Lords Sitting of 17 April 1888

MINUTES.
PUBLIC BILLS—First Reading-Roads and Bridges (Scotland) Act (1878) Amendment* (68); Timber Acts (Ireland) Amendment* (69).
Second Reading—Electric Lighting Act (1882) Amendment (No. 2) (38).
Committee—Report—Army (Annual)* (55); East India (Purchase and Construction of Railways) * (56).
PROVISIONAL ORDER BILL—Third Reading—Local Government (Ireland) (Bangor and Warrenpoint),* and passed.

NEW PEER.
William Henry Lord De Ramsey—Was (in the usual manner) introduced by virtue of a patent dated the 8th day of July 1887, his father, the first Baron, who was created by such patent, never having taken his seat.
ELECTRIC LIGHTING ACT (1882) AMENDMENT (No. 2) BILL.
The Lord Wigan, Earl of Crawford.)
ELECTRIC LIGHTING ACT (1882) AMENDMENT (No. 2) BILL.

  (No. 38.) SECOND READING.
  Order of the Day for the Second Reading, read.
  THE EARL OF CRAWFORD, in rising to move that the Bill be now read a second time, said, that he did not intend to weary their Lordships by going into the former discussions upon this subject. The Bill was rather more extended in its nature than any measure previously introduced into that House on the subject of electric lighting. He would, however, briefly explain the changes which he proposed to introduce into the law on this subject. Under the 2nd
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  clause of the Bill the persons who were known as undertakers, and who provided currents of electricity for the purpose of distribution to individuals within a certain area, would be permitted to obtain certificates and to make their arrangements with the Local Authority as a licensing authority without having to go to the enormous delay and expense of applying to a central office for a Provisional Order, and of having that Order subsequently embodied in a special Act of Parliament. The cost of the Provisional Order system and the Parliamentary procedure consequent thereupon was undoubtedly very high, and in addition to that there was the grave objection that that course of action could only be taken during a certain portion of the year. Unless everything was not foreseen for the next 12 months no work practically could be proceeded with until a new Provisional Order was obtained. They had to go now into a very much larger question than was contemplated in 1882 when this Act became law. In addition to the method of procedure by licence, Provisional Order, or special Act the present Bill would enable the Local Authority to enter into an agreement with, and to grant permission to, the undertakers for their several works and purposes as set forth in this Bill. In the event of the Local Authority refusing, the Board of Trade would be authorized to step in and to say whether that refusal was a just and a right one or not. Clause 3 dealt with the description of the supply, and that was, he thought, sufficiently guarded by saying that the description or method of supply should be only made under certain rules to be approved by the Board of Trade. The application of electricity for lighting purposes had been in use for six or seven years, and in consequence of the demand the Phœnix Insurance Company in 1882 printed a set of rules for the guidance of persons who were using the electric light. By carefully following those rules accidents might, as far as possible, be avoided. The rules were first published in The Times in May, 1882. He had made it his business to inquire whether there was any additional risk placed upon buildings which were lighted by electricity, or in which the electric current was employed. He was informed by the Phœnix Office that no extra premium was charged on

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  buildings prepared for the reception of electricity under the rules they had drawn up, even though other modes of lighting were also used. In regard to the question of safety for life, he was informed by the Pelican Office that where a building was wired in accordance with the rules laid down by the fire insurance offices, they considered that there was no greater danger to life than there would be in an ordinary dwelling house. Therefore he said that the Board of Trade, in framing any rules for the guidance of undertakers, ought to give great weight to the rules which had already obtained during so many years, and which were drawn up by those who were thoroughly acquainted with the subject. Clauses 4, 5, 6, and 7 of the Bill were practically taken from the Gas Act of 1847, which was incorporated in the Electric Lighting Act of 1882 as far as those clauses were concerned. Those clauses contained all that was necessary in regard to the powers to be given to undertakers in taking up streets in passing from one part of a town to another. Clause 7 gave the Local Authority power to give notice to the undertakers of their intention of doing the work of taking up and restoring the street; and Clause 17 imposed penalties, which the Gasworks Clauses did not contain, for damage or disturbance done in laying or altering pipes. Then, with regard to telephones, they were doing such excellent and valuable service that he thought it fair that no Act for electric lighting should place them in a worse position for carrying on their business. Clause 10 was intended to give them, as against the undertakers, a legal status, and to protect them from all possible damage by an electric lighting undertaking. He also proposed that when the undertakers were not the Local Authority, but a company of private individuals, they should pay a certain sum per annum to the relief of the rates for the privilege of being allowed to use the streets. He would suggest that the sum so to be paid should be at the rate of £20 a-mile per trench, and in Committee—if his Bill should go into Committee—he should be prepared to state the amount which that rate would realize if London were properly dealt with. Most streets having houses on both sides, two trenches would
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  be required, thus raising the rent to be paid to £40 per mile run of street. Their Lordships would be surprised to learn to what an extent the rates of London would be relieved if this were done. The Act of 1882 prescribed the periods within which the works of an electric lighting undertaking were to be finished. He would propose to leave that question to be settled between the Local Authority and the undertakers. The next thing was that within five years from the passing of the Act all existing and future cables or wires or mains for electricity should be placed underground. Clauses 16 to 23 he had adopted from the Gas Act of 1871, and they regulated the appointment of Inspectors, the methods of testing, and the supply of the current to the consumer. Clauses 24 to 27 dealt with a matter of extreme difficulty, and his proposals were, he admitted, merely intended as a temporary measure. These clauses referred to the question of how instruments were to be used for accurately testing whether the current supplied was equal to that contracted for—a subject on which they had still to learn a good deal before they could consider themselves near perfect. He hoped by next year he would be able to work out in the laboratory a means of "standardizing" the measurement and the current. Clauses 38 to 44 dealt with measurements, and he hoped to induce the Government to make a small addition to the Weights and Measures Act, for the purpose of putting electric meters on the same footing as gas meters. The next point was that of the supply to be furnished to the general householder, and there he went on the lines of the Gas Act of 1871, which provided that any house-holder living within 25 yards of a distributing main should have a right to demand a supply, and that put electric undertakers under practically the same obligations as Gas Companies. But the Gas Companies had no power to object to any form of lamp the consumer might desire to use, and this Bill modified that in the case of supplying electricity, and gave the undertakers the right to discontinue the supply so long as the consumer used it in a way prejudicial to other consumers of the current. The price would be by the quantity of electricity—of energy—based on the actual

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  quantity supplied, or by the number of hours actually used by the consumer. Clause 32, also following the Gas Act, gave a Local Authority power to require a supply for public lamps if they were within 50 yards of a current. Clause 33 dealt with the question of penalties. Clause 37 changed the existing unit of measure from 1,000 "watt-hours" to 10,000. The present unit was comparable to speaking of gas by the 100 feet in place of the 1,000 feet, and the maximum price per the present unit was so small—10 d.—that it would be difficult, without resorting to decimals of 1d., to make future reductions of price. The new unit would be 8s. 4d. for 10,000 "watt-hours," from which figure it would be easy to make reductions. It would also be provided that a Provisional Order or agreement entered into with the Local Authority might be revoked by the Board of Trade on showing (1) that the undertakers were insolvent; (2) that the work could not be carried on at a profit; and (3) by the mutual consent of the Local Authority and the undertakers; and, in the event of the Local Authority desiring to purchase, they were to give notice thereof within a month to the Board of Trade saying that the agreement was to terminate. On the subject of the purchase price, he had adopted a suggestion of the noble and learned Lord (Lord Herschell) used with great success in the purchase by Government of Indian Railways—that the amount to be paid should be the commercial value of the undertaking ascertained from the average price of the shares for the seven, five, or three years preceding the purchase. Finally, the Local Authority were not to allow any new undertaker to come into their area when they had entered into an agreement with undertakers already there. Unless the work was badly carried out, or unreasonable charges were being made, he did not desire to invest the Electric Lighting Companies with any permanent monopolies; all that he asked was that they should be placed in no worse position than they were in when they first entered into their contracts. He hoped that the Bill would now be read a second time, that a great industry which had been kept back for six years, since the Act of 1882 was passed, would have room to exercise their capital. He knew, of his own knowledge, that if the
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  law were made somewhat on the lines of this Bill, in the course of six or eight months large sums of money would be thrown into the country, and employment provided for large numbers of working men. He believed that thousands of men would speedily be employed in preparing these works and upon the business of electric lighting. In conclusion, he would only add that, in preparing this Bill, he had kept himself entirely free from any bias in favour of the Electric Companies, and he had endeavoured to take a fair view of what was due to the Local Authorities and the Gas Companies. He had, in fact, tried not to be a partizan one way or the other, and he trusted that this Bill, the second reading of which he begged to move, would meet with the approval of their Lordships as being fair and equitable.
  Moved, "That the Bill be now read 2a." (The Earl of Crawford.)
  LORD THURLOWsaid, while agreeing with much which had fallen from the noble Earl, he did not find himself in a position to withdraw his Bill on this subject. It was only some amelioration in the existing law which would set the large amount of capital ready for investment free. Ever since the Act of 1882 firms and companies of electric engineers and others interested in the subject had petitioned Parliament for such modifications in that Act as would remove those restrictions which, it was alleged, had the effect of crippling the progress of electric lighting, and in a Petition which was presented to their Lordships' House yesterday those gentlemen had expressed a view, which he shared, that a Bill so complex in its character as that of the noble Earl's had but a faint chance of finding acceptance, if not in this House, at any rate in the other House of Parliament. Having regard to the circumstances and the subject-matter, he had no hesitation in saying that the Petition embodying that view was signed by as representative and influential a body of names as could be brought together. The second reason why he was unable to withdraw his Bill in favour of that of the noble Earl was that it was too soon after the great Act of 1882 to revive the whole question. All that was wanted was a simple measure of relief to the Companies, giving them a larger measure of

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  time in which to recoup themselves for their original outlay, so that they should not be compelled against their will to charge their clients a prohibitive price for the electricity which they supplied. A measure of such proportions as that of the noble Earl, dealing with public questions so complicated and important, ought, moreover, to be brought in on the advice of the Board of Trade, or some other Government Department, in order to do complete justice to all the interests at stake. His third objection was that it legislated on many points of detail which should be left to be dealt with by Provisional Order according to the merits and requirements of each case. Lastly, with regard to the Purchase Clauses, he objected to the Bill that it did not recognize the absolute right which the Local Authority should have, in his opinion, to become the purchaser on fair terms of the undertaking of a private company supplying electric light within the area of such authority at the expiry of the period for which the Provisional Order was originally granted.
  THE SECRETARY TO THE BOARD OF TRADE (The Earl of ONSLOW)said, that the speech of the noble Marquess on the occasion of the second reading of his noble Friend's Bill would have shown that the Government were sincerely desirous to do what they could to promote the extension of electric lighting; and if it had been certain that the Bill now before their Lordships represented the feeling of those interested in promoting electric lighting in this country, it might have deserved a more attentive consideration. But, as had been just pointed out, a Petition had been laid upon the Table signed by a number of leading firms in the trade who would be most likely to apply to negotiate with the Local Authorities who said that they were satisfied with the Bill of the noble Lord opposite (Lord Thurlow). He might further say that since the Government consented to the second reading of the Bill of his noble Friend opposite there had been a very large number of applications to the Board of Trade in the hope that the extension of time from 21 to 42 years would have the effect of inducing capitalists to embark money in these undertakings. This Bill proposed to make an important change in the existing law. Hitherto
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  Parliament had declined to allow Companies promoted, whether for purposes of electric lighting, gas supply, or tramways, to make their bargains for themselves, without the supervision and consent of Parliament. But this Bill proposed to abolish the Provisional Order altogether, and the noble Lord only proposed to do it in the case of the Electric Lighting, and no other, Companies. There were, he admitted, proposals in the Bill which were commendable. No doubt it would be a great advantage to secure, within a reasonable period, that those overhead wires which were a danger and disfigurement to the Metropolis should be laid underground. In the Bill of the noble Earl there was no provision for any penalty upon any Company which failed to carry out the removal of wires. Again, hitherto it had been a practice that the authority or individuals liable to repair certain streets within the area of the undertaking which were not repaired by the Local Authorities should be able to appear before the Board of Trade and state their objections to the proposals of the promoters, and those streets were then placed in a Schedule to the Order. As he understood the Bill of the noble Earl, those persons would not under it have the opportunity of appearing before any authority, and would have to submit their case to arbitration. The principle which Parliament had always enunciated was that no monopoly should be set up; they had had sufficient experience of the result of creating a monopoly in gas, water, and other matters. In this Bill it was stated that nobody should have any permanent monopoly; but from the word "permanent" he gathered that there would be a temporary monopoly—i.e., while the order ran, and the noble Earl had omitted to state any time for the duration of the Order. With regard to the clause which proposed to give Local Authorities power to purchase, he thought that it would have been better to set about that in a more direct manner. As to the manner in which an undertaking was to be acquired by the Local Authority, Parliament had hitherto laid down the principle that the property which the undertakers sold at the expiration of the period granted should not contain any remuneration for the good-will of the concern. The noble Earl now proposed to apply

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  the same principle to his Bill as was applied in the case of Indian railways and similar concerns—namely, that the price should be five years' of the marketable value previous to the notice to acquire the undertaking. It was possible that the Company which sold might be a public Company, with shares, the value of which was quoted on the Stock Exchange, and the price would be readily ascertained; but if it were a question of a private Company or an individual, there would be no such means of ascertaining the value. Again, there were many Companies which took up electric lighting as a part only of their business; in that case it would be obviously be difficult to separate the value of the electric light business from that of the other business. This Bill proposed to confer an entirely new power on the existing Local Authorities. It should be remembered that these authorities were undergoing a very great change, and it was very doubtful whether it would be wise to confer upon existing authorities powers such as these; in his opinion, the proposed County Councils might very reasonably be jealous of some of these powers being conferred upon the smaller authorities. It was impossible to discuss in Committee of the Whole House all the complicated and technical proposals of this Bill. Although it was true that many Committees had sat to consider this question of electric lighting, still they had not dealt with all the technical and difficult questions set out in this Bill. As he had said before, the Government were anxious to do all that they could to encourage the investment of capital in electric lighting, and although he had stated several grave objections to the Bill of the noble Earl, he did not wish to throw any discouragement in the way of the increase of electric lighting. He thought, therefore, it might be well that this Bill should be allowed to go to a second reading; and if their Lordships should be pleased so to do, he would suggest at a later stage that the Bill should be referred to a Select Committee, and that upon the Report of the Select Committee the next stage of the Bill should be taken.
  Loan HERSCHELLsaid, he was glad to hear that the noble Earl who had just spoken did not intend to oppose the second reading of the Bill now before them, because it involved questions
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  of considerable interest and importance, and was, in fact, the proposal of an alternative scheme. However, if some alteration were made in it, it would not be inconsistent with the passing of the other Bill dealing with the subject, which had received its second reading. He would regret extremely, however, if this Bill were made a ground for postponing the progress of the Bill to which he had referred, because the Bill of the noble Earl no doubt raised very complicated questions which would need minute discussion and examination, and he was anxious lest the effect would be to hang up this question to an indefinite period and prevent any legislation on the subject passing at any early date. With regard to the Petitions which had been referred to, he believed that they were directed towards supporting the scheme which was already in progress rather than to opposing the Bill of the noble Earl. There was no doubt that the Act of 1882, with regard to the terms of purchase, needed amendment. It was not the case that whether the terms were onerous or not was a matter affecting only the promoters and the Local Authority; apart from the question of whether they could make the terms such as to induce capitalists to put money into electric lighting, he thought that the public had a distinct interest in seeing that the terms were not too onerous, as the undertakers would seek to recoup themselves by charging more than they otherwise need for the electric light. That meant that the present generation was to pay more than they otherwise need for the electric light in order that the next generation might get it for less than they ought. He hoped, therefore, that the measure of his noble Friend, which had already been read a second time, would be allowed to proceed. At the same time, he hoped that the Bill of the noble Earl would be read a second time. Owing to its complicated character, he thought there was little chance of its passing through the other House this Session.
  Motion agreed to; Bill road 2a accordingly.
  House adjourned at a quarter before Six o'clock, to Thursday next, a quarter past Ten o'clock.