HL Deb 28 April 1899 vol 70 cc797-805

Order of the Day for the Second Reading read.

Motion made, and Question proposed— That this Bill be, read a second time."—(Lord James of Hereford.)

THE CHANCELLOR OF THE DUCHY OF LANCASTER (Lord JAMES of HEREFORD)

My Lords, the Bill which I now ask your Lordships to read a second time is one of not very general applicability, but it is one of considerable utility. Its general object is to enable the different water companies that exist in London to connect up with each other, so that in case of deficiency in the supply of one company, the over-abundant water of the other may be conveyed into the area supplied by the deficient company. That is the general purpose of the Bill, but its immediate necessity and urgency result from the deficient supply, especially of last year, of the East London Water Company. Your Lordships, of course, are aware that for 16 weeks this company was unable to fulfil its obligation to maintain a constant supply of water, and great inconvenience was caused thereby. Such a state of things ought not to be tolerated in the metropolis if it can possibly be avoided, and it can be avoided. To a certain extent, the inconvenience was mitigated by the efforts of the New River Company, and the Southwark and Vauxhall Company, which supplied between them about 11 million gallons of water per day to East London. But that was not enough, and, as I have said, for 16 weeks a constant supply was not afforded to the consumers within the East London Company's area. The object of this Bill, whilst, of course, it is general in its terms, is to prevent a recurrence of such an incident, and it is proposed to give the Local Government Board power to call upon the different companies to effect works of intercommunication. The companies will now have the obligation cast upon them of giving the necessary assistance in cases of emergency to prevent a deficiency in the water supply occurring in the future. I am sure the general principle of the Bill must meet with the approbation of your Lordships, although there were those in the House of Commons who felt it to be their duty to prevent the new powers being granted under the present conditions of the water controversy to the existing companies. This Bill was, however, permitted to be read a second time without a Division being taken upon it. Having stated the general object of the Measure, I do not intend to enter into any discussion of the details, because I do not think, in the first place, that those detailed provisions do more than necessarily carry out the object of the Bill, and because from the nature of the Bill it is somewhat peculiar in its construction. The Bill will go to a Select Committee, because it takes powers which affect private property. This Bill was referred to the Hybrid Committee by the House of Commons, where a variety of interests appeared by counsel and discussed the details of the Bill. The details in the Bill now before your Lordships are those as framed by the Committee of the House of Commons. So far as the principle of the Bill is concerned, the Government are carrying out the suggestion made by the Royal Commission, presided over by Lord Llandaff, in their interim report. As this Bill must go to a Select Committee, where all those who are interested can appear by counsel, state their case and give evidence, I do not intend at this stage to enter upon any question of detail. Of course, if your Lordships think it right to touch upon any matter of detail, I will endeavour to give an explanation in my reply.

LORD TWEEDMOUTH

said his noble Friend the Chancellor of the Duchy, in commending this Bill to their Lordships, had rested his case largely upon the old classic grounds that the Bill was such a small one. The noble Lord also said the Bill would go to a Select Committee. He was glad to hear those announcements from the noble Lord. He agreed with the principle, at any rate, of the Bill, but had some criticism to make. The noble Lord said this Measure was only in the nature of a palliative remedy, and that it was not intended to be any settlement of the great controversial questions of the water supply of London. He agreed that the palliative measures necessary could be effected by means of a very small Bill, but this was not a very small Bill. So far from being confined to the objects stated by the noble Lord opposite, the Bill contained powers of a much wider character, which, if purchase were not effected in the next seven years, amounted almost to a scheme for the amalgamation of the eight metropolitan water companies. There were three special points to which he would direct their Lordships' attention with regard to the provisions of this Bill. First of all there was a want of limitation as to the class of works to be executed under the Bill, a want of limitation with regard to the amount of capital to be raised under it, and a want of limitation as to the time which the Bill was to be operative. Then, too, there was transferred to the Local Government Board, for the purpose of the Bill, the power to decide how much capital was to be issued by these companies, instead of leaving it, as had always been the case, to Parliament; and, further, the Bill was a departure from all recent Parliamentary practice with regard to the issue of new capital by water companies, inasmuch as the new capital was not to be subjected to any charge for a sinking fund. The only limitation he could find in the Bill was in paragraph A of the first clause, but it was possible under that clause for the companies to submit schemes for any works for the supply of water so long as they did not go to a new source for that supply. Under clause 3, unless the undertaking of the company was purchased within seven years of the passing of this Bill, any capital raised under the Bill could be added to the capital which would have had to be taken into consideration in the case of any future purchase. It was rash to assume that a Measure for the purchase of the London water companies would be got through all its stages and receive the Royal Assent in seven years, and, therefore, he contended that the proposal in the Bill was a departure from all recent Parliamentary practice, because it had been the evident intention of Parliament, both in that House and in the House of Commons, that no new issues of capital by the water companies should be treated as part and parcel of any additional sum to be paid by the community when purchase was effected. The usual practice had been that when a water company required new capital it applied to Parliament for powers to issue a definite sum; but in this Bill there is no reference at all to the fixing of a definite sum. The amount of new capital which any company would be allowed to issue under this Bill was left to the arbitration of the Local Government Board, and this was, in his opinion, a most extraordinary innovation. The Bill would give the companies power, with the sanction of the Local Government Board, to issue £1,000,000 or £2,000,000 worth of new capital without applying to Parliament at all. Three schemes were put before the Royal Committee for effecting this intercommunication between the eight companies. The Royal Commission expressed the opinion that scheme No. 3, which was estimated to cost £64,000, would, if carried out, afford the necessary measure of aid to the East London Water Company in the event of a recurrence of drought; but they were satisfied that further consideration would probably result in the elaboration of some better arrangement for obtaining the object in view. There was not much doubt but that the scheme would cost £100,000, and he held that this was a sufficient amount to warrant the sanction of Parliament being necessary. If the amount was limited to £100,000 they might look with greater complacency on the proposal. With regard to the absence of any limitation, of time, it would only have been reasonable, as this was avowedly a Measure meant to remove a temporary difficulty, to include in it a time to which the operation of the Bill should be limited. To leave to the Local Government Board the power of deciding both as to the works which were to be carried out by new capital under the Bill and to decide as to the amount of new capital to be raised by the several companies was, he ventured to say, an innovation. This was a subject which had up to the present been left to the decision of Parliament, and he regretted that for the purpose of this Bill the power was to be transferred from Parliament to the Local Government Board. Again, the proposal that the capital to be issued under the Bill should not be subjected to any charge for a sinking fund was a departure from all recent Parliamentary practice. Ever since 1886, Committee after Committee of both Houses had, in all cases where power to issue new capital was granted to the water companies, insisted that the whole of the new capital should be subject for a charge for a sinking fund. It had evidently been the intention of Parliament that in the case of new issues of capital by the water companies they should not be allowed to make commercial profit out of such new issues, and that whatever commercial profit was gained from them should be put into a fund for the general benefit of the water consumer. The Controller of the Finance Department of the London County Council had calculated what the amount of the sinking fund was at the present time, and what it was likely to be. At the present moment it was not much, having only been in operation since 1886; but the Controller of the Finance Department of the County Council stated that up to the end of 1897 the amount of authorised capital now subjected to the sinking fund was £6,320,000. He estimated that when the sinking fund arrangements operated in full, say in 1915, the annual instalments paid to the fund would amount to £120,000 a year. The fund at present was not large, as only a small portion of the capital had come under its operation; but it would grow, and was estimated to amount to £1,780,000 in 1915, and to upwards of £5,000,000 in 1930. It was argued, he believed, that in the ease of the capital under this Bill it would not be right to subject it to the charge for a sinking fund, because the capital would not be a profit-earning capital. But who was to decide, in taking the capital of great concerns like these, what part was profit-earning and what was not? It seemed to him an extraordinary thing that, after 13 successive years, during which Parliament had imposed this con- dition on the new issue of capital by these companies, Her Majesty's Government should come forward in the 14th year—he supposed they had caught the infection from the Chancellor of the Exchequer—and propose to make a raid on the sinking fund which had been established for the benefit of the water consumers of London. There were other points with regard to this Bill which he would not do more than just touch upon. There was the question of how far it was just that the water consumers in a particular district, who took water from a company at a low rate, should be obliged to pay a higher rate for water supplied under the provisions of this Bill by another company. He hoped the matter to which he had referred would receive the very careful consideration not only of the Committee to which the Bill was to be sent, but of their Lordships' House. He did not dispute the wisdom of the decision arrived at by the Government, that the whole of the London Water question should be sent to a Royal Commission; but he would point out that those who thought fresh sources of water should be acquired, or that purchase should be adopted with regard to the present companies, were required to hold their own hands until after the Report of the Royal Commission. That being so, he thought it was only fair that equal justice should be meted out to all, that the Government should hold a perfectly equal balance between the two parties in this question, and not by any accident in the provisions of the present Bill give an advantage, as he held this Bill clearly did, to the one side—namely, to the water companies.

EARL COWPER

said everyone must be glad Her Majesty's Government had taken up this subject without delay. He did not rise in any way to oppose the Bill, but to call attention to one particular section which would, he thought, have an effect not intended by its introducers. He referred to the second section of the first clause. He had been informed on good legal authority that this section gave considerably more power than was necessary for the purposes of the Bill. He believed the section was intended merely to give the companies who were ordered by the Local Government Board to supply water to other districts in times of necessity the power of connecting their mains with-those of other companies; but it seemed to him to go further than that, and to give them power to sink wells, to construct works, and take water outside their own districts altogether. In Hertfordshire fears were widespread among the people that the water companies could, under this Bill, buy lands in the county, sink wells, and drain the watershed of the district. He would be very sorry to put any obstacle in the way of a Bill which was intended to remedy distress caused by an insufficient supply of water in the poorer districts of London, but he trusted he would get a satisfactory declaration from the Government that the injustice to which he had referred was not possible under the Bill.

*THE EARL OF VERULAM

endorsed every word uttered by the noble Lord who had just spoken, and said that in Hertfordshire the flow of the streams in his neighbourhood had seriously decreased during the last few years. Anyone seeing the lines of farmers' carts fetching water from the rivers would realise that this was a real danger. He trusted the noble Lord in charge of the Bill would rectify in Committee any mistake made in the drafting, in order to protect Hertfordshire from the danger to which the noble Lord had referred.

THE CHANCELLOR OF THE DUCHY OF LANCASTER (Lord JAMES of HEREFORD

I am glad to be able to assure the noble Earl and the noble Lord who has just spoken that the fears of the people of Hertfordshire are groundless. I do not quite appreciate myself how any anxiety could have arisen, for I can find nothing in the Bill which would give powers to any water company to tap any fresh source of water supply. I have consulted the Attorney-General and Solicitor-General, and they are equally clear that there is no power under this Bill to take any water from Hertfordshire, or from any other source that is not now drawn upon under existing powers. Hertfordshire may be quite sure, therefore, that, so far as the Law Officers can see, there is no risk whatever of the danger to which the noble Earl alluded. It may be necessary to lay down a main or pipe, but that will be, if I may use the term, a per- fectly dry operation, and simply for the purpose of connecting the mains of one company with the mains of the other company supplying the area in which there is a deficiency. I do not think the representatives of Hertfordshire would object to the soil being broken for the purpose of laying a pipe if they have a guarantee that no water shall be taken. It is our intention that no water shall be taken from any area in or out of the metropolitan water area which cannot be taken now, and provision shall be made to make it certain that neither Hertfordshire nor any other county outside the area can be in any way affected by the powers of this Bill coming into operation. I will not follow my noble Friend with regard to the details of the Bill. I look forward with some apprehension that it is possible that I may have to take part in the proceedings of the Select Committee, and it is possible that my noble Friend will also take part in those proceedings. We shall then sit judicially, and if we enter into a Debate here upon the details of the Bill it may be supposed that we had prejudged the various questions that will be raised before us. I feel tempted to reply to the noble Lord, but for the reason I have given I do not think it will be well to do so. My noble Friend's principal argument was that there ought not to have been a clause prohibiting the sinking fund, and my noble Friend suggested that we had been inspired by the Chancellor of the Exchequer. As a, matter of fact we were inspired by the Royal Commission, who recommended that as the money raised under this Bill would not yield revenue to the companies they should be exempt from the obligation of the sinking fund clause. I agree that if they are to get no remuneration we should not make them contribute towards a sinking fund when they have no profit out of which to contribute. You are here dealing with money compulsorily expended for the purpose of humanity, and to prevent the recurrence of the state of things which existed in East London last summer, when the district supplied by the East London Water Company was 16 weeks without a constant supply. This is an emergency Bill, and it has been thought that a safer and a better plan would be to leave the working of it to a Government Department. It is impossible to define the exact works to be carried out, and no general scheme can be laid down. In the same way, what can be the utility of limiting the expenditure? The Local Government Board will see that it is as little as possible, and the companies will have nothing to gain by spending money in this direction. They will, of course, wish it to be as little as possible, but no one can foresee what may be the expenditure required. We have thought that in this matter the Local Government Board may safely be trusted to look after the public interests. I agree with my noble Friend in saying that this is not a Party question. One Party may be in the Local Government Board to-day and another to-morrow. Surely we may trust our public men to perform their duty to their fellow citizens, and surely it is better to give discretion to a public body rather than to fix specific limits that may be unsuitable to the condition of affairs that may arise. All the points that my noble Friend has raised can be discussed in the Select, Committee, and in the Committee of this House. The details of this Measure are so framed that a great public good will be accomplished.

Question put.

Bill read a, second time and committed, the Committee to be proposed by the Committee of Selection.