HC Deb 17 February 1959 vol 600 cc229-73

4.51 p.m.

The Paymaster-General (Mr. Reginald Maudling)

I beg to move, in page 1, line 7, after "shall" to insert: as respects sums borrowed before the end of March, nineteen hundred and sixty-five". It might be for the convenience of the Committee, Sir Norman, if we could discuss all the Amendments together, as they are all directed towards the same point.

Mr. Alfred Robens (Blyth)

Would that suggestion include the Amendment in page 2, line 4, at the end to add: (2) Any power conferred by this Act to make an order includes power to vary any such order by a subsequent order. (3) Any power conferred by this Act to make an order shall be exercisable by statutory instrument, and no such order shall be made unless a draft thereof has been laid before the Commons House of Parliament and has been approved by a resolution of that House.

Mr. Maudling

Perhaps we could take that one separately and take the other three Amendments together with that which I am moving, namely,

In page 1, line 12, to leave out "two thousand three hundred million pounds" and to insert: eighteen hundred million pounds or such greater sum, not exceeding two thousand three hundred million pounds, as the Minister may by order specify", In line 22, to leave out "three hundred million pounds" and to insert: two hundred and forty million pounds or such greater sum, not exceeding three hundred million pounds, as the Secretary of State may by order specify", and In page 2, line 4, to leave out "one hundred and thirty-five million pounds" and to insert: one hundred and ten million pounds or such greater sum, not exceeding one hundred and thirty-five million pounds, as the Secretary of State may by order specify".

The Temporary Chairman indicated assent.

Mr. Maudling

During the Second Reading there was broad agreement on the lines of advance of the electricity industry for the period of its seven-year programme. There was a widespread feeling that the proposals did not provide for adequate Parliamentary control over the expenditure involved. Although it was accepted that the House is being asked, as it were, to approve the authorised capital of the undertaking and not the issued capital, it was felt that to provide authorised capital of such an amount and to carry forward perhaps for six years or more without automatic provision for Parliamentary control in the meantime was going rather too far.

A number of suggestions were made how Parliamentary control could be strengthened and the Government have carefully considered them, before coming forward with the proposal that we are now discussing. It was suggested by several hon. Members that the Select Committee should be provided with an officer analogous to the Comptroller and Auditor General to help them in their investigations. The Government will be glad to consider that suggestion, but clearly it is not proper to put it forward as an Amendment to the current Bill. It will be advisable to have the views of the Select Committee itself before any decision is taken. I understand that the Select Committee may have advice to offer in the future.

The possibility has been canvassed of reducing substantially the total amount provided for in the Bill. In the case of the Electricity Council, the total is £900 million. This would probably be retrograde, as this industry ought to be encouraged to plan ahead for lengthy periods. Another suggestion was that of a Statutory Instrument where the annual borrowing exceeded a certain amount. There is the technical difficulty in this suggestion that the borrowings of the Electricity Council are of a rather special character. Its investment in fixed capital continues at a fairly steady level, whereas working capital requirements fluctuate widely.

Any provision which required an annual Statutory Instrument above a certain figure would run into two difficulties. If we fixed it at a reasonably high figure it would be quite arbitrary in its incidence. We might have a debate in any given year on a Statutory Instrument, but the fact that we had one would not be related to the circumstances in the industry, nor to whether the House felt the need for a debate. If, on the other hand, we fixed it at a low level, the effect would be to have a debate automatically every year. I do not think the Committee would feel it desirable in this case, or the case of nationalised industries generally, to provide for their capital programmes and borrowing programmes to be automatically debated every year in this House.

So we came to the suggestion we are placing before the Committee. The effect, broadly speaking, is to require the Minister to come to Parliament for further authority half-way through the borrowing programme envisaged by the Bill. I should like to concentrate on the proposals so far as they relate to the Electricity Council. The same principles, of course, apply to Scottish boards, although the figures are different. The Bill provided originally that the borrowing limit of the Electricity Council should be increased from £1,400 million to £2,300 million. The Amendments make it clear that it has authority up to £1,800 million, and after that the Minister must specify any increase within the ceiling of £2,300 million and specify it in an Order subject to affirmative Resolution of this House.

The effect in terms of timing will be, roughly, that the Minister will have to come to the House for further authority about the end of 1961 or the beginning of 1962. The only way in which that could be postponed would be if the Electricity Council were able either to economise further in capital expenditure or to contribute more by way of self-financing. Those are both things which hon. Members on both sides of the Committee would be glad to see happening. We feel that by this group of Amendments we have done the best we could to meet the wish of the House for further Parliamentary control without in any way impeding the general progress of the electricity industry which the House as a whole wishes to see.

I have only one word I wish to add. My noble Friend is also considering ways of improving and extending the annual White Paper on investment in the Fuel and Power Industries so as to give more information and more assistance to the House than it does at present. I hope these Amendments will commend themselves to the Committee as a whole.

Mr. Arthur Palmer (Cleveland)

We attempted to set out our view on this matter as plainly as we could on Second Reading. The right hon. Member for Flint, West (Mr. Birch) first raised this issue of the need for greater financial accountability in the course of our Second Reading discussion. He was followed by certain of his hon. Friends.

Our view was set out in these terms, that on this side of the Committee we have no objection in principle to greater Parliamentary accountability in the financial sense, provided adequate and workable machinery can be devised. That seems largely to be the difficulty. It brings to the front a very considerable problem generally in relation to the running of nationalised industries, particularly when we remember that those industries are only a part of the general economy and the great bulk of the economy is in private hands and responds —at any rate up to a point—to the market.

5.0 p.m.

The dilemma which often faces the House in looking at these questions in relation to the nationalised industries is: are the nationalised industries to be publicly-owned but commercial enterprises working in a genuine competitive spirit and within a free or market economy, as it is sometimes referred to today, or to be primarily public services? It seems very difficult for hon. and right hon. Members on both sides of the Committee to make up their minds. When I speak of them being run primarily as public services, I do not mean to suggest that they should not at the same time be economically and efficiently run—as public services should be—but that nevertheless they are intended primarily to provide a service to the public and to industry rather than to be commercial enterprises in the normal way in which that term is used.

That is a difficult issue and, although we on this side of the Committee think our ideas are much sounder than those of hon. Members opposite, I am not suggesting that necessarily we have thought of the correct solution. It may be that a great deal of experience will have to be gained before any really effective machinery for the control of nationalised industries and some firm attitude towards the type of services they are intended to give can be worked out. I speak with modesty as to the general view of my hon. and right hon. Friends, but on balance, when dealing particularly with public utilities such as the electricity and gas industries, we tend to come down in the end in favour of the second view, what I described as regarding those industries primarily as public services, economically and efficiently run, but nevertheless public services.

I am not so sure that hon. and right hon. Members opposite have been able to make up their minds at all. From time to time one notices contradictions in their attitude. On occasion, they want commercial methods above everything else to dominate the running of nationalised industries. On other occasions, they speak of the discipline of the market. Then they come to another favourite argument of theirs, that there should be greater Parliamentary checks and investigations.

I think the truth about it all, which in a sense resolves the apparent con- tradiction, is that at heart they dislike nationalisation. That is much of the difficulty they have. We on this side of the Committee do not suffer from those inhibitions. We believe in the principle of public enterprise and believing in that principle we believe that public enterprise must necessarily have public accountability. Public accountability is one of the justifications for public enterprise and public ownership. The difficulty is to find the appropriate machinery.

We are not so sure that this rather crude mechanism in the proposals now before the Committee, by which it is necessary to come back to the House in the course of three or three-and-a-half years, would work out instead of leaving the period at seven years, or that it really provides the answer and qualifies for the description of appropriate machinery. In the case of the electricity supply industry, we are studying an industry in which it is quite essential in the very nature of things to look ahead for a great number of years. Power schemes of all kinds, whether of generating stations or transmission lines distribution systems which naturally go with them, must be looked at and planned for seven or even ten years before they are brought to completion.

In this matter of power systems in a modern economy, nothing seems to hold back the process of their development because, after all, they are not really determined on their own account. Only within limits do they make their own progress. The electricity supply industry responds to the general development of the economy as a whole. In fact, in every modern industrial country the development of electric power systems is determined by the prosperity—domestic, commercial and industrial—of the whole nation. As has often been pointed out, electricity is an infallible index to the general standard of life in all industrial countries. Therefore, on the assumption of continuing British prosperity—and we are all anxious to make that assumption —it seems that of necessity we must increase investment in electric power year by year.

Unless we make proper provision for doing that, we run the risk of jeopardising our national prosperity. I think that is common ground on both sides of the Committee. While accepting that whether we like it or not we must have a tremendous development of electricity supply— which is not something we can make a choice about—the fair issue is, are the capital resources being provided as economically as possible? That is a fairly straightforward issue. Although it is straightforward in the sense that one can put it in that way, when we look at it more closely we find it is a highly involved, technical question and not an easy one for Members of Parliament to answer.

One can only attempt, as I attempted to do on Second Reading, to look at the practical tests and checks which are available to us in relation to the efficiency of British electricity supply. I do not propose to speak longer than is necessary this afternoon. Those practical checks on the efficiency of eleotrical supply are a matter of price and it is acknowledged that prices are very low. The Herbert Committee almost condemned the electricity supply industry for selling its product too cheaply.

Mr. Gerald Nabarro (Kidderminster) indicated dissent.

Mr. Palmer

The hon. Member for Kidderminster (Mr. Nabarro) shakes his head, but he should look at the relevant paragraph in the Report. Not only did the Herbert Committee make the criticism that the electricity supply industry was selling its product too cheaply, but that is a criticism made by the Economist andThe Times and a number of the other more serious and solemn newspapers. If we look at the cost per kilowatt installed in new plant and so on, we find that the costs today are really no higher that they were a few years ago, in spite of the tremendous advance in the price level. One could go on and quote the figure I gave on Second Reading about manpower used per kilowatt. There again, the industry comes through very well.

It is not possible for hon. and right hon. Members to run away from the fact that the nationalised electricity supply industry is a highly efficient and successful industry. Nothing in this world is perfect, but this industry does reasonably well. If hon. Members opposite really think they can add something by Parliamentary checks, good enough, but I doubt if this method is going to help a great deal. It will simply mean that three or four years from now there will be another general debate on the industry, but there will not be an opportunity for the House to look closely at the financial affairs of the industry. If we are anxious to do this job, in the long run the Select Committee procedure is the more effective method.

While we do not raise any marked objection to the change, I should like to know how the industry is reacting to it. We appreciate that it is in the nature of a political compromise between the front and back benches opposite. We have had these compromises before in electricity and fuel and power affairs, and we tend to take them almost for granted. They go through a kind of settled routine, but I suggest that the House of Commons should not go too far in attempting to investigate in detail the affairs of the electricity industry. Too much meddlesome interference in the affairs of this industry, too much pulling up of the plant to see how it is growing, will not help the industry in the long run in the service of the nation, and the result is likely to be to drive away good men from the leadership of the industry.

As I have said, we do not raise any marked objection to the change. It is in the nature of a political compromise. The Paymaster-General has been sniped at from the back benches opposite. There has been a very loud demonstration by the hon. Member for Kidderminster—

Mr. Nabarro

There is nothing loud about me.

Mr. Palmer

I think that that is very much a matter of opinion. It has not only been loud on this occasion, but we had a similar kind of procedure, a kind of rehearsal, when, in 1957, during the Electricity Bill, we discussed planning powers. There was on that occasion resistance to the Government Front Bench and in the end the Front Bench surrendered to the hon. Member and his hon. Friends. An even more striking instance occurred with regard to the right of the industry to manufacture plant. The Paymaster-General came down to the House and said that they could not surrender this power, that the industry must be dependent—

Mr. Maudling

Is the hon. Member arguing that a Government should accept suggested Amendments to a Bill only when they come from the opposite side of the House?

Mr. Palmer

I do not suggest that at all. I think that it is a matter of principle. What I am suggesting is that Ministers should know their own minds and stand their ground. That is a very fair point to make.

If this had happened on just one occasion it might be understandable, but it has happened so often. It happened when we were discussing planning powers and the right to manufacture, and now we go through the whole shocking procedure once again on the matter of capital allocations. The blunt truth is that we are suffering from a constitutional difficulty. We have a highly intelligent Minister responsible for electrical power affairs in this House, but the true power lies in the other place, and, although the right hon. Gentleman may try to stand his ground, in the long run he tends to be betrayed by his noble Friend, who is prepared to make concessions which, if he were given the power himself, he would never think of making. That is the truth of it.

We on this side are entitled to say that, because in a few months probably the two sides of the House will change position, and we shall do things rather differently and set the example of more responsible and consistent conduct of our affairs.

Colonel C. G. Lancaster (South Fylde)

It would be as well if I were not drawn into a general discussion by the hon. Member for Cleveland (Mr. Palmer) on the merits or otherwise of nationalisation. I want to deal for a moment or two with the Amendments.

At the time of the presentation of the Bill and on Second Reading a number of my right hon. and hon. Friends and I were concerned, not only about the size of the bill for this very large capital development scheme, but also about the time factor involved. As we saw it, it meant that we were possibly compromising, not the next Parliament, but the one after that. A matter of seven years will elapse before this matter will be discussed, and during that time a number of circumstances might have arisen which in great measure would have vitiated the premises on which the present scheme was originated.

In those circumstances, we felt that some alteration should be embodied in the Bill, and on behalf of my right hon. and hon. Friends I should like to express our gratitude that the Paymaster-General has seen his way to do so. This would be an appropriate moment to express a word of thanks to the Minister, who has guided us very wisely in this matter. It is a nice balance between Parliamentary control and a reasonable degree of freedom for the industry in carrying out large development plans. An apt solution has been arrived at, and, as I say, on behalf of all hon. Members on this side I should like to express our gratitude for what has been proposed by the Paymaster-General.

5.15 p.m.

Mr. Nabarro

I should like to thank my right hon. Friend the Paymaster-General for the generous fashion in which he has responded to a number of suggestions made from this side on Second Reading. I do not think there is anything unusual or unconstitutional on the part of my right hon. Friend in accepting suggestions made by my hon. Friends and myself. We are generally in agreement with one another in principle.

Mr. Robens

The hon. Member has sacked two.

Mr. Nabarro

I have not sacked two people. I am expressing my gratitude to my right hon. Friend for responding generously to our proposals.

On Second Reading I suggested that the major increase in the ceiling of capital sums authorised should be cut in half, but I chose my words very carefully and I gave a specific purpose. I did not in any way wish to inhibit the capital development plans of the electricity boards, and I was careful to say in c. 124: I shall seek later in this Bill to reduce by 50 per cent. the ceiling authorised for the borrowing powers with a view to cutting in half the span of years ahead for which we are seeking to legislate."—[OFFICIAL REPORT, 20th January, 1959; Vol. 598, c. 124.] My right hon. Friend, by the formula enshrined in these Amendments, has done precisely that. All that we are doing today, as I understand it, is authorising an additional sum of £400 million to take us to the end of 1961 or the beginning of 1962, when a Statutory Instrument will be brought to the House so that all of us may review past expenditure on capital account and the prospects for the immediate future and authorise or otherwise the remaining sums within the global amount denoted in this Measure. That is a wise and, in my view, successful compromise.

I propose to reserve until Third Reading a few further comments on the load factor which my hon. Friend the Parliamentary Secretary will recall was not responded to by the Secretary of State for Scotland on Second Reading. The load factor was raised by my hon. Friends and myself and by several hon. Members opposite strictly in the context of economy in capital investment within this hugely expensive industry.

During the Committee stage, I wish to ask my right hon. Friend only one question which continues to rather perplex me. Under the Electricity Act, 1957, area boards are given powers to seek capital in the open market without Treasury guarantee, if they so desire, subject to the consent of the Minister. In the event of area boards doing that and raising, for example, £100 million, does that sum of money fall within the ambit of sums authorised in this Bill or not? That would have a marked bearing upon the adequacy or otherwise of the total sums which we are discussing this afternoon. I see that my right hon. Friend is examining this point closely, and I am grateful to him. I should like to direct his attention to the Explanatory and Financial Memorandum, the penultimate sentence of which is extremely difficult to understand. It reads: If the Council and the Boards were to use the increase in their borrowing powers authorised by Clause I to borrow in the market"— I presume that that means the open market without Treasury guarantee— instead of from the Minister or the Secretary of State under Section 42 of the Act of 1956, the liability of the Consolidated Fund in respect of guarantees for these borrowings would be increased accordingly. I should have thought that if they went to the open market there would be no charge on the Consolidated Fund. This point is perplexing me, and I should like my right hon. Friend to explain it if he can.

Mr. Maudling

The only occasion on which there should be increased liability for giving guarantees is when they borrow money from the market on a guarantee.

Mr. Nabarro

If they go to the open market under the 1957 Act. That is my point. There is no Treasury guarantee.

Mr. Maudling

If they go with a Treasury guarantee that will involve some contingent liability on the Exchequer. If they go without a guarantee there can be no additional liability on the Treasury.

Mr. Nabarro

That leads me to my point. Do I conclude from my right hon. Friend's answer that if they go to the market and borrow without Treasury guarantee—which they are permitted to do under the Electricity Act, 1957, should my right hon. Friend the Minister of Power give his consent—any such sum borrowed on the market without Treasury-guarantee would fall without, not within, the ambit of the finances in this Bill? Would my right hon. Friend care to respond to that point?

Mr. Maudling

The first sentence of the Explanatory and Financial Memorandum seems to me to be the valid one. It reads: The aggregates of the outstanding borrowings by the Electricity Council, the North of Scotland Hydro-Electric Board and the South of Scotland Electricity Board, whether by way of temporary borrowings, stock issues or advances from the Exchequer. It does not appear to be confined to stock issues with a guarantee.

Mr. Nabarro

I conclude that if they borrow on the open market without Treasury guarantee such sums of money are outside the ambit—

Hon. Members


Mr. Palmer

Would not it save time if the hon. Gentleman were in the Government himself?

Mr. Nabarro

Yes, of course, it would. I quite agree with that. That is a relevant issue. I am not in the Government, but, as my right hon. Friend will recognise, this is a valid question. It has perplexed my hon. Friends and myself.

I conclude that the sums which we are authorising within the purview of the Amendments cover borrowings by the present system under the appropriate Sections of the Finance Act direct from the Treasury, and whether such moneys are borrowed by the electricity boards on the open market with or without Treasury guarantee all must come within the purview and ambit of this Bill.

I am grateful to my right hon. Friend for satisfying my curiosity and putting my perplexities at rest. I have the greatest pleasure in supporting the Amendments, and I am grateful for the generous spirit of compromise which has actuated my right hon. Friend in these important financial considerations.

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

Far from it being an act of compromise, it seems to me to be an act of complete surrender—

Mr. Nabarro

Certainly not.

Mr. Hayman

—to the bullying and blackmailing methods of the hon. Member for Kidderminster (Mr. Nabarro), both in this Chamber and in Committee, when dealing with his own Ministers. Any of us who recall the days we spent in Committee on the 1957 Bill, now an Act, will remember that from time to time the hon. Member for Kidderminster came with a hammer to hit his right hon. Friends and then disappeared from the Committee until it was time for the next blow.

Today, the Paymaster-General has surrendered too much. A few weeks ago, he came to ask the House to sanction borrowing up to £2,300 million. This afternoon, he brings forward an Amendment to limit the total to £1,800 million. The difference between the previous amount borrowed and the amount asked for a few weeks ago was £900 million. All that the right hon. Gentleman asks for now is £400 million, or less than half of the additional money for which he was asking a few weeks ago.

The Paymaster-General has said that this sum will carry the industry on until about the end of 1961. That is less than three years. Surely a great industry like this ought not to be compelled to come to Parliament within two years for sanction as to whether it should continue its rate of development. It is an extraordinarily limiting time. After the experience of recent years, when the industry has never known from year to year how much it would be permitted to spend, I should have thought that now at least was the time to give it power to go ahead and to plan for three or four years, without the fear of having to come to Parliament in the middle of the job for sanction to carry on.

Mr. Robens

I found the speech of the Paymaster-General an extraordinary one. He came to tell us that he had considered what had been said by his hon. Friends on Second Reading and had come to the conclusion that they were right and he was wrong.

Mr. Nabarro

No. It is a compromise.

Mr. Robens

I can only repeat that the right hon. Gentleman has come to the Committee today and told us that on second thoughts he considers that all the arguments which he advanced on Second Reading were wrong and that all that the hon. Member for Kidderminster (Mr. Nabarro) and his supporters said was correct.

Mr. Maudling

I did not say that; the argument for greater accountability came from both sides of the House.

Mr. Robens

On Second Reading, the Paymaster-General applied himself to the argument of accountability. Speaking in his Ministerial capacity, with all the knowledge and expert advice that he was able to obtain, he assured the House that the accountability was adequate. Today, the right hon. Gentleman has told us that the Amendments are due to consideration of the suggestions made by his hon. Friends. He has come to the conclusion that all the arguments he put forward earlier, which were completely against this kind of Amendment, were wrong and that his hon. Friend the Member for Kidderminster (Mr. Nabarro) and his supporters were right.

What the Paymaster-General did not tell us was the interesting story of what happened at a private meeting of the Tory Fuel and Power Group upstairs. If the information which leaks out from meetings from time to time is correct, it was there that the right hon. Gentleman's mind was changed. At least, that is the view of some of the correspondents who are able to secure information about these matters, and I have no doubt that that is perfectly true.

Therefore, the right hon. Gentleman's change of mind is based not upon arguments made in the House about accountability, but is because of the power and influence of the hon. Member for Kidderminster, who already, on previous occasions, has compelled the Government to move from office two predecessors of the right hon. Gentleman's noble Friend. By pressure in a private meeting upstairs, the on. Member and his hon. Friends have secured what the Paymaster-General was not prepared to give to the House on Second Reading.

5.30 p.m.

What did the right hon. Gentleman say about accountability and what has made him change his mind about it since Second Reading on 20th January? Speaking of accountability, he said that there was plenty of opportunity for the House to review the work of the nationalised industries—in this case, the electricity industry—because there was, first, the annual review provided for in the Finance Act. His right hon. Friend the Member for Flint, West (Mr. Birch) suggested, however, that the Paymaster-General was wrong, that Section 36 of the Finance Act, 1958, operated in one year only and that the budgetary review to which the Paymaster-General had referred did not exist. Whatever be the merits of the argument between his right hon. Friend and himself, one of the methods by which the Paymaster-General said that Parliament could examine what the nationalised industry was doing was the annual review through the Finance Act.

The Paymaster-General then drew attention to the fact that each year a White Paper on capital expenditure in the power industries is issued and gives a second opportunity within twelve months for us to discuss the nationalised industries and for Parliament to exercise some degree of oversight in what they are doing. The third safeguard to which the right hon. Gentleman referred was the Select Committee, which is constantly looking over the affairs of nationalised industries, as a result of whose Report we have already had one debate. The fourth method to which he drew our attention was the annual reports of the industries themselves, in this case the electricity industry.

The Paymaster-General, whose guidance we always value, said on Second Reading—he was well warned by the strange leakage to the Press about where the attack would come from and on what lines and, therefore, his brief had been prepared accordingly—that because of the four headings which I have enumerated, there was no doubt that there was adequate Parliamentary supervision. He dismissed beforehand, therefore, the case which he has made today that still more Parliamentary accountability was required.

Then, the right hon. Gentleman made the case for the seven years. The present Amendments would reduce that period to the point at which the electricity industry had reached the limit of its borrowings, whether in three, four or five years, and then it would require an Order in the House to take its borrowings above the lower limit and to go to the maximum or to such sum as the Minister determines. When we discuss the Order, we may find out from the right hon. Gentleman whether he proposes to do this in two bites or more.

Having dismissed beforehand the case of the hon. Member for Kidderminster and his hon. Friends that there was insufficient accountability to Parliament, the Paymaster-General proceeded to make a very strong case for the seven years. We on this side supported him, because in an industry like this, which has to invest millions of pounds a seven-year programme is not unreasonable. All these arguments convinced us in the Opposition that we were right to support the Government.

Today, however, the Paymaster-General, for whom we have tremendous respect, tamely caves in to this little group of back-benchers opposite who are able to exercise so much power over so formidable a figure as the right hon. Gentleman that we are bound to wonder exactly who is running the Government, whether it is those inside it or those who are out of it.

We have now reached the stage when the Bill that we discuss on Third Reading will be a brand new one. It is all changed, rather like the Bill concerning baking that we discussed on Friday. On Second Reading, not once, but many times, the Paymaster-General persuaded the House that seven years was the right period. He said: So we must take action now to increase the total ceiling, and, in the view of the Government, it is right to take a seven-year period, because of the nature of the industry, the long time over which its capital development programme must unfold, and the time it takes from the start of a project for electricity generation to its completion. For all these reasons, it seems most sensible to take a seven-year period. This seven-year period of authority for borrowing is linked with a seven-year programme for the general expansion of the industry … He went on to say: What we are asking the House in this Bill to do is to approve an overall limit of borrowings by the electricity authorities over the next seven years, and in asking the House to do that, we must also ask it to confirm the Governments view that the general programme laid before the Government, the House and the public for the expansion of the industry over this seven-year period is, in broad terms, a reasonably sensible programme. We are not asking for detailed approval, which must be given year by year, but it is important that there should be general approval for the expansion programme of the industry over this seven-year period. He added: The proposal is for an investment over this seven-year period of £1,470 million in fixed capital for generating electricity and £660 million for distribution, giving a total of £2,130 million."—[OFFICIAL REPORT, 20th January, 1959; Vol. 598, c. 41–2.] It is no use the Paymaster-General, occupying a position as an important Minister in the Government, to come to the House and, on the basis of good argument, persuade the House to accept the seven-year period, together with his arguments about public accountability, and then to come back a few weeks later and say that what he said then was all nonsense, that what the Government now want is much greater Parliamentary accountability, that not much notice need be taken of all the business about the seven years and that the industry can be allowed to spend so much money and then the right hon. Gentleman will make an order and let the industry carry on with the remainder.

That is not treating the House too well. If the right hon. Gentleman had any doubts about his seven-year period or about public accountability, he should have been fair to the House and expressed those doubts on Second Reading and not been so adamant about seven years and public accountability. This change of attitude by the right hon. Gentleman has nothing to do with suggestions that were made in the House on Second Reading, because the Parliamentary Secretary made no reference to these matters when he replied.

Mr. Nabarro

It was not the Parliamentary Secretary, but the Secretary of State for Scotland, who replied.

Mr. Robens

When the Secretary of State for Scotland replied, he made no reference whatever to these points. As we considered whether the Bill should be given a Second Reading, there was no indication that there would be any change. I repeat that, on a Bill which deals specifically and only with this one matter, the Paymaster-General has given way to this powerful Fuel and Power Group in his own party and has misled the House of Commons in consequence.

I hope that the right hon. Gentleman, on any future Bill dealing with fuel and power, will be good enough, at least in the interests of the Opposition, who have tried to assist the Government in these matters, to consult the Fuel and Power Group of the Tory Party first and then come to the House and tell us exactly what is in his mind. It is clear that we shall, in future, have to rely far more on the speeches of the hon. Member for Kidderminster than on the speeches of members of the Government, because his views certainly carry more weight than those of Ministers and the people who draft these Bills.

What is to happen now in regard to the seven-year programme? Does it go on, as laid down in this admirable booklet to which the Paymaster-General drew our attention and on which he said the whole case for the Second Reading was made. This booklet, "Power for the Future", contains the seven-year programme. Are we to have another programme given to us, a programme which will, first, take our development up to the lower limit of this borrowing, and then, in a second part, take us to the upper limit? What guarantee have we that, when the lower limit has been reached, the right hon. Gentleman will come to the House with an Order to raise it to the higher limit?

There is nothing compulsory in the Bill, as far as I can see. If we take the right hon. Gentleman's position on Second Reading and then during the Committee stage, it would seem better for us to address our questions to the hon. Member for Kidderminster. The hon. Gentleman will be able to tell us whether he will be able to persuade his right hon. Friends at the time to come forward with an Order permitting an increase or not. What reliance can we place on the right hon. Gentleman on the Front Bench?

Mr. Nabarro

I should be very interested in having a revision of the publication" Power for the Future in the early future. I should not like the right hon. Gentleman to attribute to me any special prescience in a matter of this kind. I will quote a far greater authority, the Economistof 27th December, 1958, which said: One rather notable omission from the booklet 'Power for the Future' which the Electricity Council has issued to explain how it intends to spend the £2,130 million between this year and 1964–65 is any figure of how much generating capacity it intends to have in commission at the end of its investment spree". Those were rather derogatory comments.

Mr. Palmer

That is complete nonsense.

Mr. Nabarro

The hon. Gentleman the Member for Cleveland (Mr. Palmer) may think that, but the Economisthas among its ranks some distinguished critics of the nationalised industries, and it is not a Tory journal.

To the right hon. Gentleman the Member for Blyth (Mr. Robens), I say at this stage that I would welcome an amendment to the booklet "Power for the Future", based on the Amendments that we are putting through today. I would welcome a restatement of future policy every two years on the part of this immensely expensive industry.

Mr. Robens

This now places us in much greater doubt. At first, I was ready to accept these Amendments and take the advice of the right hon. Gentleman. First, he shakes my own confidence in what he now has to say to the House on these matters, and then what the hon. Gentleman the Member for Kidderminster has just said makes me much more doubtful about even agreeing to these Amendments going through without a Division.

I say at once that the hon. Member for Kidderminster and his hon. Friends in his very powerful Fuel and Power Group have a great deal of knowledge. I hand it to the hon. Member for Kidderminster that he has read up all his stuff on this matter.

Mr. Nabarro

I am extremely grateful to the right hon. Gentleman.

Mr. Robens

If he is as successful in his last plea for a review of "Power for the Future" every two years as he has been in making the Paymaster-General eat his own words, then, it seems to me, these Amendments take on a much more serious slant than they appeared to do when we first discussed them.

I want to put a question to the Paymaster-General, and I should like him, if he will, to reply personally to it. Perhaps he might intervene. I mean no disrespect whatever to the Parliamentary Secretary in saying that, and I do not in any way wish to interfere with the hon. Gentleman making a speech. It is a very important matter, and this is the question I put. Does the right hon. Gentleman stand by this programme or not?

Mr. Maudling

The answer is, "Yes".

Mr. Robens

So we may take it that, if the hon. Member for Kidderminster now marshals his group to try to enforce the policy he has just announced, we can rely, this time, even if we could not previously, upon the right hon. Gentleman sticking to his guns or, at least, sticking to the generating programme. That is some comfort to us, and I hope that now that we have that on record we shall at least have something with which to face this formidable hon. Member for Kidderminster, who is able to exercise such tremendous pressure upon the Government.

What is to happen to the forward planning of the electricity industry? Has it a forward plan on the basis that there will be an Order at some time, when it has used up the lower limit of its borrowings, to enable it to go to the maximum? Or has its business associations with the companies which supply the industry to be on the basis that, "These are the sort of orders we can give, but you must understand that, at a certain date, when we have paid all our bills for capital expenditure, we cannot determine whether we shall be able to take delivery of anything more because that will be determined entirely by the Minister coming forward and agreeing about an Order in Council".

5.45 p.m.

The Parliamentary Secretary to the Ministry of Power (Sir Ian Horobin) indicated dissent.

Mr. Robens

The hon. Gentleman seems to be suggesting that this is not so. I am bound to say that once one departs from a seven-year programme which, I should have thought, enabled both the manufacturers and the industry to plan and go ahead with complete safety, knowing that the orders placed could be properly met, and once that programme is reduced, doubt must be created somewhere.

What is the point of the Amendment? What is the point of reducing the amount of borrowing—'this is what I understood the right hon. Gentleman to say—if it is not at a certain point to make it possible to examine once again the programme of the electricity industry? If it is determined by Parliament—the Government, with their automatic majority, will determine it—that it shall not have any more money, what happens to the orders placed by the undertakings with private enterprise?

Mr. Maudling

The same thing as would happen in the last year of a seven-year period would happen in the last year of a four-year period.

Mr. Robens

What is that?

Mr. Maudling

They go on.

Mr. Palmer

There will be a different Government then, anyway.

Mr. Robens

They do go on. Very well.

Therefore, what the Paymaster-General is now saying is that these Amendments are mere whitewash to placate the hon. Member for Kidderminster. They mean absolutely nothing, and, in four years' time, when all this money at the lower limit has been used, the hon. Member for Kidderminster will speak about an Order which the right hon. Gentleman will produce, and it will not make the slightest difference. All this is merely to placate the back benchers. That is exactly what we thought was the truth.

Mr. Nabarro

There is apparently a great conflict of emotion between the right hon. Gentleman and his hon. Friend the Member for Cleveland (Mr. Palmer). The right hon. Gentleman is now clearly assuming that my right hon. Friend will still be in office four years' hence. A jolly good thing, too. The hon. Member for Cleveland, in rather prophetic fashion, was saying a few moments ago that it would only be a matter of months before the two sides changed round. Really, the right hon. Gentleman ought to do his homework before he addresses the Committee.

Mr. Robens

I have done my homework. It is always the custom in the House of Commons to deal with a forward programme and to deal with Ministers as they are at the time. The future can take care of itself; we will deal with the changed circumstances when they arise.

At present, I am dealing with the position as it is now. I am projecting the thing forward and I have merely been trying to elicit from the right hon. Gentleman the true motives of his Amendments. I am perfectly satisfied that we have them now. He has not gone back on his Second Reading speech at all. He still believes in the seven-year programme. He still believes in Parliamentary accountability. This is really a bit of eyewash to placate the hon. Member for Kidderminster. I suppose that we can really take it both ways. [Laughter.] it is all very well for the hon. Member for Kidderminster to laugh. It seems quite clear that we can take it either way, either as evidence of weakness on the part of the right hon. Gentleman or as something to placate the hon. Member for Kidderminster.

Mr. Nabarro

Or both.

Mr. Robens

That is exactly what the right hon. Gentleman said in his interventions.

It is not that one violently objects to the Amendments. In view of what the right hon. Gentleman has said about it. in effect, really making no difference at all to the programme, I do not think that it matters much whether there is this Order in Council for the increased borrowings or not. It gives us an extra day for the debate on the electricity undertakings, which in itself is not a bad thing if Parliament has the time.

The right hon. Gentleman was not, I think, very fair to the Committee when he produced such powerful arguments both on the question of accountability and on the seven-year period, afterwards running away from them as he has. I do not wish to say more at this stage. On the next Amendment, I may have one or two words to say. In advising my hon. Friends to agree to these Amendments, I can only repeat that this is an appalling piece of Parliamentary work on the part of the right hon. Gentleman. It is something which surprises us on this side very much, because we did feel that at least he, if none of his predecessors, was able to stand up to the powerful hon. Member for Kidderminster.

Sir I. Horobin

The right hon. Member for Blyth (Mr. Robens) has been making rather heavy weather of all this. I think that there are, however, one or two points on which a little rational assistance would be of help to the Committee. First, to dispose of the point made by my hon. Friend the Member for Kidderminster (Mr. Nabarro)—I am not sure whether I ought to call him my "hon. master"or my "hon. dupe"—

Mr, Robens

Does the hon. Gentleman remember his "hordes and droves?"

Sir I. Horobin

Consent by the appropriate Minister would, in any case, be required, in this case the Minister being my noble Friend. The point is that that consent, whatever the type of borrowing, could be given only within these limits.

As regards the seven years, I would like to make it quite clear—in one sense this is the point of the first Amendment, the one we are, technically, now considering—that the period until 1965 carries out exactly the aim of the brochure and the plan for the industry. The further figure in the second Amendment relating to the earlier period—about which, I gather, the right hon. Gentleman will have something to say—also follows exactly the development put forward in the plan, as generally approved by the Government and the House on Second Reading.

I do not think that we need pursue any of the more general points made by the hon. Member for Cleveland (Mr. Palmer). Whether it be a public service or a commercial activity, some form of accountability is obviously desirable. In passing, I will say that it is not true that the Secretary of State did not deal with all this when he wound up. The right hon. Member for Blyth made a mistake which he corrected. I was, unfortunately, ill and could not be there, and, in any case, I was not to wind up the debate. My right hon. Friend the Secretary of State for Scotland wound up, and my attention has been drawn to his remarks at the very beginning of his speech: …in the speeches from both sides of the House the main matters of interest have been connected with the fact that no one has yet devised the proper method of keeping control of nationalised industry …"—[OFFICIAL REPORT, 20th January, 1959; Vol. 598, c. 152.] The right hon. Member for Blyth, inadvertently and trusting to his memory, made a statement contrary to the facts. It is important to get this right. The whole issue is not a question of wild revolts, pressures and blackmail and all the rest. It is a very close balance of arguments. The right hon. Member for Blyth might recall some of my own guilty past in this matter. I disclose no secrets when I tell him that discussions on accountability went on before the Bill was introduced. They were continued in the House on Second Reading and they went on afterwards, before, during, and after the famous meeting of the Conservative Fuel and Power Committee.

There is a balance of argument on this which all serious students of the nationalised industries recognise, on what is the right way of ensuring that there is sufficient Government and Parliamentary control, without limiting the proper freedom of the industry to carry on its business. After all, we are dealing with £400 million. We tend to get too used to these huge sums, but £400 million is a very great deal of money, and it is right and proper that Parliament should consider, as the Government have considered, whether it has made the correct choice between giving too much freedom and giving too little.

It is perfectly true, as the right hon. Member for Blyth said, reciting some of the words of my right hon. Friend, that there is an argument that debates on a White Paper, on annual reports, and on a Report from a Select Committee, if it returns to this industry, all give opportunities. But they all suffer from considerable defects, and it has been felt that it would be wise to ensure that a discussion took place without waiting for such a very long period of time.

The right hon. Member for Blyth did not do himself justice on the question of what happens towards the end of any period. The argument was a reductio ad absurdum.We have the annual Army Act, but does the Army stop planning what is to happen after 31st December? We all agree that something like this large sum must be obtained. The function of debate is not necessarily to discuss or to reduce the amount required. It is to give an opportunity to the House, or to the Committee, to consider at reasonable intervals the stewardship of these bodies.

Mr. Robens

Then why was a period of seven years provided for in the Bill in the first place?

Sir I. Horobin

Seven years, or nearly six years as the period is, is the time over which the industry is planning. The right hon. Member will see from the second Amendment that it is quite clear. That Amendment provides for … such greater sum, not exceeding two thousand three hundred million pounds, as the Minister may by order specify. What Parliament, in effect, is now saying is, "You need not come forward with another Bill and go through all the proceedings of an Act, but you must come forward with an Order which Parliament can debate."

Nobody pretends that this is the final solution of the problem of the accountability of the nationalised industries. No one believes that this is eternal. It remains true, as my right hon. Friend has said, that nobody has found a solution to this problem yet. On a balance of reasonable argument and discussion, from that and this side of the Committee and within the parties, it has been felt that it w ill not seriously limit the freedom of the industry to conduct its affairs if we ensure that there is a Parliamentary discussion at a shorter interval than was provided for in the original Bill.

Hon. Friends of the hon. Member for Cleveland will look with some disquiet upon what appeared to be his threat to them that if and when the party opposite sits on this side of the Committee —which heaven forbid—those on the Front Bench do not apparently propose to accept any Amendments from their hon. Friends. If more hon. Members had been present on the opposite benches during the debate we might have had a little private revolt from them.

But this is not a matter to get wildly excited about and talk about plots and pressures. All that has been done is to ensure that Parliament can keep a rather closer control over very large sums of money, and that seems a reasonable thing to do.

Amendment agreed to.

Further Amendments made:In page 1, line 12, leave out "two thousand three hundred million pounds "and insert: eighteen hundred million pounds or such greater sum, not exceeding two thousand three hundred million pounds, as the Minister may by order specify".

In line 22, leave out "three hundred million pounds "and insert: two hundred and forty million pounds or such greater sum, not exceeding three hundred million pounds, as the Secretary of State may by order specify".

In page 2, line 4, leave out "one hundred and thirty-five million pounds" and to insert: one hundred and ten million pounds or such greater sum, not exceeding one hundred and thirty-five million pounds, as the Secretary of State may by order specify".—[Mr. Maudling.]

6.0 p.m.

Mr. Maudling

I beg to move, in page 2, line 4, at the end to add: (2) Any power conferred by this Act to make an order includes power to vary any such order by a subsequent order. (3) Any power conferred by this Act to make an order shall be exercisable by statutory instrument, and no such order shall be made unless a draft thereof has been laid before the Commons House of Parliament and has been approved by a resolution of that House. One purpose of the Amendment is to provide that there should be an Order, to be confirmed by an affirmative Resolution. The Amendment makes clear that any Order need not take the whole of the remaining £500 million. In other words, if £400 million out of the £900 million has been borrowed, there must be a Statutory Instrument which need not, if the Minister at the time thinks fit, automatically cover the whole of the remaining £500 million. If necessary, it would be possible to obtain more than one Order to cover the remaining period of time.

Mr. Nabarro

Does that mean that at the end of 1961–62 the Minister would bring forward one Statutory Instrument to cover twelve to eighteen months ahead and another one and another? Will he have a number of bites at the cherry, or will he bring forward one Instrument to cover the whole period, until the exhaustion up to the ceiling of the borrowing powers under the Bill?

Mr. Maudling

The point is that the Minister's hands should be left untied either way. I hazard a guess that any Minister would say, if things are going right, "We will increase the borrowing powers up to the full limit of the Bill", but it would be unwise to tie his hands and prevent his proposing a lower figure if he thought that the best course.

Mr. Nabarro

I should like to add my commendation of these two important Amendments to the Committee. I particularly want to draw attention to the flexibility which was revealed by my right hon. Friend's answer to my intervention. I regard it as particularly important that. when we have exceeded the first sum of the increase, namely, £400 million at the end of 1961 or early 1962, the Minister should be in a position to proceed annually with his Statutory Instrument if he so desires, and according to the development position in the industry at that moment, rather than that he should bring in one Statutory Instrument to cover the whole period between the end of 1961, or the beginning of 1962, and the suggested exhaustion period of 1965.

The reason for that is the purely practical one that nuclear-power generating installations are immensely more expensive in terms of capital investment than conventional stations. Only yesterday, the Parliamentary Secretary told me that 12 to 14 nuclear stations are planned between this date and 1965. I am glad to see that the hon. Member for Houghton-le-Spring (Mr. Blyton) is listening, because the National Union of Mineworkers, for example, has said that two of these nuclear power stations should be abandoned in favour of conventional or coal-fired stations.

I called it the attitude of King Canute yesterday at Question Time, but whoever is Minister of Power at the end of 1961 must be in a position to judge where the emphasis is to be put as between conventional stations and nuclear stations. On that will depend the sum of money required for capital investment purposes year by year for the remaining period, from the end of 1962 to the proposed exhaustion date in 1965. It is for that reason that the flexibility enshrined in my right hon. Friend's answer to my intervention is the crux of the matter associated with these two important Amendments, which I so warmly support.

Mr. Hayman

It ill becomes the hon. Member for Kidderminster (Mr. Nabarro) to be talking of King Canute. His whole record in the House of Commons is one of trying to stop the oncoming tide of progress. The very speech which the hon. Member has just made was one to welcome the fact that every year he will be empowered to make another attempt. I was glad to hear the Paymaster-General say that he was prepared to think of the end of this stage in 1961 and of going on with the further £500 million and doing the whole job.

Mr. Robens

This is a sorry day for the Paymaster-General and the Parliamentary Secretary. Their rout is complete. The victory goes to the hon. Member for Kidderminster (Mr. Nabarro), and he has won a victory greater than he had thought. He did not appreciate, until the Paymaster-General revealed it in his speech, that it may be that when we come to the second part of the cherry it will be taken in little bites and perhaps annually. This is the point to which I indicated previously I wanted to return.

Is it really in the Paymaster-General's mind, or is he so frightened by the hon. Member for Kidderminster that he is coming here to plead with his hon. Friend and say, "We shall do this only year by year after we have had the first bite". Is the right hon. Gentleman so very much afraid? Why has he become so mouselike? Why does he begin by increasing the borrowing powers, in the Amendment which we have just carried, to a substantial amount and then suddenly, alarmed at his boldness, decide to tell the hon. Member for Kidderminster and his hon. Friends, "Do not worry about the Amendment. I might come here year after year for just a little bite. This is all for the benefit of Parliamentary accountability"?

This makes absolute nonsense of Parliamentary accountability. There are better ways of increasing the number of times on which Parliament could discuss the operations of the electricity authorities. If the Government of the day were prepared to do it, and provided the time, we could have an annual debate on the Annual Report. Other ways could be found of having debate.

It is running away far too quickly to suggest to the electricity authorities—in connection with their borrowings for the tremendous amount of work they have to do, which the Paymaster-General has recounted—that when they have used up the lower bracket of the borrowings the Paymaster-General is likely to come to the House and let the rest of the borrowings out bit by bit year by year. And the right hon. Gentleman says that the suppliers to the industry will not be worried! They are bound to be worried. The Paymaster-General has run away from his Second Reading speech already. It only requires the hon. Member for Kidderminster, in debate on one of these Orders, to frighten him again and he may run away again. He could even conceivably produce no Orders in Council for any money at all, and what will the big companies who are to supply the power stations of Britain do then?

This is what we are driven to under this Government. We have got mice on the Treasury Bench, instead of men who can stand up to the hon. Member for Kidderminster. I would myself regard it as absolute nonsense if this Amendment, which we are to accept, because the automatic majority of the Government would compel us to accept it anyway, when it becomes enshrined in the Bill, means that the Paymaster-General has in mind coming to the House year by year for sanction to dole out these moneys. I would regard that as very bad indeed, and I hope that the Parliamentary Secretary, who really does stand up to people, will tell us what it means.

I cannot help but think of the Parliamentary Secretary making a speech in which he referred to the customers of electricity undertakings as "hordes and droves". What businessman could possibly describe his customers in that way? [Interruption.] I was saying that I admire the way in which the Parliamentary Secretary stands up to people, and my appeal is made to him, rather than to the right hon. Gentleman, in whom I have lost confidence.

Here is the Parliamentary Secretary, who went to the South-West of England, where people wanted to take advantage of hire-purchase arrangements, and who described the valued customers of the electricity undertakings as "hordes and droves". As I say, what businessman would describe his customers in those terms? The Parliamentary Secretary can, because he himself can stand up to the people who want hire purchase.

Therefore, I want him to have the same courage to stand up to the hon. Member for Kidderminster. He should not be frightened by these upstairs meetings or these private arrangements in upstairs rooms. They have frightened the Paymaster-General, and they have frightened his noble Friend, but I am sure that they will not frighten the Parliamentary Secretary. I hope that he will get up and denounce the Paymaster-General and say that, as far as he is concerned, if he has any responsibility for them, when he has to deal with these Amendments, he will provide the electricity undertakings with the whole of the remaining borrowings, and not put up with this nonsense which the Paymaster-General, in his present delicate state of health, feels unable to resist.

Sir Peter Roberts (Sheffield, Heeley)

I think the right hon. Member for Blyth (Mr. Robens) is making a mountain out of a molehill, if my hon. Friend the Member for Kidderminster (Mr. Nabarro) can be called a molehill. I did not realise that this timidity which he is suggesting had anything to do with the Bill or with the Amendments which we are discussing. It is merely a question that we feel that these matters should be reviewed from time to time.

I think that my right hon. Friend the Paymaster-General is right in doing what he has done, and I would only add that I am sure he will bear in mind that in planning a great industry of this kind, it is essential that those planning the industry and those serving in it should be able to think in terms of years ahead. We do not want to see periods of one, two or three years which may inhibit the expansion of this great industry. I am quite certain that, in bringing out the point about flexibility, he had in mind the overall picture, and not this cherry-biting to which the right hon Gentleman referred. I am quite certain that my right hon. Friend has this point in mind, and that we can be satisfied that the planning of this industry will be able to go ahead in the great measure which we require.

Mr. Robens

Are we not to have some reply to what has been put from this side of the Committee, and also to what has just been said by the hon. Member for Sheffield, Heeley (Sir P. Roberts)? Is not the Parliamentary Secretary going to get up and say what is the real intention behind this? I do not expect the Paymaster-General to do so, because obviously he has a very heavy cold, and that, in my view, accounts for his humble submission to the hon. Member for Kidderminster. I feel sure that the Parliamentary Secretary can stand up to the hon. Member.

Mr. Maudling

If I had spoken again, I might have been guilty of tedious repetition, because I have already given the right hon. Gentleman the answer to the question which he asked me. We have not in mind a system of annual Orders after the first borrowing, and I would agree entirely with what the right hon. Gentleman says. I think it most probable that the remainder of the balance could be given. We want to get enough flexibility, and not tie the Minister's hands here and now, so that, when he brings forward the Statutory Instrument, it must contain the whole balance. I very much share some of the opinions which the right hon. Gentleman expressed, though I disagree with others.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Schedule agreed to.

Bill reported, with Amendments: as amended, considered.

Motion made, and Question proposed,That the Bill be now read the Third time. —[Mr. Maudling.]

6.14 p.m.

Mr. Nabarro

I was not quite sure— and that is why I was a little tardy in rising—whether my right hon. Friend the Paymaster-General proposed to speak in moving the Third Reading of this Bill. I shall not detain the House for more than a few moments, but there are important matters associated with this massive finance which I think must be alluded to before we part with the Bill.

On Second Reading, many references were made to the wastage of capital inherent in a low load factor. For example, my hon. Friend the Member for Glasgow, Pollok (Mr. George) alluded to this matter, and not only in the context of the Scottish Boards. He referred to it in a much more general sense, and I am glad to see that my hon. Friend is here listening to his words of wisdom on that occasion. He used these words: In Scotland the South of Scotland Board and the Hydro-Electric Board are diligent in seeking off-peak loads and have had some successes but only in small schemes. I suggest there are further substantial areas where examination would show how the load factor could be substantially improved."—[OFFICIAL RFPORT, 20th January, 1959; Vol. 598, c. 140–1.] During my Second Reading speech, I quoted from Mr. Kelf-Cohen's recent book on nationalisation and endorsed his reference, which is exactly in consonance with what I have said on many previous occasions in fuel and power debates, to the effect that very large savings in capital investment, which is what we are talking about in this Bill, could be secured if the load factor of electricity generating stations were improved.

I called on Her Majesty's Ministers attending that debate to give us some idea of what they had in mind in the expenditure of the sums which we are authorising in this Bill and in regard to economies in capital investment by using more adequately and efficiently existing power stations and securing from them a higher load factor. With great respect to my right hon. Friend the Paymaster-General, that point was not replied to by the Secretary of State for Scotland. All that the Secretary of State for Scotland did, in an utterly parochial sense, was to deal with his own Scottish boards —the North of Scotland Board and the South of Scotland Board—but, with great respect to the Scots, they are relatively small compared with the English boards. The entire operation in Scotland does not represent as many electricity consumers, even if they were 100 per cent. supplied with electricity, as does the Midlands Electricity Board by itself in England.

This is an important matter within the context of how the money which we are authorising in this Bill is spent, and that is a Third Reading point. The sum of money we are authorising is within the Bill, and what I want to know from my right hon. Friend, who I hope will reply to this debate, is what he thinks about improving the efficiency with which electricity generating stations are being operated, with a view to raising their load factors.

I want to make some specific suggestions to him. He has powers of direction. I think that a direction should be issued by the Minister of Power to all the electricity boards to concentrate upon raising their load factors, with a view to improving efficiency and to economising in new capital investment year by year within the ambit of these huge sums which we are authorising by the Third Reading of this Bill. The more efficiently that capital investment is made, the longer it will last and the less there will be carried upon the national economy. Not only should he give a new direction to the electricity boards to concentrate upon improvement of the load factor—and not only to the Scottish boards, because, as I have said, they are relatively small, although I am not being discouraging, because the population of Scotland is 5 million, as compared with 40 million in England—not only would I want them to concentrate on raising their load factor, but I would require, if I were the Minister—

Mr. Palmer


Mr. Nabarro

The hon. Gentleman said "Ah". I am not sure whether a proper description of that exclamation is a bovine noise or not, but it is a singularly unintelligent one. I repeat that, were I the Minister, not only would I give a direction in that sense, but I would also require that these boards reported annually to me on the success or otherwise which had attended their efforts in securing an improvement in the load factor, and therefore, of course, an increase in the efficiency with which the money is invested.

My final point is this. In 1954, we spent a great deal of time in this House separating the Scottish electricity boards from the English boards. There was a good deal of difference of opinion on whether or not that was a wise move. In this Bill we are putting the Scottish boards back into the same Measure as the English boards. It seems to me to be a retrograde process, and as the Bill, as amended, provides for certain statutory instruments after 1961, I am glad to see that the Joint Under-Secretary of State for Scotland, my hon. Friend the Member for Dumfries (Mr. N. Macpherson), is in his place listening to these words.

May I ask him whether he would use his influence, when these Statutory Instruments are presented, to make quite sure that we have one Statutory Instrument for the Electricity Council, and that we have two further Statutory Instruments—one for the South of Scotland Board and one for the North of Scotland Board. I may find myself in the position of supporting the Statutory Instrument for the English boards, I may desire to support the Statutory Instrument for the South of Scotland Board, but it is just conceivable that I might not approve of the scale of expenditure envisaged by the North of Scotland Hydro-electric Board, and I want to be in a position to be able to vote against the expenditure of the North of Scotland Board, if I deem fit, without having to vote against the expenditure of all the other electricity boards.

I should like my hon. Friend the Parliamentary Secretary, when he replies, to give me an assurance that, whenever the Statutory Instruments are introduced under the Amendments which we have carried in Committee, there will be separate Instruments for the Scottish boards so that if we desire to accord to them treatment different from that accorded to the English boards, we may do so.

I hope the Measure will get an unopposed Third Reading. The sums of money we envisage are justified. We are voting for 10 per cent. increases in electric power every year for seven years ahead. That is what we are underpinning financially, and that has the effect over a single decade of doubling the electrical generating capacity of the nation. It is a measure of the industrial expansion which has been maintained continuously now since the end of the war, and we should not cavil in any way at the huge sums of money that are envisaged in the Bill, provided that there is the proper Parliamentary accountability, which my hon. Friends and myself have sought—not in a cabal upstairs in the Parliamentary Power Committee of the Tory Party, but perfectly publicly on the Floor of the House —to provide, with a measure of success, within this Bill.

6.25 p.m.

Mr. Hayman

I rise to support the Third Reading of the Bill and to welcome the assurance of the Paymaster-General that at the end of three years, if he is still there, the right hon. Gentleman will be prepared to come to the House for sanction to proceed with all the rest of the borrowing powers under this Bill.

On the question of efficiency within this industry, we should also test the efficiency of some of the private companies which manufacture, say, cookers. My wife and I have just had the unfortunate experience of paying the biggest sum of money we have ever paid for a cooker—and we have been using electric cookers for twenty-five years. This one has now started to hum, and we are told that it hums because the elements are made with a cheaper material. I have no doubt that the hon. Gentleman the Member for Kidderminster (Mr. Nabarro) would have a lot to say if that oven had been manufactured by the nationalised industry—

Mr. Deputy-Speaker

Order. The hon. Member is going far from the Third Reading of the Bill. The cooker he mentions was not manufactured by the nationalised industry, and, therefore, it is clearly not within the Bill.

Mr. Hayman

I am sorry, Sir, but one feels a little strongly on this matter. I agree entirely with most of what was said by the hon. Gentleman the Member for Sheffield, Heeley (Sir P. Roberts) about the necessity for providing enough capital for this great industry to plan ahead, and not only to plan ahead, but to work with the assurance that the plans it will be preparing in these three years are likely to be carried out in the following four years.

6.28 p.m.

Sir Patrick Spens (Kensington, South)

I should like to say a word or two as the ex-Chairman of the Select Committee on Nationalised Industries. Unfortunately, I was in bed when the Second Reading of this Bill came on. I had looked at it with a great deal of anxiety because, as the familiar faces now in this Chamber who were with me on the Committee will know, I was particularly interested in trying to increase the control of this House over the expenditure of the nationalised industries, and we spent many days on that point.

I congratulate the Paymaster-General and the Parliamentary Secretary to the Ministry of Power, and all those who have contributed to this Bill. In its present form it adds one more opportunity for the House of Commons to increase its control over the expenditure of this industry. As I read the report of the debate on the Second Reading, and as I have listened to all this debate, we have concentrated on this one nationalised industry and on the amount which it is to have over the next seven years and, to some extent, how that is to be spent.

This, however, is only one of a number of nationalised industries, and it is essential for the House to remember that every time we pass a Measure of this kind we are dealing with only one out of a number, and that other industries will be coming forward for equally large, if not greater, amounts of money. It is true that after we have passed the Bill none of this money can be borrowed without the consent of the Minister. It is also true that the Minister of each Department ought to know something about what the other Departments concerned with nationalised industries are doing in the way of finance; but that is not the same thing as this House knowing what is going on month after month, year after year, and the problem still remains to be solved as to what machinery there is by which this House can be kept informed of the total sums of money raised from month to month and year to year by all the nationalised industries.

Let us take the large sums of money we are authorising here under a seven-year scheme. In our investigations of the Scottish Hydro-Electric Boards we found that not one estimate worked out in practice. Always by the time the work came to be paid for, a much larger sum of money had to be found than had originally been thought necessary. That happens everywhere. Therefore, when we vote a sum of money under a seven-year scheme, we must realise that long before the seven years are up it is more than likely that the money will have been spent and that still more money will be required.

It is that kind of combined expenditure by all the nationalised industries over which this House has lost control. This is a Measure which will bring the position before this House half-way through the scheme, when the Minister will have to disclose what has been spent, and how far the scheme has progressed. I hope that, simultaneously, the House will know what has happened in the spending of money by the other nationalised industries. It is for that reason that I think this Bill, as amended, is an important one and I congratulate everybody concerned on its amended form.

6.33 p.m.

Mr. J. C. George (Glasgow, Pollok)

I thought the right hon. and learned Member for Kensington, South (Sir P. Spens) gave the impression that the Scottish Estimates had been badly miscalculated. I am sure he did not intend to give that impression, but listening to him one might think that was so.

Sir P. Spens

No, it was due purely to rising costs between the time of the Estimates and the completion of the work.

Mr. George

I wanted to make it clear that the Select Committee was convinced that this was unavoidable and that the board had done its work well. Since prices have steadied, we shall not expect the same worry in the years that lie ahead.

Nationalisation has brought many fears to the people of this country, and none greater than the fact that huge sums of money are voted by this House with very little examination and debate. It is a further cause for alarm to look round the House of Commons today and to realise that those vast sums of money are voted in this Bill with such a meagre attendance. It is right that we should examine the expenditure as often as we can, and the nation has a right to expect that far more interest is shown in these vital matters than has been shown today.

These vast sums are based on plans which come before this House, and there is much cause for alarm about how those plans are made because, once made, they are never again really checked. There is no method of checking plans from the beginning until they are put into execution. Again, the plans are made in an undesirable atmosphere, since the men making them know that they do not have to find the capital and that the capital will flow in. Therefore, there is no inducement to work for economy and since they do not have to make a profit, again there is no inducement to economy. Somehow or other we must make sure that the nation is getting value for its money, and so there is some reason for asking for accountability. The right hon. Gentleman the Member for Blyth (Mr. Robens) said he was ready for an annual debate, and I think we should have that when we are talking of vast sums of money such as we are passing this evening. The atmosphere generated by the ready availability of capital should be followed by checking all along the line.

I have often felt that after nationalising this vast industry and the coal mining industry there should be advisers to check the development plans. Be that as it may, we must use every possible opportunity to check the vast sums of money that are being spent in order to ensure that the money is being looked after and that the country is getting value for the sums spent. In conclusion, I congratulate my right hon. Friend the Paymaster-General on this Bill.

6.36 p.m.

Mr. Palmer

We are glad to support the Third Reading of this Bill, and in a moment I shall give the two principal reasons for doing so. In his speech the hon. Member for Glasgow, Pollok (Mr. George), said it was important to have greater Parliamentary accountability of nationalised industries because otherwise there was only a limited check. He also said that the men who run these industries do not have to find the money and therefore they can plan ahead without too much let or hindrance. I do not think the hon. Gentleman is normally unfair, but he was not fair in this instance. From my own knowledge, those responsible for running the great electricity supply industry of this country are always anxious at every stage to check their costs against comparable costs in other countries and to check their efficiency against the best efficient practice in the rest of the world. It is unfair to say about those responsible for running the nationalised electricity supply industry today that if it were not for some extra checks placed by this House, there would not be normal checks of efficiency and of economic expenditure in the daily working of the industry.

Mr. George

I thank the hon. Gentleman for giving way. I did not say they were wasteful in their planning. I talked about the atmosphere in which they planned, of money flowing in to meet whatever plan they devise.

Mr. Palmer

I accept that correction, but the fact is that, by every kind of practical objective test, the British electricity supply industry is run very economically. No one can doubt that on the facts.

I was glad that the right hon. and learned Gentleman the Member for Kensington, South (Sir P. Spens) intervened for a moment, because I had the honour, as did the Parliamentary Secretary, of serving under him when he was Chairman of the Select Committee on Nationalised Industries. The right hon. and learned Gentleman is right in saying, as regards a Parliamentary check on nationalised industries, that if the two sides of the House accept the principle of nationalisation, it is a matter of general concern to us all here, and the more we can work together to devise an effective way of providing this, the better. Certainly those of us who served on the Select Committee have tried, if only humbly, to make a start in that direction.

We are glad to support the Third Reading of this Bill for two reasons. First, because we believe in the expansion of the British economy and we know, as practical people, that in this modern age this expansion can only be based on electric power.

Looking ahead, it is sometimes overlooked that the development of nuclear energy is entirely dependent on electric power, because it is not possible to use nuclear energy unless it is used viaelectric power. The day will ultimately come when the whole of our electricity supply, as the secondary source of energy, will come less from coal and oil and more from nuclear fission, or even fusion.

There are very good practical industrial reasons why we should give the Bill a Third Reading, since upon it the continued expansion of the British economy will largely depend. We are glad to support the Third Reading from this side of the House because we are proud that these achievements are the achievements of a publicly-owned industry, and as the party responsible for putting through the 1947 legislation, we feel that by that legislation we did a very good job for the country—and we hope that we are fairly modest about that. When with the passing of the years we see that things are working out in a highly successful fashion, we take that as a tribute not only to those in the industry itself, but also to the great principle of public ownership and public enterprise.

The hon. Member for Kidderminster (Mr. Nabarro), who is not in his place—

Mr. Nabarro

I am here

Mr. Palmer

I think that I am accurate in saying that he is not in his normal place. The hon. Member again raised the question of the load factor and he quoted the book by Mr. Kelf-Cohen. With all respect, I would not regard Mr. Kelf-Cohen as an entirely impartial authority, and I need not put it higher than that. Mr. Kelf-Cohen has written a book arguing that the load factor of the British electricity supply industry is not as high as it might be.

That is common ground, and no one thinks that it could not be higher than it is at the moment, but the correct and adjusted figure is'about 48 per cent. That might easily be improved by another 10 per cent., but it is no good the hon. Member becoming so dictatorial as to suggest that the Minister should give a direction to the industry to improve the load factor. The fact is that the load factor of a power supply system—and I have made this point before—is not entirely within the control of the industry itself. It depends on the load factors of the various industries which take the power. For instance, the load factor of general British industry is probably not much more than 20 per cent., and for commerce it is probably not much over 10 per cent.

I am not saying that a great deal could not be done. Much could be done, particularly by improved tariffs. However, one of the problems about tariffs is that, since electricity supply is cheap and the cost of laying on a supply is relatively cheap, the cost constitutes a small factor in total industrial costs. Therefore, even with the best possible tariff it is not always possible to help as one might suppose from theory.

Instead of directions being given to the industry, the way forward might be to try a rather more peaceful method, as I suggested on Second Reading. It is that, in consultation with the manufacturers of electrical apparatus, the boards themselves might, over the next few years, try the experiment of a combined operation to have not only greater use of electric current. but to have the current used by appliances giving a greater all-round diversity. In this matter I am on the side of voluntary effort and not on the side of direction.

Mr. Nabarro

I am sure that the hon. Member will permit me to correct him in one material respect. I did not say, in the plain unvarnished terms which the hon. Member has now suggested, that there should be a direction to the boards to improve their load factors. I said that there should be a direction to the boards to concentrate upon load factor improvement as a fundamental consideration in economy in capital investment. That is a rather different matter.

Mr. Palmer

I am always anxious to be at any rate polite to the hon. Member and I accept his correction, although all that it means is that the attention of the boards should be drawn to the load factor. I should have thought that they already knew all about it.

In the course of our discussions today, we have had a number of exchanges about the Bill itself, on the fact that the Bill on Third Reading is very different from its appearance on Second Reading. The right hon. Gentleman the Paymaster-General seemed anxious to play down the changes, as did the Parliamentary Secretary. However, it was reasonable and understandable that we should make some criticisms of the way in which the changes have been made. On Second Reading the right hon. Gentleman said: … in the view of the Government, it is right to take a seven-year period which is quite definite, while he later said: For all these reasons, it seems most sensible to take a seven-year period."—[OFFICIAL REPORT, 20th January, 1959; Vol. 598, c. 41.] which was fairly definite. A change having been made, it is not unreasonable for us to try to find out why.

The Parliamentary Secretary seemed to suggest, when I talked about this not being the way in which government should be carried on, that I was suggesting that if we had had the power we would have done things differently and would have exercised dictatorial methods. I am a very mild person by temperament and that idea would not occur to me, even if I were in a position to carry out such a plan. I assure the hon. Member that that was not in my mind at all.

In a democratic party, there must be consultations and talks and from time to time there will be compromises. Certain compromises of that kind are not unknown in my party. It is the process of democratic government. However, on this occasion, remembering that this has been done previously, it would have been easier for all concerned if the changes had been made at an earlier stage. There should be some special office for the hon. Member for Kidderminster so that he could automatically be consulted before Bills were printed. It would save time. Perhaps the ideal solution would be for him to come into the Government and take over the job.

Mr. Nabarro

Quite rightly.

Mr. Palmer

We should have heard nothing of these changes but for a meeting upstairs when the noble Lord from another place was prepared to make concessions which, if left to himself, the Paymaster-General might not have been inclined to make. I cannot read his mind, but that is my guess.

In view of the assurances that we have been given today, I do not believe that the changes are likely to hold up the industry's development. Its credit is extremely good and if it goes ahead and seeks plant and equipment, those making that plant and equipment will know that their money will come along sooner or later, so that in practice the changes will probably not make much difference. Nevertheless, I feel that the industry deserves better treatment and that it would have been all to the good if the Government had decided these things in the first place instead of waiting for a meeting upstairs.

The industry has grown up over the last half a century and has always been reasonably efficient and go-ahead. It is our view that nationalisation has given the industry tremendous opportunities and it has shown itself capable of taking advantage of those opportunities. For those reasons, we support the Third Reading.

6.49 p.m.

Sir I. Horobin

It will be for the general convenience of hon. Members if we get the Third Reading before seven o'clock, and I am sure that hon. and right hon. Gentlemen will not think me discourteous if I speak briefly.

I want first to deal with a request from the hon. Member for Kidderminster (Mr. Nabarro), who is somewhat peregrinatory. One never knows where to find him. He asked whether there would be separate Instruments for Scotland and England. As the Ministers are different, there must be separate Instruments for the Scottish and English borrowings, but it will be possible for both Scottish Boards to come under the same Instrument.

With regard to some of his remarks about load factor, which were also taken up by the hon. Member for Cleveland (Mr. Palmer), all I need say is that this is a matter very much in the mind of the Electricity Council. It is not at all an easy matter, because the Council is not a free agent. That is not to say that it cannot do anything. It is interesting to point out to the House that the existence of the grid makes an enormous difference in this matter. I am advised that the 50 best stations in the country, although they have only just over 40 per cent. of the total capacity, produce 60 per cent. of the output. I could enlarge upon that. It is of great importance that the bad stations should only be used as little as possible, at peak loads. A substantial number of them which are used only at peak loads, are already completely written off as to capital expenditure as they are so old.

A great deal is being done with the bulk tariff as a direct incentive to the boards to improve their load factor, and a number of special tariffs and special arrangements are made with big consumers to encourage them to do the same. The amount of demand, for instance, which is kept off the peak load at present is well over 1 million kilowatts and rising fairly rapidly. It would not be at all fair to suggest that nothing is being done.

Reference was made by one hon. Member to nuclear power. One of the biggest elements in this is pump storage. The only pity is that we are not able to do more of it. It is an essential matter in the case of nuclear stations, which must operate at the highest possible load factor, that things should be so arranged that they can be used at a steady rate all the year round. I have no time to develop this matter of load factor other than to say that there is no need for directives, and no one should know this better than the Electricity Council and the boards. The Ministry is always in touch with them. The whole matter of research into consumer demand is being considered at the moment. It is quite a difficult matter, and much more difficult than it looks, to disentangle what is the real load factor in relation to particular demands. Work is being done along those lines. There have been cases in which the industry has gone to the extent of double wiring certain installations all through, so it should be possible for it to carry out practical research in that field to see exactly what is the problem. Improvements have taken place and further improvements will take place.

Finally, I should like to refer to the interventions of my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens), who speaks with such authority as pater familiasto many of us who served under him on the Select Committee on Nationalised Industries. I am sure that he will agree with me, when all the interchanges are over on this Bill, that the House and the country feel very friendly towards this industry. There is no question that it will be scamped of money it really wants. It wants an enormous sum of money, very rightly and properly, and certainly sensible minds at the head of the industry appreciate the fact that Parliament, as the custodian of public interest must keep a reasonable but friendly control over what is happening. That is all that is asked.

If we pass this Bill, as I am sure that we now shall, the industry can go ahead and plan very rapidly for its development. It will, in fact, get the money, but it will have to come to Parliament to justfy it as I am sure it will be able to, but if it cannot then, Parliament will have a duty to take very necessary steps. That is, however, a remote eventuality which I do not think anyone on either side of the House expects will occur.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Mr. Speaker

The Sitting is suspended for five minutes.