HL Deb 21 December 1925 vol 62 cc1653-64

Debate resumed (according to Order) on the Earl of Clarendon's Amendment to the Motion of the, Viscount Peel (moved on Tuesday, December 8), That the Special Order which was presented on the 15th day of July last be approved—namely, to leave out all the words after "That" and to insert "having regard to the decision of a Select Committee of this House upon the Horley and District Gas Company (Electricity Supply) Bill (H.L.) the Special Order be not approved."


My Lords, in view of what the Lord Chairman said to your Lordships last week and also in view of the fact that the agents on behalf of the Horley Gas Company do not desire to proceed further with this matter, I do not propose to ask your Lordships to proceed to a Division. I therefore beg leave to withdraw the Amendment standing in my name.

Moved, That leave be given to the Earl of Clarendon to withdraw his Amendment.—(The Earl of Clarendon.)


My Lords, before this Amendment is withdrawn I should like to call your Lordships' attention to what I think is the very unfortunate position in which this Horley and District Special Order and the competing Gas Bill have got themselves. I will not go into the merits because I know nothing of the merits. I have had no opportunity of hearing the evidence. The evidence has not been submitted to us and therefore I am not in a position to say anything with regard to the merits of these respective competing schemes.

I do observe, however, that the Gas Company came at the beginning of the Session to this House with a Bill. The Bill received a. Second Reading and went through the Committee Stage. After four days' consideration it was unanimously passed by the Committee. The Bill subsequently passed your Lordships' House and went to the other House. When it reached the other House the Bill went before a Committee of that House and, after consideration in Committee, it was defeated. No complaint can be made about that. It is not the first time that a Bill which has passed through your Lordships' House has been rejected in another place.

Now comes a difficulty. The competitors applied for an Electricity Order. In order to obtain it they had to go before the Ministry of Transport. One would have thought that the Ministry of Transport, having been informed that there were competing parties in this matter, before making an Order in favour of the applicants would at least, have inquired whether there was any competition and would have insisted upon hearing the ease for the competitors. No such proceeding, as I understand took place. The case for the competitors was never heard or presented before the Ministry of Transport. It was riot presented for this reason—that the Gas Company had got their Bill through the first House. Whether wisely or foolishly I do not know and it is not for me to say, but they took up the position j'y suis, j'y reste—I have got my Bill through the first House, and it is now for the second House to consider. The Ministry of Transport do not seem to have taken this fact sufficiently into consideration. They thereupon passed the Electricity Order, putting aside altogether the proposals which were embodied in the Bill. They passed the Order, it received the assert of another place and then came up here to receive the assent of your Lordships' House.

Let us see what the position is. We are asked now by the Ministry of Transport, who have never had a public hearing of the case or considered the views of the competing parties, to accept their Order made in favour of one party which has never been heard in this House. You have, therefore, the spectacle of this House, which has heard and approved and presumably supports the finding of its Committee, being asked to reverse its decision upon the ipse dixit of the Ministry of Transport which has never heard the competing parties. We, who have never heard them, are asked to accept the views of the Ministry. I do not believe that it was ever contemplated when the Act under which the Electricity Orders are made was passed that such a state of things as this should arise, and it seems to me the position is an unfortunate one. I should very much like to know what is to happen in the future. Are we to be treated to another spectacle of conflicting procedure, or will the Ministry of Transport he careful in the future to hear both competing parties before they pass an Order, or how is such a position to be dealt with? It is obvious that such a. position might easily arise, especially if we bear in mind the fact that we have really invited it to arise by passing the Statutory Gas Companies (Electricity Supply Powers) Act, 1925. That seems to be a special invitation to the companies situated as the Horley Gas Company is to come and ask for electricity powers.

At this time of the Session and at this period I suppose it would be too much to ask your Lordships to reject. the Order of the Ministry of Transport; but upon my word I believe the best solution of the whole difficulty would be that neither scheme should go through this Session, and that at the beginning of next Session both parties should start afresh and get a proper hearing before the tribunal of Parliament. Then everybody would be satisfied after the cases had been properly heard by a properly constituted tribunal.


My Lords, I do not know whether your Lordships would allow me to say a word or two upon this very confused matter. I have no right to speak on this main question, because I have already addressed your Lordships, but it is only with a view of keeping the matter clear that I ask leave to say a word. My noble friend has raised this question again. He is aware, no doubt, that it has been under the consideration of this House already on two occasions. I am certain, I may say in the first place, that any observation which falls from him, with his immense experience, will not fall upon deaf ears, and that so far as the Ministry of Transport are concerned, a proper note will be taken of what he has said.

So far as your Lordships are concerned, I would venture to recall to the memory of noble Lords what actually occurred. When this Electricity Order was originally submitted to your Lordships' House an Amendment was moved by my noble friend Lord Clarendon, not as a member of the Government but as the Chairman of the Private Bill Committee to which my noble friend has just referred. That Committee considered this Bill of the Gas Company, which was afterwards rejected in another place. Discussion took place in this House and it became apparent that there was considerable doubt in the mind of noble Lords as to what the precise facts were. Several matters which my noble friend has mentioned entered into the difficulty which was in your Lordships' minds. Finally, some of us thought that the House was really not in a position to arrive at a decision as matters stood because it was not sure of the facts, in particular, in regard to the matte: which has been so pointedly urged by my noble friend—that the Gas Company had not had a proper opportunity of being heard in the inquiries, one of which was by the Ministry of Transport., in the course of the proceedings. Consequently, we finally resolved to do what I think my noble friend would entirely have agreed to had he been present. We resolved to send the Order back to the Special Orders Committee so as to have a Special Report from them as to the line it would be wise for your Lordships to take upon this matter.

The Special Orders Committee was established last year, baying in view the very sort of circumstances which have occurred, to guide your Lordships as to how you ought to proceed when an Order was submitted to you for confirmation which was rather out of the common and not according to the ordinary rules; in short, just, such a case as this. We hoped to get guidance from the Special Orders Committee and sent it back to them saying, in effect: Here is a ease on which we want particular guidance in regard to these points. One of the matters was that to which reference has been made by my noble friend, that the Gas Company had not had a proper hearing. We asked the Special Orders Committee to tell us about those things and what we ought to do. It was sent back upon my own Motion to the Committee. That Committee was a, very business-like body. There was no kind of delay. It sat two days afterwards and it was very well attended. Ten members of your Lordships' House attended the meeting of the Committee and a unanimous Report was produced, which was submitted to the House. I will not describe the Report because my noble friend the Lord Chairman is present and I am sure your Lordships would give him leave to state exactly what. the Report was. But its effect was to show that every step which the Special Orders Committee could take to secure a proper hearing for all the parties had been taken, and after all the investigations they made they decided to recommend that the House should pass the Order.

I do not propose to detain your Lordships any longer. I have carried the history of this matter up to the point at which it passed out of my hands into the hands of my noble friend the Lord Chairman and, if I may say so, your Lordships would do well to hear what he has to say about the Special Orders Committee before any such drastic step as that which has been suggested is taken.


My Lords, before the Lord Chairman speaks may I make one or two observations? I was present on the two previous occasions when this matter came before your Lordships' House and I know the whole proceedings. A most unfavourable impression was created upon myself, and I think also upon a good many members on this side of the House. With all respect to the noble Marquess, I do not think the matter so far as future Bills are concerned has been entirely cleared up. It may be that it is right to let this Order go through, though certainly, if I had the power, I would adopt the suggestion of the noble Viscount and let the whole thing be thrashed out in Committee next year. I think that would be really a satisfactory way. What has happened is this. As stated by the noble Viscount, this House has passed and approved a Bill promoted by the Gas Company under an Act of Parliament. They passed it after a thorough investigation. That Bill is thrown out in another place, and, as Viscount Ullswater has said, that is not an unusual matter. Then we are asked, in lieu of the Bill which we investigated, to approve this Order, without knowing anything about it. The Order has never been investigated by this House at all. That is a most unsatisfactory way of doing business. It seems that after this House has taken the trouble to investigate a matter and sent it up to another place and it is thrown out there, the practice is that this House is to take what comes from the Ministry of Transport without knowing anything about it, and although it is directly contrary to what the House has voted after an investigation. I cannot imagine a more unsatisfactory way of doing business.

When this matter was before this House on the first occasion, I found it very difficult to understand the nature of the company that was promoting this Special Order at all. So far as I could make out it had little or no capital. It seemed to be a kind of private company put up for the convenience of certain people, and when the Order was before your Lordships it was referred back to the Special Orders Committee with a suggestion as to chat should be done. I understand from the statement of the Lord Chairman that they applied to the Gas Company and. asked if they wished to have a hearing.


A further hearing.


Yes, a further hearing. The Gas Company at once said "No." And do you wonder at that? Do you wonder at their reply after they had promoted a Bill through this House and had been tossed about in this way after having gone to enormous expense? Everyone knows that they were in a financial position to carry out this matter. A Bill is passed here and it goes to the House of Commons. Then an Order is made taking the matter entirely out of their hands and without any hearing of their case by the Ministry of Transport, the company relying on the fact that they had their Bill and that it would be unnecessary for them to be heard. I think any company would be thoroughly sick of being tossed about like this and spending the shareholders' money in this manner. Looking at the facts it simply means that the Bill we investigated and understood and recommended is to be thrown out and an Order that we know nothing whatever about is to be passed.


My Lords, during the debate on this subject many noble Lords have emphasised the fact that the interests of the inhabitants of the district which is to be served must be considered first, and the noble and learned Viscount opposite congratulated the inhabitants of this district that they would be getting their supply from a bulk supply. I do not know that this is most favourable to the interests of consumers. Nobody doubts that the Gas Company have proceeded perfectly fairly. They gave due notice to the rival company, the Electricity Company, that they were introducing a Bill in this House. The Electricity Company then applied for an Order, and when the case came first before us we were told that now the Electricity Company did not propose to supply current themselves but to be a distributing company—in other words, they were to be a kind of middle man. I do not think the interests of consumers are served in this way. The Electricity Company will not distribute for nothing. The engineer who contributed half the funds (£5,000) and his co-partners who gave the other £5,000 will expect interest on their money, and this will cone out of the pockets of the consumers, an additional cost to the sum charged by the big company supplying the current.


My Lords, as I have been specially referred to by the noble Marquess the Leader of the House, I hope I may be allowed to say one word as regards the procedure in Committee. Probably I did wrong—although I did my best to explain shortly, and I hope succinctly, what happened in the Committee—when I moved the adoption of the Report in making the speech I did, and perhaps I should have been more in order if I had reserved what I had to say until this afternoon. I at once re-echo what Viscount Ullswater and Lord Carson have said, I thought last week that the preferable course was for this matter to be heard again—I suggested a Joint Committee of the two Houses next Session—but that is one proposal that has met with no favour at all. That question was put to both parties in the Special Orders Committee—it was not the only question put by any means—and they agreed (it was the only subject on which they do agree) that they do not want any further Parliamentary inquiry. That being so I feel that we have no alternative but to accept the proposition of the Ministry of Transport, who, by the Act of 1919, were made the responsible agents of Parliament, if I may use the phrase, in these matters, and it was for that reason that I announced to your Lordships that I should not feel justified in voting against the proposal made by the Ministry of Transport that this Order should be now affirmed, subject to Amendments which I notice are on the Order Paper.

Quite rightly Viscount Ullswater asks the question, What is to happen in the future? Your Lordships realise what has happened. By the Act of 1919 these matters, instead of coming by Private Bills, were to come by Orders. And your Lordships will not forget the procedure. There must be an application in the first instance to the Electricity Commissioners. The Electricity Commissioners consider the case, they can hear it if they desire to do so, and they submit the Order to the Minister of Transport. The Minister of Transport can affirm the Order or refuse the Order, and he can, in the course of the proceedings, hold an inquiry if he thinks fit. In this case he did invite the Gas Company to appear at his inquiry, but they refused, for reasons which have been repeated more than once in the course of these proceedings. I understand that the appeal from the Electricity Commissioners to the Minister of Transport is a real appeal, and there are people. I know, who would argue that the Minister of Transport is absolutely independent and judicial in reviewing these Orders. The ordinary man in the street like myself does not forget that they live in the same building, and do not regard it so much as proceeding from a lower court to a higher court as those concerned in the working of this system are inclined to do. I hope that experience may show in future cases that the appeal from the Electricity Commissioners to the Ministry of Transport is a real appeal and not merely a re-submission of the case from one room in an office to another room in the same office.

Having said that, I may add that one difficulty, at any rate, now goes. The Gas Company all through these proceedings have been in the position that they could not themselves go to the Electricity Commissioners to ask for the Electricity Order—though the Electricity Company could do so—and accordingly they had no remedy but to promote a Bill in Parliament. Until this year an electrical company desiring powers had to go to the Electricity Commissioners and a gas company had to go to Parliament. Consequently the two competing schemes could not go along the same road. That, difficulty has disappeared. The noble Viscount on the Cross Benches referred to the Act of 1925. That Act, for the first time, makes it unnecessary for the Gas Company—though, of course, they have not lost their right—to come to Parliament direct. They can go to. the Electricity Commissioners for an Order in the same way as any other authority. I hope, therefore, that the difficulty will not recur in future cases. One does not, however, disguise from oneself that the system under this Act of 1919 is on its trial and, though I for one say quite frankly that I will do my best to further and assist it, one is bound to watch it carefully in see what inconveniences arise, so that Parliament may not often be put in the same sort of difficulty as that in which we find ourselves in this particular case.


My Lords, until this morning I thought that we had come to a decision on the lines that the noble Earl, the Lord Chairman, has indicated to us, but I received this morning a somewhat impassioned circular from the Gas Company—I do not doubt that many others of your Lordships received a similar circular—setting out their case as if it were a case that we had not discussed and so far settled in the previous discussions in this House. There are two or three points which, I think, have not been quite sufficiently realised. The first is that the very object of these electricity schemes is to cut down the enormous cost to the consumer and the unnecessary overcharges which are made by reason of the matter being in the hands of small companies. This Gas Company is an illustra- tion, and it may be that the local Electricity Company would be another if it had been left uncontrolled.

For that purpose Parliament, as the results of the two Acts which your Lordships passed, the Act of 1919 and the Act of 1922, set up—I agree under the Ministry of Transport., but as a more or less scientific body—the Electricity Commissioners. They have their headquarters at Gwydyr House, Whitehall, and their Chairman is Sir John Snell, a man who, from his vast knowledge and great experience in these matters, is fitted to exercise the semi-judicial functions which he has to combine with his executive duties. His business is to work out schemes which will give the public an electrical supply at a much cheaper rate than they have to endure at the present time. His purpose is to set up what arc called bulk supply schemes by which electricity can be produced in large amounts and distributed easily. Barking, of which your Lordships have heard, is an illustration of such a producing centre.

This matter came, so far as the Order was concerned, before the Electricity Commissioners. It is quite a mistake to suppose that the Electricity Commissioners do not look into things. They look into all alternative possibilities, and doubtless they considered the Gas Company, though the Gas Company did not appear before them. Their business was to see how electricity could b provided for the public in the cheapest and the most effective fashion, and they sent up to the Ministry of Transport, their Parliamentary heads, this Order. There was a conflict between the view taken in your Lordships' House and the view taken by those who promoted this Order and, in the end, established its validity in the House of Commons. I cannot help thinking that we have looked rather away from the main and underlying feature of this whole matter. The fact that there are Electricity Commissioners whose business it is to provide electricity much more cheaply and effectively than it is provided at the present time, and that this Order had this as its purpose must not be forgotten. You cannot do these things on a small scale; you can do them only on a large scale.

This question has been brought before your Lordships in the form of a conflict. The Gas Company has promoted a Bill. I listened with attention to my noble friend Viscount Ullswater and I hoped to hear from him some suggestion, at all events, that the Gas Company would produce as cheaply or something like as cheaply as the bulk supply producers. But I have heard no word of that either from the noble Viscount or from my noble and learned friend Lord Carson. I am compelled to remain in the belief, which I have held throughout, that in passing this Order the Electricity Commissioners followed their usual very careful practice of trying to get the cheapest and most effective supply for the people for whom they have to act, and that this intention is embodied in the Order that is now before us. There was much discussion when this Order came before the House and the compromise was agreed on of sending the matter to the Special Orders Committee. The Special Orders Committee have made a recommendation, which is supported before us by the Lord Chairman, and, speaking both on the merits of the case and on its technical aspects, I cannot help feeling that the course which the Lord Chairman has advised us to take is the only wise one. For that reason I am indisposed to join in the suggestions of Lord Ullswater and Lord Carson.


My Lords, I cannot help feeling that, if I had not been present during the various stages of the discussion of this matter in your Lordships' House and also at the meeting of the Special Orders Committee, I should probably have been found supporting the noble Viscount on the Cross Benches and agreeing with him that the Motion should not be accepted. But, having followed the matter from its very beginning and having been present at the meeting of the Special Orders Committee, it does seem to me that we cannot really do better than agree to the suggestion that has been made by the noble Earl, the Lord Chairman. When the matter came before your Lordships the position was most unsatisfactory. The fact that the Electricity Commissioners, through the Ministry of Transport, recommended one thing and that a Committee of your Lordships' House recommended another made the position already difficult. It was further complicated by the fact that the Chairman of the Committee was the noble Earl, Lord Clarendon, and that we therefore had two noble Lords on the Government Bench opposing One another upon a matter which, if not of great importance, did not look entirely satisfactory. It was in those circumstances that the matter was referred to the Special Orders Committee.

All these matters, especially in regard to electricity, are becoming more and more difficult and complicated and we are, I think, merely fumbling and finding our way towards a more satisfactory method of procedure. I do not suppose that, after the meeting of the Special Orders Committee which took place last week, we shall have a repetition of that which happened in the House before. I think it is very unlikely that we shall again find the Electricity Commissioners at variance with a Select Committee of your Lordships' House, and therefore the awkwardness of a fortnight ago is not likely to be repeated. In these circumstances I think the best thing we can do is to agree with the Lord Chairman. On the last occasion when the discussion took place in this House the Lord Chairman was supporting the Select Committee of your Lordships' House and it was then that I opposed the recommendation of the Electricity Commissioners. That position has passed away and the various combatants on that occasion are now in complete agreement. We have the noble Earl, Lord Clarendon, withdrawing his opposition to the recommendation of the Minister of Transport and we have the noble and learned Viscount who leads the Opposition and the Lord Chairman agreeing in the same course of action. Therefore I think that on the whole it is much better to agree this afternoon to follow out those various suggestions in the confident hope that this same difficult position is not likely to recur.

Amendment, by leave, withdrawn.


I have to move, as an Amendment to the original Motion, to add "with modifications." These are the recommendations of the Special Orders Committee to which the Lord Chairman referred last week.


These are the Amendments on the Paper.

On Question, Amendment agreed to, and the Motion, as amended, agreed to.