HL Deb 25 June 1925 vol 61 cc791-802

Order of the Day for the Second Reading read.


My Lords, the objects of this Bill are to put statutory gas companies on the same footing as other gas companies in reference to obtaining electricity powers from the Electricity Commissioners, and to empower the Electricity Commissioners to grant money powers to such companies and to statutory gas companies already authorised to supply electricity. As matters now stand, such companies must promote Acts for either of these purposes. The present position is that in many of the rural districts of England people are becoming awake to the fact that electricity, as a means of supplying light, is more satisfactory than gas, and many of the statutory gas companies are willing and anxious to supply such electricity out of their superfluous power. As things are now, before they can do that, they have to promote a Bill in Parliament and the cost of promoting such a Bill is in some cases prohibitive, and especially so in the case of the smaller companies. As to the larger companies, they have in twenty-four cases promoted such Bills and these powers have been granted to them by Parliament.

The objection which my noble friend Lord Banbury of Southam has to this Bill is, I understand, this: that it will increase the powers of the bureaucracy at the expense of the powers of Parliament. I think my noble friend may be fighting in a good cause, but so far as this question is concerned it is a lost cause. By the Gas Regulation Act of 1920, powers which had been previously exercised by Parliament in connection with gas companies were transferred to the Board of Trade, and by the Electricity Supply Act of 1922, the functions which had previously been exercised by Parliament in connection with electricity were transferred to Electricity Commissioners. The Electricity Commissioners are now empowered to deal with something like 90 per cent. of the applications made to Them for a grant of electricity powers, and the only people whose applications they cannot deal with are these statutory gas companies. There are certain Amendments to this Bill which have been drafted by the Government Department concerned, and if your Lordships give it a Second Reading I propose to put them down for the Committee stage. In conclusion I would only say this. If your Lordships do not give a Second Reading to this Bill, you will be affirming no principle, and merely making it more difficult for people in rural districts to obtain electric light. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Raglan.)


My Lords, I rise to move the rejection of this Bill on these grounds. The Bill takes away front Parliament powers which, I might say almost from time immemorial, it has exercised, and bestows them upon a body of persons called the Electricity Commissioners. I do not know who those Commissioners are. They may be, and probably are, a most excellent body, but no one knows who in the future these people will be, and it seems to me that it is a very great mistake to take from Parliament powers which it already has, and bestow them on bodies which are practically responsible to no one. Moreover, I would like to draw your Lordships' attention to this fact. These are powers of a valuable nature. The Commissioners, if this Bill is passed, will be able to grant concessions which have a pecuniary value. I do not think it is necessary for me to say that that power might be subject to corruption. Where a body of people have power to grant concessions which have a pecuniary value, it is not improbable that at some time or another unjust pressure will be put upon them to grant these concessions. Not only have they power to grant concessions to these gas companies to supply electricity, but they have power to grant them permission to borrow money and to raise capital. Up to the present time, if any statutory company desired to borrow money or to raise capital, it had to come before Parliament, and the matter was thoroughly investigated.

The position now is that the Electricity Commissioners may give power to a certain company, which is perhaps not very well off, to borrow money, and to put that money in front of its existing debenture stock. That that is not an improbable event I will show your Lordships. A good many years ago, when I was a member of the House of Commons, one evening late I found a Bill which gave powers to a small railway company—I think it was an Irish railway company—to borrow money, and to put it in front of its debentures. Mr. Ritchie, who was then Chancellor of the Exchequer, was the member of the Government in charge of the House, and I pointed cut to him that this was a very serious thing, and that I hoped he would help me in resisting it. His reply was that something of the same sort had already been done—very much the argument which has been used by my noble friend to-day, that because something has been done once you must go on doing it, whether it is good or bad. There was only one other railway director in the House at that time, and I could not get him to support me. I divided the House, but I only got a very small number of votes. However, I went to the late Lord Avebury and told him what had taken place. He moved the rejection of the Bill in your Lordships' House, and carried his Motion. Since then we have never heard anything more of any attempt to put money in front of any existing debenture stock, and, so far as I know, that particular railway lost nothing by what happened.

This Bill enables the Electricity Commissioners to grant powers to statutory gas companies to supply electricity in an area in which an electrical company has already got electricity powers, which powers have been limited by Parliament. Their dividends have been limited, their charges have been limited, and they are obliged to sell their concerns to the local authority at the expiration of a certain number of years. It may be said that the Board of Trade would never give their consent to anything of that sort, but I should like to draw your Lordships' attention to Clause 2 of the Bill which says: The Electricity Commissioners may also by Electricity Orders subject after consultation in each case with the Board of Trade"— It is not subject to the approval of the Board of Trade, but after consultation with the Board of Trade. In my opinion it is a mistake to part with Powers which safeguard the property of individuals in this country even to a Department. The Board of Trade at the present moment may be, and probably is, a very excellent Department, but no one knows what it will be in the future and if the Party so ably represented by the noble and learned Viscount opposite comes into power, very different views may obtain in the Board of Trade. We know that certain members of the Labour Party have said that one way of nationalising industries is so to injure them that they cannot pay their way and the nation must step in and nationalise them. Therefore I do not think we ought to rely for all time upon what the Board of Trade may be.

If you turn to Erskine May's Parliamentary Practice, you will find this:— Bills for the particular interest or benefit of any person or persons are treated in Parliament as Private Bills. Whether they be for the interest of an individual, of a public company or corporation, or of a parish, city, county or other locality, they are equally distinguished from measures of public policy— I contend that this applies to the Bill now before your Lordships' House. If you read a little further on you will find this:— Passing now to the existing practice, the proceedings of Parliament in passing Private Bills, are still marked by such peculiarity. A Bill for the particular benefit of certain persons may be injurious to others"— that is exactly what I say this Bill may be— and to discriminate between the conflicting interests of different parties involves the exercise of judicial inquiry and determination.… In passing Private Bills, Parliament still exercises its legislative functions, but its proceedings partake also of a judicial character. And if you read a little further on you will find, in the list of Bills which are given on page 676 as being Bills which should be Private Bills, Electricity Supply and Gas Work.

I have been told by a great authority that all this is quite true and that if this Bill related to two or three gas companies, or to the gas companies in London or Birmingham or any other large town, I should be perfectly right in saying that it was a Private Bill and not a Public Bill. But because it relates to all gas companies in the country it is said that it is not a Private Bill at all, and it may be a Public Bill. That is to say, five or six people may not do a thing but ten or twelve people may. With all deference to my high authority, for whom I have great respect, I say that, although that may be a correct argument from the legal point of view, it certainly is not common sense. I attach great importance to this Bill for the very reason which the noble Lord who moved it advocated. He says that it has been done before. I remember the late Sir Charles Dilke saying, in the House of Commons, that it was no use saying you had precedents, one bad precedent does not make two good precedents; and I think he was absolutely right. If you once allow bodies like the Electricity Commissioners or Departments —I include Departments because of late years they have been very anxious to obtain powers for themselves which ought to be reserved for Parliament—to obtain these powers, you do not know what injury you may do to private people.

I was Chairman of the Committee on National Expenditure, and I was also on the Canteen Committee in 1923. I have a very great opinion of the old Civil Service. They were an example to any similar institution in any country, but I cannot say the same of the latter portion of the Civil Service where they have been exposed to temptation and have had valuable powers given them. If your Lordships will excuse me, I will read two or three sentences from the Report of the Committee on Army and Navy Canteens which sat in 1923:— In July, 1919, a former employee of the Board, Mr. Walter Hyde, became associated with Mr. Blake, and almost immediately thereafter Mr. Blake began to buy large quantities of goods from the Board. Major Boyd, who was the official in charge, stated on oath that he was not a friend of Mr. Hyde, but the Committee obtained letters which had passed between Major Boyd and Mr. Hyde, and the first letter began: "My dear Arthur," and the reply from Major Boyd began: "My dear Walter." In this letter, which I will not trouble your Lordships by quoting, Major Boyd says that he is in some little difficulty owing to his friendship with Mr. Hyde and is doing everything he can to make the position as easy as possible. That is what I am afraid may result if certain people are given powers which have a pecuniary value.

I am not against these various gas companies having these powers, but let them obtain them in the ordinary and proper way. I have here the statement given me by the promoters of this Bill. They say that already twenty-four gas companies have got these powers in the ordinary way—I make the number twenty-one. But I hope your Lordships in rejecting this Bill, as I hope you will, will do it not because you object to the companies having the powers they desire, but because you consider they should obtain them in the proper way, and that the control of Parliament, which is a valuable control and has been in existence for many years, should still continue.

Amendment moved— Leave out ("now") and at the end of the Motion insert ("this day three months").—(Lord Banbury of Southam.)


My Lords, before any announcement is made, there are one or two questions I should like to ask. My difficulty about this Bill arises from wholly different reasons to those of the noble Lord who has just spoken. He dreads the Electricity Commissioners. He speaks of them as if they were some new body projected into the political firmament and exercising influence of which he knows nothing, and which he fears may be malign. The Electricity Commissioners came into existence after the Electricity Act of 1919, and they are one of the most important bodies that we have connected with the electricity interest. It is a very high-class Commission, comprised of very eminent men of great knowledge and great integrity, and their function is a very important one. This country has scattered all over it a vast number of small generating stations and supply organisations, and the functions of the Electricity Commissioners are, so far as they can, to get these together in order to prevent the waste that is going on to a very serious extent to-day, by bringing them into groups. Nearly every week—I think we may say every week—the noble Viscount opposite moves to approve a lot of Orders which they have made for the purpose of bringing people, whom they have to get together by negotiation, into groups of this kind. Accordingly, I think that the Electricity Commissioners are a very valuable body: where we should be without them I do not know.

But there is another consideration. The powers of the Electricity Commissioners are very limited powers, because this House thought fit to cut out of the Bill of 1921, and again out of the Bill of 1922, anything like compulsory powers. The result is that they have to proceed by negotiation and by withholding powers which it is within their discretion to confer in proper cases. But they use their powers in relation to, and are restricted in the use of their powers to, authorities and companies which are generating and distributing electricity. I do not know how these gas companies are going to come in. It may be that they do, but I suspect that the twenty-four cases to which the noble Lord alluded were cases where they have got through Bills before this system came into operation and have special powers and privileges.


May I interrupt the noble and learned Viscount? I see that two of these Bills were passed in 1923.


Two Bills? There it is, you see. It is done by Private Bills and not by Orders of the Electricity Commissioners. What I want to know is upon what ground it is sought to bring these gas companies within the scope of the operations of the Electricity Commissioners. I am far from hostile to gas or to the gas companies. I think that in the end it will prove that they will co-exist along with the suppliers of electricity, and that you will have two very valuable adjuncts to the public interest. But I am not prepared to say that any gas company can take the position of an electricity supply company or an electricity supply authority. I do not know, and I hope we shall be told, how it is, why it is, and on what footing, the gas companies are seeking to come in.


May I interrupt the noble and learned Viscount for one minute? It was impossible to obtain that information because this Bill passed the House of Commons at 11.30 or 12.30 at night, and was taken through all its stages without any discussion at all.


That may very well be, but this Bill asks that the statutory gas companies may apply for special Orders under the Electricity Supply Acts, 1882 to 1922. These Orders are now given by the Electricity Commissioners, and apparently what they want is to come in as if they were ordinary producers of electricity, either as municipal corporations or as public electricity companies. Lord Raglan did not tell us on what footing they want to come in. If they want to come in as s sort of outside suppliers of electricity, outside the scheme laid down by the Statutes of 1919 to 1922 and outside the control of the Electricity Commissioners, then I object to them very much, for it is only reintroducing confusion where we have with great difficulty got rid of it. If, on the other hand. they want to come in under the roof of the Electricity Commissioners, then I want to know whether they are the kind of people who naturally come in under that roof.

Who are they, and for what purpose do they want electricity? If it is for the purpose of their business, they will get it as soon as the scheme has passed through, because there will then be a large distribution at a cheaper rate than at present and gas companies will get supplied like any other customer. But why they should wish to come in under the scheme of the Electricity Commissioners and under the Statutes to which I have referred, I really do not know. I think there is some confusion of thought about this. Either they are people who would come in without being specially named, in which case no legislation is wanted; or they are people for whom legislation is wanted, in which case I doubt whether they are people who ought to come in. It is information on that head that I want in order to know how to vote.


My Lords, I have no special knowledge which would enable me to answer the question just asked by the noble and learned Viscount, but it seems to me, if I understand Clause 1, to be quite clear what is intended. A gas company that got powers through this Bill would come in under the Electric Lighting Acts and would supply electricity in the same way as either a municipal corporation or a public company would supply electricity, and, of course, it would come in under the scheme of the Electricity Acts. That being so, I think it is quite right that the Electricity Commissioners should be regarded as the proper Government Department to watch over them, if no more than that is intended—and I believe that no more than that is intended.

If I may now refer to the speech of my noble friend Lord Banbury of Southam, I hope he will forgive my saying that in the course of his remarks I found myself agreeing with a good deal that he said, but I am bound to say that if I had been confining my speech to this Bill I should not have said any of those things. My noble friend, first of all, raises the point that this ought to be a Private Bill, subject to Private Bill procedure, and not a Public Bill. I have no more authority than any of your Lordships on that point, but I am quite convinced that this is an erroneous view. Your Lordships are, of course, aware of the procedure under which all Bills come. They are examined by responsible officials who, if they think that the Standing Order should in any way apply, exercise their responsibility, subject, of course, to the supervision of your Lordships' House, and refer this Bill to the Examiners. I understand that the proper authorities have been into that question in the case of this Bill and have decided without hesitation that it is a Public Bill, in the sense in which we all generally understand it, and I have no doubt whatever that their decision is right. After all, this Bill, submitted for approval to your Lordships' House, is a Bill of purely general application and does not affect any private rights.

Certain figures have been quoted to your Lordships. We have been told that in either twenty-one or twenty-four cases Parliament has given power to authorities to supply both gas and electricity. If I had made the first speech I should have put the number at twenty-five, but I am not quarrelling over one or two eases. It is fair to say, I think, that this figure is independent of municipal authorities. There are scores of municipal authorities in the country who supply both gas and electricity, and it is a public convenience that they should do so. I am not afraid, on the point which has been elaborated, and quite rightly so, by my noble friend Lord Banbury, of the danger—he foresees danger, but I do not—of giving these rowers to the Electricity Commissioners, and for this reason. The noble Lord seemed to think that there would be danger of undue pressure being brought upon them. Perhaps there would. Public Departments are there to have pressure brought upon them. But the whole thing is subject to the review of Parliament.

In giving power to enable gas companies to apply to the Electricity Commissioners to make special Orders authorising them to supply electricity, Parliament has not finished with the matter. These special Orders remain subject to the approval of Parliament in each individual case, and I am not, therefore, afraid of any danger in this respect. On the question of principle, there is no doubt whatever that Parliament is willing that very often in particular cases the same authority should supply both gas and electricity, and I believe wisely so. I do not regard the Bill with any fears, but as merely a useful piece of Parliamentary machinery, within the power of Parliament, and I believe your Lordships will be wise if you read it a second time. If it ultimately receives the Royal Assent I believe it will facilitate matters much more than it will create difficulties.


My Lords, I would like to say one word from the point of view of the Ministry of Transport. As the noble and learned Viscount opposite raised his very interesting point, I thought he was going to proceed to speak on the question of generating stations, but he did not do so. Generally speaking, the Government do not regard this Bill with any disfavour, but are quite ready that it should receive a Second Reading. I do not think I need deal with the points which have already been dealt with by the noble Earl, the Chairman of Committees, but perhaps he will allow me to add this point, on any new procedure, which I believe has already been alluded to by the Leader of the House. Of course, if there were any unusual feature in any of these Orders it would come before the Committee which is to be set up, who would at once report upon the subject. The noble Earl also referred to the fact that as electricity authorities these gas companies would, of course, come under the control of the Electricity Commissioners and Electricity Acts.

I do not suppose that the effect of this Bill will be very large. What I understand is that there are, in some parts of the country, areas not really supplied with electricity at all, and where, I think rather as a temporary measure, it may be convenient for the gas companies to raise money or apply some of their money to the supply of electricity to those who want it. Of course, the noble Lord is well aware that the Electricity Commissioners are forming these authorities all over the country and hoping that electricity will be supplied from large generating stations on a, far more economical scale than at present. All these matters are fully within the cognizance of the Commissioners, and I think we may have every confidence that they will not sanction any Orders where the setting up of generating stations would interfere with large scale schemes or with the supply of the cheaper electricity which we hope will be produced. Therefore I say, on behalf of the Government, that I think there can be no harm in passing the Bill, knowing that the larger points will be fully safeguarded by the Electricity Commissioners.


My Lords, I am not an expert in these matters, but I have here some information which I think may answer the points raised by the noble and learned Viscount. The difficulty in the way of statutory gas companies obtaining electricity powers is felt more than ever at the present moment, owing to important developments in connection with the cheaper production of electricity, by which surplus heat arising from the process of gas manufacture, which has hitherto been wasted, is now being utilised for the generation of electricity. This process is now being largely adopted in large gas works, such as the Gas Light and Coke Company's works, for the production of electricity for use in their own works. Smaller companies have no use, or very little use, for electricity in their gas works, but the surplus heat referred to could be utilised for generating electricity for the purpose of a public utility supply, at a cost, too, at which it would be quite impossible for an electricity company, operating on a similar scale, to generate. I do not know whether that answers the noble and learned Viscount.

On Question, Bill read 2a, and committed to a Committee of the Whole House.