has increased to no less than £58,000—an increase of £27,000—despite the increased turnover.

Surely there must be something wrong with a business which increases its turnover by 19 per cent. and thereby increases its loss by nearly 60 per cent. Again, I feel that this is due to the board's method of selling. For instance, there are the huge and expensive showrooms. In my village, for example, having decided that there were sufficient consumers to justify mains electricity, canvassers came round the village once again.

I want to say that the British Electricity Authority was completely fair with the local traders. It did not start its campaign for selling appliances until it had announced in the local Press that the village was to get electricity. I understand that the team of canvassers had a certain amount of success in selling the various electricial appliances, and that they have now stopped. I also understand that in a month or two's time there is to be a demonstration of electricial appliances.

Surely, it would have been better to hold the demonstration before the canvassers went round, for then the villagers could have seen exactly what equipment they could buy, what it would do, and what it would cost. Some of the local traders are complaining that the South-Western Electricity Board, backed by the financial credit of the central authority, is able to finance hire-purchase transactions at 4 per cent. whereas private firms, if they have to go to a discount house, have to charge between 10 and 12½ per cent.

One wonders whether or not it would be possible for the South-Western Electricity Board to co-operate with the private firms. Could not the board advance the credit and the private firms the selling organisation? I am quite convinced that it would be perfectly possible to work out some means whereby each received a fair share of the profits. In that way, the board would be able to reduce its expenditure on publicity and selling appliances.

Dr. H. Morgan (Warrington)

Public money to be used by private traders.

Mr. Lambert

Why not? I can see nothing wrong in that, provided that each gets a share of the profits. If the board is able to reduce its costs that, surely, must benefit the consumer, which it is the board's duty to do.

I now come to the Consultative Council. In the South-West we have one main Consultative Council consisting of 27 members and four local committees with a total membership of 49, and I understand that each of the committees meets four times a year. I wish to pay a tribute to the people who serve on these committees. They are busy people who have given up their leisure in order to serve their neighbours. One realises how difficult it is today to find people who have the time and who are willing to devote their time and energy to serving their fellow citizens in various public positions. But one cannot help feeling that there is a great deal of overlapping in this consultative work.

As I see it, the trade associations look after the various industrial concerns, the National Farmers' Union look after the agricultural interests, the local authorities look after the private consumers, and, when called upon, Members of Parliament try to help each type of consumer. Reading through the Report of the Consultative Council, one finds that nearly half of it is devoted to the views of the council on rural electrification. Its members appear to have been able to take little or no action to help the board extend the mains to rural areas.

My hon. Friend the Parliamentary Secretary is well aware how some two years ago the back benchers on this side of the House who represent rural constituencies stressed to his right hon. Friend the Minister the necessity for taking instant and very drastic action in order to increase the provision of rural electricity. In the Report, it appears that the Consultative Council also dealt with tariffs. The board decided that owing to increasing costs of all sorts, it was essential to raise the tariffs in order to produce an increased revenue of £1,150,000. The Consultative Council, on the other hand, recommended that it was not necessary to produce such a large amount. It suggested that revenue should be increased to produce only £750,000.

I am well acquainetd with the Chairman of the South-Western Electricity Board, who is an able and shrewd person, and I have a feeling that he proposed this higher figure—£450,000 more than was ultimately accepted—as a sort of Aunt Sally for the Consultative Council to knock down. In the final paragraph of the Report, which deals with the activities of the council, it is stated that the board circulated to all consumers in the area a leaflet dealing with the council's activities.

It is surprising that it was necessary to circularise all consumers after the council had been in existence for at least seven years. I understand that there are 647,983 consumers in the South-Western Electricity Board's area. Think of all the work involved. The leaflets all had to be prepared and printed, folded and put into envelopes and sent to the consumers. Probably the only reaction of the consumers on receiving the leaflets was that anyway electricity charges were far too high.

I urge my right hon. Friend to look into the organisation of the Consultative Council to see whether it cannot be reorganised so as to ensure that there is no overlapping, to see if it is possible to reduce the cost, and, finally, to free the very public-spirited members of the council and of the various committees for other duties in which they may help the public more than they are able to do in their present capacity; I know that they are intensely willing.

5.10 p.m.

Mr. W. A. Wilkins (Bristol, South)

There are few of us in this House who do not like and respect the hon. Member for Torrington (Mr. Lambert), and it is not often that we like to cross swords with him on the Floor of the House. I had no intention of taking part in this debate until I heard what the hon. Gentleman had to say, and I very much regret that he made what I feel is an attack upon the South-Western Electricity Board. He said many things which were entirely unfounded, particularly in regard to the board and its chairman, and I should like to try to answer one or two of the criticisms he has seen fit to make.

My right hon. Friend the Member for Blyth (Mr. Robens) interjected to correct one of the statements which the hon. Member made with regard to the possibilities of carrying out rural electrification in the South-West Region in 1945—and I presume that he meant in the subsequent years—at a capital cost of £11 million which he said would cost £17 million today. I cannot believe that the hon. Member for Torrington really thought that even if the industry had then been nationalised, it would have been possible to carry out rural electrification to that extent and, at the same time, to be able to supply people with electricity.

Mr. Lambert

I was in no way criticising the Chairman of the South-Western Electricity Board. I was trying to point out the difficulties under which the board laboured. The figures I quoted were produced by the chairman in a speech at Torquay in 1953. He always maintained that it was impossible for the board, with a large, sparsely-populated area, properly to compete on equal terms with other boards in the sphere of rural electrification.

Mr. Wilkins

I accept what the hon. Member has just said. I can well imagine that the chairman of a board such as the South-Western Electricity Board would, in advancing certain claims for capital expenditure, probably make comparisons between the cost at a certain time and now.

I assure the hon. Member that it was not possible in those days to develop rural electrification to the extent that we hope to see it not only now but in the years ahead. Before I became a Member of Parliament, I was for 10 years on the committee of the Bristol municipal electricity undertaking. For quite a number of years I was the vice-chairman, and finally the chairman. I think that I know something of the problems which then confronted an industrial city in carrying electricity to the rural population.

As became a very large electricity undertaking, we had every desire to take electricity to as many people as we could in the area surrounding Bristol. Even though I cannot recollect any point which was more than 10 miles from the centre of our distribution, it was very difficult to initiate schemes which were economic from the point of view of our city. I am satisfied that it just would not have been possible to take the amenities which electricity can provide to the rural population —a desire expressed by so many hon. Members, including those on the benches opposite—unless we had nationalised all the undertakings.

In his observations about the methods adopted, the hon. Member referred to our own board—the South-Western Electricity Board. He spoke of it canvassing villages prior to agreeing to schemes being put forward. My recent experience in his own part of the country is that the people are just longing to get electricity. They want no encouragement. They do not need canvassers to go into the area to stimulate the demand for the supply of electricity. Surely we do not send canvassers into these areas principally to persuade the people to take electricity. They want it already.

This, however, is a rather complicated business. A lot of talk with prospective consumers is necessary before they may even feel that they are able to afford the cost which would devolve upon them. That is happening now; I have a case in hand at the present time. If a supply of electricity is to be taken from a main which may be a mile, 1½ miles or an even a greater distance from the place to be supplied, the potential consumer must know what it will cost him. I say that because invariably—and. I think, quite rightly—we have to ask them whether they are prepared to guarantee a certain payment in respect of the amount of electricity which they may consume.

Mr. Lambert

I do not think that the hon. Gentleman can realise that, in April this year, the South-Western Electricity Board announced a new scheme of rural development contribution. Under that scheme the amount payable does not depend at all on the distance the mains have to be brought, but purely on the size of the house or farm.

Mr. Wilkins

That may very well be so now, but it was not so two years ago —or even 18 months ago. We were then having to explain to the potential users of electricity in the rural areas what it would then cost them.

The hon. Member said that since this Government had been in power, owing to the fact that more capital money had been made available in the last 18 months or so, it would be possible to go ahead with greater rural electrification. He must surely call to mind that there were those of us in this House who, in, I think, last July 12 months, interviewed Lord Citrine on the special position of the South-Western Electricity Board. The South-Western and the Eastern Regions are the only ones suffering from severe disabilities with regard to the expansion of supply. In regard to rural electrification, many other regions are extremely fortunately placed because of the immense industrial load they have at the centre of the region that enables them both to support the development of rural electrification and to reduce the cost of production.

I am rather dismayed at the apparent lack of gratitude shown by the hon. Member for Torrington. I do not altogether blame him for that because, obviously, he was stating a constituency case. I assure him that had he represented a constituency in the City of Bristol he would have had to contend with very serious opposition from the people of that city, who are now paying nearly double the price for their electricity that they had to pay before, largely because of the enormous additional burden falling on them for distribution costs.

Mr. Nabarro

There is, of course, something in what the hon. Member says. There is a slight subsidy from town to country, but he has exaggerated it about 100 times by saying that the people of Bristol have to pay double because of rural connections. Perhaps he will put that right.

Mr. Wilkins

If I have exaggerated in any way, I must have followed the excellent example that we often get from the hon. Member for Kidderminster (Mr. Nabarro). I said at the beginning of my speech that I had had no intention of speaking until I heard the hon. Member for Torrington; therefore, I have not been able to verify certain figures as I would like to have done. I used the term "nearly double."

Mr. Nabarro

It is quite wrong.

Mr. Wilkins

If it is quite wrong, I am pleased to hear it, but the people who get the accounts do not think it is wrong. I have been a consumer of electricity for a long time, and I know the difference that it has made to my accounts. It is not true to say that the whole of this burden falls upon the people in the rural areas. Ns a Socialist, I have declared that I believe it is our duty to take to the people who bury their lives in the countryside producing our food all the benefits that we possibly can by means of electricity to assist them in their industrial lives, particularly agriculture. I am prepared to urge my friends in the industrial cities to accept our share of the responsibility for carrying those services to the people in the rural areas.

The hon. Member for Torrington was critical of the South-Western Electricity Board. He criticised its methods. He also referred to the amount of its turnover, and drew a comparison between the profits which were made in 1952, which I think he said were £53,000—I did not quite hear the figure that he mentioned —and the figure for the past year of £98,256. He was critical on the ground that the turnover had been very greatly increased. He was not completely fair, because of all the reports which the South-Western Electricity Board had published, I think this is easily the most encouraging. Even if he did not feel so inclined, the hon. Member might have made one or two observations about the successes of the board during the past year.

Mr. Lambert

I was not complaining about the board's overall profit. Indeed, I said that the board had turned a loss of £149,000 into a profit of £98,000. I was talking about the loss on their contracting and sales of fittings activities in respect of which the loss has increased from £35,000 to £58,000.

Mr. Wilkins

I understood the hon. Member to make a comparison between the amount of profit that was made and the turnover which had taken place in the board's accounts during the year. When the hon. Gentleman reads his speech in the OFFICIAL REPORT, I think he will find that he referred to the vast increase in the turnover of the board and the comparatively small increase in the amount of profit that was made during the year which we now have under review.

It has been the policy of the board—it is a right policy in which I hope the board will be encouraged—to try to keep its costs to the consumer down. This board has been most successful in absorbing the various increases, particularly increases in the price of coal and things of that kind, and in keeping its prices stable. I cannot recollect any increase during the last year, and even perhaps the last two years. The board has relied upon the increase in business to offset the costs which are, in the main, outside its own control.

The hon. Member for Torrington, having been critical of the board, might have pointed out that the board has concentrated on the reduction of its working costs. It has brought down its working costs from .394d. per unit sold to .373d. per unit sold in a year in which there has been an increase in the price of coal, I think, of 4s. 7d. a ton. It is not quite so easy as it might appear to be to absorb an increase of 4s. 7d. a ton in view of the enormous quantities of coal that our generating stations devour in the course of producing electricity. Again, the board's management costs were brought down from .064d. to .058d. per unit sold, and that was in spite of increases in salaries and wages to the staff.

I regret having been critical of the speech of the hon. Member for Torrington but, as the hon. Member for Kidderminster reminded me when he said that I was exaggerating, it does not do to exaggerate matters of this kind. If we have a sound case, it will rest without any exaggeration at all. I hope that hon. Members from the South-West, recognising that this is a difficult region, will agree with that statement. When we want to see Lord Citrine, we felt that we had a case. We knew that our people were hard-pressed because of the cost of rural electrification, and we are grateful to the board for what it has done.

May I remind the hon. Gentleman that what the board has done is based upon a principle which may now apply to any region in the country, should that region at any time need to have help for rural electrification. In other words, there are regions in the country which will be able to absorb for quite a while their own rural electrification, but as they spread their mains further and further away from the centre, they in turn may need to come to the British Electricity Authority to receive assistance for such development.

Mr. Palmer

Is it not a fact that the Government have granted the authority to raise the capital but they have not raised the capital themselves?

Mr. Wilkins

That is so. I was simply talking about the principle. My hon. Friend the Member for Cleveland (Mr. Palmer) was with us when we went to see Lord Citrine about this matter. It is the principle that we are concerned about. Lord Citrine told us at that time that he would like the Authority to be able to help with rural electrification, but he had to find a formula that could be applied to the whole of the country, and he has, in fact, now found that formula. We in the South-West of England ought to be gratified at the progress made in rural electrification and at the possibilities of further financial help in any development which we may have in the future.

5.28 p.m.

Mr. Gerald Nabarro (Kidderminster)

I have a great deal of sympathy for the comments made by the right hon. Member for Blyth (Mr. Robens) about the massive scope of the affairs of the nationalised industries which we are expected to cover today, in 6½ hours of Parliamentary debate. We are concerned not only with the Annual Report of the Gas Council and the Annual Report of the British Electricity Authority, but the whole of the Annual Reports of the largely subsidiary area boards, and quite clearly it is beyond the capacity of the great majority of Members of this House to deal, in any detail, with every aspect of that massive accumulation of financial and economic statistics, and technical facts and figures.

For that reason, I shall welcome the establishment of a Select Committee very shortly which, though not controlling or even guiding the policy of these great nationalised undertakings, will be able to examine their affairs both at more regular intervals and with the attention to detail that the Reports so obviously merit.

In view of the great scope of our deliberations today, my speech will be devoted only to certain aspects of the Annual Report of the British Electricity Authority. I think it is important that it should be placed in its correct perspective as the largest single capital investor of any of our nationalised undertakings. The capital investment pro- gramme of the British Electricity Authority last year was of the order of £170 million, out of which almost exactly 50 per cent., namely, £85 million, was in respect of new power stations and the provision of additional facilities for electric power generation.

My right hon. Friend put this matter in precisely its correct perspective. He referred at the beginning of his speech—as I intended to refer at the beginning of mine—to a statement made quite recently by the Chancellor of the Exchequer that it is possible to double our living standards within a span of a quarter of a century. But the critical factor in the doubling of those living standards is surely the provision of more and more electric power, in respect of which, as compared to the massive strength of the United States of America's generation facilities, we are notably deficient.

In spite of all the efforts we have made in post-war years, it is still true that the average industrial worker in the United States is approximately two and a quarter times better off than his equivalent in this country. It is therefore with a feeling of great satisfaction that I observed my right hon. Friend to report that, in the course of the last full year, we have added to the generation capacity of the British Electricity Authority by no less than 1,413 megawatts installed or 1,413,000 kilowatts installed, and that, as my right hon. Friend anticipates, by 1961 we shall have worked up to a level of approximately 2,000 megawatts of new capacity installed per annum. That will, indeed, be a great achievement.

At this juncture I think I should refer to a wholly false statement made by the right hon. Member for Ebbw Vale (Mr. Bevan) at the Socialist Party Conference at Scarborough. No doubt there were no other Members at Scarborough, other than the hon. Member for Cleveland (Mr. Palmer)—who was not particularly vocal on that occasion—with sufficient technical knowledge to contradict the right hon. Member for Ebbw Vale, but this is what he said, as reported in the "Manchester Guardian" of 29th September, 1954: The truth is that the present Government has not only built houses at the expense of schools but also at the expense of factories and power houses. I shall argue the issue of factories and schools on another occasion. What I am here concerned with is the right hon. Gentleman's statement that the housing programme of Her Majesty's Government has been conducted at the expense of power stations. That is wholly mendacious. What has, in fact, occurred—and the precise figures are readily available for any hon. Member who cares to read the Report of the British Electricity Authority—is that the average installed capacity per annum added during each of the years between 1946 and 1950 was 576 megawatts, whereas the average additional installed capacity per year in the period between 1951 and 1953—which is the first three years of the present Government—was 1,355 megawatts, which is approximately two an a quarter times as much.

The Government take no credit for that; it was planned under the previous Government, because power stations are planned at least five years ahead. But now let hon. Members opposite see what is going to happen in the period between 1954 and 1959. My right hon. Friend has already given authority for the installation of additional capacity on a rising scale year by year. He has given authority for no less than 1,529 megawatts installed per annum for each of those years.

Mr. Palmer

So what?

Mr. Nabarro

I am only referring to the fact that the right hon. Member for Ebbw Vale made this wholly mendacious statement to the Socialist Party Conference at Scarborough, in the presence of the hon. Member for Cleveland, who, no doubt in his customarily docile fashion, sat there nodding assent. We are planning for additional electric power generating capacity on a scale which will underpin and fully support the Chancellor of the Exchequer's proposals for a steady expansion of our living standards in order to be able to double them within 25 years.

Without such a scale of capital investment for the electricity generating industry, it would be impossible for the Chancellor's proposals to be carried through. The limiting factor in the expansion of electricity in this country during the last few years has been not only capital investment but, very largely, the coal supply position. I fancy that by this time every hon. Member recognises that the British Electricity Authority is the largest single consumer of coal in Britain. Last year it burned no less than 36.15 million tons of coal. Were the whole of the expansion facilities for electric power generation during the next seven years to be based upon the supply of coal, that 36.15 million tons would rise to no less than 51 million tons per annum —an addition of 15 million tons a year within seven years.

As I said in a speech which I was privileged to make in connection with the Reports of the National Coal Board just three weeks ago, it seems very unlikely that that additional coal would be available for the British Electricity Authority or any other large coal consumer. Therefore, I warmly endorse the policy of my right hon. Friend in placing increased dependence upon the use of oil as a substitute for coal, or a partner working in double-harness with coal, as the means of generating electric power.

What my right hon. Friend is doing is only in common with world trends. I discovered quite recently some interesting figures, derived from the statistics of the principal industrial nations of the world, as to the declining use of coal and the increasing use of oil, natural gas and hydro-electric power as a source of energy. For instance, 5 per cent, of the world's energy resources was derived from hydro-electric power in 1938; in 1953 it was 7 per cent. Seven per cent. of the world's energy resources was derived from natural gas in 1938; in 1953, the proportion had risen to 16 per cent. In 1938, only 24 per cent. of the world's energy resources were derived from oil; today the figure is 35 per cent. But whereas 64 per cent. of the world's energy resources were derived from coal in 1938, today the figure is only 42 per cent.

Summarising that mass of figures—and it is always difficult to digest such a mass of figures spontaneously—64 per cent. of the world's energy resources sprang from coal and 36 per cent, from all other sources in 1938, whereas today the position is practically reversed. Only 42 per cent, of the world's energy resources is now derived from coal, whereas 58 per cent. is derived from other sources, to which the greatest single contributor is oil.

There can therefore be no reasonable doubt that, with the most difficult and delicate coal supply position in which the nation finds itself today, my right hon. Friend is precisely correct in launching and expanding a policy of substituting oil for coal at out principal power houses. His policy also has been given sinews by the successful conclusion of the negotiations between Her Majesty's Government and the Persian Government for the reopening of the Abadan refinery. The fact that no less than 35 million tons of fuel oil will become available on the world's markets in the next three years as a result of the reopening of Abadan suggests that even if 40 per cent., which is this country's share in the Consortium. of that oil comes to the United Kingdom it will be a sufficient amount, in aggregate, to match the increasing demand for fuel oil for firing our power houses.

A great deal has been said in this debate about rural electrification. I do not propose to enter into any parochial arguments as to the merits of the rural electrification policy in the areas of individual boards, or to enter into any sterile arguments as to how many farms were electrified before vesting day and how many have been electrified since. Any comment that may be made from the benches opposite I can always match with a party political riposte; but it is hardly appropriate that I should do so on an occasion such as this.

What matters to me—and I address my remarks to my right hon. Friend—is the cost of the electrification of the balance of Britain's farms. So far we have connected to electricity mains supplies 152,500 farms out of an estimated total of 285,000 farms. We have connected just over one half. However, as the hon. Gentleman the Member for Bristol, South (Mr. Wilkins) observed, as the expansion of the farm electrification proceeds, every connection becomes more difficult, more laborious, more costly and generally less profitable to the area board making the connection. I have discussed this matter with officials of the British Electricity Authority and the area boards. They are fully alive to the problem. Today I make two contributions to this matter that, in principle will I think unanimously be supported in all quarters of the House.

The first contribution is this. In my view, it is extravagant and unfruitful to continue the process of electrifying the more remote farmsteads by the process of expanding the electrification limbs by overhead cables farther and farther cross-country. What I wish to see is each of the more remote communities established as an independent and separate unit for electricity generation and consumption purposes. The right hon. Gentleman the Member for Derby, South (Mr. Noel-Baker) in an intervention asked what about the use of oil in rural areas. He is quite right, and I have one example in mind. I am not sure if the town of Aberystwyth is in the hon. Gentleman's constituency?

Mr. T. W. Jones (Merioneth)

Not quite. It is in Cardiganshire.

Mr. Nabarro

Yes. It is in Cardiganshire. Before the war a very important electric power station was set up at Aberystwyth, fired by fuel oil. The reason was that it was much too expensive to take overhead cables from the main electricity generating stations in the more populous areas to the east. The principle is exactly the same with all these remote rural areas.

There ought to be small auto-diesel generating units established in the middle of each of these remote areas to serve the immediate vicinity and community. By that means much of the heavy capital cost of overhead lines and cables is eliminated. There is one more important factor. The cost per kilowatt installed in a major modern coal-fired power station is £70. The cost per kilowatt installed of an auto-diesel unit—a relatively small unit—for rural purposes serving the immediate vicinity and community is only £35. The capital cost is half and the distribution costs are substantially reduced.

Mr. Victor Collins (Shoreditch and Finsbury)

What sort of geographical area or size of population has the hon. Gentleman in mind? I am thinking of an area such as Exmoor which I used to represent in this House, an area where there are widely scattered villages and only a few people. Is the hon. Gentleman suggesting one unit for each village?

Mr. Nabarro

That would depend on the size of the village or hamlet or community on which would depend the total demand for electricity from that unit, which would be related to the size of the auto-diesel set installed. One could instal an auto-diesel set of 100 kilowatts. One can put in one of 1,000 kilowatts or of 10,000 kilowatts according to the size of the area to be served and the extent of aggregate demand. I want to impress upon my right hon. Friend that this is a vital economy in rural electrification measures and ought to be very actively considered.

The second point is this. We are on the threshold, as my right hon. Friend emphasised, of the application of nuclear power to the requirements not only of industry but also of the domestic consumers of this country through the medium of electricity. It is the only way, of course, that nuclear power can be used in the home. However, there is another major consideration. The Minister of Transport referred the other day to "a drastic and exhaustive scheme" for the reorganisation of the railways. That will involve a major contribution by the Government in the form of quickened and increased capital investment.

The application of nuclear power to railway traction must be through electrification. It cannot be in any other way. At the present time, as I said in the coal debate recently, 19,000 steam locomotives on British Railways are burning coal at a thermal efficiency of an average of only 6 per cent., and 94 per cent. of the heat and energy qualities in the coal are wasted and are going up the chimneys in smoke. If that tractive effort is provided on the railway system through electric locomotives, the electricity will be generated at power stations using low grade coal burned with a thermal efficiency of 24 per cent., four times greater than the efficiency with which the large coal is at present burned by the steam locomotives of British Railways. That is the economic case. It is the irrefutable case for the electrification not only of suburban routes but of the more heavily loaded main lines.

Nuclear power's application to traction on the railways must be through electricity, and here there is a vital link with rural electrification. I enjoin my right hon. Friend to get his principal advisers to show him a large-scale map of the main line of the London Midland Region over 158¼ miles from Euston to Crewe and then, at the British Electricity Authority's headquarters, trace in on that map all the areas within 10 miles on either side of that main line that have not yet been connected to the electricity grid system. My right hon. Friend will find that about 50 per cent. of the overall length of 158 miles is not covered by the rural electrification limbs.

What I want to do is this. I should like to see within five or seven years the main line of the London Midland Region from London to Crewe fully electrified. It is not by any means impossible from the point of view of capital, or operational profitability, or the engineering capacity of the British Transport Commission. I should like to see the current at regular intervals along that 158 miles transformed down in order to provide rural electrification facilities adjacent and contiguous to that main railway line. That would very substantially diminish the cost of carrying electricity to all the rural areas which are immediately contiguous to and adjacent to the main railway lines.

In other words, what I am pleading for is a closer co-ordination of policy between the enormously expensive development plans of the British Electricity Authority and the development plans of the British Transport Commission, which, as we know from the statement by the Minister of Transport a few days ago, are likely to be extremely costly if what he calls "a drastic and exhaustive" reorganisation of the British railway system is to take place.

We have heard pæans of praise for the nationalised industries today, but it is also the duty of Parliament occasionally to be critical of the vast sums of money which they spend. I am sure there must be a few Members of this House other than myself who believe that the nationalised industries might be a little more efficient in certain connections than they are. There is always room for that. I know no private business that cannot be improved by independent investigation, by a clear-sighted policy provided by "new blood" and so on.

Today I want to criticise very severely one aspect of the British Electricity Authority's development policy. The Electricity Act, 1947, says in Section 50: It shall be the duty of the Central Authority to investigate methods by which heat obtained from or in connection with the generation of electricity may be used for the heating of buildings in neighbouring localities, or for any other useful purpose, and the Authority may accordingly conduct, or assist others in conducting, research into any matters relating to such methods of using heat. The Act goes on to say: Any Electricity Board may themselves provide, or assist other persons to provide, for the heating of buildings by such methods as aforesaid or otherwise for the use of heat obtained as aforesaid. What that means is that an economic use should be provided as far as is practicable for the vast amount of low-pressure steam which is available from our major power stations. Though I drew an invidious comparison a few moments ago between the thermal efficiency of electric power generation by the use of coal-powered stations as compared with the use of coal by railway locomotives, I urge hon. Members not to think that to extract 24 per cent. only of all the heat and energy properties from coal and to waste 76 per cent., as we do at electricity power stations, is a very enviable or satisfactory record. What I am anxious to do is to find economical uses, as is provided for by Section 50 of the Act, for the other 76 per cent. of the heat and energy values in the coal which is so largely wasted by the condensing of the steam in the cooling system of the power stations.

I have spoken on many occasions in this House about the use of what are called back-pressure turbines. They are well known in British industry. For instance, an Anglo-American productivity team went to the United States of America recently to study fuel conservation. I did not have the honour to be a member of the team, and I had no influence whatever upon its report or its findings, but it is significant that on the centre page of its report it publishes a magnificent map of the borough of Kidderminster. Why? Not because of its Parliamentary representative, of course, nor in deference to my views, but because of one important economic factor which, I am sure, will be accepted by every representative in this House of a textile constituency.

Kidderminster is the principal centre in the United Kingdom of the carpet industry. I know that there are a few carpet factories in other parts of Britain, but nothing compares with the scale of the industry in Kidderminster. I do not propose to digress upon the merits of Kidderminster, Glasgow or Kilmarnock carpets. What I want to say—the hon. Member for Kilmarnock (Mr. Ross) will warmly support this—is that in carpet factories there is a very large demand for low-pressure steam for two purposes, for heating the factories and for processing in the dye sheds.

What has happened so largely in the textile industry, notably in the carpet industry, is that by the application of the principles of employing back-pressure turbines, the factory makes its own electric power. It uses steam the first time for generating electric power; it then exhausts the steam and uses it at low-pressure for heating the premises and for processing the work on the premises. These principles can also be employed at a power station owned by the British Electricity Authority, as in the case of Pimlico, for providing hot water and heating services.

The significance of all this is apparent from a comparison between two simple statistics. When coal is burned at a British Electricity Authority power station it is used with a thermal efficiency of only 24 per cent. In a properly balanced power-cum-heating scheme in factories and in localities, with the use of back-pressure turbines, coal can be burned at an efficiency of 70–80 per cent. There is, therefore, in that case three times or more greater thermal efficiency and three times or more the value of heat and energy derived from every ton of coal than in a condensing steam B.E.A. power station.

The British Electricity Authority has a statutory responsibility to sell waste heat, as it is called, and to develop means for using it productively in industry, in commercial premises and elsewhere. What has it, in fact, done? In six years it has provided one minor scheme at Pimlico. My right hon. Friend has announced the fact that there are to be further schemes at Spondon, Derbyshire, at Warrington and at Stepney. However, the British Electricity Authority has in fact discouraged the application of these principles generally on the plea that the capital cost is too high in relation to the profits to be earned. The Americans do not find it so.

The Germans also do not find it so, and if my right hon. Friend wants a magnificent example of the application of these principles, let him go, as I did a few months ago, to Hamburg. There he will see rebuilding going on, just as in the City of London, and it is just as costly as in the City of London, but at Hamburg 50,000 kW. back-pressure turbines are being installed in order not only to provide electric power for the locality but also to feed low-pressure steam for heating hot water and processing purposes to the whole of the locality by a district heating scheme, thereby deriving 70–80 per cent. thermal efficiency from the coal burned. Yet in Great Britain we continue to build vast condensing steam power houses and neglect these opportunities.

If ever there was an opening for the application of massive fuel conservation methods on the principles that I have enunciated it was upon the commencement of the rebuilding of the City of London, which was commenced a few months ago, but once again the British Electricity Authority has evidently neglected to grasp its opportunities.

Sir William Darling (Edinburgh, South)

Might I inform my hon. Friend, giving him a chance to look at his notes, that the City of Edinburgh 12 years ago used the surplus hot water from its electricity undertaking, which now belongs to the British Electricity Authority, for its open-air public baths, with considerable success?

Mr. Nabarro

I am grateful to my hon. Friend. There are a few examples in different parts of the country of that sort of thing. There may be sitting in the House at present the Parliamentary representative of the Lea Valley area, a major horticultural producing area a few miles from London. A British Electricity Authority power house was built close to this market gardening district where there is a large demand for steam for heating the glass-houses in which the horticultural production is conducted. Thus, the British Electricity Authority could have piped waste steam to all of them. But no. All these growers have to wheel their little barrows of half a hundredweight of coke or coal or so to the boilers in their individual glasshouses instead of being able to use this enormous amount of waste heat that is inevitably available from a condensing steam power house. That is a sad story of lost opportunities for a massive contribution to fuel efficiency.

Mr. Michael Stewart (Fulham, East)

Before the hon. Gentleman leaves this interesting point, will he tell us if he would institute the building of power stations in the centres of population rather than, as now, away from the centres of population?

Mr. Nabarro

Power stations are not necessarily built away from centres of population. The Bankside Power Station has been built in the centre of London.

Mr. Cyril Bence (Dunbartonshire, East)

Hamms Hall Power Station is not in the middle of Birmingham; it is 20 miles outside.

Mr. Nabarro

It is not very far removed from the industrial conurbation that today stretches from Coventry in the South to Wolverhampton in the North. As I happened to be resident in that area for many years, I may be allowed to know that.

A number of references have been made today to the prospects of atomic power and earlier speakers suggested that it might be 10 years before the first atomic generating station is actually working. I had the privilege of visiting the Calder Hall site in September to see the progress being made there on the construction of Britain's first atomic power station, which has a capacity of 60,000 kilowatts installed. I should say, without being unduly optimistic, that that power station will be finished in its entirety by the end of 1956. Although it is a prototype and pilot nuclear power station, nevertheless it is capable of repetition and imitation elsewhere, and I believe that we shall be making a substantial contribution to the grid supplies of electricity by atomic plants very much before 10 years have expired.

The nationalised gas and electricity industries have done fairly well this year, but the credit is largely due to my right hon. Friend for ensuring that they get the sinews for additional production and that they are no longer starved of capital moneys as they were during the days of the former Socialist Government. I congratulate my right hon. Friend upon the sagacity of his policy and on the obvious success which has attended his efforts.

6.5 p.m.

Mr. William Ross (Kilmarnock)

The hon. Member for Kidderminster (Mr. Nabarro) has gone round in a complete circle in his encyclopedic speech. He rather staggered us with all the figures which he threw out and all the weighty statements which he made. I almost believed him for a time. Then he mentioned carpets and Kidderminster, and seemed to imply that Kidderminster was the carpet centre of this country, completely forgetting Glasgow, Kilmarnock and Ayr. So I started thinking again about the other statements he had made.

Mr. Nabarro

rose—

Mr. Ross

I should like to end my sentence. I thought that if he was not quite so near the truth in that statement, he might be a wee bit wrong in some of the other statements he had made.

Mr. Nabarro

As a matter of statistical fact, 40 per cent. of the whole carpet industry of the United Kingdom is in the town of Kidderminster, and its facilities are thus just four times as great for carpet manufacturing as those of the town of Kilmarnock.

Mr. Ross

I cannot agree with that. It is not always best to judge by size. The hon. Gentleman has one of the loudest voices in the House, but that is no reason for saying that he is one of the best Members of Parliament. We in Scotland —in Kilmarnock and Ayrshire—are quite content with the reputation there for quality.

The hon. Member spoke of the paeans of praise on this occasion, and, I believe, in our last debate on coal, for the nationalised industries. He joined in them and spoke about the development plan, and took my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) to task. I will come back to that later. He said that the fact that so much in the development plan had been brought into operation was due to the wise planning and preparation made by the previous Government. But he finished his speech with a rather stupid peroration about the sinews being provided by the present Government. He destroyed his own speech, so we are doubtful whether he should speak with such authority as he does.

The hon. Member is inclined to push the Ministry of Fuel and Power down the track which it is already going. He has urged on it the importance of something that the Department itself and the Government have pointed out, even in their own Reports. Take the use of steam. I do not know whether the hon. Member has read paragraph 121 of the Report of the British Electricity Authority on district heating and steam supplies. The Report shows that the Ministry of Fuel and Power and the Authority have certainly not lost sight of the need to do all that they can on these lines. They start by saying: Ten schemes for district heating and industrial steam supply were under investigation during the year, … and go on to outline what they are. They are by no means back-pedalling on this business, so far as I can see. [Interruption.] It is not a case of taking five years at all. The scheme in Manchester has been carried to an advanced state. The hon. Member painted a false picture.

Mr. Nabarro

No, not false. I was clear and specific about it, but nothing like enough has been done in this field to conserve coal; in fact, only minute progress has been made. Apart from the Pimlico scheme, there is nothing of a massive character which has been done by the Electricity Authority.

Mr. Ross

That is entirely different from the impression which the hon. Member gave the House and Kidderminster—I will not go so far as to say the whole country—about the work of the Ministry of Fuel and Power. The impression which he gave me was that he was just pushing the Ministry down the track which it was already going. He wants it to go in the same direction and demanded that it should go a little faster. I do not blame him for that.

The hon. Member took my right hon. Friend the Member for Ebbw Vale to task on the question of power stations, and then proceeded to refute what my right hon. Friend said by reference to development plans. That is a different matter altogether. If he turns once again to the Report on this question, he will discover that the Report itself admits that the work in 1952–53 was held up because of shortages of building material. Let him read the Report for himself.

Mr. Nabarro

What paragraphs?

Mr. Ross

I do not know what paragraphs.

Mr. Nabarro

Oh.

Dr. Morgan

Do not yawn.

Mr. Ross

It is all right, I will get it. It is paragraph 116 and it is entitled, "Effects of Shortages of Materials." The hon. Member should read that paragraph and paragraphs 117 and 118 and then he will find why the actual construction of power stations has been held up. But less advanced construction and manufacture, affecting the plant programme for 1953 and 1954, suffered severely.

Mr. Nabarro

Read the rest of it.

Mr. Ross

I am not going to read four paragraphs, but when the hon. Gentleman comes to the House with a well-prepared speech he should not quote an attack related to power stations and answer it with facts relating to generating plants.

Mr. Nabarro

Will the hon. Gentleman read the next three lines?

Mr. Ross

I am not going to—

Mr. Nabarro

Because it indicts the Labour Government.

Mr. Ross

—because it is not my speech. Did the hon. Gentleman say something?

Mr. Nabarro

I said, read the next three lines.

Mr. Ross

I thought the hon. Gentleman said something else.

The reason I intervened was to underline the curious lack of enthusiasm from hon. Members opposite in attacking the principle of nationalisation. We hear it at Question time and we hear it vaguely at other times, but when we get an opportunity to consider the matter in detail—and complaints are made by hon. Members opposite that we never get sufficient opportunity to attack nationalisation—comes to the House with a well-prepared we find that the benches opposite are strangely empty and that the speeches made from that side are even more empty of criticism of the actual principle.

I do not doubt at all that this is due to the fact that the details that have been given of the work of this nationalised industry in particular refute the speeches which have been made in the past about The inability of the nationalised industry to perform this vital public service. The hon. Member for Kidderminster was quite right when he spoke about the necessity for adequate power at a man's elbow and near his hands if we are to maintain our present position and achieve that doubling of our standard of life about which the Chancellor of the Exchequer spoke the other day.

If it is very important to achieve that, and if hon. Members opposite do not believe it can be done under nationalisation, then this is their chance to tell us about it. Instead, all that we have had has been paeans of praise, and little wonder when we read the review of the electricity industry as presented in the Report now before us.

In the six years since vesting date the number of consumers has increased by 2½ million and the annual sales of electricity by over 57 per cent. That is a good start in a post-war period when we were faced with all the difficulties of the demands for materials and for the basic power producer, coal itself. Further, the price of electricity, both to domestic and industrial consumers, has risen by only 30.1 per cent. as compared with prewar. That is a record of which no other industry in the country can boast. The British Electricity Authority is entitled to an expression of gratitude from this House for the work it has done and is continuing to do.

As a Scottish Member I have to say that this is the last time I shall be able to challenge the Minister of Fuel and Power on this subject because in next year's debate I shall probably be challenging the Joint Under-Secretary of State for Scotland, inasmuch as the organisation of electricity in Scotland is being handed over to the Secretary of State. While I still have the opportunity I should like to express my gratitude to the Ministry of Fuel and Power for the way it has looked after the interests of Scotland. There has been no question of narrow nationalism in dealing with this vital service.

If I have any complaints they are the usual constituency complaints which everyone gets, particularly those who represent a scattered county constituency. We in my area are not entirely satisfied with the range of development of rural electrification, but hon. Members from England, from other parts of Scotland and from Wales say exactly the same thing. Progress is being made, but I am not satisfied that it is being made fast enough.

It is a fact that the farmer who is denied electricity is the same farmer who is denied the telephone and for the same reason. He is too far away and it would cost so much more than normal to link him up. We are concerned with the importance of agriculture and the importance of the small man in agriculture. It is the small man in the outlying farms for whom we must cater, and to do that we must to a certain extent neglect the towns. It is not really neglect, but laying off the towns if necessary to bring supplies to such small farms.

I have rather disturbing news about one of the areas in my district on the borders of Lanarkshire and Ayrshire, the Louden Hall area. There the small farmers are concerned because they have not got any electricity as yet. They were promised it when work was being undertaken near that district, but now the area has been passed over and work is being carried on in another part of Ayrshire. When I wrote about these farmers who wanted supplies I discovered that development in this district, which was due to take place at the beginning of next year, has been put off for another six months. All I am told is that that is for "reasons out of our control." I think when an Electricity Authority representative writes to a Member of Parliament it is not good enough just to say, "for reasons out of our control." If the reasons are known, then the Member is entitled to be told what they are, so that he can judge whether they are good or bad.

As it is, I am now in the position that I have to write and tell these farmer constituents of mine, "You cannot get it at the moment; indeed, you will not get it when I said you would, when last I wrote to you. It has been put off for another six months, and I cannot tell you why." I hope we shall be told the reasons in future in most cases, even when the system has been transferred to the Secretary of State for Scotland and I have to belabour the Joint Under-Secretary of State. I gather that electricity is to be lumped along with education in the Scottish Office. The position is becoming fantastic, but I hope that we shall be given as good and as reliable a service as we have had from the Ministry of Fuel and Power.

The additional £1½ million granted in 1954 for rural electrification must be stepped up considerably. I do not think we should be satisfied that we are doing all we can. Undoubtedly, as things are, for that same expenditure this year we shall not be able to supply as many people as last year with electricity simply because distances are greater. To maintain our record we should be getting towards that 70 per cent. about which the Department speaks as being linked up by 1957, and 83 per cent. by 1963. But that leaves a vital 17 per cent. to 20 per cent. of farmers outside the possibility of getting the help that they require at a time when food is so necessary to this country.

I hope when the right hon. Gentleman hands over to the Secretary of State for Scotland he will also hand over some of his technical staff. That is something about which I am very concerned. Electricity is going to a Department that has never had electricity under its control before, so that it will have to deal with something new. I think that the whole thing is futile and silly. These islands will stand or fall together and electricity supply cannot be tartanised and divided in that way. The division is one of the silliest things done by the Government, because by it they are cutting up a vital industry. I sincerely hope that those who take over the responsibility in Scotland will look at the record of the Ministry of Fuel and Power in handling this matter centrally and will ensure that everything that has been done will continue to be done.

6.20 p.m.

Sir John Barlow (Middleton and Prestwich)

I do not propose to follow the controversy between the hon. Member for Kilmarnock (Mr. Ross) and my hon. Friend the Member for Kidderminster (Mr. Nabarro), because I am not in any way an expert in carpets and there was a considerable difference of opinion as to where the best or most carpets came from. I have no doubt that both towns serve very useful purposes.

The hon. Member for Kilmarnock, however, rather threw out a challenge when he said he was surprised that there was no attack on the principle of nationalisation from this side of the House and, further, when he went on to say that we on this side were empty of criticism of nationalisation. Much as I should like to pursue that, I fear that I should soon be ruled out of order if I did so.

I should, however, like to say this. Having been a Member of the Standing Committee which considered the Gas Bill, some years ago, and having sat through very long debates, if I remember rightly the chief arguments of the party which is now in Opposition were that nationalisation would make for better co-ordination, integration, grouping, efficiency and service than would private enterprise. I agree that there has been some integration and co-ordination, but there has not been nearly enough regrouping and there is much room for efficiency and for better service. I could easily develop these criticisms, because I still think that, on balance, the nationalised industry is not better than the industry would have been under private enterprise.

The Fifth Report of the Gas Council is a most interesting document, full of information and every kind of statistics. Being the Fifth Report, it gives a bird's eye view or stocktaking of the whole position. It would have been unfair to criticise after only one, two or three years, but I think all will agree that after five years one can picture the industry as a whole and see whether it has improved or could be improved. For this reason, I have been through the Report and I should like to make a few criticisms.

It will be recalled that when the gas industry was nationalised, the Gas Council paid £190 million in capital value for the gas companies, together with £31 million to cover obligations of local authorities and a further £6 million representing loans of various kinds. The Gas Council, therefore, cost the nation about £226 million. Incidentally, many of the companies were bought at far too cheap a figure from the point of view of common fairness between buyer and seller.

It will be remembered that the Stock Exchange value of the shares, where it existed, was taken as the basis of payment. If anyone could look through the list of Stock Exchange securities and say at any time that he could purchase the whole of a company for the value of a few quotations, he would find that he could get some very good bargains; but that, obviously, is impossible for the individual, and it is unfair for the State to take advantage of that kind of situation.

Some of the companies which were taken over were greatly penalised by that method of purchase. Throughout the war it was most difficult, or virtually impossible, for them to get new capital for expansion and development. Many of the companies—I do not say all of them—ploughed back probably 50 per cent. of the profits which they made and undertook their developments out of profits and not by means of new capital, as the industry is doing today.

Those companies which ploughed back their profits and paid small dividends obviously had very low Stock Exchange values. Therefore, they were penalised severely at the time of nationalisation. It was the spendthrift, profligate companies, which did not plough back profits and did not improve their equipment, which came out by far the best. It was most unfortunate to see so many well-run companies penalised at that time.

During and immediately after the war, it was almost impossible for gas companies to raise new capital. When they wished to raise new capital or to raise the price of their commodity, they had to promote a Bill in Parliament because they were statutory undertakings. That was a difficult and expensive job and one which would not be lightly undertaken. When they came to Parliament for a Bill, the gas companies were cross-examined by any party who cared to oppose them and they usually had a fairly rough passage. For that reason, when they succeeded in getting the right either to raise new capital or to increase the cost of their gas, they had established beyond all doubt that they had a very good case In fact, they had established their case much more thoroughly than the Gas Council establishes today its right to increase its capital.

I have pointed out that the original cost of the gas companies was over £220 million. In the last five years, the Gas Council has spent slightly over £200 million on new capital expenditure. In the last five years it has spent nearly as much as was paid for the whole industry when the Gas Council first came into being. I suggest that the present-day expenditure of capital is far too great and that new schemes are being put forward without sufficient scrutiny and without the Gas Council having to do as the gas companies did in the old days in proving their case before expert witnesses in promoting a Bill in the House of Commons.

My right hon. Friend has told us this afternoon that the industry is doing well and is expanding rapidly. He mentioned that industrial usage for the first half of this year had increased by 8 per cent. If we consider the whole period since nationalisation, the increase in the quantity of gas produced has amounted only to about 5 per cent., which, I should have thought, was rather disappointing, especially when it is remembered that the gross sales for gas last year dropped by 4 per cent., and also in spite of the fact that the capital value last year was increased by 22½ per cent. and the cost of gas was increased by ½d. a therm. If that was a public company in private hands I would suggest that all was not well with it. The vast expenditure on capital is not in line with the hoped for increase in gas or its price. So the economy has not been as great as was suggested originally, nor indeed as much as was hoped for.

The economies which one had hoped for in regrouping and by other means were also disappointing, because there has been an increase in the amount of labour used in the industry from 140,000 when it was nationalised to 145,000 today. True, that figure of 145,000 today is approximately 2,000 less than it was last year or the year before, but, in view of the rosy picture painted before nationalisation of the great advantages in economy, these figures are disappointing.

In this interesting and admirable Report of the Gas Council, detailed costs are given for all the areas, and it is interesting to see the great variation between them. The cheapest cost is in the Northern area, where it is 11.63d. per therm and the most expensive is in the South-Western area, of which we heard so much a little earlier this evening from both sides of the House, at 19.3d. per therm. Recognising the great difference in the areas involved, that variation would seem to me to be a very wide one. It is interesting that the North-Western area, in which I live, has a fairly low figure of just under 16d. per therm.

I wonder whether some of these areas are being much more efficiently run than others. Knowing some of them which are run extraordinarily well, I cannot believe that there is not room for improvement in others. In a private business it is perhaps much easier to scrutinise costs than it is in a national industry. I urge the Minister to try to bring pressure to bear to ensure that costs are carefully scrutinised.

In passing, I want to show how the nationalisation of the industry affects one town in which I am particularly interested, that of Middleton, in Lancashire, which I have the honour to represent. The compensation received for the municipal undertaking amounted to £5,950. The Gas Council also had to take over loans and debts amounting to approximately £57,000. There had been spent by that undertaking on equipment and plant over the years £290,000. The difference, in the meantime, had been written off out of profits. The plant was reasonably good. I know that much has been said about the bad plant and equipment which was taken over, but it is easy to over-emphasise that and to get an untrue picture, but in this case the plant was fairly good.

The cost of gas at the time of taking over varied from 3s. 9d. to 3s. 7d. per 1,000 cubic feet. Now, when the municipality has lost its gas undertaking, which looked like being a valuable asset in the future, the people are being charged from 7s. to 4s. per 1,000 cubic feet, which is very much criticised by my constituents. They have almost exactly the same service, but they pay much more now for their gas.

If we look at the expenditure of the Gas Council itself we see that it amounts to almost exactly £1 million. In fairness, I must say that this includes the cost of exploration for natural gas, amounting to over £113,000. That is most important, however, and should be proceeded with as far as possible. I was interested to see that the cost of publicity is charged against the Gas Council, quite apart from the area boards, and that it increased from £200,000 to £300,000 last year. A 50 per cent. increase in the cost of publicity, when the actual sales of gas have been reduced and when presumably the capital equipment is better, makes one wonder whether the industry is being particularly well run.

I agree entirely with what was said by the right hon. Gentleman the Member for Blyth (Mr. Robens) about amalgamating the publicity of the different nationalised bodies. There is a tendency for nationalised bodies to work as individual empires against each other, rather than to work together and integrate. I therefore hope that the Minister will do what he can to put that right.

It is significant that certain classes of consumers of gas are beginning to diminish and I hope that that tendency will not go far. For instance, the number of industrial and commercial users was down last year and the actual sales of gas were diminishing under items 1 and 2, both domestic consumers, item 4, commercial, and item 7, public lighting. I hope that that will change but, in view of the tremendous expense involved, it looks either as though the sales of gas ought to increase or that the expenditure should be cut. It is no good spending more to sell less. That is bad economy.

Now, after a five-year period of working, I hope that the Minister will take a good look at the gas industry. In many directions it has done a good job of work, but every great business of this kind can be improved greatly and I maintain that this is the time to do it. We do not wish to see built up a great empire of gas which is increasingly uneconomic. If the Minister does not act now, things will grow steadily worse. This, therefore, is the crucial time to improve matters and I hope he will take advantage of it.

6.40 p.m.

Mr. A. J. Irvine (Liverpool, Edge Hill)

I welcome the opportunity to intervene in this debate. These occasions when it becomes possible to discuss the Annual Reports of the authorities of nationalised industries are important. Hon. Members are afforded the opportunity to study progress and consider how the theories, for or against which they argued in many instances for many years, are developing in practice.

I wish to deal with certain matters in the Report of the British Electricity Authority. That Report seems to set out a narrative of expansion and progress on a very encouraging scale. We read of a notable increase in the rate of installation of new plants and of other equally important developments. Some questions arise from the Report which I desire to put to the Minister. I make no claim to intimate knowledge of or acquaintance with the electricity and gas industries. I approach the whole subject rather with the keen interest which I and other hon. Members take in the progress of publicly-owned industries, in seeing how their achievements compare with those of their predecessors.

Under Section 2 (3) of the nationalisation Act, the British Electricity Authority had the statutory power to manufacture electrical plants and fittings and to supply them. How much, if any, of the expansion in the production of plant and fittings, about which we read in the Report, is being carried out by the Authority in its manufacturing capacity? Certain passages in the Report strongly give the impression that that part of the Authority's activities is, in practice, being very largely abandoned.

I should like to draw attention to three paragraphs which give that impression. Paragraph 94 states: The sizes of the Authority's programmes (i.e., for 1953 onwards) have been governed by (a) the amount of plant which the manufacturers are likely to be able to supply in the programme year, having regard to the amounts of plant from earlier programmes which cannot be completed until that year … As the Minister will readily appreciate, that paragraph which conveys the impression that the Authority is confronted by shortage of plant and by the failure of manufacturers of plant to provide an adequate supply, gives no encouragement to the hope that the Authority is doing anything itself to meet that shortage, although it has statutory power to do so under the Act.

Another paragraph gives me the same impression. Paragraph 180, which deals with switchgear, states: General agreement was reached with the switchgear manufacturers on a general specification … Progress was made … and, later, the paragraph refers to cooperation with cable manufacturers.

All these items of plant and equipment are items which Parliament has been at pains to see that the Authority itself shall have the power and right to manufacture. It seems to me a very important matter to find out whether any of these powers are being exercised or implemented and, If so, to what extent, and if not, why. As I understand, the Authority and the area boards are entirely free, are, indeed, specifically authorised, to compete with private firms in all manner of repair work, in competitive tendering for wiring contracts and the installation of equipment. How far are the boards in competition with private firms in that field?

One sees huge buildings rising in all parts of London which, presumably, are effectively and satisfactorily equipped with lighting and heating installation and wired with the best and most modern equipment. One assumes that there is some competition for the task of carrying out the installation of this equipment. I should like to know whether the Authority is putting in competitive tenders, as it can do and as many of us think it ought to do if it is to be an efficient, expanding concern. Just because politics are lifeless at the moment there is no reason why everything else should be lifeless.

As I understand, the area boards have their own building departments and they are capable of carrying out constructional operations, though it may be at this stage, on a comparatively small scale. One hears that quite considerable constructional operations are being authorised by the boards and the central Authority for their own purposes—for storing plant and for offices, and so on. I should like to think that in some cases the building departments were taking on the constructional jobs themselves. There is no reason why they should not, as far as I know. If it is not practicable at this comparatively early stage of their history for them to take on the larger works, I expect that there are items of work, which now are probably sub-contracted, which could be effectively carried out by the boards themselves.

It seems to me that in this connection one may hold two conceptions of this very important industry of electricity supply, as envisaged and provided for in the 1947 Act. One is the conception of a supply industry pure and simple, farming out to private contractors its building work, its supply of plant and all else and not seriously competing with private firms on repair work, installation work or tenders for work outside the immediate field of electricity supply.

The other conception, much more attractive to my hon. Friends, is that of a live concern which, when confronted with plant shortage, sets about manufacturing plant itself up to the limits of its capacity. There are no limits put to its statutory powers. There may be very severe limits placed upon it in practice. One would like to see this other conception of a live concern take shape—a concern which when confronted with the problem of plant shortage, not only sets about manufacturing plant itself but also develops building activity, repair activity, installation activity and shows an increasing disposition to intervene in competitive tenders with private firms.

It seems to me that only an industry which conforms to the latter of the two conceptions I have put before the House is likely to provide the incentive, the encouragement and the esprit de corps we all want to see in nationalised industries. I am informed that there is fairly widespread fear in the industry of redundancy among the manual workers in particular. I can conceive of no more effective counterweight to bring against that than the conception of an industry expanding in the way I have indicated in the fields to which I have referred.

I also wish to make reference to another topic which I have raised at Question time from time to time with the right hon. Gentleman—the matter of joint consultation. I am fully aware, as I am sure is the right hon. Gentleman, that joint consultation, like foreign affairs, is a subject on which it is fatally easy to speak at great length and on which to be fluent to the point of danger. On the other hand, I feel satisfied, from what I have learned, that there is a great deal of dissatisfaction on this matter of joint consultation. The main burden of the complaint is a belief that what is occurring is that lip-service only is being paid to the conception of joint consultation. Meetings undoubtedly are taking place—they are somewhat flaunted in the Report, where we are told that on one occasion 275 persons attended one meeting. A picture of enthusiasm and—to use an appropriate term in this connection—galvanised energy is conveyed.

One learns from all too many sources that the workers' representatives on these occasions often come away with the impression that what has taken place is not consultation at all but a presentation of prior information to the meeting. A statement is made for the board on what its intentions are and what the advantages are of the proposals to be made, and matters of that kind. Although, undoubtedly, that is an advantage and it is interesting and highly desirable that it should be defended and properly put forward in argument, it is not, of course, joint consultation in any proper sense of the term.

What is widely felt, I gather, is that the practical contributions which the workers' representatives bring forward—very often they are men of considerable technical experience—are not implemented. Information is received, but recommendations are not implemented. This question of joint consultation is only another aspect of the point I was making earlier. The more expanding, live and varied is the concern the more active and effective is joint consultation likely to be. I know for a fact that in the London area there is nothing which many of the manual workers and friends of the industry so much desire as to see expansion of the activities of the central Authority and the boards in the fields of which I have spoken.

They are very concerned, in London, with the introduction of the two-tier organisation and they fear that the disbanding of sub-areas will give rise to redundancy. They also fear that it will mean longer distances to travel which, under the existing wages agreements, may mean less real wages for the men in the job after a period of six months has expired. They want to see these administrative economies and these processes which may result in redundancy countered by the type of expansion I have advocated tonight.

The Minister has very courteously indicated to me at Question time that these matters cannot be the subject of general directions. Only yesterday, when I put this point to him, he said: … I am sure we are all in favour of joint consultation, but the carrying of it out in detail and questions of administrative economy are surely matters for the boards themselves."—[OFFICIAL REPORT, 8th November, 1954; Vol. 532, c. 854.] Therefore, ex hypothesi, they are not appropriate for general direction. That is all very well, but if the criticism is raised, as I raise it, that joint consultation, in practice, is taking the form of giving prior information and is not joint consultation in the proper sense at all, that is not a matter of detail. I submit that it is a subject entirely appropriate to a general direction.

The term "general directions" is becoming a term of art. How many of them are there? How many subjects do they deal with? What measures are taken to see that their requirements are fulfilled? It is very much to be hoped that, in this matter of joint consultation, general directions—not on matters of detail, but dealing with the principle—will be made. We do not want the Minister of Fuel and Power to be merely a past-master in the art of nonintervention.

6.58 p.m.

Mr. Richard Fort (Clitheroe)

I agree with the hon. Member for Edge Hill (Mr. Irvine) on one of the things—but about only one—on which he expresed himself. That was the point he made about joint consultation. The success of joint consultation is more a sign of sound management and efficiency in a business than anything else.

But I cannot imagine that any of the proposals which the hon. Member made in other parts of his speech—particularly when he referred to paragraph 94, and suggested that the B.E.A. make very heavy machinery, and engage in other activities—would do anything else but result in making worse the already very real difficulties of management in these large concerns instead of making management easier and more flexible. I therefore and myself in complete disagreement with the hon. Member, although, in general terms, one cannot but be glad to hear what he had to say about the importance of joint consultation.

However, rather than take the hon. Gentleman to task, I wish to refer to one or two matters which have come up during the course of the debate, and, first, to the question of rural electrification. Hon. Members have said how excellently this has progressed, and it is true that a great many more farms have been connected in the last few years than were connected before. But though it was ignored in the eloquent speech of the right hon. Member for Blyth (Mr. Robens), there is the question of the enormous expense which this expansion has involved.

I know that my hon. Friend the Member for Kidderminster (Mr. Nabarro) made some suggestions for cutting down the capital cost of these rural electrification schemes—and other bon. Members more technically expert than myself may be able to decide whether they are sensible or not—but I think we have reached the stage where the system of financing this rural electrification should be examined from the point of view of whether a different method should be adopted.

So far, we have financed rural electrification out of the revenues earned from other parts of the electrical system. If one turns to the table of statistics, one finds that in areas all over the country prices for electricity to the farms which can bear no relation to the cost involved. I suggest that when the second five-year period comes round, which is referred to by the British Electricity Authority in paragraph 83 of its Report, we should persuade the Minister of Fuel and Power and the Minister of Agriculture and Food to get together to examine the possibility of having a special subsidy for rural electrification. Then, instead of having the subsidies which undoubtedly exist at present—and as a consequence of which none of us knows what this much needed service is costing—we should say that as a matter of policy the House of Commons is prepared to allocate £x million per year to meet the cost of connecting these outlying farms. Then we should know where we stand.

It seems to me that one contrast between the gas industry and the electricity industry is to the advantage of the gas industry in the important matter of price policy, of which rural electrification is a special example. In paragraph 225 of its Report, the Gas Council states: With regard to prices, the principle which the Boards adopted, and which was subsequently endorsed by the Ridley Committee, is that, broadly, prices should reflect the cost of supply. I wish we could find anywhere in the Report of the British Electricity Authority as downright a statement of price policy as that; but far from it.

The Authority seems to have taken elaborate precautions to disguise its policy. Not only does it refuse to publish it in the Report, but it refuses, even to the Ridley Committee, the essential information of what are the diversity factors in the different areas. Without that information one can make only rough estimates of how closely the prices expressed by the tariffs are based on costs.

Turning again to the statistics in the Report of the British Electricity Authority, it is obvious that not only in rural electrification is there a considerable element of internal subsidy, but in domestic consumption as well. The most striking example of that is the figure given for the prices charged in the London area for electricity for industrial purposes and for domestic purposes, where the domestic price for the past year is lower than that charged for industry, as it has been in earlier years.

Admittedly, it relates to only one area, but one cannot help feeling that in other areas there is a large element of subsidy in the domestic price, which means that industry is helping to pay for it. One assumes that a consequence of this—to which my hon. Friend the Member for Kidderminster drew attention—is that we are still using a great deal less electricity per employed person in this country than is used in the United States of America.

I hope that if the Minister cannot give a general direction—which seems to be a phrase with a special meaning—he will at least clearly indicate to the British Electricity Authority that it should publicly state its price policy in the same way as the Gas Board has done. If only we could be quite sure that both industries were basing their prices on costs, we should then have reasonable competition between gas and electricity.

I was rather alarmed to hear the right hon. Member for Blyth, and, I think, an hon. Member on this side of the House, saying that there is too much competition; that we ought to have combined sales rooms and more control over publicity. My complaint is not that the expenditure on publicity is too much, but that the expenditure on research is too little. What hon. Members on both sides of the House are asking is that someone should decide what could best be done by electricity and what could best be done by gas. I think that we should allow the consumers to decide what suits them best.

In the Report of the Gas Council there is a striking example of how this works. Reference is made to the encouragement given to people to replace old-fashioned gas appliances with modern appliances, and figures are quoted showing the number of cases where that has been done. It shows that people are capable of making this decision for themselves if they are given the necessary information. I am far less alarmed about people being misled by what is called "sales talk," and so on, than by the idea that somehow or other, by taking a figure decided centrally, it can be estimated that one service is better rendered by gas and another by electricity. Let the consumers know what are the right prices, based on the real costs, and they will be the best judges in this matter.

That is why I conclude by asking my right hon. Friend to let it be known, especially to the B.E.A., how grateful at least one Member of this House would be if we could see as clear a statement of price policy for that Authority as we have seen for the gas industry.

7.10 p.m.

Mr. Michael Stewart (Fulham, East)

I wish to refer briefly to one or two matters in the Report of the British Electricity Authority. Before doing that, however, I wish to point out that there is one general lesson that emerges from the debate which is worthy of being stressed. We have got into the habit of having regular debates on the nationalised industries. It is more and mare apparent with each one we have that there is no longer any attempt to make any attack on the general principle of public ownership in these industries.

That is in itself a very good thing. Indeed, one of the advantages of bringing an industry into public ownership is that the nation is then able to consider, simply on its merits and not with the object of defending a system of private ownership, how best that industry should be organised. However, while we are all glad to see this general acceptance, I do not think that hon. Gentlemen opposite ought to carry it to the point of supposing that these arguments for public ownership, which have now been generally accepted in these industries, are not of fairly wide and general application.

Let us look at some of the points made in the debate already, especially in the speech of the hon. Gentleman the Member for Kidderminster (Mr. Nabarro). He referred to increasing expenditure—at times it was on power stations and at times it was on generating plant, according to what happened to suit his argument against my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) —but, at least, it emerged that he felt that there has been gratifying progress in these fields, for which he was prepared to give credit to the late Government, the present Government and the right hon. Gentleman almost indiscriminately.

The fact itself is undoubted. Progress of that kind, with great capital expenditure on a form of investment the return for which cannot always be immediate, is a kind of enterprise which is becoming increasingly beyond the reach of the private investor. It is one of the advantages of public enterprise that we can have progress of this kind.

Mr. Nabarro

The whole of my comments about generation facilities for the British Electricity Authority were devoted to demonstrating that the statement made by the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) at the Scarborough Conference of the Labour Party to the effect that the Government are building houses at the expense of power stations was wholly mendacious.

Mr. Stewart

I heard all that the first time. The error of which the hon. Gentleman was guilty was pointed out by my hon. Friend the Member for Kilmarnock (Mr. Ross). It was on that point that the hon. Gentleman muddled up power stations and generating plant. The fact that he drew a false moral is no reason why the House should not draw the correct one, which is that, investment of this kind being beyond the reach of private enterprise, that is one of the reasons why it is a good thing to extend the field of public ownership.

Again, the hon. Gentleman referred to the desirability of further railway electrification. I think that we should agree with him. It is now more than 30 years since a Royal Commission stated quite clearly that further electrification of the railway system was very much to be desired in the public interest, but that it was idle to expect that the private investor would ever do it.

Wherever we turn we find the same moral being pointed out to us, that we are now living in an age where the effect of technical development, the great masses of capital required and the degree of the research necessary in order to find out what investments are worth making make the whole business of investment more and more appropriate to public than to private enterprise.

Mr. Fort

I am sure the hon. Gentleman would agree that there are other industries which are still run by private enterprise, such as the oil and chemical industries, where comparable sums of money have been invested without the industries having to come under Government control?

Mr. Stewart

That is partly because the returns there are more certain, more speedy and more obvious. My point is that, although we live in a community in which there is still a great deal of private enterprise, the general trend of scientific invention is to make that community one in which public enterprise is increasingly required.

Reference was made to the contribution which atomic energy may in time make, but from what source comes the development of that industry? From what type of enterprise does it come? What is the description of that industry which comes from the Government? The reference is to "Britain's atomic factories," not to private enterprise atomic factories; but perhaps I am wandering a little from the immediate scope of the debate.

In the Report we find that, one after another, the general arguments advanced against public ownership are knocked down. There was a protest by one hon. Gentleman that some of the high hopes of public ownership that were voiced from this side of the House have not fully been realised. It may be that we were a little over-optimistic, but what is certain is that the dismal prophecies of the results of public ownership that were heard from hon. Gentlemen opposite have been falsified in every case.

The suggestion was made repeatedly that the result of public ownership would be sheer incompetence on the part of the management. Every page of the Report, and every paragraph of the Minister's speech, not only in this debate but in debates on other industries for which he is responsible, give the lie to that allegation.

It was suggested that one result of public enterprise would be jobbery in the giving of appointments. Nowadays, no serious responsible person attempts to repeat that accusation. Indeed, one feels that one should almost apologise to the House for bringing up this outmoded nonsense, but it is just as well. It reminds one of the kind of things that members of the British Medical Association say about the results of the National Health Service.

It is as well to realise that the result of the experience, the experience which the House scrutinises when it reads these Reports, is to strike off the list one after the other the stock arguments against public enterprise. That list of arguments has not been replenished during the last five or six years, and it is not likely to be. It was suggested that another result of public enterprise was that it would become a kind of tyranny over the workers. The chapters of the Report on staff relations and wage negotiations do not suggest that that is so. Nothing that has happened has borne out that argument.

Also, it was suggested that one result of public enterprise would be an increasing employment of hordes of officials instead of people engaged in getting on with the actual job of production. In page 63 of the Report there is an interesting table which shows that during the period under discussion the total number of employees of the Authority and the area boards increased by 1.9 per cent. The number of manual workers increased by more than that and so, I am glad to observe, did the number of technical trainees and apprentices, but the number of people in the executive, clerical, accountancy, sales, managerial and higher executive posts increased by a lesser percentage than the percentage for the staff as a whole.

To put it another way, out of every 100 persons employed there were fewer engaged on executive and clerical duties —what are sometimes rather loosely and inaccurately described as non-productive jobs—and not, as was prophesied, a vast proliferation of officials at the expense of the people doing the productive work. This is only one example of a tendency to be observed in the public industries in general.

I trust I may be forgiven for elaborating this point but since for many decades to come the nation will face the great issue of how its great industries can be owned and organised, it is as well that we should realise that the experience that we have had so far has completely destroyed the case on which opposition to public enterprise was rested in the past. If there had been in those arguments even 10 per cent. of truth we should have had this debate thronged with indignant hon. Members of the Conservative Party anxious to point out how their views had been justified.

I want now to refer to one or two points of lesser but not inconsiderable importance in the Report. With regard to Chapter 5, which deals with employment and staff relations, my hon. Friend the Member for Edge Hill (Mr. A. J. Irvine) has referred to joint consultations. It seems to me that the Report gives us an over-rosy picture of what joint consultation is like. When I read it I felt that if it was correct—I have no doubt that it is as far as it goes—there must be many workers in the country who have had a very gratifying and satisfactory experience of the working of joint consultations. I could not help wondering why I had never met any of them. Those I have met have always had rather disappointing experiences of joint consultation.

Perhaps the moral is that these Reports might be written with a little more bluntness and candour. I understand the difficulty of those responsible for running the nationalised industry in view of some of the ignorant propaganda against nationalisation as a whole. There are always people who want to fire on the Union Jack and run up the Jolly Roger of private enterprise above it. That may make the people responsible for public enterprises a little timid in admitting such failures as they experience. However, I assure the Minister that he can always rely upon the Opposition to back him up against any irresponsibles who may appear behind him. He may congratulate himself upon the fact that most of them have not appeared today.

We want more candour in some sections of the Report, and the one dealing with joint consultation should be among them. The right hon. Gentleman might try asking some of the leading trade unionists concerned to write him a first draft of the section on joint consultation and he can then sort out with them what will present a balanced picture. That is a suggestion which the right hon. Gentleman might seriously consider. I am sure that we could have something more spirited and more interesting to read, and it would help show the House what the difficulties are in getting joint consultation really to work.

The section of the Report dealing with education and training is extremely encouraging. It looks as if we are on the way to doing what R. H. Tawney advised the nation to do in his book in the 'twenties "The Acquisitive Society," to turn industry more and more into something like a profession, something in which the people engaged in it can feel pride, and in which they feel they have an opportunity to rise according to ability. Again, one feels that the section might have been a little more realistic if some of the undoubted difficulties that must occur in getting a career really open to talent had been more fully developed in the course of the Report.

I want, briefly, to mention relations with the consultative councils, whose task it is to look after consumers' interest. There are few more melancholy jobs in the world than trying to represent the consumer. We are all consumers, but we are something else as well, for we are all probably producers in some industry or other. It is notorious that a man is generally more directly concerned with and interested in himself as a producer than himself as a consumer. He has his trade union or professional association to represent him as a producer, and that will often command much of his loyalty and interest. He is a consumer only part of his time. Trying to represent the consumer is one of the most nebulous jobs in the world.

For that reason, I wish the difficulties of getting the consumer's voice heard had been more fully described in the Report. I hope that next time—perhaps I might be allowed to express the hope, without any ill-will to the right hon. Gentleman, that it will be someone else who has to present the Report next time —we may have a little more fullness and a little more candour on these topics.

Another point which struck me relates to the ability to compare accident statistics. One can in time dig the comparison out, but it ought to be immediately apparent. The only statistical comparison which there is with the previous year in the section of the Report dealing with safety, health and welfare, is the rather odd remark that there was a considerable increase, presumably over the previous year, in the number of talks given by the Authority's regional safety officers to local advisory committees. That is a useful statistic in its way, but statistics about the actual number of accidents would be a little more to the point.

Although all hon. Members on both sides of the House will have criticisms to make about many aspects of the Report, I would again say that one of the important facts which has arisen from this debate and similar debates is the increasing strength of the case for public enterprise.

7.28 p.m.

Mr. Anthony Hurd (Newbury)

The hon. Member for Fulham, East (Mr. M. Stewart) has paid his tribute to nationalisation, as we should expect. I want to pay a tribute to the Minister and the Parliamentary Secretary for the impetus they have given to enterprise in our nationalised electricity industry.

I have a personal interest in this subject, in that in June, 1953, I was fortunate in the Ballot for Private Members' Motions and had the opportunity of raising the question of rural electricity supplies. We had a very useful and full debate, and we got a valuable meeting of minds. The Minister had taken the trouble beforehand to clear the ground of some obstacles which had been delaying the progress of rural electrification. I thank him now for being as good as his word in that debate. With the full co-operation of the British Electricity Authority and the area boards, my right hon. Friend has really been able to take us a good step forward in bringing electricity to our farms, hamlets and villages. We have not yet gone the whole way, but there has been a good step forward, and I thank my right hon. Friend for the impetus he gave to this progress.

In Berkshire, we have been fortunate for many years in the way in which our electricity supply has been run. That is why I disputed what the right hon. Member for Blyth (Mr. Robens) said about private companies refusing to bring electricity to rural areas. Happily, we in the Southern Area had under nationalisation only to carry on the tradition established by the Wessex Company, and we are doing so satisfactorily.

I should like to give the House an instance of some of the difficulties which still have to be overcome, and my experience in overcoming one problem with which I recently had to deal. I think the experience may be useful to other Members from rural areas.

In January, I had a letter from an outlying area beyond Lambourn on the Berkshire Downs. I was told there was a group of 41 prospective electricity users, including 16 farmers, who could not come to terms with the Southern Electricity Board about a mains supply for their farms and houses. It is a very lovely part of the country, but it is an isolated area and the main electricity line would not lead to anywhere. It would decidedly be on a spur line, and it obviously presented a very considerable economic problem to the Southern Electricity Board. Indeed, the board informed me that the capital cost would be £8,100 and that the anticipated revenue would be only £474 a year—that was what the prospective users said they would take. To make the finances of such a scheme sound it would need a revenue of at least £900 a year.

I called a meeting at Lambourn at which about 50 householders and farmers and the deputy-chairman of the Southern Electricity Board and his key men were present. They very sensibly not only produced a map but got out some samples of what Mr. A had said he would use and what Mr. B had said he would use. Alongside that they had, from their experience, the actual amount of current they believed Mr. A and Mr. B would use.

We took some typical examples—there was a big farm, racing stables and several smallholders and one caravan. When the figures were read out of what Mr. A said he would use and what the board said he would probably use and what Mr. C and Mr. D would probably use, we very quickly got undertakings well above the £900 guarantee. Some people had just not realised how they could use electricity today. One man had put himself down for £6 worth of current a year. It transpired that he was spending £32 in buying Calor gas in cylinders, but when he found he could use an electric cooker and had no need to spend money on gas he asked to be put down for £15. In that way we quickly got to the required income.

I was glad to hear this week from the deputy-chairman of the Southern Electricity Board that this scheme has now been approved, that it has been successful in obtaining the necessary support for the scheme to supply the Seven Barrows neighbourhood, that the Board has authorised the expenditure and the preliminary obtaining of wayleaves and consent is proceeding. That is satisfactory. It has taken some months, but it often does to get everyone in agreement.

This scheme will be of considerable benefit to that outlying farming district, and we shall find not only milking machines and equipment for grain drying and grinding grain, but also television masts sprouting right along the electricity route. That is one of the benefits for which the rural dweller looks. It is a great boon to have entertainment in one's own home on a wet winter evening. That particularly applies to the farm worker and his wife. Nowadays, happily, the farmer and his wife regard electricity not only as a source of light as many of us did in the early days but also as a source of economic power, and I foresee in outlying districts and, in-deed, throughout the rural areas that we shall continue still to increase the use of electricity.

I was interested to hear from the Southern Electricity Board that the farming use of electricity in that area last year had gone up by 18.6 per cent. It is true that a good many more farms have been connected to the-main supply, but looking at the average use of electricity by consumers one finds that in the Southern Area as a whole it went up by 10 per cent. That is a satisfactory advance, and I have no doubt that we shall see it increasing year by year.

I really rose to pay my tribute to the Minister and the Parliamentary Secretary for the impetus they have given to the getting of electricity to the rural areas. There is still more to be done. In my area we have 85.5 per cent. of the farms now connected to the main supply. In this area we ought to be well above the 90 per cent. mark, and I hope that we shall be by the time this Government have completed the job.

7.36 p.m.

Mr. George Darling (Sheffield, Hillsborough)

I think I ought to begin by apologising for not hearing the earlier speeches in the debate; in fact, I would like to begin by saying something which has nothing to do with this debate: the sooner we get helicopter services going the sooner shall we be able to help those hon. Members who have to take part in by-elections and also wish to come to the House in good time.

I was very interested in the remarks by the hon. Member for Newbury (Mr. Hurd) about rural electrification. As a representative of the City of Sheffield, I am not particularly interested in rural electrification, but I think he was going a bit too far to give so much praise to the present Minister for recent developments in rural electrification with just a passing reference to the British Electricity Authority and no reference to the Minister's predecessors.

Mr. Hurd

Unfortunately, they did very little about it.

Mr. Darling

That argument cannot be sustained.

I think that the most interesting suggestion about the further development of rural electrification came from the hon. Member for Clitheroe (Mr. Fort). He suggested, in rather revolutionary fashion—and I thoroughly agree with him—that the Minister of Agriculture and the Minister of Fuel and Power should together decide what subsidies ought to be paid for the extension of electricity without any reference to the Chancellor of the Exchequer. If the Chancellor of the Exchequer merely had to take instructions from such Ministers, it would put the Chancellor in his place and public money would be wisely spent instead of having Chancellors of the Exchequer coming along, as they often do in so many cases, to stop the proper expenditure of public money. The expenditure of public money on electricity development would be well worth while.

My first point is really to show the difficulty that we are in when we discuss the Reports of the fuel and power industries in the way that we have done—with a debate on the Report of the National Coal Board and then another on the Gas Council and the British Electricity Authority. In discussing them in this piecemeal fashion, we do not have a discussion, as we ought, on what our fuel and power policy ought to be, because fuel and power policy covers all three industries and it is really the overall policy that we are concerned about.

We have to begin with coal, because both the gas and electricity industries are based upon coal, and, somehow or other, in the interests of the community and of these industries themselves, we must stop the wastage of coal that is now going on. We burn our coal where it ought not to be burnt, and where about 85 per cent. of its value goes up the chimney in smoke and, with it, valuable raw materials.

In all the talks and discussions that we may have about the high cost of gas, electricity and coal, and about the need to reduce their cost, we must appreciate that never again in this country can we have cheap coal. When we compare the prices of these commodities and services today with the prices which operated before the war, we have to remember that the price of coal before the war was far too cheap for a healthy coal industry and for a healthy industrial community. We shall never again get cheap coal, so we ought to be far more vigorous in whatever efforts are needed to make proper use of coal and to obtain from it the fullest advantage.

I do not want to spend too much time talking on the technical side, but, if we are to get the fullest advantage from our coal, there will have to be far more carbonisation, far more coking ovens, and far more tar distillation plants to obtain the by-products, and the result of all that will be an increase in the quantity of gas to be used somehow. But it is not gas so much that we need in industry as much more electricity.

I think it is common ground that our industries are really short of cheap electric power. We cannot go on operating as an industrial nation and exporting our products to the world unless we can get cheaper electric power. What we are concerned about is how we can turn that increasing quantity of gas, which we are bound to have in the future, into electricity, and do a lot of other things at the same time.

It seems to me that one of the economies that could be made in this field of fuel and power is to reduce the great expenditure that is now incurred in unnecessarily carting coal about the country. We have mentioned this point before in these debates. There are coal trains going up and down the country all the time, taking coal to power stations, which were badly sited in relation to the coalfields, when, if there had been a proper siting policy for power stations in years gone by, it would be far easier and cheaper today to transport electricity instead of coal.

But we can also take the power for the electricity stations in the country through gas mains. If, in the production of electricity, we turn over from steam power, which is very wasteful in the coal that is burned, both from the point of view of smoke pollution of the atmosphere and in the expense that is necessary to carry coal in trains around the country, and if we take gas through gas mains, cut out steam generators and turbines and substitute gas turbines—a point which I have tried to make repeatedly in the House—we should not only get greater value from the coal, but we should get the greatest advantage out of the carbonisation process, the tar for producing all the by-products, and coke for domestic burning and for use in certain industrial processes. We should then have gas running our electricity stations, and all this out of the one process, with gas turbines producing electricity instead of steam turbines, which would cut out smoke pollution and be valuable in every way.

In calculating the cost of the turnover, we cannnot make a proper calculation by putting the whole cost of this transformation of electricity production from steam to gas turbines on the Electricity Authority itself. We must have a fuel and power policy which takes in all the economies that would result from the sort of proposal I am now making.

It is not only the case that we should have an increasing supply of gas if such a policy were carried out, but that we shall have increasing supplies of gas anyhow. We ought to be making full use of the tail gas from the oil refineries, which has been mentioned before. Next, is the exploration for natural gas still going on? We do not know what it will produce, but it is no good producing gas at all unless we make full use of it.

There is also the question of the methane gas from some of our coal mines which have too much fire-damp. Then there is a prospect which I suppose is rather remote and perhaps not worth talking about now, and that is underground gasification of coal. With the extension of our steel industry, too, we have the coke ovens in the steel works again producing gas, most of which may not be used in the steel industry itself.

It seems to me to be utterly idiotic for us to neglect the prospect of using gas and gas turbines and thereby making all the economies which I have mentioned. It is idiotic to neglect all that development and have no positive policy to provide for it. The Minister was congratulated by the hon. Member for Newbury, I think quite wrongly, on his rural electrification development, but, really, in the absence of a fuel and power policy, for which the Minister himself is responsible, to congratulate him on his success seems to me to be far-fetched.

Mr. Geoffrey Lloyd

The hon. Gentleman did say that he has not been here all the time, and I myself, among other things, mentioned what our fuel policy was.

Mr. Darling

I apologise to the right hon. Gentleman. If that policy is along the lines which I have been indicating to the House, I will give him all the congratulations he deserves, but I doubt very much whether that is the sort of fuel and power policy we are to have from him.

The second point which I want to mention, and I expect it has been mentioned already in my unfortunate absence, is the question of giving the consumer advice in the supply of apparatus and equipment for domestic heating. I do not want to suggest that we should oppose the gas and electricity industries having the right to go ahead with their own publicity schemes and develop their services in regard to the appliances that are available, but I do think that, following the lines of the Ridley Report, we ought to make it possible in our localities for the consumer to be advised, before exercising a perfectly free choice after that advice has been given, on the appliances which are most suitable for the consumers' purposes.

There should be advice on such questions as whether a solid fuel grate would be far more suitable for space heating for which the customer requires an appliance, whether, perhaps, a gas fire would be better and cheaper, or even whether it might not be better to use an electric heater. In every locality, instead of there being two separate showrooms run by the gas and electricity authorities, there should be a body with a joint showroom, with properly trained people who can give the consumer advice on these matters, but leaving them with a free choice. I hope that something can be done on these lines.

Recently, at their request, I addressed a meeting of the coal managers of the co-operative societies of this country, when I put forward this idea. It is quite silly to have coal managers who sell only coal and coke, without reference to how the coal and coke are to be burnt. Some co-operative societies send members of their staff to the Coal Utilisation Council to get technical advice which is used for the benefit of customers. As one result of the rather passionate speech which, I regret to say, I made, the coal managers have now changed their title. They now call themselves "The Co-operative Fuel Managers' Association." They agree with me in wanting to establish in cooperative societies the idea that the fuel manager is also the person who sells appliances. Other firms that sell coal also have the same idea.

The customer, instead of simply ordering two or three cwt. of coal or coke—if that is how he buys it—may ask the fuel manager for advice about stoves, and whether there is a cheaper and better stove than the one he is using. This trade ought not to stop at the selling of coal or coke, and the selling of grates and stoves ought not to be in the hands of furniture shops, which also sell things like radios and easy chairs. Advice by people who know what they are talking about should be freely given not only to retail customers but to builders and local authorities responsible for building council houses.

This will not interfere with the free choice of the customer, which, of course, must be retained. There must be publicity by the gas and electricity industry. An advisory service such as I have suggested fits into the sort of fuel policy that we ought to have. The Minister may have announced great schemes of development for the proper use of coal and of gas in the production of electricity, but unless he can give the sort of lead I have suggested, I still maintain that he has not a satisfactory fuel and power policy.

7.52 p.m.

Mr. James Hudson (Ealing, North)

I had the privilege, which my hon. Friend the Member for Hillsborough (Mr. G. Darling) did not share, of listening to the Minister's speech and to the speech of my right hon. Friend the Member for Blyth (Mr. Robens) in reply to it. I had to go away for a little while, but, none the less, I have heard most of the debate. I intervene now only because of what was said by my hon. Friend the Member for Fulham, East (Mr. M. Stewart) to be the insoluble problem of what should be done about the organisation of consumers.

That problem has to be faced. I hope that the Minister will forgive me if I seem to be talking only to hon. Members on this side of the House. There is hardly anybody left on the Government side to point out the alleged evils of nationalisation. It reminds me of the little rhyme which I learned when I was a child, and which started like this: The boy stood on the burning deck, Whence all but he had fled. There are only the Minister, his Parliamentary Private Secretary, and a Whip, left on the Government side of the House. I am sure that the Minister will not complain if I point out that his party is scarcely backing him in the good work that he has done. He deserves better support than he seems to be receiving at the moment.

I go back to the question of consumers. I naturally think of it, being a representative in this House of the co-operative movement, which is taking an increasing interest in the question of the part which consumers shall play in the scheme of things under nationalisation. The co-operative movement does not necessarily accept nationalisation as the only way of organising Socialism, and it puts in a claim for its own movement as a contribution to the socialisation of industry and services for ensuring that the consumers' needs get prime consideration at every point. The co-operative movement knows that it cannot solve this vast problem of fuel merely by a co-operative fuel society, and it readily accepts the nationalisation of coal, electricity, gas, and the other things which have yet to be.

I claim on behalf of the co-operative movement that much closer attention must be given to the way in which the views of consumers shall be observed in the development of nationalised industries. I draw attention to the last Report of the British Electricity Authority. It is only in the appendices to the Report that one sees anything definite about the organisation of consumers. We read in Appendix 3 that the consumers have their chance of speaking through the regional consultative councils, and the names and addresses of the chairmen and secretaries of the council are given.

As to what these councils are doing and how they propose to develop in the future, the Report says that a consultative council should consider and report to the board on such matters as are referred to it by the board. It must be informed of the general plans and arrangements for carrying out the functions of the board and must make representations thereon. Complaints which the council receives from consumers must be passed on to the board for consideration. From my general reading of the Report, I assume that nothing very much has been submitted by the consumers for the consideration of the board, because nothing is referred to in the Report.

Here is a considerable field to be explored. I am not saying that the British Electricity Authority is responsible; rather are we in Parliament responsible. We have set up the various nationalised boards but have not yet devised a sufficiently alive consumers' organisation for people generally to accept and use in order to protect consumers' interests. There has been a very great improvement in the lot of the producers as a result of nationalisation. The miners stand out in this respect, but the same applies to gas and electricity workers. It is imaginable that the producers, by skilful organisation, may be able to extract more from the industry than the consumers will find it possible to pay.

While it is in the general interest of the consumers of this country today to see that the miners are treated best among the workers engaged on our behalf, it is certainly in the interest of the miners to see that, when the price of coal reaches the point at which it becomes too high for the housewife to pay, there must be effective means for representation by the housewife consumer regarding the price she pays or the quality of the commodity she receives, or, for example, as in the case of electricity, the way in which the gadgets are prepared by which her work in the home may be lightened and her life generally improved by the new nationalised service which we are developing.

I believe that the nationalised service, for example, in Scotland—I suppose that I can refer to the Scottish Hydro-Electric Scheme, although this will be the last year that we shall be able to do so under these Reports—

Mr. Nabarro

The hon. Gentleman cannot refer to it now.

Mr. Hudson

I understood that the actual administration had gone on at least for part of the year under the old dispensation.

Mr. Ross

The position is that this will be the last year in which the Minister will be responsible for the South-East and South-West Electricity Boards in Scotland.

Mr. Nabarro

Is the hon. Gentleman aware that on not one single occasion since the end of the war have the affairs of the North of Scotland Hydro-Electric Board and its Annual Report been subject to the scrutiny of this House? What a disgraceful indictment of the hon. Gentleman's party.

Mr. Hudson

I was about to make the very minor point that it was recently reported—for example, when the Loch Lugart scheme came into operation—that there had been a tremendous increase in the number of consumers, especially in the north-eastern districts of Scotland. Tom Johnston pointed out that the percentage of consumers had increased to a greater degree than, probably, in any other area in the world. Even in the northernmost part of Scotland people are enjoying the wireless programmes, and are even installing the washing machines to which reference has been made tonight.

That being so, their views with regard to development are a matter of the greatest importance, and in future years we shall look forward to an extension of the account which the Electricity Authority gives us of the way in which the consumers' views are being expressed, the alteration that may be made as a result, and the reactions of the boards to the suggestions put forward. I am quite certain that the Minister will agree that, in so far as we can, we ought to put out best efforts into securing the further development of the organisation of the consumer. I intervened in the debate merely to say that.

8.5 p.m.

Mr. F. H. Hayman (Falmouth and Camborne)

I rise to pay my tribute to the excellent work done by the South-Western Electricity Board and by the South-Western Regional Gas Board, because, apparently, the work of those boards has been criticised this evening by hon. Gentlemen opposite. On the question of electricity development, I would draw the attention of the House to the following extract from the Sixth Annual Report of the South-Western Electricity Board: Extension of Service. 27,338 new consumers were connected this year—the highest number in any year since the Board was constituted—and in the six years since Vesting Date about 150,000 consumers have received a supply for the first time. By connecting over eleven hundred farms during the year the Board have now doubled the number on supply six years ago. In six years the South-Western Electricity Board has doubled the number of farms connected to the electric mains supply. The overall sale of units was stepped up by 10.1 per cent. compared with 1952–53, the highest increase achieved by any area board. Sales to industry rose by 16.8 per cent. The whole of this expansion has coincided with a decrease in working costs. The Report goes on to say: The Board's own internal working costs, including distribution, consumer service and administration, were brought down from .394d. per unit sold to .373d. per unit sold, in a year when a further increase in the price of coal —4s. 7d. per ton in the South West—again increased the bulk purchase price of electricity. I submit that, quite apart from the development in electricity which has gone on in the urban districts during the six years since vesting date, this doubling of the supply of electricity to farms is something of which we can be very proud, and something for which the late Labour Government can take great credit concerning the nationalisation of the industry. I am quite sure that the Minister and his Parliamentary Secretary are quite ready to give credit to past Governments, because they have experienced an increase this year which is due to the development that was planned and that was already taking place before they came to office.

With regard to gas, no one who has lived in Cornwall during the last generation can fail to have been struck by the immense development that has taken place in the distribution of gas during the past three or four years. Many main roads in Cornwall are now up because the mains supply is being laid in places where it never was before. I think that both the gas and electricity area boards deserve immense credit for their great achievements during these years.

Regarding the amount of electricity sold to farms, I am a little apprehensive that farmers are not making the full use of the supplies available to them. The South-Western Electricity Board has done everything possible to increase the supply of units, but the farmers have been a little hesitant. One sometimes thinks that they are mainly concerned to get electric lighting but not to use electricity for the industrial side, if one may so term it, of farming. The National Farmers' Union and the South-Western Consultative Council are doing all they can to popularise the use of electricity for power purposes.

I think that, in the South-West, we can claim to have as good electricity and gas consultative councils as any in the country. In the gas industry, particularly, they are excellent teams. On the electricity side, they have never ceased to prod the British Electricity Authority, and the Minister himself, to see that certain deficiencies in the structure of consumer councils are made good. This is perhaps an occasion when one can say that there is a very great future for these councils. I hope that no hon. Member opposite will depreciate the work which they do, and which they are capable of doing.

8.12 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

I was rather struck by the admissions from hon. Gentlemen opposite, and the statements which have been made during the debate about the integration of industry. Surely hon. Gentlemen opposite have never objected to the integration of an industry. The difference is that they call it rationalisation, and say that nationalisation is a bad thing. I worked for many years with a company which, by 1936, had gained control of 20 others—by rationalisation. There is, however, a very important difference between the method by which that company acquired the other 20 and put them out of business, and what happens when an industry is nationalised.

The company I speak of, for which I worked for 17 years, succeeded in integrating its particular industry by using trade practices to force voluntary liquidation on all the others. The capital of those concerns was thus wiped out, and the one company acquired the businesses, their customers and trade, and was able to enlarge its own factory at no capital cost. By the integration of the nationalised industries, on the other hand, we have an accumulation of the capital of all the units integrated. I know from my own industrial experience that many companies which have been established over 100 years have been in voluntary liquidation a hundred times. It is surprising how often they have received permission to write down their capital. The capital charges would otherwise have been so great that they could not have carried on.

In the British Electricity Authority's Report it is astonishing to see that though, in 1952–53, the increase in fuel costs rose by .019 per cent., the increase in the cost of financing the industry rose by .025 per cent. The increase in the cost of buying coal has been less than the increase in the cost of financing the production of electricity. The same applies when one turns to the cost per unit sold, Raw materials, labour, salaries and wages represented .330d. per unit sold. The cost of the various financing arrangements was .362 per unit sold. Our engineers, technicians, miners and all the men engaged in the physical processes cost the industry less than does the financial side.

That is a most amazing situation. It has always been a mystery to me why it is that, in all our municipal enterprises, and now in the nationalised industries, the rate of increase in capital charges and the cost of finance, has overtaken the physical cost of doing the job. That would have happened in the industries I have mentioned were it not that from time to time the capital was written down, but one cannot write down the capital of nationalised industries.

In the burgh in which I lived I can remember when the annual cost of a particular service was £104,000 a year. When the local authority wiped out that service there remained an annual cost of £84,000 for interest charges. The reason was that we had never been able to write off, but if one is running a factory or a business one can have one's capital written down. When Baldwin's capital was written down, it reduced the company's financial obligation, but we cannot do that in nationalised industries.

This has to be looked into. Where are we getting? The time will come when the engineers, scientists and technicians will give us push-button production with the minimum of labour, but it seems to me that the financial charges will go higher and higher and that they, rather than the costs of production, will be the main burden on industry. This is a very serious problem in a capitalist country.

I do not wish to indulge in Socialist propaganda, but I remember that, between the wars, in the industry with which I was connected, the Japanese were "hitting us for six." Because they were financing their enterprises in a way different from ours they were producing at almost one-third of our production costs. The company for which I worked succeeded in cutting down a lot of its capital and so got near to the Japanese costs, but how long will these costs go on, from electricity to the public services and through every form of industry to the consumers?

I see that the financial charges have again increased. The increase was over £11 million last year. Will it go up again next year? How long is it going on? I know very well that it dropped a little with the reduction in the Bank rate, but not to what it was when the Bank rate was first raised by the present Government. I am quite certain that if the Bank rate were again cut, it would not appreciably lower the financial charges on the industry.

This sort of thing is going on in the nationalised industries. Year after year it seems that we are to be compelled to meet these increasing financial charges. If we are never to be able—and I am quite certain that, as long as the capital system lasts, we shall not be able—to write down that capital, even though the physical capital has disappeared, I do not know Where we are to get.

We all know of factories built, say, in 1800, in respect of which loans have had to be raised. But when a company raises money to this extent, the physical thing that was created disappears, while the burden of the loan remains. This applies to companies, local authorities and utility undertakings. This process seems to carry on in perpetuity, and the only way in which the position can be redeemed is by raising another debt to clear the preceding debt. Therefore, when the physical creation has disappeared, interest is still being paid on a debt created 100 years ago.

Some of us may live long enough to see the British Electricity Authority selling units of electricity at 1s. a unit, of which the cost of wages and raw materials to produce electricity account for 2d. and financing accounts for 10d. I know that the figure of .362 is not distributed in the form of producing power. On the other hand, I know that the other figure to which I referred is so distributed. This is merely an accounting process. At the same time, it puts a burden upon our physical processes and frustrates us in getting the full use of our resources. The time is rapidly approaching when this problem should be examined, and this or the next Government should examine the whole system of cost accounting and financing in our nationalised industries.

Our economic history shows that most of the large manufacturing companies established in the last 100 years have written down their capital. Large numbers of them have gone into voluntary liquidation. Many have gone bankrupt and have been bought up for scrap. Some of the finest industrial firms in the country, with great reputations, have at some time or other gone into voluntary liquidation or have written down their capital, and there is no discredit to them for so doing.

I sometimes feel that it would be useful to get rid of the burden of the moneylenders and write down some of the debt which is accruing on our nationalised industries. I feel sure that the physical processes of producing and distributing coal and electricity would not be harmed in the slightest if we could gradually eliminate the burden of borrowing money to do the job. As things are, it would seem that we cannot mine coal or produce electricity unless we can borrow the money to do so. To me, that does not sound real. There is something fictitious about it.

I do not claim to be an expert in economics or in finance, but as a practical engineer, a man who is used to doing real work and producing real things, it seems absurd that the high cost factor should continue and extend this process of going to moneylenders to find the money, mortgaging generations to come before we can do the job. We can mortgage the future as much as we like, but the people who use these resources in the future cannot consume the corn that is grown today. It will be gone. It seems to me completely immoral and nonsensical to pile up burdens of debt on our enterprises, and I am certain that this is one of the principal causes of frustration not only in Britain but in the British Commonwealth and Empire, because we have allowed this thing to hang around our necks.

I am afraid that I may be getting out of order. I will, therefore, conclude by expressing some gratitude for the change of view of some hon. Members opposite in their new appreciation of these integrated industries. If their fears of nationalisation arose from the belief that costs could never be brought down and that heavy capital charges must be maintained eternally, I can appreciate their point of view. But if their fear of nationalisation was due to the thought that it would be difficult to reduce the wages of the workers, I have no sympathy with them. Whatever it is, it is good to see a change of heart on the part of hon. Members opposite.

8.27 p.m.

Mr. E. G. Willis (Edinburgh, West)

I intervene in this debate in order to raise a matter which is really a constituency point, although I think it will apply to other constituencies in which there are large power stations. I have in my constituency Portobello Power Station, and I understand that it is one of the biggest in the country.

Mr. Nabarro

And the best.

Mr. Willis

I am prepared to accept that. Adjacent to the Portobello Power Station is a large area of ground which is used for the purpose of storing fine powdered fuel. On the other side of this area which is used for storing fuel are dwellinghouses. This fuel store is a nuisance to the citizens who have to live next to it, because as soon as the wind blows from the east or the north many houses suffer from dirt and dust.

I noticed in the Report that the British Electricity Authority is spending a lot of time trying to prevent pollution of the air by the emission of smoke from chimneys, but it seems to me that this is just as great a nuisance. I sincerely hope that the British Electricity Authority will find some adequate means of preventing the spread of dust from these fuel storage dumps, which has become a nuisance.

I should like to make one or two comments on the Report. I have considerable sympathy with my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) on the question of interest charges, because, on examining the summary of accounts of the British Electricity Authority, I noticed that out of an expenditure of £320 million £32 million is for interest.

Mr. Nabarro

I interjected to say that Portobello was the best power station in the country because it has the highest load factor of any power station in the United Kingdom: 30.93 per cent.

Mr. Willis

I am not a technical expert, and I could not comment on that. I was dealing only with a local matter which, I think, affects other power stations: that is, the question of how the fuel is stored and the fact that it is spread over large areas and is a nuisance to hundreds of people close by.

On examining the summary of the combined trading accounts, I notice that out of expenditure of approximately £320 million, £32 million is for interest. Ten per cent. for interest seems to me to be a very large proportion. I should have thought that a publicly-owned undertaking, with all the guarantees of the State behind it, would have no necessity to pay more than 2½ per cent. If I put money in the Post Office, I receive 2½ per cent. Why we should pay 10 per cent. of the expenditure in connection with the electricity industry seems to me to be rather strange. I suggest seriously that the Government should consider this again. If interest of 2½ per cent. was payable, there could be a saving at once of £24 million, which is a very considerable sum.

The second thing that strikes me about the combined trading results is that we spend only £250,000 on research. For an undertaking with a turnover of £320 million to spend only a quarter of a million pounds on research seems rather ridiculous in present-day circumstances. Surely, something is wrong with our sense of values when we run an industry in this fashion. I should have thought that the Authority ought to be spending a great deal more on research, particularly when we consider the fact, to which the hon. Member for Kidderminster (Mr. Nabarro) drew attention, that the average thermal efficiency of plants is 24 per cent. I should have thought that at least some additional money could be spent in finding methods of increasing the thermal efficiency.

Mr. Nabarro

It is no good talking about interest of £32 million without relating it to the capital invested, which, if the hon. Member reads the Report, he will find to be £1,092 million at its written-down figure, of which only £32 million a year, or approximately 3 per cent., is in respect of interest, which is by no means extortionate.

Mr. Willis

That may be so. All I am venturing to point out is that one-tenth seems to me to be a large proportion of the turnover to apply to interest as compared with the amount spent on research.

We have heard a lot of praise given to the industry today. The Minister must find himself at times in a rather difficult position to have to tell us what this nationalised industry is doing while at the same time supporting a party which does not like nationalisation, which opposes nationalisation and which uses every opportunity to try to denigrate nationalisation. Nevertheless, the British Electricity Authority has done a fine job of work.

One of the developments which I have been very pleased to see in this nationalised industry is the extent to which joint consultation appears to have developed. I do not know whether my hon. Friend the Member for Cleveland (Mr. Palmer), who knows more about these matters, would necessarily agree, but, judging from the Report, a good start appears to have been made. I have always been one of those who viewed nationalisation, not simply from the aspect of whether it was more efficient than private enterprise, but also from the point of view of whether it gave the workers a feeling that they had a say in the industry. In my view, the development of industrial democracy is as important as the question of efficiency. Judging by the Report, joint consultation is developing along satisfactory lines, and the worker appears to be getting an opportunity of giving his experience, skill and knowledge to the industry. That is an exceedingly admirable development.

Undoubtedly, this industry has a great future and, since being nationalised, it has been making the progress we wished it to make. I hope that this development will continue so that ultimately we may see reality given to what many of us have wanted to see in industry, and have always regarded as being complementary to political democracy, that is, industrial democracy.

8.36 p.m.

Mr. Arthur Palmer (Cleveland)

To those of us who are familiar with the insular traditions of the electricity and gas industries, to lump them together in the same debate, as we have done today, seems an extremely risky procedure. It is rather like bringing together at the same wedding party distant relations who have not spoken to each other for 50 years. From my own experience of the electricity industry I can say that the controversies of present-day politicians, or even those of mediaeval theologians, have very little on those who once argued, and may still argue, about the advantages or disadvantages of electric cooking as against gas cooking. I was glad that the Minister said it was not necessarily bad that a friendly rivalry should continue under the new conditions of public ownership.

The need for gas and electricity prices to balance has an encouraging effect on the plans of gas and electrical power engineers to cut costs and improve the efficiency of fuel utilisation. The right hon. Gentleman spoke modestly of what the nationalised industry had done already. He gave the saving in fuel for one year on the assumption that, with the new efficiencies, the industry had saved so much fuel. Taking that line of argument further, since vesting day the electricity industry has saved 12 million tons of coal and the gas industry 2 million tons.

This friendly rivalry in seeking to serve the public to the best advantage is, in a sense, inherent in the Electricity Act, 1947, and the Gas Act, 1948, when the party on this side of the House established separate public corporations with an obligation to pay their way. However, our view today is that the common social purpose of the publicly-owned gas and electricity industries should enable them to understand each other's intentions rather better than in the past.

I support, as do my hon. and right hon. Friends, free consumer choice; but, in our view, consumer choice should not prevent the local organisations of electricity and gas industries from joining forces from time to time to give would-be consumers advice on the best fuel or combination of fuels to suit their purpose in their own interests and the general welfare.

I am not opposed, nor do I think my hon. and right hon. Friends are seriously opposed, to advertising by publicly-owned bodies. If the private interests in the steel industry and the private insurance interests have the right to put the case for private enterprise in the advertising columns of the "Daily Herald," as they do, what is to prevent publicly-owned industries putting their case to the public in the similar columns of the "Daily Mail"? I think it is fair and right that they should do so and consumers and the public should be the judges.

The nationalised fuel industries, however, should set an example to private enterprise in their advertising policy. They should advertise accurately and boldly in the spirit of dedicated public service, and should avoid what the advertisers call "knocking copy." The economics of the fuel and power services have changed radically since the conditions in the 1930s, from deflation, unemployment and a buyers' market to the potential inflation in the economy today, full employment and a sellers' market. That is why the general commercial outlook for these industries should be different nowadays compared with what it was before the war.

I spoke of the right of the nationalised fuel and power industries to advertise, because they are doing a good job. No oral opponent of public ownership on the other side of the House has denied it. There are shortcomings, of course. Nothing is perfect in the world of either the public or the private economy and it is the business of debate to point out the faults. That has been done today in varying styles by hon. Members on both sides of the House.

I am sure, however, that nobody seriously supposes that the hundreds of electricity undertakings which were in private and municipal hands would have obtained capital as cheaply as the British Electricity Authority is doing. Nor do I think that those undertakings would have used it with quite the same vision. Certainly, the even more numerous pre-nationalisation gas undertakings would not have combined, or have shut down uneconomic works, in the way in which the gas boards have done in the past few years.

Whatever the human deficiencies of the fuel and power industries—and I think that there are many still—no one can say that any supporter of them need apologise on account of technical and scientific failures. The technical matters which the House has been discussing today demonstrate the technical energy and imagination of the gas boards, the British Electricity Authority and the area electricity boards. If there were time I could say a great deal about the engineering achievements of the industries, but they are common knowledge to hon. and right hon. Members—such things as the thermal efficiency of the new power stations, the electricity super-grid, the European inter-connection, and, in the gas industry, the achievements in research into natural gas, the installation of oil plants and other matters.

The hon. Member for Kidderminster (Mr. Nabarro) spoke eloquently, as he always does when he gives his very fine and penetrating lectures in popular science. On this occasion, he ran off to ride a favourite hobby-horse of his and referred to district heating. He said that Battersea Power Station was the only example of the British Electricity Authority undertaking a heating scheme in connection with power stations. Does the hon. Gentleman realise that though the station was built in a densely populated area it came into commission first in 1933, and nothing was done or proposed at that time in the way of district heating?

Let us take some other London power stations. I know them quite well. Deptford, West is a very large power station, with 300,000 kilowatt capacity approximately in the centre of a densely populated area and was put down in 1929, I think. Then there was Acton Lane at Willesden and Barking. We should be fair about these things; nothing was done at all at these stations by the old owners for district heating.

Mr. Nabarro

The essence of the case is that the use of back-pressure turbines in conjunction with district heating schemes finds ideal efficiency in circumstances in which one puts the power station down first in an area which is to be built, or rebuilt such as the City of London, or in Hamburg, or scores of other examples like the new towns in this country. That is what the Anglo-American Productivity Report brought out clearly.

Mr. Palmer

I do not disagree with the hon. Member on this point, but he referred to Battersea and I say that if Battersea could have been developed for district heating it should have been done before nationalisation. I do not blame the electricity engineers of the old power companies too much. The fact is that it did not pay to collect the waste heat because coal was too cheap. Now that coal is more expensive it is more and more economic to collect waste heat. But it is no use blaming lack of development on the British Electricity Authority. The truth is that it has shown much more energy than its predecessors.

I have two questions of some technical interest which I should like to put to the Parliamentary Secretary. I will mention the gas industry, which does not always come too easily to me, but I have a great respect for it. It is a tradition to look on the gas industry as running in uneasy harness as a fuel and power industry with electricity, but I suggest that it is just as realistic to look on the gas industry as a branch of the chemical industry taking one raw material, coal, and burning it into innumerable alternative forms of matter.

In his speech today and, I think, in a speech in the debate on the Report of the National Coal Board, the Minister spoke in glowing terms of the new American method of transporting natural gas in liquid form. He said that the gas industry was to send a team to the United States to look at these things. I would like this to be checked, but I have it on very good authority. I am glad to say that in my constituency there is the great I.C.I. plant at Wilton. When talking to engineers at that plant last week, I understood that this method had been in use in our chemical industry for quite a number of years, in a modified form. I suggest that before we send people to America to look at their methods we might look nearer home. I should be glad if the Parliamentary Secretary could tell me whether he has information about experience in this matter in our own chemical industry.

There is a further technical point I wish to put to the Parliamentary Secretary. In that same coal debate the Minister said that 15 new coal mines were being constructed and 51 older collieries were being reconstructed. The National Coal Board expected soon to be spending capital at the rate of £100 million a year. At the same time, the imagination of us all is being fired by talk of nuclear power stations which are to come as a development of atomic energy. The electricity industry is to use the great bulk of coal from new pits and the electricity industry will also use nuclear fuel to make electricity.

I am interested in what the Government have in mind about the proper balance of capital expenditure between the nuclear power method and the development of the coal industry to supply the coal so that we may make electricity according to the former fashion. The other day I put a Question to the right hon. Gentleman, to which I received a written answer. I asked what proportion of the public electricity supply did he expect to find going out to the grid lines at the end of the next 10-year planning period. The answer I received was that no one knew, that it was too early to say.

If we are now progressing with vast capital expenditure on nuclear power stations, of which I approve; if we are progressing with vast capital expenditure on new coal mines, which presumably is also deserving of approval, it would be pleasant to know how one thing links up with the other. But, so far as I know, up to now no statement about that has been made.

Now I come to a matter on which there is bound to be some difference of opinion between hon. Members on both sides of the House, the question of the organisation of these nationalised industries. As a Socialist, I am prepared to say that one may nationalise an industry but that unless it follows the principles of sound and effective management in the light of experience it will not automatically be an efficient industry. It is for that reason that we on this side of the House—and I am sure that my right hon. Friend the Member for Blyth (Mr. Robens) would agree—have not challenged the establishment of the Herbert Committee to look into the organisation of the electricity supply industry.

About seven years have passed since the vesting date for that industry, and no one is suggesting that we hit on exactly the right form of organisation in the first place. We are glad to think that, without any challenge to the principles of nationalisation, the form of organisation is to be investigated. I am glad, too, that an engineer has been included on the committee because, previously, there was no engineer investigating that industry Engineers have to put up with a lot and that was a hard blow for them; but that has now been put right.

No doubt many questions will be examined by the committee and we might suggest many others, including whether the separation of generation and bulk transmission of electricity from distribu- tion is essential; whether the area boards and the divisional organisation should be combined and whether it would be a gain to abolish sub-areas. There are a number of questions of that kind. I believe that the staff and work-people would wish the Herbert Committee to examine the promotion policy, because there is a question in the electricity supply industry, as I understand it, about whether the present methods are successful in bringing the ablest men to the top. I am not sure that they are. It may be possible, and I have the impression that it is so, that many capable men in the industry on the technical side are feeling wasted and frustrated far too soon in their careers.

If I understood him rightly, the right hon. Gentleman said that it was likely that a similar organisation would be established in due course to see how the gas industry was working out. I would put in this qualification, that the right hon. Gentleman and the Government which he adorns may not necessarily last long enough to appoint such a committee. There is no guarantee about that in an uncertain world. But if such a committee is formed, and a report does eventually emerge, it would be interesting to compare its findings on joint consultation in the gas industry with the ultimate findings of the Herbert Committee on joint consultation in the electricity supply industry.

I am glad that some of my hon. Friends, including the hon. Member for Edge Hill (Mr. A. J. Irvine) and the hon. Member for Edinburgh, North (Mr. Willis) referred to joint consultation. I have had a fair experience of it and I still serve on the National Joint Advisory Council, which is the main consultative body for the electricity supply industry. In electricity, we have an elaborate system, with joint consultation from the top to the bottom. There is a simpler system in the gas industry organised mainly at local level.

No one would doubt that Lord Citrine has put tremendous energy into the working of his system. He believes in it and he has worked very hard for it, but in spite of his efforts and the efforts of the trade unions it remains largely a machine with perhaps an electronic but not a true soul. That is my impression and it is the impression of many of my colleagues in the industry.

The fault is not very hard to find. It is that the electricity boards, it may be because of bad traditions from the past, still do not trust their employees sufficiently to talk with them on things that really matter. If it is welfare—the so-called lavatory subjects—it is all right, but when it comes to efficiency and reorganisation, then the boards are less willing to talk. I was rather surprised, indeed shocked, by the answer which the Minister gave to my hon. Friend the Member for Edge Hill yesterday when my hon. Friend asked a Question about consultation in London and the reorganisation of sub-areas. The Minister replied: I understand that this body is experimenting with certain reorganisation with a view to reducing its administrative costs. I am sure that we are all in favour of joint consultation… That is the usual pleasant little platitude— but the carrying of it out in detail and questions of administrative economy are surely matters for the boards themselves."—[OFFICIAL REPORT, 8th November, 1954; Vol. 532, c. 854.] Is that the case? I have here the Electricity Act, 1947. Section 53 (1, b) deals with the statutory duty of the Authority and of the area boards in the matter of joint consultation. They are responsible for …the promotion and encouragement of measures affecting the safety, health and welfare of persons employed by Electricity Boards and the discussion of other matters of mutual interest to the Boards and such persons, including efficiency in the operation of the services of the Boards. If the Minister seriously believes that reorganisation is not a matter for consultation but is something which is purely the concern of the management, that will take the industry back many years.

I do not blame the right hon. Gentleman too much. I know enough about the working of our Parliamentary system to know that he did not prepare that answer entirely on his own. It probably came from the London Electricity Board. If that is so, he should look very closely at the practice of the London Electricity Board. If it is really the policy of that board, he should consider what is being done in the light of the wording of the Act.

I come to another criticism of the electricity industry, which is also to a lesser extent a criticism of the gas industry. I refer to the matter of prices and investment policy which has been touched on very lightly indeed, to my surprise, during the debate. The hon. Member for Kidderminster said a little about it and, in view of his fallacies about district heating, I think that the hon. Gentleman is much more at home on questions of finance than he is on questions of technique. The hon. Member for Clitheroe (Mr. Fort) also made a brief reference to this topic.

It is a fact that the electricity industry boasts a record surplus this year of £13 million. The gas industry is much more modest, with a mere £2 million. Both industries are financing future developments by borrowing money. Last year, two-thirds of the total industrial investment of the country went to electricity and gas; it is less this year.

I have no figures of the price of gas, but many figures of the price of electricity on an international basis. The figures have been supplied by a memorandum which the Minister may have seen from the Organisation for European Economic Co-operation, which is an interesting document. It gives the real average price of electricity per unit in this country in relation to the cost of living today as about 40 per cent. of what it was in 1938.

The tendency for the real price of electricity—that is, in relation to the actual cost of living—to fall goes further in the United Kingdom than elsewhere in Europe. I am, therefore, driven to the conclusion—it does not come too easily to me to say this—that I am doubtful whether the electricity industry is charging enough, particularly for the peak load units which are produced mainly from low efficiency plants. To build up financial reserves and to replace old plants, it may be necessary to charge rather higher prices for the peak load units in future. I should like the views of the Parliamentary Secretary on that point.

The Annual Reports of the gas and electricity industries which the House has been discussing in some detail today tell us, quite truthfully, that labour relations in the industries are on the whole good. I have expressed some doubts about joint consultation, but, broadly speaking, it is not unfair, untrue or inaccurate to say that labour relations are good, certainly very good compared with one or two other industries which one might mention. Those of us who have trade union connections in these industries are very glad that the labour relations are good. The gas and electricity industries were not broken down industries before nationalisation. Unlike the coal industry, they were prosperous and expanding, and under nationalisation as we know it they have continued to prosper and grow, and employees of all grades share that prosperity.

My hon. Friends feel, as I do, that that is excellent, but we also believe that the primary purpose of nationalisation has never been to serve any section of the nation, whether it be within the industry or outside it. It has been to serve the whole nation by giving good service and good value to the consuming public. I suggest that in the light of the debate today, and particularly by reason of the absence of any real sustained criticism from hon. Members opposite, the publicly-owned gas and electricity industries can be congratulated upon a very useful year's work.

Their achievements now belong not to any one party or to any one opinion but to all of us. There is merely the fact that my hon. Friends and I can take some small pride at least in the thought that it was our action in difficult years following the great Second World War that made these industries, for the first time, the true possession of the British people.

9.4 p.m.

The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks)

The debate has taken a line rather different from that normally taken by our fuel and power debates in the past. It has been shown during the course of the day that the House is probably interested more in broader issues and policy matters than in delving into the comparatively petty details of figures in the accounts and detailed sentences in the paragraphs of what the right hon. Member for Blyth (Mr. Robens) described as the considerable volume of Reports that we have under discussion.

The right hon. Gentleman should be satisfied with the response which he received to his request for constructive criticism. On this side of the House we welcome it as well. The criticism has been constructive and very helpful. The hon. Member for Hillsborough (Mr. G. Darling), as well as the hon. Member for Kidderminster (Mr. Nabarro) and other hon. Member's, have contributed some very helpful suggestions. I am afraid that I shall not be able to refer in detail to every suggestion that has been made in the course of quite a long debate, but if hon. Members will forgive me I will endeavour to pick up any points that I omit in correspondence.

The right hon. Gentleman the Member for Blyth asked particularly about plans for economic development. He said that the need to be first in the field with atomic development was a matter of national prestige. I can assure him that the Government hold that view most emphatically. I would remind him of what my right hon. Friend said in his closing words, which were that we hope that in both these developments, one of which was the development of nuclear energy, it was up to this country to take the lead. I can assure the House that the policy of Her Majesty's Government is to press on with all speed, and I think there is already considerable evidence of that.

The right hon. Gentleman knows of Calder Hall, which will be the first atomic reactor in the world to feed electricity into the general national service. He is probably also aware that there are two types of experimental reactor being built in this country, and a new type of reactor is already planned for construction immediately after Calder Hall is completed.

The House will remember what my right hon. Friend said during the course of the debate in July on this subject. I certainly would not desire to be any more prophetic on a matter of such extreme difficulties and technicalities than he was at that time. I cannot go further than to follow on what he said by indicating that I think it would be unreasonable, in view of the vast amount of work which has to be carried out and the vast amount of planning which has to be done, as well as research, discovery and so forth, to anticipate that large-scale atomic energy will be available commercially through the grid system within less than about 10 years. I can assure the House that the Government have every intention of speeding progress to the maximum possible extent and of taking advantage of every opportunity which may present itself.

The right hon. Gentleman also referred to the advertising accounts in the Reports. He was supported by my hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow), and I was afraid that what had been done in advertising was not going to meet with the approval of the House until we had an apostle of light shining behind me, my hon. Friend the Member for Clitheroe (Mr. Fort), who is not here at this moment. He gave his support at the crucial moment. I would say that what the hon. Member for Cleveland (Mr. Palmer) said on this subject was perfectly correct. I am perfectly prepared to align myself with him in saying that it is right and proper that these nationalised industries should be able to advertise. Their main object in advertising is to diffuse their load so as to improve their pay load and to inform potential and actual customers of the facilities which are available to them. With regard to the manner in which they advertise. I entirely accept what he said. I can also tell the right hon. Gentleman that we are entirely opposed to senseless or wasteful advertising.

On the question of research, I was asked if we could show the actual amount spent. It may well be that, on that point, the Authority's Report might be more happily phrased or more clearly put, but I would remind the House of the conclusion of paragraph 412, from which hon. Members have quoted: Much of the expenditure involved is of a capital nature, in respect of works which form part of the industry's normal productive capacity. This capital expenditure and the substantial revenue charges relating to it are not, therefore, allocated to research, but they would fall to be included in any assessment of the Authority's total research expenditure. Indeed, the industry is doing a very great deal in regard to research, both directly and indirectly. Much of the work is done by the British Electrical and Allied Industries Research Association, and the cost is shared between the Boards and the manufacturers. The British Electricity Authority itself will be contributing to research by other bodies numbering at least half-a-dozen, including, of course, a contribution made to the Ministry of Fuel and Power itself in regard to research into gas turbines, which will interest the hon. Gentleman who spoke particularly on that subject. In addition, there is sponsored work at the universities and most important research work which is going on under the aegis of the Atomic Energy Authority, with the British Electricity Authority in association.

Mr. Robens

Before the hon. Gentleman leaves the subject of research, may I say that it is not surprising if we have a wrong appreciation of this research because of the way in which the accounts are made up? The Report says that this capital expenditure in relation to research and the substantial revenue charges relating to it is not allocated to research. May I ask where we will find the total amount spent upon research? Would it not be possible in future Reports to give the total amount spent on that research? The point that I was making was that it seems absurd to spend £1 million on publicity and rather less than a quarter of a million on research; but it looks now as if that is not the case.

Mr. Joynson-Hicks

I quite agree with the right hon. Gentleman, and I admit that he has put his finger upon a point on which the phraseology might well be clarified, and in other years the situation may be very much more comprehensive. No doubt the Chairman of the Authority will have noted the criticism and will remember it on a future occasion.

Mr. Noel-Baker

Can the hon. Gentleman tell us what the total figure is, and whether the Government are satisfied with it? Will he also say if they will listen to the pleas which my hon. Friends have made and press for the spending of a larger sum?

Mr. Joynson-Hicks

I am afraid that, at the moment, I cannot give the right hon. Gentleman a figure representing the total sum expended by the industry on research, but I will endeavour to obtain it and to let him know. I have considerable sympathy with his point of view, and I know that my right hon. Friend has as well. There is undoubtedly and immense amount of research going on, and I do not think any questions involving research are being held up, certainly not on account of finance or by my right hon. Friend in any way.

Sir W. Darling

Will my hon. Friend bear in mind that private enterprise in the electricity industry does an immense amount of research for the benefit of the public and that the figure of £1 million for advertising and £250,000 for research is not now remarkable when account is taken of what is done by independent private enterprise, as hon. Members on the Opposition side ought to know very well?

Mr. Joynson-Hicks

I am very much obliged for the support which I have now received from Scotland, and I appreciate my hon. Friend's contribution.

The right hon. Gentleman opposite asked me for information about the drilling of natural gas which has been going on in the Ashdown Forest. I do not know whether he has seen the site. If not, I commend it to him, because it is a most interesting thing to see. A well drilled near Crowborough yielded three small shows of gas at depths of from 800 to 1,100 feet from the surface. Since then a well has been carried to a depth of 3,400 feet, in the course of which a small show of gas has been obtained. Now the results of the drilling are being examined by the geologists. There have not been indications of gas in commercial quantities at this particular well. For the future, the development of what one might call a "suspected field" will depend upon the results of the geological survey, when they have been received.

One further question, which I was asked by the hon. Member for Edge Hill (Mr. A. J. Irvine), concerned the ancillary activities of the British Electricity Authority. The boards compete with private enterprise contractors on contract work, and I am not sure that they do not have nearly one-seventh of the total of that work. They are not manufacturing plant and fittings, but their building departments construct technical buildings, such as sub-stations for the boards. The extent of the work undertaken by the boards varies from area to area. It is entirely within the discretion of a board what it shall take on.

Mr. A. J. Irvine

Would the Minister commit himself to the view that it is desirable that the Central Authority should develop its manufacturing activities? It seems to me that it should do so.

Mr. Joynson-Hicks

No, I will not commit myself to that view, because the matter is entirely for the Authority to decide for itself. It has a statutory right to do so, but the way in which the boards exercise their discretion is a matter for them.

One more question, from the hon. Member for Cleveland was about liquid methane. It is true that the liquefaction of gas is not a new idea. The hon. Member, like myself, has probably seen—as I am sure the right hon. Member for Derby, South (Mr. Noel-Baker) has—villages which are now lit and powered by liquid gas conveyed to them in cylinders. The gas is butane or propane. I shall be surprised if the manufacturing of these gases has been done in bulk for bulk conveyance. What has never been done here yet is to convey gas in bulk by means of containers sufficiently inexpensive to make transmission cheaper than by pipeline, or at least, to make it as cheap. If the hon. Gentleman has any further information on this subject, either about the gas industry in this country or about the American gas industry, I can assure him that we shall be very pleased to have it.

The hon. Gentleman also made various helpful suggestions for proposals to the Herbert Committee. I have no doubt that that Committee will note what he says and will take it into consideration. In addition, both he and other hon. Members referred to the question of joint consultation in the electricity industry. I am quite sure that Lord Citrine will take very great heed of what has been said in this House on that subject.

To return to the main theme of the debate, I would remind the House that in his opening speech my right hon. Friend made a novel and important declaration of policy to which considerable reference has been made during the debate. He said that the national interest called for the boards to be enterprising and properly venturesome. I think that that remark has been received with some cautionary doubts.

The hon. Member for Kidderminster queried whether there would be sufficient availability of coal to meet the demand. Above all, he gave the House, in what I hope he will allow me to say was an extremely helpful and constructive speech, a considerable number of imaginative and enthusiastic proposals for different lines of development.

There is no doubt that if we are to give power to the elbow of the industrial workers in this country—at any rate on the American scale—if our housewives are to enjoy reasonable amenities, and if our standard of living is to be doubled in the next 25 years, then all that can only be done by the fuel and power industries taking proper commercial risks and not settling down into a bureaucratic rut. I am quite certain that nobody in this House wishes to see them do that. I believe that my right hon. Friend may very well be content with the general endorsement which the House has given to this proposed new policy.

Now I wish to say a word or two about consultative councils because my hon. Friend the Member for Torrington (Mr. Lambert) and the hon. Member for Falmouth and Camborne (Mr. Hayman) seemed to be in a certain amount of disagreement over their consultative council. On this occasion, I would certainly back the hon. Member for Falmouth and Camborne, because I think that he has a very good council.

I sometimes wonder whether the House fully appreciates the work which these bodies are doing. They are a new conception, and each one of them—there are some 28, I think—is treading a separate path under my right hon. Friend's guidance in fulfilment of their functions. I am convinced that they will be a very welcome check to any monopolistic tendencies which may arise, and that, as representatives of consumers on tariff questions and on policy questions of one sort and another, as well as on the interpretation of the boards problems, they are fulfilling an ever-growing function and acting throughout the industry as economic stabilisers.

I welcome my hon. Friend's tribute to the work which they are doing. We have upward of 700 ladies and gentlemen in a full voluntary service on these councils, in addition to those who are serving on the district committees. I do think that a very warm tribute is due to them for their public service.

Several hon. Gentlemen, and my hon. Friend the Member for Middleton and Prestwich, in particular, made reference to efficiency in the industries. There is really not a great deal to question in regard to technical efficiency, but what is so exceedingly difficult to ascertain is the administrative efficiency. One sometimes hears criticisms of that, but not, I think, so often nowadays as was the case some years gone by. That, itself, is a very good indication that administrative efficiency is improving steadily.

I should like to quote two figures which are helpful because, although one cannot get any exact yardstick, one can get certain trends which indicate how efficiency is running. In 1948–49, 825,000 kilowatts were sold per employee of the administrative, clerical or technical categories. That is a fairly wide-embracing administrative description. In 1953–54 that figure has risen to 920,000 kilowatts, which is a considerable improvement. One can get a similar trend by looking at it the other way round. The cost of meter reading, billing, account collecting, administrative and general expenses was reduced by 2 per cent. in 1953–54 as compared with 1952–53. That indicates a considerable improvement in the general level of efficiency in the industries.

My hon. Friend the Member for Clitheroe made certain references to prices. I would say to him that, in comparing the industrial with the domestic tariff, one must take into account that the industrial is normally a very much more expensive load than is the much more diversified and widespread domestic load. The industrial load is therefore more costly to meet than is the domestic load. He, again, had what I thought was a very good point in regard to the phraseology used in the B.E.A.'s Report. It would be admirable if, in its next Report, it did publish a paragraph on pricing policy.

I mentioned just now that my hon. Friend the Member for Kidderminster expressed anxiety about the availability of coal to sustain and meet the exceedingly widespread expansion which we are now envisaging, both as a necessity for this country and in the natural course of events. To some extent I think that answers the right hon. Member for Blyth when he invited me to give an assurance that what was being done would not result in coal not being required. I have no hesitation at all in giving that assurance. In fact, one of the most urgent spurs in the present line of development is to try to relieve the drive on the demand for coal. Otherwise it will not be anything like so easy for the coal industry to carry through reorganisation whilst also being pressed for maximum production. So far as man can foresee, I can assure him there is never any likelihood of there being a surplus coal cutting down production below what the National Coal Board envisage in their plan as a whole. This generally confirms the Government's policy to embrace all the alternative sources which we possibly can—oil, natural gas, methane, atomic power, liquid methane and so on.

What I am not so sure about is whether the House—including my hon. Friend the Member for Kidderminster in particular —appreciates the immense savings not only that can be but which are being made in coal at the present time. There is a very real move in the direction of saving coal through increased fuel efficiency. My hon. Friend asked particularly about district heating schemes, and I say quite frankly to him that I sincerely wish that I could give him some good news. I myself am a great believer in these schemes, but the problem is one of economics, and it is difficult to test the economic results of any proposal until one has some precedent by which guidance can be given.

I have discovered one scheme. It is a private enterprise scheme, by a brewery, which is, through its waste heat, supplying three blocks of flats with all their hot water and heating. That is working very well indeed.

Mr. J. Hudson

A brewery supplying water! That is very good.

Mr. Joynson-Hicks

I thought that would appeal to the hon. Member. That is why I mentioned it. The economics of that scheme have worked out satisfactorily, and I hope that it will lead to further developments along the same lines.

Another thing that I wonder whether the House fully appreciates is that the results of the steam power survey which we carried out recently have disclosed that no less than one-fifth of the power requirements of private industry are obtained from back pressure engines and turbines. That is a considerable improvement on what we used to believe was the case. The acquisition of these fuel efficiency and saving devices is continuing considerably and at a substantial rate.

There were £3 million worth of back pressure engines and turbines sold in this country last year; £1¼ million worth of air pre-heaters, £1¼ million worth of heat exchangers, £500,000 worth of waste heat boilers, and £2 million worth of feed-water economisers. In addition to that, nearly £2 million was spent on automatic stokers, which have not quite the same degree of saving, but certainly show an improvement in fuel efficiency. A total sum of some £10 million, known to have been spent very largely in the private sector of industry on these fuel efficiency devices, shows an improving and increasing trend in fuel efficiency throughout the country.

A considerable part of the debate has turned upon the question of rural electrification. I feel that I ought to say something about it, and particularly to acknowledge with gratitude on behalf of the electricity industry the tribute paid by my hon. Friend the Member for Newbury (Mr. Hurd). My hon. Friends the Members for Torrington and for Kidderminster, and the hon. Members for Bristol, South (Mr. Wilkins) and Kilmarnock (Mr. Ross) also spoke upon this subject. We have, therefore, had quite a good day on rural electrification.

I think that we can be gratified at the way the boards have taken advantage of the opportunities which the Government have provided for progressing in this field. I do not wish to enter into an argument as to which Government did best in which field, or whether the industry did better before or after nationalisation, but we should be gratified at the way in which the industry has seized the opportunity that the Government has given to it. I think that here particularly is a need for just that sort of commercial risk for which my right hon. Friend was asking when he opened this debate "a proper spirit of adventure" was the phrase he used—because rural electrification is by no means easy to put across.

I am a farmer myself, as many hon. Members know. We farmers are very loath to abandon ancient apparatus. On the other hand, farming efficiency is increasing at an unprecedented rate. Just as businessmen in industry are coming more and more to recognise that a modern appliance is much more efficient and cheaper to operate than an ancient boiler or an antique piece of machinery, so businessmen in agriculture are coming to recognise that many of the traditional forms of operation which have been carried out in the same way for generations can be much more cheaply and efficiently done by a small electric motor.

Rural electrification carried into the farms will not only be of immense benefit to agriculture from the productivity viewpoint and also of immense benefit to our rural population from the amenity aspect, but I believe that the increase in consumption from the agricultural industry will enable the Boards to overcome many of the difficulties which they naturally anticipate at the present time with regard to the costs of rural electricity as it reaches the outside areas. One thing that the agriculture industry is learning, and which we have been preaching for so long, is that efficiency in production is impossible without efficiency in fuel consumption.

I should like to say a final word on the question of smoke, as there has been a good deal of reference to the amenity of gas and electricity. I am an inveterate enemy of smoke. Smoke in our atmosphere is a very bad thing not only from the health point of view, but from the economic aspect also. From time to time there are all sorts of figures, which are really nothing but guesses, as to the cost to the nation of a smoky atmosphere, but when we think even of the time and money which is wasted in our own households on cleaning and laundering resulting purely from smoke dirt, it makes one wonder why one has not done something about it before.

Gas, coke and electricity are the principal clean fuels in the homes. Twentieth Century civilisation will not be worthy of itself until we have a smokeless atmosphere.

Mr. L. M. Lever (Manchester, Ardwick)

Manchester is moving in that direction.

Mr. Joynson-Hicks

Manchester is setting a good example, and I am glad to see that it is being followed elsewhere.

Mr. Lever

As usual.

Mr. Joynson-Hicks

As usual. In general industry, great strides are being made towards reducing the smoke that goes into the atmosphere, and in the new homes great strides are being made also. One of the most difficult problems is in the old homes which do not contain modern appliances, but I hope very much that improvement will gradually result in that direction also.

Mr. Nabarro

May I ask one question? Both the right hon. Member for Derby, South (Mr. Noel-Baker) and myself have raised the matter of the employment of small independent auto-diesel oil sets to cope with rural electrification in the more remote areas. Can my hon. Friend say anything about those suggestions?

Mr. Joynson-Hicks

I must apologise to my hon. Friend, and to the right hon. Gentleman who intervened on the same point, for not having referred to it. I said that there were some points which I might have to pick up. I cannot say anything about that point at the present time. However, I mentioned a rather similar thing which is being done in regard to gas, where liquid gas is being used for a similar purpose to that which my hon. Friend has in mind in the local power station to serve an isolated community. Whether it will be an ultimate line of development for developing the fringe of rural electrification or not, I should not like to say at the moment.

Mr. Palmer

If the hon. Gentleman is drawing his speech to a close, perhaps he will remember the point I raised about the balance between capital expenditure for electricity on nuclear power stations and coal mines. It is an important point.

Mr. Joynson-Hicks

I appreciate that point, but I thought that, when I was dealing with the development and future of the atomic commercial industry as a whole, I had indicated that the matter was not sufficiently far advanced as yet to be able to determine what the actual commitments were likely to be, and consequently one could not take into account the balance of capital development in that industry and in the coal industry; but the point is one which we will not overlook.

Mr. Noel-Baker

As the hon. Gentleman was good enough to say something about small diesel stations for remote rural areas, will the Government bear in mind that it might be worth while making a small loss on that in order to avoid the building of pylons all over many rural areas where they would be a great disfigurement?

Mr. Joynson-Hicks

The right hon. Gentleman is on to a good point there, and it is one which we will certainly consider. I am obliged to him. We have considered gas and electricity pretty fully today. In them, we have the principal servants by which we can achieve the amenities we need in our everyday life, and also the improved standard of living at which we are aiming. In addition, we have in them the principal servants for helping increased productivity throughout the realm of industry.

In each case at the present time we must admit that our standards fall far below what it is possible to achieve. Consequently, we have in this country an immense demand for expansion, and immense scope for development, both of gas and electricity and, naturally, of the fundamental materials which enable them to come into being. Therefore, I think our debate will be a cause of encouragement for those industries as well as being a call from this House to those industries for progress along really enterprising commercial lines.

Question put, and agreed to.

Resolved, That this House takes note of the latest Annual Reports and Statements of Account of the Gas and Electricity Industries.

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