HL Deb 30 November 1926 vol 65 cc1008-12

Minor Amendments of Electricity (Supply) Acts, 1882–1922.

Enactment to be amended. Nature of Amendment.

LORD MESTON moved, in the reference to the Electricity Supply Act, 1922, to insert

"S.5 … At the end of subsection (4) there shall be added the words 'but nothing in any 'such scheme shall be deemed 'to impose on any such 'authorised undertakers any 'liability to make any such 'contribution after the 'expiration of a period of 'not exceeding three years 'from the date of the 'constitution of the autho-'or body."

The noble Lord said: The purpose of this Amendment is to remedy a difficulty in the Act of 1922. Section 5, subsection (4), of that Act enables the Electricity Commissioners, when a new joint electricity authority is set up, to require the existing authorised undertakers in the area to contribute to the administration expenses of the joint authority.

At the time the 1922 Act was before this House the dangerous possibilities of this provision were foreseen and some objection was offered to the clause as it then stood. The noble Viscount defended the provision on the ground that, when a new joint electricity authority was set up, it would at first have certain small administrative expenses and it was only reasonable that the existing authorities in the area, the authorised undertakers, should help to meet those expenses. It was on that understanding—I do not put it any higher; it was a reasonable undertanding—that the opposition to the clause was withdrawn. Experience however, has shown that the actual practice has gone very far beyond what was then regarded as the intentions of the Act. Authorised undertakers in several parts of the country—I speak more particularly for the London supply companies which have not been absorbed in the joint electricity authority for the London area—are being forced by orders of the Electricity Commissioners to pay shares of expenses which are by no means initial and by no means inconsiderable, but, on the contrary, are both unlimited in time and in amount. A reference was made at an earlier stage of the evening to a case in which the joint electricity authority had opposed certain Bills promoted by the London supply companies. The London supply companies lost their Bills but they had to pay a share of the expenses of the joint electricity authority in offering their opposition.

When a joint electricity authority is first set up and has no factory of its own, when it does not make or sell current, it must have its preliminary expenses met in some way or other, and it is arguable that the undertakers already existing in the area should contribute to those expenses, but when once the joint authority is on its own legs, when it sells its own current and collects its own revenues, it seems only fair and reasonable that it should meet its own administrative expenses. It seems, on the contrary, extremely unfair and unreasonable that it should be able to pass on those expenses, or even a share of them, to supply companies in the area which are quite independent of it. That unfairness becomes still clearer when the joint electricity authority in question is in active competition with the independent companies which it is asking to contribute to its expenses. The position may actually arise of the joint electricity authority fighting the companies and at the same time feeding on them, forcing them to raise their charges to their own consumers in order that the charges of the joint electricity authority's consumers may be lightened.

That seems clearly unfair and opposed to the purpose of the section in the Act of 1922. What this Amendment proposes to do is to limit the liability which we always understood was to be limited but which the Electricity Commissioners are now in some respects making unlimited. We propose to limit it by a somewhat rule of-thumb suggestion that the liability should not extend beyond the first three years of the existence of the joint authority concerned. I beg to move.

Amendment moved— Page 45, line 22, at end insert the said words.—(Lord Meston.)

VISCOUNT PEEL

I understand that the noble Lord thinks that these joint electricity authorities ought not to raise money to meet these particular charges for a longer period than three years. He quoted some statement of mine made, I think, four years ago. I cannot tell without looking at it whether I may have slightly understated the particular expenses which would fall upon the joint electricity authorities and which they might have to charge upon their constituent bodies. I am not sure what is going to happen when this arbitrary three years is fixed. They have certain expenses and after the three years they are no longer able to raise them from the people from whom they did raise them.

I do not quite understand what is to happen. Are they going bankrupt? Surely they must raise them in some fashion or other, and though the noble Lord says they ought to be able to raise them because they are going concerns with incomes of their own, if they have not in fact incomes of their own the money has to be raised in some fashion. Surely it is not wise to say that after three years the contributors shall no longer be liable. You would get into almost an impracticable impasse. It may be that at some time these charges should cease to be made, but is not that the actual thing that would happen as soon as they have an income of their own? As soon as they have an income of their own they would deal with these charges themselves. What is going to happen at the end of three years if they have no income of their own?

LORD MESTON

The difficulty is that there is no compulsion on the part of the joint electricity authority even if it has reserves of its own to release the undertakings from the liability which the orders under the Act impose. Although the three years is an arbitrary suggestion, I am quite prepared to agree to any reasonable term longer than three years or any reasonable method of limiting liability. But I do feel that the liability in its present unlimited form goes far beyond the original intention and ought to be in some way restricted. If the noble Viscount is prepared to consider the matter from this point of view I am prepared to withdraw the Amendment.

VISCOUNT PEEL

I was only wondering while the noble Lord was speaking whether it would not be possible to make some arrangement that when they receive an income it would be their duty to relieve the contributors of charges. I will consider the point if the noble Lord wishes, but I think you cannot lay down an arbitrary period of three years.

LORD MESTON

I am very much obliged to the noble Viscount and I will withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD MESTON

I beg formally to move the Amendment standing in the name of Lord Oranmore and Browne to insert a new paragraph in the references to the Electricity (Supply) Act, 1922.

Amendment moved—

Page 45, line 22, at end insert—

("S. 5. … After the first proviso to subsection (1) there shall be inserted the words Provided also that no council of a county or borough or county district shall under the provisions of this section lend any sum or sums exceeding one million pounds or subscribe for any securities or join in guaranteeing the interest on any securities the nominal value whereof exceeds one million pounds unless authorised so to do by an Order of the Electricity Commissioners confirmed by the Minister and such Order shall be provisional only and shall not come into force unless confirmed by Parliament.").—(Lord Meston.)

VISCOUNT PEEL

The Amendment has not been presented in any way and has only been formally moved. I understand it may be out of order because it is an attempt to place statutory restrictions on third parties who are not concerned with the measure. It is an attempt to amend Section 5 of the Act of 1922 and the real effect is to bar the L.C.C. from action under Section 5 of that Act where the amount exceeds one million pounds. I confess that as no justification has been placed before me for this Amendment I am bound to resist it.

LORD MESTON

I do not press the Amendment.

Amendment, by leave, withdrawn.

VISCOUNT PEEL

My concluding Amendments are drafting.

Amendments moved—

Page 45, line 36, after ("to") insert ("an undertaking or part thereof in respect of which").

Page 45, Line 37, after ("authority") insert ("is").—(Viscount Peel.)

Sixth Schedule, as amended, agreed to.

Remaining Schedule agreed to.

LORD ASKWITH

May I ask when the Report stage will be taken?

THE EARL OF BALFOUR

Probably next week.