HL Deb 05 May 1873 vol 215 cc1459-63

called attention to certain Bills introduced this Session by Gas Companies for a permanent increase in their maximum charges on account of the sudden rise in the price of coal within the last 12 months, and to the inexpediency of granting such an increase even in cases in which some immediate addition to the present rates may be properly conceded, as it may be reasonably expected that the late increase in the price of coal may not be permanent. Now, he thought it extremely desirable that the House should express such an opinion on this matter as would be likely to lead to a uniform course of action by the Select Committees before whom the Bills of those companies would come. He must say that he did not think what they asked for should be conceded as a matter of course. These companies, like other companies, were speculative bodies which had obtained from Parliament concessions which were made to them on terms which included a maximum price, and they must take the consequences. Some of the Bills might come up from the Commons as unopposed Bills, and in this case he could act uniformly with respect to their provisions; but when they came before the Select Committees it would not be well to have one Committee doing one thing and another Committee another thing. He was quite willing to admit that if, as regarded the price of coal, matters remained for some time as they were at present, there might be reason in some cases for fresh legislation to enable Gas Companies to carry on their business, which at the maximum price allowed by their existing Acts they might not be able to do. But the increased price of coal had not as yet lasted long enough to justify a general increase in the maximum which the Gas Companies were allowed to charge;—and it must be borne in mind that many of those companies had long contracts, under which they would continue for a long time to come to be supplied with coals at the old rates. In the case of those Companies clearly there was no ground for asking for any increase of their maximum. Again, in many instances the Gas Companies had been making very large dividends, and were perfectly well able, with good management, to carry on their works at a profit, though, perhaps, for the next half-year or so they might not be able to make such profits as they divided in past half-years. He did not think that a reduced dividend, where there was still a profit, a sufficient ground on which to base an application to Parliament for an increase of maximum. It must be remembered also that if Gas Companies had recently been paying a higher price for their coal, they had been receiving a higher price for their coke. The whole matter was a difficult one, and therefore he thought an expression of opinion in their Lordships' House for the guidance of the Select Committees when the Bills came before them would be of advantage.


said, he entirely concurred in what had fallen from his noble Friend the Chairman of Committees. He thought it very undesirable indeed that in consequence of the present price of coal these large Companies should come for powers to make a permanent increase in the price of their gas, while the enhanced price of coal might not be permanent. At the same time, while he thought the larger Companies had no sufficient justification for such a course, the case might be different with some of the smaller and more recently established Companies. If they were obliged to go on with their present maximum at the present price of coal, they might find themselves on the verge of ruin. It struck him that the difficulty might be met by an extension of the provisions of the Gas and Water Facilities Act of 1870 by including maximum price and illuminating power as subjects in respect of which Provisional Orders might be granted by the Board of Trade. He believed no risk to the public interests would be incurred by allowing a Gas Company, or the local authorities, to come to the Board of Trade for a Provisional Order to revise the maximum price, because the Board would not issue such an order without due inquiry.


doubted whether the mode suggested by the noble Duke would be a practical one of meeting the difficulty. It might be that the Gas Companies were in need of a temporary increase of their maximum; but there was nothing beyond speculation to guide them in arriving at a conclusion as to whether the increase in the price of coal would be permanent. There was considerable difference of opinion on this subject, and therefore he thought that powers ought not to be given to the Companies for a permanent increase. If an increase were to be allowed to them, it ought to be only for a limited period—say two years; and if a necessity for a continuance of such an increase should appear at the end of that period they could apply to Parliament again.


said, it appeared to him that if any increase in the maximum were allowed it should be only for a strictly limited period. He was of opi- nion also that it should be an Instruction to the Select Committees not to grant any increase until after a careful and searching inquiry. Some of those Companies were taking a very unfair advantage of the monopoly which Parliament had conceded to them, and therefore he thought some Resolution ought to be come to declaring that no Select Committee ought to grant an increase of maximum price for an unlimited period, and that in no case should a Select Committee grant any increase whatever without a strict inquiry in which it had been established by evidence that the Company had done its best to economize the production of gas. In return for their monopoly Gas Companies ought to give the public good gas and economize the production as much as possible.


said, there was very great difficulty in ascertaining the profits of a public Company, and whether it exercised due economy in production. If the Legislature should once sanction the principle that Gas Companies were to obtain an increase of maximum price on the ground of a rise in the price of material, there would be applications for the same powers from Companies of every kind, and he did not see how Parliament could consistently refuse the request. Any concession by Parliament such as that now asked for by the Gas Companies ought to be regarded with great caution and be very carefully considered.


said, he thought his noble Friend the Chairman of Committees had done great service by bringing this matter before the House, with the object, as he understood his noble Friend, of eliciting their Lordships' views in reference to the subject. Several valuable suggestions had been thrown out; but it must be admitted that the question was one of very great importance and of immense difficulty. He thought it of sufficient importance for consideration by a General Committee, which might inquire and advise the House as to the course most desirable to be taken. To increase the price of gas without necessity would be a dangerous proceeding, but it might also be dangerous to call upon the Gas Companies to supply gas at less than cost price. If their Lordships thought well of his suggestion, he would propose that a Committee be appointed to consider the general question of what rule should be acted on in the case of those applications by Gas Companies.


thought it right to observe the circumstances were different in the cases of different Companies. It might be desirable to permit a small increase in the price for a limited time, in order to prevent some of the Companies closing their works; but as far as he was able to judge, the demand made on Parliament was unreasonable in very many cases. If their Lordships permitted him, he would think over the matter, with the view of considering whether he might not be able to suggest some course of action. If he should not be able to do so, or if their Lordships should not approve his suggestion, a General Committee might be appointed. He might mention that almost all town Corporations were now seeking to get the supply of gas into their own hands. He doubted whether that was good policy at the present moment, and would recommend those bodies not to be too hasty.

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