HL Deb 07 March 1922 vol 49 cc290-325

Debate on the Motion by Viscount Peel for the Second Reading of the Bill resumed (according to Order).

THE EARL OF BESSBOROUGH

My Lords, on rising to submit to your Lordships some observations on the Second Reading of the Electricity (Supply) Bill I beg to ask for that indulgence which your Lordships extend to a member of this House who is addressing you for the first time. My excuse for choosing this topic on which to address you is the fact that I have for some little time taken an interest in the electrical industry, and the observations which I shall venture to submit are based upon what I consider to be the public interest in this matter, and not upon that of any of the parties concerned.

During the course of the very interesting exposition which the noble Viscount gave in moving the Second Reading of this Bill last week, he made, if I may so venture to describe it, a very remarkable admission. The noble Viscount referred in eulogistic terms to the wisdom of your Lordships in rejecting a very considerable portion, and a very important part, of the Electricity (Supply) Bill of 1919. I am tempted, therefore, to refer very briefly to the genesis of the measure now before your Lordships, for the Bill which we have to consider this afternoon is not only an amendment of the Act of 1919, but is complementary to it. The Act of 1919, as originally introduced in that year in another place, was brought forward with the avowed purpose of making possible a cheap and abundant supply of electricity in this country, and it was to accompany the erection of houses for heroes to live in, both of which happy things were promised to us in the Election of 1918.

The principle of the 1919 measure was to make electricity cheap and abundant, as regards its supply, by the erection of big stations with a view to bringing about economy of production. I need hardly say that this principle is one which has long been accepted in this country by everybody concerned. Indeed, if I remember aright, as long ago as 1906 a Bill was brought forward by the industry itself embodying the very purpose which the Government Bill of 1919 desired to achieve, and if political considerations had not intervened, the Bill to which I refer might, and possibly would have been passed in that year. If that had been done, there is no manner of doubt that the improvements necessary in the industry would have been carried out at infinitely less expense than they can possibly be carried out in the circumstances now existing.

Although the principle was the one desired by everyone, the proposal of the 1919 Government Bill went a great deal further, for it proposed to do what everyone desired, by compulsion and under strict bureaucratic control. In those circumstances the Bill met with a very strenuous opposition in another place, and discussion extended over many weeks in Committee; but when the Bill reached your Lordships' House, I think I am correct in saying, it did not differ very substantially, so far as the principle is concerned, from the Bill as first introduced by the Government. In this House, as your Lordships will no doubt remember, the Bill met with such devastating criticism that the noble and learned Viscount on the Woolsack rose on behalf of the Government to withdraw a great many of the important provisions proposed, in deference, no doubt, to the wishes of a majority of your Lordships. The withdrawals, announced on behalf of the Government by the noble and learned Viscount on the Woolsack, included the compulsory clauses of the measure.

Those of your Lordships who were present at that debate will recall the very memorable exposition of the subject made by the late Lord Moulton, and also, I think, by the late Lord Downham, in concentrating your Lordships' opposition upon certain features of that measure, with the result that I have indicated. This was the episode which the noble Viscount recalled the other day when he extolled your Lordships' wisdom in so completely transmogrifying the measure which the Government had up to that moment pressed with so much tenacity. I submit, therefore, with all deference, that in view of your Lordships' record with regard to the 1919 measure, you are well entitled to examine the present Bill in the most searching way possible.

I should like, before discussing the terms of the Bill now before us, to refer to the rest of the history with regard to this matter, for after the 1919 Act was passed two Bills were introduced in another place by the Government, in 1920. One, a Bill which was called, I think, the No. 2 Bill, was very much the same as the measure now before us. Neither of those Bills succeeded in reaching your Lordships' House. In 1921 a proposal for legislation on this matter was referred to in the King's Speech, and a Bill was again introduced in another place, but, like the Bills of 1920, it failed to reach your Lordships' House. This year, however, it is of some interest to note, the Government are dealing with the matter in a different way. This year, unlike last year, there was no mention of this subject in the Speech from the Throne, and, instead of making a further attempt in another place to promote the measure, a Bill is introduced in this House without any previous warning.

The noble Viscount has described it as a most innocuous measure. Nay, more, in his concluding words, he held out the blissful expectation of a cheap and abundant supply of electricity as the result of its passage. I think, therefore, that we are entitled to ask whether the Act of 1919, which this Bill proposes to complement and extend, has, in its two years' operation, made the electricity supply of this country any cheaper or any more abundant, and, if it has not, whether the proposed extension in this Bill of the powers of the Electricity Commissioners and of the proposed joint electricity authorities, holds out any reasonable hope of bringing about that happy consummation? The noble Viscount, it is true, quoted a number of figures to show the recent development of the industry and its future possibilities, but I can hardly think he would suggest that the development has anything whatever to do with the setting up of the Electricity Commissioners or any other of the provisions of the Act of 1919, or, in fact, that the Act has had any effect whatever on prices or the amount of supply.

The noble Viscount then proceeded to describe in some detail the activities of the Electricity Commissioners since they came into existence over two years ago, and we have also the advantage of studying the operation of the Act as set out in the able Report issued by the Electricity Commissioners and published last year. I am perfectly willing to admit that they have held a great number of local Inquiries; that. they have delimited a great number of areas and suggested a great number of schemes, but I say that in spite of this, after two years of constant work, in no single instance has any order yet been issued for any of the schemes they have propounded, and not a single scheme has even been accepted by any of the electricity supply authorities concerned. With regard to these Inquiries I understand that the Commissioners have invariably requested electricity supply undertakers to submit schemes for setting up joint electricity authorities on the assumption that the authorities will possess powers to be given by some Act of Parliament, not passed, but presumably on the lines of the three measures submitted in another place during the last two years. For the Commissioners thus to anticipate legislation is an assumption on their part, not entirely alien to the idea of bureaucracy, that a Government Department is in some way superior to Parliament.

Let me refer to one specific Enquiry, and I will take an important district in this matter—namely, the London district. In the case of London the Commissioners held an Inquiry last year. It lasted seven weeks, and it cost, approximately, £40,000, and that amount does not include the salaries and expenses of the Commissioners. I will not suggest who bears that expenditure, but at present it seems to be borne by the taxpayer. I admit there is some irregularity in regard to this matter which Clause 6 of the present Bill is intended to obviate. At this Inquiry all the parties in the whole of the area concerned, with one notable exception—Poplar, a borough which seems to go in for placing itself in an exceptional position—came before the Commissioners with an engineering scheme in which they were entirely agreed and which they brought forward perfectly voluntarily.

What was the result of this long and expensive Inquiry in which all concerned came forward to help as best they could? Nothing whatever. No scheme whatever has resulted so far as the Electricity Commissioners are concerned. I will go further and say that in this particular case they had a unique opportunity of bringing all parties into line in London, and that they did not succeed in the purpose for which they were created by the Act of 1919. In view of that statement, which I believe to be perfectly correct, it is somewhat astonishing to read in The Times of February 25 a statement, quoted as on the authority of Mr. Arthur Neal, the official spokesman of the Ministry of Transport in another place, that the supply problem in London had been practically solved. I suggest that perhaps the electrical industry is, after all, not so very different from other industries in this country and that it would do better with a little less, rather than a little more, legislation.

The noble Viscount suggested very persuasively to your Lordships that there was nothing in this Bill that could possibly offend the most delicate palate. I beg most respectfully to differ from him. Let me draw your Lordships' attention to the provisions which are calculated to offend even a hardened palate, if such there be in your Lordships' House. The noble Viscount laid great stress on the fact that this Bill is permissive and entirely dependent on consent. In so far as it is permissive, what is the kind of thing it permits? By Clause 5, as I understand, it actually permits a local authority to use the money of the ratepayers for purposes quite outside their own area. But Clause 5 is not even entirely a permissive clause. Surely subsection (4) of the clause is frankly compulsory, for it requires and compels authorised undertakers to contribute towards any administrative expenses of the joint electricity authority, and to meet a temporary deficiency in the fund established under the principal Act. I do not know how that subsection can he described except as frankly compulsory. I contend that it immediately infringes the principle of the Act of 1919; and that it is entirely inconsistent with the statement of the noble Viscount that compulsion is unnecessary, and that your Lordships acted with so much wisdom in 1919 in strongly objecting to compulsion. I cannot agree, therefore, that the Bill is merely permissive, or, that where it is permissive it is necessarily innocuous.

The noble Viscount told us also that unless this Bill, or sonic similar Bill, became law it would render futile, useless and ineffectual a great number of the provisions of the Act of 1919. Is not that rather an extraordinary admission on the part of a member of the Government? What does it mean? It means that the 1919 Act, to which the Government attached so much importance, on which so much Parliamentary time was expended, which on the admission of the noble Viscount your Lordships so much improved, and under which so many expensive Inquiries have been going on for two years, was in itself a futile, useless, and ineffectual measure. Personally, I venture to agree on that point, for I do not see what the Act of 1919 has done to bring about the objects for which it was brought forward, and I suggest that we might have heard your Lordships' wisdom even further extolled if you had rejected the whole of the Act of 1919 instead of only a very important part of it. But I would like to add with regard to its operation—and there I think the noble Viscount will agree—that no complaint can be made against the industry of not having done the best in their power to make this Act work.

The noble Viscount, in his speech, examined the clauses of the measure one by one. I will not attempt to put a strain upon your Lordships' indulgence by following him through each clause. I have already made a brief reference to Clause 5, but I should like to suggest that, if this clause is really to take its place in the law of the land, there should be some limit to the amount which local authorities are going to be allowed to raise for the purpose of lending to a joint electricity authority.

VISCOUNT PEEL

There is a limit in the Bill. The noble Lord has not observed that all this is subject to the consent of the Ministry of Health.

THE EARL OF BESSBOROUGH

I suggest that the sort of safeguard your Lordships would prefer to see would be a safeguard which is included in the Act, and not left to the Government Departments which have so far administered the Act of 1919. I further submit that the proposal to require authorised undertakers to contribute to the administrative expenses of the authority and to make up a joint authority's trading losses can only be called a highly objectionable provision, particularly as the amounts which they may have to make up are, as I have already argued, quite unlimited so far as the proposed Act is concerned. In fact, this provision seems to me practically to be the same thing as saying: "Hand over part of your business to somebody else, and then pay any losses that person may incur in carrying on your business, whether those losses arise from incapacity, or from recklessness, or from any other cause whatever." I think your Lordships will agree that no ordinary business could stand on such a principle for a moment.

If I may say one word more upon Clause 5, I would remind your Lordships that this clause has appeared in various Bills several times before, and I believe that serious objection has already been taken to it on the ground of the need of economy. If economy was necessary in this country in 1919, in 1920, and in 1921, I think I shall not be making a controversial statement when I say it is even more essential in 1922. I will now trouble your Lordships only by referring very briefly to one other clause. I refer to Clause 16, which is to enable owners of railway, tramway or light railway generating stations to supply electricity, subject to certain safeguards. I submit that this clause, as drafted, is open to objection, and is likely to lead to injustice. If it is to be passed it seems to me to require a provision that a supply shall not be given within the area of supply of an authorised undertaker except with the consent of that undertaker. Without such a provision in the clause as I read it a supply could be given to one and one only of two undertakers having competitive areas.

I do not know what is your Lordships' intention with regard to the Second Reading of this Bill, but I submit with great respect that if it is going to be read a second time to-day, very important Amendments are needed to several clauses, and, incidentally, in the direction that I have endeavoured to indicate, primarily with two important objects—first of all, to secure some limit upon the borrowing powers of local authorities; and secondly, to prevent authorised undertakers being required compulsorily to contribute to the trading loss of a joint authority. Without wearying your Lordships any further, I submit that the wisdom shown by your Lordships in the case of the measure of 1919, to which so remarkable a tribute has been paid from so unexpected a quarter, is equally necessary in the consideration of the measure now before your Lordships' House.

VISCOUNT HALDANE

My Lords, I have listened, as I am sure many of your Lordships have listened, with real pleasure to the felicity of diction with which the noble Earl who has just sat down has expressed the substance of his case. I have boon more impressed, I confess, by the felicity of his diction than by the felicity of the substance. I venture to speak to your Lordships not only as a mere amateur of this matter. I sat for two years as Chairman of the Coal Conservation Committee, and I followed the fortunes of the project which arose in the time of that Committee through its subsequent stages until it assumed ultimately, the form of the Bill of 1919, which passed the other House, but met with a somewhat violent onslaught when it came before your Lordships' House. The noble Earl who has just sat down referred to the elaborate examination and the destructive criticism to which the financial clauses of that Bill were subjected. I followed that debate very closely, and took some part in it, and my recollection is that the House would have none of the Bill on the ground of bureaucracy, that magic word which figured greatly in the speech of my noble friend the late Lord. Moulton, and of which we shall hear more before we have done with this matter.

The Bill of 1919, in its integrity, is gone. We are not dealing with compulsion at the present time. The purpose of this Bill is a much more moderate one—namely, to give the facultative powers, the permission which is required to enable the schemes worked by the Commissioners under the Act of 1919, in the truncated form in which it was passed, to become operative. The noble Earl reproached the Commissioners and the Government with the fact that, notwithstanding the operation of the Act, so little had been done. But there has been no power for the local authorities, who after all are the important people in this matter, to exercise the powers that are required. They are hampered and hindered as regards their finance in a way in which they are not hampered and hindered in respect of gas or tramways, or any other undertakings, and the purpose of this Bill is to enable them to give effect to schemes of this kind. This is not compulsion; it is the untying of their hands.

I cannot wholly congratulate the Government, either on this occasion or upon the last occasion, on having made the most of their case. I think there is a tremendous case for the proposition that is before the House. I am not talking of the details, though I think the details carry out the minimum of what is required, but of the very serious situation in which the country finds itself at the present moment, and the crippling of its industrial power compared with that of other nations. Taking evidence, I found that in the United States the skilled workman has at his disposal, on an average, 56 per cent. more power than has the skilled workman in this country. Why? Because electrical power is furnished there with greater freedom, and in greater quantities, than here. But the arguments which came before us were even more remarkable. We were not a mere Parliamentary Committee. The Committee over which I had the honour to preside was one in which I think I was the only layman. The others were not laymen, in the sense that they consisted of industrial engineers of the highest qualities, coal owners, manufacturers and people of every variety of experience in this matter, as well as highly qualified technical experts.

The first and foundational fact which we came across was that of the coal that is raised and consumed in this country 80,000,000 tons is consumed annually for the purpose of producing industrial power for use in factories, by railways, and municipalities, which have to supply power and light, and other purposes connected with industry. We found, not merely by theoretical estimates but by comparing the experience of regions where they had managed to get into operation a system such as is proposed in this Bill, that that amount of 80,000,000 tons could he reduced, if all went well, by not less than 55,000,000 tons, so that 55,000,000 tons out of 80,000,000 tons represented the waste under the old system. The reason is not difficult to find. A small generating station is always very wasteful, because the loss of energy is large in proportion to its size; it is a long way from the pithead, where the coal is produced, and it cannot get the coal with the cheapness with which a large generating station can obtain it.

We found, for instance, that in Northumberland and Durham, where the local authorities and the colliery owners—Lord Gainford knows a good deal about this—were producing electricity at the pitheads, the cost of production was so reduced that you could buy power there for industry at a halfpenny per unit, while if you crossed the borders into Lancashire you paid, on an average, at least three halfpence per unit or three times as much. These figures are trifling as compared with London, to which I will come in a moment, but up in the North, in Northumberland and Durham, where this has been done by men of great enterprise and skill, all those engaged in industry are being supplied from large central generating stations with power, as I have said, at the rate of something like a halfpenny per unit. Even in these days of the high price of coal it is not much more, because you can use waste coal for producing power for electricity, although you could not carry such coal into the market and command a decent price for it.

When you come to London and compare it with the state of things that you have up in the North, the outlook is appalling. The noble Lord spoke of London and of the failure of Sir John Snell's Commission to get a scheme. Can he wonder at that, when he remembers that there are seventy generating stations in greater London, fifty different systems of supply, twenty-four different voltages and ten different frequencies. To that condition of things, how can you have either economy or efficiency? How can you avoid being charged prices far in excess of what you should be charged for your electric light, and, if you are engaged in industry, how can you avoid being charged prices which make the effective use of electric power impossible in industry? The noble Earl went on to object to Clause 16, which gives the railway companies power to produce and sell electric power. I only wish that a thoroughly efficient generating station such as the Underground Railways have at Lots Road, were allowed to come into competition and generate power, for then you would learn how cheaply such power may be obtained. But the noble Earl says, as I understand, that it would be an injustice to private enterprise to give such power without the consent of the undertakers in those districts. Does he imagine that those gentlemen who now charge 2d. and 3d. per unit are going to expose themselves to the competition of those who will produce power at a halfpenny or a penny, when they have the power of refusing their consent?

The truth is, that the opposition to this Bill is all summed up in a series of newspapers and circulars which have rained in upon me during the last two days. Here is a sentence in which it is all summed up—"A flank attack upon the citadel of private enterprise." It is a flank attack upon the kind of thing which I have been describing. If we prevent the public from getting the benefit of the cheap supply that they require, and if we hamper industry in obtaining cheap electric power, it will be a day of ill omen in our annals. The noble Earl fixed upon Clause 5 of this Bill as giving to local authorities some power of enforcing contributions. Yes, but that is only when all the undertakers in the district have come in.

What is the scheme? The scheme is this, to remove legal disabilities which prevent those engaged in the production of electricity from coming together and producing it in that large quantity which is possible at the source where the coal is raised. If this Bill becomes law, and people are set free to follow out their economic tendency, which is to produce at the cheapest rate, instead of being prevented by law as at present, what will be the result? The result will be that generation will then take place on a large scale near the collieries, and the electricity will be brought by cable over long distances. It can be brought 200 miles if necessary, but it will rarely be necessary to bring it more than a fraction of that distance, and the local authorities and undertakers, who have organised themselves, will work together and supply power and light at a cheap rate to those engaged in industry. I know that some of the authorities have been too ready to apply the profits of such undertakings to the reduction of the general rates, and I should like to see power and light produced to the consumers at a rate which is just as much as would cover the cost of production and provide for all sinking fund charges and interest on debt.

I think that if this Bill passes, and people are free, the tendency will be to cut down the cost of production. Take Northumberland and Durham. I believe—my noble friend Lord Gainford knows better than I—that at sonic of the larger collieries they are producing electric power at the pithead, and selling it to outsiders, and that is a wholesome state of things. It promotes competition. Where they can combine together they do so, and the North Eastern Railway has announced its intention of electrifying its main line. It has already electrified its suburban lines. The electrification of suburban railways is proceeding everywhere. But why should the benefit of that be restricted to the railway companies? In London, for instance, why, instead of the seventy generating authorities which we have at the present time, should there not be one great generating authority composed of the various authorities come together and working under one scheme and generating their electricity, their coal landed at the mouth of the Thames, or brought wherever it is most convenient and economical to bring it for generating purposes. That is what we had before us in the expert evidence in the Committee to which I refer.

But I do not want to dwell on that Committee. After all, it is a Committee on which I sat, and over which I presided, and just for that reason it ought to have less authority and be less cited by me. The Government of the day very wisely said: "The proposals of this Committee are much too far-reaching for us to leave it to the recommendations of the Report of that Committee." And the Board of Trade appointed another Committee, over which Sir Archibald Williamson presided. That was a Committee which contained very eminent men; it was a different Committee from the one over which I presided. I have here the Report of that Committee. What did it do? It agreed, after a pro- longed investigation, with the conclusions of the Coal Conservation Board. And, even then, the Government, which I think was rather a timorous Government in this matter, was not satisfied, because it had further investigations by the Board of Trade, which have resulted in the proposition now before your Lordships, and in the appointment of Sir John Snell's Commission.

Sir John Snell's Electricity Commissioners have been able to do no more—thanks to the way in which the last Bill was truncated—than go about the country and make schemes and recommendations. The schemes and recommendations could not be carried into effect for one among other patent reasons, and that was that at every turn the local authorities and other corporations are restricted by statutory limitations. The Bill proposes to set them free to work out their own destiny—not to compel them, but to enable theta to say: "It is our economic interest to produce electricity and power cheaply for those who require it." And what we now seek to get from Parliament is the power to do so without restriction.

No doubt it has been the custom to impose restrictions from time to time on borrowing powers of corporations—not always. In this case the Government take power to impose very direct restrictions upon borrowing power. Whether that is wise or not, I do not know; there is a good deal to be said for leaving things to the local government and responsibility to the electorate. But, at any rate, the more narrow course has been taken in this Bill, and the restrictions exist. In these conditions, how can it be said that we are in a satisfactory position in this country? Six hundred generating authorities in this country, the average size of which is only 5,000 horse-power ! That is ridiculous, compared to modern standards. If you look at the United States, if you look at what is happening on the Continent, you will find that their generating stations are enormously greater in size than ours, and consequently the price is very much less. Is it fair to compel our manufacturers to be subjected to that kind of disadvantage? It has been estimated by the Board of Trade Committee that in this case, if their proposals were carried out, we should have ª27,000,000 worth of coal for export; in addition to what we have at present, that would he set free for the purpose. Or put in another way, we could, by using that coal, get 15,000,000 more horse-power for consumption here in our industries.

It is of that which it is proposed to deprive us in the name of an appeal to let private enterprise alone—private enterprise with its seventy generating stations in the London Metropolitan area; private enterprise, which is raising the rates for power and for light to the extent which your Lordships have heard; private enterprise, which will do nothing to come together under the Snell Commissioners; private enterprise, which cannot be assisted as long as the local authorities are left under the statutory restrictions which they are under as the law now stands, and from which this Bill proposes to relieve them. I do not think that this Bill does as much as it ought to do in the public interest, but at least it does remove a mass of statutory restrictions which at present exist, and it will leave the local authorities free to fulfil a great national need, free to work out the national destiny.

LORD BUCKMASTER

My Lords, with the general discussion as to the best methods of developing and distributing electrical energy I do not propose to deal. I have not the eminent qualifications which the noble and learned Viscount possesses with regard to that subject. What I want to ask your Lordships to consider is what is the purpose of this Bill, and whether this measure, which has directly nothing whatever to do with the amalgamation or acquisition of great electrical undertakings, is one that commends itself to your Lordships' better judgment. For reasons best known to the Government this Bill is nothing but a financial Bill, and they have thought fit to introduce it, in the first instance, to your Lordships, notwithstanding the fact that during the last three years every warning and every item of advice that your Lordships have given to the Government on financial questions has been wholly disregarded. None the less, they think that this matter is one upon which your Lordships' judgment should be first invited.

What is it that the Bill proposes? It is, in fact, nothing but an elaborate machine for the purpose of enabling money to be raised by an authority that is known as a joint electricity authority. What is the joint electricity authority? The joint electricity authority is an authority established under the Electricity (Supply) Act, 1919. So far as I can understand, it is a body that comes into existence when the Electricity Commissioners have decided that a certain scheme should he adopted for providing electricity and, as part of that scheme, they are entitled to enable authorised undertakers within the electricity district to hold land and do all that is necessary for the purpose of carrying out the provisions.

I think therefore it will not be wrong to say that authorised undertakers are a body of private people who receive the protection and the direction of the Electricity Commissioners, and are enabled to carry out, under their direction, the large schemes for the amalgamation of electrical undertakings and the development of electrical energy on a large scale that the Bill contemplates. Be it so. They are really nothing but a body of people who may be engaged in carrying on a very beneficent undertaking, but who, I assume, are going to carry it on for their own benefit. I do not imagine that it is suggested that the joint electricity authority are a body of philanthropists. Personally, I should be very sorry if they were, because I am quite convinced that a body of philanthropists, entering into any undertaking so vast and far-reaching as the electricity business, would only come to a lamentable grave. I therefore imagine that these are a body of private people, who are engaged in the laudable purpose of undertaking a great industrial enterprise in the hope that they will make it succeed, and in the knowledge that, if they do succeed, they will profit by it. That I believe to be the foundation of every successful electricity enterprise, and every other enterprise, too.

Having considered that that is their position, what is it that this Act provides with regard to that body? First of all, it enables them to borrow, and Clause 1 which enables them to borrow is really a little astonishing, because it proceeds to describe, as Acts of Parliament not infrequently do, the various purposes for which these powers may be exercised and, having specified them in considerable detail, goes on to say that they may also do it "for the purpose of any other payment," or other work, or any other thing which they are authorised to execute or do. I should have thought it would have been a much simpler thing to have said at once: "You may borrow as much money as you can get the Commissioners and the Ministry of Transport to sanction for any purpose you like, provided it is within your powers." That would have been the full effect of Clause 1, which extends over a page and a half of the Bill.

The whole of the rest of the measure proceeds in much the same way. There are powers to suspend sinking fund; there are powers to issue stock; there are powers to acquire land and to issue stock in its place. I imagine that is an optional power, and that it is not intended that land should be acquired and that the landowner should be compelled to accept stock in its place. Then, in the middle of the Bill we come upon this power of the local authorities. What is it that the local authority may do? The local authority is enabled to give financial assistance in any form it pleases to the joint electricity authorities on such conditions as it thinks fit. That, again, is a clause in general words, following specific powers that they are at liberty to exercise. Generally, they are at liberty to give any financial assistance that they please to these joint electricity authorities, on such terms and subject to such conditions as the authority, the company, or the person who is giving such financial assistance may think fit.

I say that is a power of the most tremendous and far-reaching character to be placed in the hands of a local authority, and when the noble and learned Viscount says: "Oh, but see how you are hindered here and hindered there because local authorities have not these powers to advance and finance these schemes," I ask him to say how many local authorities in this country have as members of their body people who are competent to determine that the particular scheme which is authorised is one upon which it is wise and proper to invest the public funds? That is the real question. The real objection that is entertained by persons like myself to the enlarging of these authorities is just this—that you put the exercise of expert powers into inexpert and uneducated hands, which is a fatal thing to do.

With the best will in the world, these people will make the most profound mistakes and in the end, in spite of the delightful vision with which the noble and learned Viscount gladdened your Lordships' eyes, of lessened rates and lowered charges for electricity, you will find that the same thing will happen as happened with the Water Board—that the charges are going up and the rates are going up with them. If the noble and learned Viscount will permit me to say so, there is no good whatever to be gained from expatiating upon the advantages you would get if these great schemes were successfully carried through. The question is whether, at this moment, the local authorities and other people are in a position to dip into the public purse to the depth to which they will be bound to clip in order to finance these schemes, on the prospect of their success.

I think, too, that much misunderstanding may be caused from attempting to compare the conditions that must happen here with the conditions that exist elsewhere. When, for instance, the noble and learned Viscount, with his great knowledge, calls our attention to what happens on the Continent or in America, I feel bound to ask, What are the generating stations there? I imagine that a great part of them are due to the tremendous power that is obtained by water. The noble and learned Viscount says: "No."

VISCOUNT IIALDANE

A great many are not.

LORD BUCKMASTER

It may be that some are not, but is the noble and learned Viscount prepared to say that in the United States of America one of the great sources for the generation of electrical power is not the Falls of Niagara?

VISCOUNT HALDANE

It is one out of a great number.

LORD BUCKMASTER

One out of a great number ! It is a great power, and it is not only that. You have water power there almost unlimited in extent. The people who believe that we have got similar water power in this country are, I think, under a profound delusion. I have not forgotten—I think it was last year—that a question was raised about one of the finest rivers in Scotland, and local authorities put forward their claim to be able to use the waters of this river for the generation of electrical power. One expert after another came up, and said: "You may wish to do it, but, great as your river is, and it is one of the finest rivers in the United Kingdom, there is not sufficient power to enable you to work it effectively." I say that thing is undoubtedly true here, and that you cannot possibly compare the conditions under which we have to generate our power with the conditions under which it can be generated in Switzerland, in Italy even, and certainly in the United States of America or in Canada.

Instead of promises as to what may happen in certain events, I should like to see some better examination made of the actual schemes which your Lordships are asked to approve. This Bill does not approve a particular scheme, which is, I think, the way in which this matter should be carried through. I think these undertakers in any district should come before Parliament and get their powers, because then each scheme may be the subject of criticism. I will undertake to say that a scheme which has had the advantage of going before a Committee of your Lordships' House will emerge strengthened, and sometimes purified, by the process. That is the right way to do it. But this Bill asks you to give power to sanction expenditure for any scheme over which you have no control. It is a scheme—

VISCOUNT PEEL

The noble and learned Lord will pardon the interruption; I am sure he would not wish to make a misstatement inadvertently.

LORD BUCKMASTER

I would not.

VISCOUNT PEEL

The noble Lord said that the House was asked to sanction general powers to make schemes over which neither your Lordships nor the other House have any control whatever.

LORD BUCKMASTER

Yes.

VISCOUNT PEEL

That is not so, because every scheme that is made by these Commissioners must come before your Lordships' House and another place, and it does not become operative unless a Resolution is passed saying that it should be so.

LORD BUCKMASTER

Is that under the Act of 1919?

VISCOUNT PEEL

Yes.

LORD BUCKMASTER

Will the noble Viscount give me the number of the section?

VISCOUNT PEEL

It is Section 7, subsection (2).

LORD BUCKMASTER

I am very much obliged to the noble Viscount.

VISCOUNT PEEL

I am sorry to have interrupted the noble Lord.

LORD BUCKMASTER

I am really grateful to the noble Viscount. He is quite right—I am not the least anxious to misinterpret him. I find that he is right and I was wrong, and I regret it. There is power in the Act to approve these schemes, and unless they are approved by the House they do not become operative.

VISCOUNT PEEL

That is so.

LORD BUCKMASTER

That is perfectly right, and my criticism should be modified to a certain extent—namely, that these schemes should not be approved in this manner. It is provided that the Board of Trade shall approve them, and then they are placed before the House. But my real complaint is that they do not go before a Committee either of this House or another place before they are passed. They obtain nothing but the approval of the Board of Trade, and then they are passed. I was inaccurate in saying that your Lordships had no control in regard to them, but my feeling is that there is no effective control. I can see no reason why the whole of the powers which still operate in regard to other undertakings of a public nature should be removed from them now, and that your Lordships should be asked to sanction such a Bill as this which, if it be passed, will, I fear, tend greatly to the multiplication of local burdens, and hold out to us only a remote possibility of any ultimate benefit.

LORD MONK BRETTON

My Lords, I must ask the indulgence of your Lordships if I speak upon this matter, because it was only about half an hour ago that this Bill was put into my hands, and I was asked to come down here and state on behalf of the London County Council that they attach the utmost importance to the Second Reading of this Bill, and that they very much hope your Lordships will not run counter to them. We regard this as an enabling Bill, and we hope that it will meet with more popular approval than did the compulsion which was a feature of the district boards of the old Bill. The machinery is nearly in order. The Electricity Commissioners have already been appointed, many areas have been provisionally approved, and now this Bill provides the financial arrangements which make the measure a working one. It is a Bill which, for the first time I think, provides for the co-operation of companies and authorities, admitting private enterprise. So far as London is concerned, I understand that, it is only for the purpose of generation that this Bill is to apply. The authority would be something in the nature of the Port of London Authority. Its powers would be fixed, and consequently it would not be able to go beyond the generation which had been decided upon.

A great deal of money has to be spent in London, sooner or later, on electricity. Some time before the war I was a member of a committee of the London County Council which was set up for the purpose of considering a cheaper supply of electricity for London, and we had abundant evidence from all parts of the world—from Chicago, Glasgow and Berlin, for example—showing that in London greatly increased cheapness could be obtained by co-ordination and larger areas of supply. Is the money which is now being spent on electricity to be spent wastefully or not? If it is spent all over the place by small companies and small local authorities it will not be so usefully and so economically spent as would be the case if it were co-ordinated and put under a central authority. It is in that belief that we say: "Let us have this Bill." It must be remembered, in regard to the powers of the local authorities, that under the 1909 Act and the 1919 Act there is practically no restriction on the amount which local authorities may expend, whereas under this Bill they are put under the necessity of being self-supporting.

Lastly, I desire to remind your Lordships, and I would specially remind the noble Earl below me (the Earl of Bessborough) that so far as London is concerned there is an existing statutory power of purchase by the London County Council in 1931, and if I were in the position of an electric company I should feel inclined to say: "Is it not better to go into this co-ordinating authority now rather than be swallowed up by a boa-constrictor in 1931?" Whatever may be the interests of the companies, I am quite sure that this Bill is in the interest of the public, because in 1931 the chaos of London as regards electricity will be such that the London County Council will be bound to exercise its power of taking over. If it does so it will be at a very great cost to the ratepayers. Of course, we do not know what Party is going to be in power in 1931. That might affect my noble friend, too, but I think he is gambling in a very hazardous way in not taking what he can get out of this Bill and in adopting a policy of resisting its Second Reading.

LORD SYDENHAM

My Lords, the noble Viscount has, in a very marked degree, the great art of presenting a bad Bill in an attractive manner. He has piloted through this House one or two rather bad Bills, and he will excuse me if I say that that makes one rather suspicious on this occasion. I do not say that this Bill is really a bad one, because it is an immense improvement on the Bill of 1919. That Bill, as your Lordships will remember, was destroyed by the very powerful speech of the noble and learned Lord whom we miss from his seat to-day. Compulsion was dropped, though I think it has been hidden, as the noble Earl said, in at least one of the clauses of this Bill. Some of the controversial matters in the last Bill have been expurgated, as the noble Viscount has said, but I do not think that he, or any one who studies this Bill, can tell us exactly how it is going to work.

There are so many different kinds of authorities involved in it. First, there is the Ministry of Transport which is to make Regulations that may or may not be approved by the Treasury. But any Ministry which makes the Regulations is a body of which this country, and of which industry generally, is beginning to be very much afraid. Then there are the Electricity Commissioners who, as the noble Viscount said, have already made themselves exceedingly popular, and they appear, as far as their investigations are concerned, to be in full action at the present time. There is also the attraction that they are not paid out of the taxes, but are apparently paid by the consumers of electricity, or possibly, in some cases—

VISCOUNT PEEL

They are paid directly by the producers.

LORD SYDENHAM

And of course it falls ultimately upon the consumers, so that they are paid either by the consumers, or, in sonic cases, probably by the ratepayers in the area of the municipal undertakings. How these assessments and these important percentages are made I have no idea. Then there come the advisory boards, and the advisory committees, and they constitute a sort of purgatory which the noble Viscount said had to be passed through before the "full blessedness" of the joint electricity authorities is attained. How are all these various bodies going to work? Really, no one can possibly form the slightest idea of what will happen when electricity, which is now partly municipal and partly in the hands of private enterprises, is dealt with under this Bill. Can these very different bodies come together and work in full harmony?

There are one or two points in the very lucid speech of the noble Viscount which I did not quite understand. It is due entirely to my stupidity, and not in the least to any want of powers of exposition on his part. He said that the Bill was necessary to raise capital, and that if it were not passed all the beneficent results which he foreshadowed would be held up. He also said the Commissioners had already sanctioned loans up to £15,000,000 by local authorities, and also large amounts by private companies. Anybody who is in the City knows perfectly well that large sums have been recently raised for electrical purposes. Apparently, therefore, municipal electricity, of which I confess I have grave doubts, can go straight ahead, and the private enterprises are also moving at the same time. The noble Viscount gave some very interesting and very attractive estimates. He said that by 1931 there would be an increased output of 192 per cent. I cannot make out on what that estimate is based. Unless present industrial and economic conditions in this country improve very rapidly, I do not see how this large increased demand is to come about. We are now producing far less manufactured goods than we produced before the war, and what are so often called normal times are times which, I am afraid, this country will never see again.

Then he spoke of large savings of capital. I should have thought there must be a great increase of capital under these schemes, though, of course, that increase might be a great economic gain. If it is all a complete success there would in time be certain redemptions of capital, but at the outset I should have thought that there would be large increases of capital demanded from the people who provide it; such as the £15,000,000 to which the noble Viscount referred. Then he spoke of a reduction of 32 per cent. in the cost of electricity in London by 1931. That is a most alluring prospect to those who can hope to live so long; but again I cannot see on what that estimate is based.

In the present state of things electricity supply, except on the north-east coast, is distinctly uneconomical, and in London especially. But it must be remembered that the great success of the schemes on the north-east coast, to which the noble Viscount referred, is due to private enterprise, and does not require the operation of any Bill of this kind. A great deal of the criticism which the noble and learned Lord devoted to private enterprise is really due to bad legislation connected with electricity in the past; and that is a point we ought to remember at the present time. It should make us exceedingly careful in accepting this Bill. The ideal seems to be the utmost encouragement of private enterprise under highly skilled and impartial expert guidance. I am not sure that this Bill will have that effect. It seems to me that the Ministry of Transport will always be able to interfere; and it will always have a political and not an expert head.

The main objections raised by the noble and learned Lord in December, 1919, were that the Bill would bureaucratise one of the most important industries in the country. I think this amended Bill will to sonic extent bureaucratise the industry. He also said that it would require the raising of enormous capital, which the country in its present impoverished condition could not provide. He and other speakers called attention to the danger of a highly centralised supply of such prime necessities as light, power, and heating. That danger remains, and it is a danger that ought not to be put out of sight. The British people do not take kindly to high explosives, but we have admitted crowds of revolutionary aliens into this country, some of whom are quite capable of almost any atrocity.

The noble and learned Viscount has almost repeated the very interesting speech he made in 1919, but he will not forget that on that occasion his speech was in support of a Bill which I think we all agreed was not a good Bill. It all depends, as the noble and learned Lord has said, upon how these joint electricity authorities are going to work, and whether the public will be willing to provide large sums of money for their use. Will they be managing bodies responsible to shareholders, or will they be councillors responsible to ratepayers; or will they be a mixture of both? Perhaps the noble Viscount will make that point; clear. For the reasons I have given I do not think the time has come for this Bill. I do not think the Bill will produce the effects claimed for it. If the Bill passes its Second Reading, I hope it will go to a Select Committee of this House in order that all its details may be carefully examined and that we may hear the view of those who think the Bill should not be passed.

THE MARQUESS OF SALISBURY

My Lords, may I say one word of respectful congratulation to the noble Earl, Lord Bessborough, for the admirable speech with which he opened our proceedings this afternoon. I hope it is only the forerunner of many speeches in which he will contribute his wisdom to our counsels. I regret very much that the. Government have thought it right to introduce this Bill at the present moment. The noble Viscount opposite made a very good speech the other day and advanced cogent arguments in its favour. Those arguments, however, were really not so cogent as they appeared. But the one point with which he did not deal, and which seems to me to dominate the present situation, is the financial position of the country. That is a matter we must bear in mind. I am not in favour of a policy of inaction in matters of electrical development. I agree with all that the noble and learned Viscount behind me has said of the great importance of electrical development and the creation of this motive power in sufficient quantities to meet all the purposes of commercial enterprise. But surely the present moment is an exceedingly inopportune one at which to tell the country that we are in favour of extra burdens on the rates. I confess that I shrink from it. The Act of 1919 was very carefully considered by your Lordships and was the subject of great modifications. I should have thought it would have been wise to have left that Act alone for several years before a further step was taken.

Do not let the House think that nothing is going on in electrical development. Any one who listened to the speech of the noble Viscount opposite knows the contrary. He pointed out how much was going on, and I have had an opportunity of verifying his statement. There is a great deal going on notwithstanding the severity of the conditions under which anything like industrial progress can be made at the present. None of us suggests a policy of inaction. But the real question is—Are you prepared to go to the country and say that at this moment we are in favour of extra burdens being thrown upon the rates? The noble Viscount no doubt will say that that is a matter for the ratepayers; their representatives need not contribute sinless they like. I aril all for local self-government, but I think Parliament has been rather jealous of allowing a completely free hand to local authorities.

Your Lordships must remember that we are not dealing merely with county councils or borough councils. Ordinary district councils are "local authorities" within the meaning of the Bill, so that any one of them, subject to a limitation of which I will speak in a moment, might embark upon these investments in electrical enterprise. I do not always act with my noble and learned friend, Lord Buckmaster, but I think he was fully justified in saying that you do not find, and ought not to expect to find, upon a local authority—certainly not upon a district council—sufficient experience and expert. knowledge to qualify them to protect the ratepayer in a matter of this kind. It has not been the practice of Parliament to leave them a free hand.

The noble Viscount opposite will say: "Yes, but there is always the Ministry of Health, which will stand as the watchdog of the public." I have great respect for the Ministry of Health, but I am afraid the public have not that absolute confidence in their protective capacity which the noble Viscount professes to entertain. I do not want to say anything very critical of the Ministry of Health, but it was one of the offices newly created and brought into power with a great flourish of trumpets in the days immediately after the war, when it was thought that we were able to spend any amount of money upon any number of things; and the habits into which the Ministry of Health have fallen do not give me any absolute confidence that they would act as a sufficiently reliable protection if they were all that we had to rely upon.

There is one limitation even upon that statement of the noble Viscount. So far as London is concerned, we have not even the protection of the Ministry of Health. As I read the clause, there is an exception here. Is that not so?

VISCOUNT PEEL

May I explain why? It is because the finance of London, as I, of course, know very well, is subjected to entirely different rules and regulations. It is thought important enough to require a Money Bill, which goes through both Houses.

THE MARQUESS OF SALISBURY

So it has the protection of Parliament itself. I am much obliged to the noble Viscount. For all these reasons, I feel very reluctant to pass this Bill into law. I should have thought that the Government would have been far wiser not to press it at the present moment. Just consider our situation. Let the House reflect upon the position in which public finance stands at the present moment. It would be almost an insult to your Lordships' intelligence to remind you that there is no point in saying that the burden is going to he borne by the ratepayer rather than the taxpayer. The ratepayer is quite as badly off as the taxpayer; in fact, he is almost the same person. We really cannot stand any more burdens. When the public realises that the Government have come forward awl suggested at this moment that there should be a possibility of great future burdens being thrown upon the ratepayer, I do not think that, if your Lordships pass this Bill, public opinion will justify your action.

I venture to ask the Government not to press the Bill. I think it would be most unwise to do so. I think the proper course, under the present conditions of financial stringency, is to postpone measures of this kind until better times. I am quite certain that there is no feeling so strong in the country at this moment as a determination to put an end to anything like reckless expenditure, and, even in the case of expenditure which could be defended upon its merits, to ask that it be put off until times are better.

LORD GAINFORD

My Lords, might I intervene for one moment, as having been associated for sonic time past with companies which produce electricity in the north of England, as well as being associated at present with one of the London companies which produces electricity nearer to your Lordships' House? I have also had some experience in connection with the use of electricity. From an industrial point of view, we find that we can run the collieries of this country much more cheaply and economically if we use electrical power for pumping, for ventilation, and for drawing the coat—if, in short, we utilise electricity rather than fuel for the production of power and for lighting our collieries.

It is true, as the noble Viscount, Lord Haldane, stated, that there are in the north of England several large colliery interests which have spare power and spare lighting to dispose of during certain periods of the twenty-four hours, and that they have been in communication with the local authorities as well as with the power producing companies in the north of England and have made arrangements by which their spare electrical energy may be supplied for the purpose of lighting miners' cottages, for street lighting, and, in some cases, for local industries. But although they can produce it at the comparatively cheap rate to which the noble Viscount referred, yet the loss in transmission and the waste in transforming one current into another are considerable, and I know of no case in which the figures quoted by the noble Viscount are really charged to a local authority in the north of England.

I am persuaded, however, that, given time, there is a progressive development going on in the north of England which will enable electricity to be generated for the general community much more cheaply than in the past, and I believe exactly the same development is possible in connection with the work carried on by the large companies which supply London both with light and power. During the last few weeks I have been looking very carefully at the reports of the large London power companies, and I have seen that, in spite of the very severe handicap which they had to meet last year owing to the long and protracted coal strike, there is a steady improvement in the way in which private enterprise is dealing with this matter in London. The very fact that at the present moment there is no more popular investment for the public shows that the public have confidence in the private enterprise of these large generating companies in London.

When the noble Lord, Lord Monk Bretton, a few moments ago, alluded to the necessity of very large sums of money being spent at some future time in connection with the cheap supply of electricity, I think he had in his mind the desire that local authorities should supply power and lighting, and I thought it was time, at any rate to put in a caveat. I know of one of the large companies in London who recently offered to supply one of the London boroughs with electrical energy at 20 per cent, less than the price at which their electrical expert himself thought the borough council could produce it. The borough council would have none of it. The borough council wanted to be able to charge the ratepayers even 20 per cent. more than they could get their energy for elsewhere, because they preferred to have the supply in their own hands, rather than that the ratepayers should be relieved of the increased cost of electrical energy. I know many municipal bodies may be able to supply electrical energy perhaps better than it can be done by private enterprise. On the whole, however, I believe that this is a moment when private enterprise should have a freer hand, and be able to meet the views of the people, rather than that we should be subjected to increased taxation and rates at a time when we have so many burdens to bear. It seems to me that this is not the moment to press a Bill of this kind through all its stages in this chamber, or in another place, and that this is a subject which requires further ventilation. It should be considered in Committee, and if it goes into Committee the Bill will require considerable amendment, I think.

THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT PEEL)

My Lords, this Bill has been subjected both to criticism and to approval by, I think, very nearly an equal number of noble Lords. It has been subjected to a certain amount of criticism rather stronger than I expected. Your Lordships will remember that at the suggestion of the noble Marquess I postponed the Second Reading from last Thursday until to-day, and I looked carefully at the Paper and saw no Motion put down in the name of any noble Lord for the rejection of the Bill, although I thought some of the speeches to which we have listened tended to influence your Lordships in that direction. I have placed myself under the disadvantage that I shall have to address your Lordships, if you will allow me, in reply, at a little greater length than would otherwise be the case, on the points raised in the discussion, because, as I made my speech last Thursday, it is inevitable that it should have largely passed away from the minds of noble Lords who have listened to the debate to-day.

I do not know whether I am right in congratulating Lord Bessborough upon his maiden speech in this House, but perhaps I may be allowed to do so, and I do so with all the greater pleasure because, afterwards, I am going to traverse every single statement that he made. First of all, I think it is a very hard charge which has been brought against me, not only by the noble Earl but by the noble and learned Lord opposite. They both said: "What an extraordinary procedure this is. You introduce this Bill in this House, although you introduced it in another place last year. Why are you introducing it in this House now? What the meaning of this strategy?" I really think that is a very unfair and hard charge. I, and other noble Lords, who have had to introduce Bills, have been frequently, and I think rightly, attacked for endeavouring to force Bills through this House at the end of the session, when complaints have been made that there was no time in which properly to consider them. Now, in order to meet your Lordships' requirements, we introduce this Bill at a time when finance is being discussed in another place and your Lordships have plenty of leisure in which to consider the clauses of the Bill. Yet noble Lords attack me for doing what I thought was being done for the benefit and satisfaction of your Lordships.

Now, let me say one or two words about the criticisms of the noble Earl. His first criticism could hardly have been more unfair. He says: "You promised a cheap and abundant supply of electricity, and what have the Commissioners done during the last two years to produce that supply? "That is the strongest argument, perhaps, in favour of the Bill that I have yet heard, because the reason why the. Bill is produced is in order to give some opportunity for fruition to come from the schemes prepared by the Commissioners during the last two years. Surely, the noble Earl must be aware that to take a survey of the whole of the electricity supply in this Kingdom is a very largo matter, and, as we proceed entirely by voluntary system, to bring together all these different authorities and various undertakers, public companies and so on, to get schemes for the construction of joint electricity authorities, must be a matter of considerable time. We have now advanced to this point, that all this work is done; and may I remind your Lordships that the measure you passed two years ago will be of no avail unless you equip them with the powers provided under this Bill. Then, if nothing is done, the noble Earl will be justified in making his criticism and saying: "You have done nothing to carry out the promises which you made." That is my answer to his statement. Eight schemes are ready, and four others are nearly ready and can be put into action immediately after your Lordships pass this Bill.

Then, again, the noble Earl made another criticism upon the scheme for the London district. I think an important point was made by Lord Monk Bretton, newly elected to the London County Council, in which he stated that to-day there was a petition from the London County Council that this scheme should be put into operation as soon as possible. After all, the London County Council cannot be considered a body which is against private enterprise, because they have just won a great victory in support of private enterprise. The noble Earl said that the scheme had cost £40,000. I am not in a position to criticise his figures, but I happen to have a very long acquaintance with the electrical question in London. I have often appeared before Committees in another place, and am personally familiar with all the history of London electricity during the last twenty years. I know something of the waste of money that has taken place in London, and of the difficulties that have had to be met; and I say it is a great thing if, at last, an arrangement has been made and a scheme produced which will effect a settlement and prevent this waste in the future. As I have said, it has won the approval of the great local authority in London, and to make such an arrangement between the companies and the local authorities in London is, I can assure your Lordships, a very considerable achievement.

I was also attacked by the noble Earl on more general grounds. He said I had been declaring that this Bill was permeated through and through with the voluntary principle. He searched through and through the clauses of this Bill in order that he might find some clause which contained the compulsory element, and after having searched, perhaps for many days and nights, he at last thought he had discovered one point in which the compulsory element was involved. I am afraid that the noble Earl is not quite right on this subject, but I would like to deal with the point. He discovered it in Clause 5, subsection (4), where it says— A scheme constituting a joint electricity authority may include provisions !authorising or requiring authorised undertakers, and authorising companies and other bodies represented, on the authority to contribute towards any administrative expenses of the authority. Here, he says, is the principle of compulsion; these bodies are forced to contribute to the administrative expenses of the body which is set up. Let me say that some such provision is very useful and necessary, because these bodies, at first, will have no funds out of which to pay their small administrative expenses.

But let me point out on whom, first of all, this compulsion is to be exercised. It is only on those who are represented on the authority itself. And, curiously enough, the request for this small degree of compulsion was not forced by the Electricity Commissioners on reluctant authorities, but it was suggested by the companies themselves. They said: "It is quite clear we must have sonic small expenses, and it would be rather hard, if we are agreeing together to form this joint electricity authority, that perhaps nine or ten of us should pay our fair share, and the others would not." And so they agreed among themselves to this small element of compulsion. But it is not imposed upon them from above; it is their own desire, and I need hardly say that if any of them object to the scheme they are entitled not to conic into it. I think, therefore, that the element of compulsion is really reduced almost to nothing.

The next point I have to deal with is the borrowing of money. Your Lordships will see that the borrowing of money is very closely safeguarded. First of all, the actual borrowing is limited to certain purposes. Secondly, they can only borrow with the consent of the Electricity Commissioners, and subject to Regulations to be made by the Minister of Health, with the approval of the Treasury. And these local authorities, who, we are told are allowed to lend money, can only lend it for the purposes for which those authorities are allowed to borrow. That is one point. As to another, your Lordships seemed to think that the Ministry of Health was not a very good authority to control the loans of these authorities. That is a matter of detail, but very important detail, and if your Lordships think that the powers of these authorities to borrow money or to guarantee stock, and so on, are insufficiently safeguarded, I should be glad to consider very carefully any suggestions that your Lordships brought forward on that point. We are all agreed that we do not want to give unlimited powers. But all this is subject to the local authorities themselves, who need not take any part in this unless they like. But, if there is any limitation wanted, I shall be very glad to consider any point that may be made in that connection.

Lord Buckmaster seemed to object to local authorities having electrical supplies at all, because his criticism was that they were not capable of managing these matters, which are entirely in the hands of experts. That criticism might have had some value if it was made twenty-five years ago, but, as we know, these great authorities are conducting electrical undertakings and have conducted them for many years. In fact, the amount of capital invested in the undertakings of local authorities—I am speaking of power distribution—is far larger than that invested in public companies for the same purpose. Therefore, we have to take the facts as we find them.

Surely, it is rather absurd to say that these authorities may raise large sums, as they do now, for establishing their own electricity undertakings, and that one of them may not join together with another local authority, as is proposed under this Bill, in order that they may have a joint supply which may be cheaper than the one which they could set up themselves. As a matter of fact, they have such powers of joining together for mutual supply under the Act of 1919. And the great addition made by this Bill—and it really is a help rather than a hindrance to private enterprise—is that under it the public companies can join with the local authorities to form joint electricity authorities, whereas, before, the local authorities could only act by themselves.

May I further enforce this point on the noble Marquess (Lord Salisbury), who has been contending that this is not the time when large further expenditures should take place. I entirely agree with him, and I think everybody will agree with him. But the point of this Bill is that you will economise in the expenditure of public money as far as you can. Instead of every local authority and company raising money for the extension of their own power stations to meet their statutory requirements, they join together in the different districts, and therefore it is surely obvious that the money required, when they are united together in this way, will be far less than might be raised if they were all independent units, trying to raise money for their small independent stations. The noble Lord, Lord Sydenham, dwelt on this point. I think the only specific question he asked me was: Will they appoint responsible persons upon these joint authorities?

LORD SYDENHAM

To whom would they be responsible? Would they be responsible to shareholders, or to the ratepayers?

VISCOUNT PEEL

They would, of course, be responsible to the authority that appoints them. The local authority will appoint its representative on the joint electricity authority, who will be responsible to the authority and to the ratepayers; and, in the same way, those who are appointed by the companies will be responsible to their shareholders.

THE MARQUESS OF SALISBURY

But the local authorities might be beaten by the representatives of the companies.

VISCOUNT PEEL

Might be beaten in what way?

THE MARQUESS OF SALISBURY

Upon a decision. My noble friend asks about the responsibility, and the noble Viscount says the representatives of the local authority would be responsible to their own local authority, but once in a joint electricity authority they would be subject to the ordinary rules, and they might be beaten by the company.

VISCOUNT PEEL

No, because the question is a question of price, and the noble Marquess will see that under Clause 13 there is a Regulation as to the price which will be charged for the supply, which is to be such as to cover their expenditure and such margin as the Electricity Commissioners may allow. Therefore, the difficulty suggested by the noble Marquess really could not arise.

Unless your Lordships pass a measure of this kind—with any Amendments which you think it necessary to make for securing further control over the local authorities in their borrowing—you will really render the whole of your action in passing the Bill of 1919 entirely futile. All the action taken during the last two years by the Electricity Commissioners—their survey and all the efforts they have made to set up these joint electricity authorities—will be barren and futile, unless you equip them with the powers, or, at any rate, some of the powers, that are set forth in this Bill. Some of the criticisms I have heard to-day have been directed not so much to this Bill as to the Act of 1919. But your Lordships realise that that Act was assented to by your Lordships, and all I am asking you to do to-day is to supplement that Act by clauses which, properly controlled and properly safeguarded, will enable that Act to become a reality and not be entirely useless and futile. I hope your Lordships, therefore, will allow the Bill to receive a Second Reading, subject to what I have said as to any necessary Amendments that your Lordships may propose with regard to the borrowing powers of local authorities.

LORD SYDENHAM

Might I ask the noble Viscount what he meant when he said that £15,000,000 had already been sanctioned?

VISCOUNT PEEL

I am sorry I did not explain that point. I think I stated in my opening speech that, of course, at the

present time the loans of local authorities for raising electricity supplies are subject to the Electricity Commissioners; they deal with them; those are powers which they now exercise. It is quite clear that if there is no possibility of the joint electricity authorities functioning, and if they cannot take over some of these generating stations, the Electricity Commissioners will have to permit the raising of more loans; because local authorities are not going to stand still: they must develop their supplies. This sum of £15,000,000 has been raised during the last few years, subject to the approval of the Electricity Commissioners. As I have already explained, they have no power to function through the joint electricity authorities, and that sum will be increased unless power is given to economise money, as I suggest it will be economised, by equipping these joint electricity authorities with the necessary power.

On Question, Whether the Bill shall be now read a second time?—

Their Lordships divided:—Contents, 59; Not-Contents, 40.

CONTENTS.
Canterbury, L. Abp. Strafford, E. Hemphill, L.
Birkenhead, V. (L. Chancellor.) Strange, E. (D. Alholl.) Hylton, L.
Islington, L.
Devonshire, D. Astor, V. Kenyon, L.
Richmond and Gordon, D. Churchill, V. Lambourne, L.
Sutherland, D. Haldane, V. Lamington, L.
Hood, V. Lee of Fareham, L.
Ancaster, E. Peel, V. MacDonnell, L.
Bradford, E. Ullswater, V. Manton, L.
Buxton. E. Monk Bretton, L.
Chesterfield, E. Annesley, L. (V. Valentia.) Rathcreedan, L.
Chichester, E. Ashfield, L, Riddell, L.
Clarendon, E. Colebrooke, L. St. John of Bletso, L.
Dartmouth, E. Colwyn, L. Shandon, L.
Eldon, E. Cottesloe, L. Somerleyton, L. [Teller.]
Harrowby, E. Dynevor, L. Stanmore, L. [Teller.]
Leven and Melville, E. Fairfax of Cameron, L. Terrington, L.
Lucan, E. Faringdon, L. Teynham, L.
Lytton, E. Gainford, L. Weardale, L.
Onslow, E. Gorell, L. Wemyss, L (E. Wemysn.)
Plymouth, E. Hawke, L. Wigan, L. (E. Crawford.)
NOT-CONTENTS.
Argyll, D. Avebury, L. Ponsonby, L. (E.Bessborough)[Teller.]
Somerset, D. Belhaven and Stenton, L.
Blythswood, L. Raglan, L.
Linlithgow, M. Buckmaster, L. Redesdale, L.
Salisbury, M. Carson, L. Ritchie of Dundee, L.
Chalmers, L. Rowallan, L.
Airlie, E. Cullen of Ashbourne, L. Sackville, L.
Beauchamp, E. Desborough, L. Saltoun, L.
Grey, E. Desart, L. (E. Desart.) Strachie, L.
Morton, E. Granard, L. (E. Granard.) Sumner, L.
Bertie of Thame, V. Lawrence, L. Sydenham, L.
Chilston, V. Newton, L. Tenterden, L.
Falmouth, V. Oranmore and Browne, L. [Teller.] Trevor, L.
Walsingham, L.
Askwith, L. Phillimore, L. Wavertree, L.

Resolved in the affirmative, and Bill read 2ª accordingly, and committed to a Committee of the Whole House.