HL Deb 01 August 1928 vol 71 cc1543-52

Amendments reported (according to Order).

Clause 3:

Definition of industrial hereditaments.

3.—(1) In this Act the expression "industrial hereditament" means a hereditament (not being a freight-transport hereditament) occupied and used as a mine or mineral railway or, subject as hereinafter provided, as a factory or workshop:

Provided that the expression industrial hereditament does not include a hereditament occupied and used as a factory or workshop if it is primarily occupied and used for the following purposes or for any combination of such purposes, that is to say—

  1. (a) the purposes of a dwelling-house;
  2. (b) the purposes of a retail shop;
  3. (c) the purposes of distributive wholesale business;
  4. (d) purposes of storage;
  5. (e) the purposes of a public supply undertaking;
  6. (f) any other purposes, whether or not similar to any of the foregoing, which are not those of a factory or workship.

LORD ASKWITH, on behalf of Lord Gainford, moved to leave out paragraph (e) and to insert at the end of subsection (1):— Provided also that a hereditament forming part of a public supply undertaking shall not be deemed to be an industrial hereditament to the extent to which it is occupied and used for supply to a hereditament primarily occupied and used for the following purposes or for any combination of such purposes, that is to say:—

  1. (a) the purposes of a dwelling-house;
  2. (b) the purposes of a retail shop;
    3. 1544
  3. (c) the purposes of distributive wholesale business;
  4. (d) purposes of storage;
  5. (e) any other purposes, whether or not similar to any of the foregoing, which are not those of a factory or workshop;
or, if the hereditament is primarily occupied and used as offices for, or for purposes ancillary to the general direction and management of the public supply undertaking:

Provided also that no such hereditament shall be deemed to be an industrial hereditament unless the undertakers in the charges from time to time made by them to occupiers of industrial hereditaments transfer to such occupiers the benefit of any relief from rates."

The noble Lord said: My Lords, I have been asked to move these Amendments which stand in the name of Lord Gainford. The second Amendment does not entirely exclude the purposes of a public supply undertaking, which the pure deletion of paragraph (e) would do, but brings it in again with alterations. This question arose upon an Amendment moved at a previous stage by Lord Thomson, and Lord Gainford called attention to the question of electricity, and said he would put down an Amendment for this stage. This has now been done. It does not go as far as Lord Thomson's original Amendment, but it deals with electrical undertakings. It is supported by companies which represent a capital expenditure of over £217,000,000, and which have an output of electricity exceeding seven billion units per annum. It appears to me to be a reasonable Amendment. It is in accordance with the whole principle of the Electricity Acts, which were passed a year or two ago—the principle of the electric supply of the country being carried on by big undertakings, and of enabling those big undertakings to supply electricity everywhere by big power stations and a system of "grids." This Bill as it stands, instead of encouraging the big public undertakings, would encourage private undertakings, and I suggest that it would be more expensive both for them and for the public undertakings. The more electricity those public undertakings can sell the less price will they be able to charge. They would further be enabled to extend their business so that they could reach the rural districts in a manner that would not otherwise be possible.

According to this Bill 75 per cent. of the rates would be taken off private under- takings, but the public undertakings would have nothing taken off. Under this Amendment the public undertakings would have rates taken off them in proportion to the amount of electricity supplied to private works, which could easily be arrived at by a simple arithmetical sum, in the course of the year; and the final proviso in the Amendment dots the i's and crosses the t's in order to show that they do not propose to get anything out of it, except what would put them on a fair basis as compared with the other undertakings. Many instances might be cited of how this would work, particularly in the North of England. You might have two collieries, for instance, one taking electricity from a public company, the other making it themselves. The latter will have a heavy percentage taken off their rates; the other colliery would have nothing taken off, and would have to take the electricity from the public company with a hampering charge upon it, or else go to the great expense of putting up a private electrical plant of their own, which would be contrary to the principles of the Electricty Act. I need only repeat that the calculations could be done quite easily. They involve an arithmetical sum which could be done by a child of twelve. I did one this morning, and worked it out with such simplicity that I was rather amazed at my power of doing it. So it is that, on behalf of the noble Lord, Lord Gainford, I desire to move these Amendments. The noble Viscount who is in charge of this Bill stated in his speech on the previous stage that the whole object of the Bill was, as far as possible, that the benefit should be passed on to these productive industries, and these Amendments will, I think, achieve that result. This will be fair to the big production companies, and in proper relation to the principle of the Electricity Supply Acts which are already the law of the land. I beg to move.

Amendments moved— Page 3, line 23, leave out paragraph (e) Page 3, line 26, at end insert the said new proviso.—(Lord Askwith.)

VISCOUNT ELIBANK

My Lords, I support the Amendment which has been moved by my noble friend Lord Askwith because, if the Bill were to pass in its present form, I think it would do a great deal of damage to industrial undertakings which are already linked up to a supply from public sources. The noble Lord has stated the case very clearly, but I think I might elaborate the point he made in comparing the position of two collieries. I might go further and bring it down to figures. Supposing there were two factories, one of which obtained its supply from private sources at an all-in cost of a halfpenny per unit and the other, turning out the same class of goods, obtained its supply from the public source at the same cost of a halfpenny per unit. As the Bill stands to-day, the factory obtaining its supply from the private source would get a reduction of 75 per cent. upon the rates. What would that actually mean? That one of two factories turning out exactly the same class of goods in competition with each other, would suddenly find itself with a considerable advantage over the other. It might be only a few hundred pounds, but your Lordships know how very close cut these businesses are to-day. The factory receiving its supply from the private source would find itself with that advantage over the factory receiving its supply from the public source. That alone, I think, makes a very strong case for this Amendment. But I venture to go further and to say that the Bill as it stands cuts into the success of the original Electricity (Supply) Act which was passed by the present Government last year. I hope that His Majesty's Government may see their way to accept this Amendment especially in view of the fact that at the end of the Amendment it is provided that any reduction which might be given by way of reduction of rates to the public supplies shall be passed on to the consumers.

VISCOUNT PEEL

My Lords, Notice of this Amendment, I understand, was given by Lord Gainford, but the Amendment has now passed into the very skilful hands of my noble friend Lord Askwith. He stated the case, as he always does, very clearly and I rather regret that I find it very difficult to accept the Amendment. In fact I have several objections to it; first of all, on financial grounds; secondly, on technical grounds; thirdly, on practical grounds; and, fourthly, on the merits. I will say a word on each of those heads of criticism. First of all, my noble friend has treated the subject as if this applied purely to electricity undertakings. I think my noble friend Lord Elibank was led into that path by my noble friend Lord Askwith who started upon it. Of course, it is far away from electricity undertakings.

VISCOUNT ELIBANK

If my noble friend will forgive me, I realise that it applies not only to electricity but to gas, water, and hydraulic undertakings.

VISCOUNT PEEL

I am very glad my noble friend realises that, because I only gathered from his speech what he happened to deal with. That enlarges the scope of the Amendment immensely, because it is really a proposition for the substantial derating of all these different subjects as public supply undertakings—electricity, hydraulic, water, and so on. The first point I want to make is that it is a far wider measure of derating than was suggested by my noble friend Lord Askwith, because it embraces all these different undertakings. I stated in reply to the noble Lord, Lord Thomson, a day or two ago, that the derating of gas and electricity undertakings alone would amount to about £3,000,000. Obviously, I cannot give exact figures in this case because it is a partial derating of all these different undertakings. But it is obvious that if you were to derate, or could derate, all these undertakings, as to three-quarters, so far as they supplied industrial or productive enterprise, it would need a very considerable sum, and would mean a very considerable additional charge upon the taxpayers. Neither of my noble friends has explained how he proposes to pass on the benefit of this derating to the industries concerned.

On the technical side, first of all, I never wish to make too much of technical points, but of course this Amendment comes in the wrong place, because Clause 3 deals with definitions and not with apportionment. And the last portion of the Amendment deals with relief and the allocation of relief, which, of course, is alien altogether to this Bill and will be dealt with in the Bill which will be introduced later in the year. Therefore on technical grounds it will not be possible to accept an Amendment of this kind in this Bill.

Then on the practical ground, there is the question of the difficulty which would arise as to the calculation of the derating of these particular undertakings in proportion to the amount which they supplied to industrial undertakings. My noble friend said he was struck by the ease with which he made this calculation. He is a mathematician of considerable standing, and what may be easy to him certainly would not be easy to a large number of valuers and others. Theoretically, I suppose, it is possible to make some distinction. You could ascertain the amount, the number of units or the cubic feet of gas supplied to these different industries, and add them together and make some comparison with the number of cubic feet and the number of units supplied to other industrial undertakings. You could take the receipts from the industrial undertaking and compare them with all the other receipts, but these figures are constantly shifting and I am advised by those who have gone into the subject that it Would be a very difficult matter indeed definitely to make all these ascertainments, that it would require a great deal of accounting, and that it would add very substantially to the charge in administering the measure.

As regards the question of merits, both my noble friends dwelt on this point and said that the public supply undertakings, especially this great electrical scheme under the Act of 1926, would be to some extent handicapped, because they would not be derated, whereas if an industrial undertaking supplied itself with its own electricity it would be derated to the extent of three-quarters as regards that undertaking. That, I think, in some cases would be so, but I am advised again, with respect to the incidence of rates, that it would not be very great and that it is extremely unlikely any industry would find it worth while to set up an electrical power producing plant in order to get the advantage of this derating by supplying itself when it could get its electrical supply from public undertakings. I think this point is made far stronger by the electrical development scheme itself. My noble friends will remember what that scheme originally was. It was for concentrating all the production in a few selected power stations, and for distributing the power by means of the "grid" at the smallest possible cost all over the country. I have had some experience in this matter and it seems to me extremely unlikely that they would be able to supply themselves at a cost less than the amount per unit of power supplied by this great scheme, assisted as it would be by Government guarantee in certain quarters.

I cannot think of any industry that would deliberately set up an electricity installation of its own in order to take advantage in that way of derating as against the supply it would be able to draw from the public undertakings. But even if some of your Lordships may differ on that point, I would submit that the Amendment is not practicable at this stage, that it would be very hard to work, and, in addition to all the other objections, it would lay a considerable charge on the ratepayer and would increase considerably the cost of the scheme.

LORD THOMSON

My Lords, I rise to support the Amendment on the general principle that half a loaf is better than no bread. In point of fact this Amendment goes a considerable part of the way in the direction which my original Amendment, indicated. I am not prepared to discuss the technical side of the question with the noble Viscount, who is far more versed in these matters than I am. He continually harps on the question of the shortage of money and of there being so little to go round that it should be distributed in the best possible manner. I submit that that consideration has been passing from the minds of the Government when they decided that the relief that is going to be given should be given to such highly prosperous concerns as breweries, manufacturers of perfumery and other flourishing concerns in this country. We have made that point all along. We have stressed that under this Bill wealthy and prosperous concerns get a benefit while the small shopkeeper and householder get nothing. An injustice has been clearly shown by the noble Lord, Lord Askwith, in regard to these public utility concerns, and it seems to me that these injustices are characteristic of the whole measure. For that reason, if the noble Lord goes to a Division, I shall have the greatest pleasure in voting with him.

LORD PARMOOR

My Lords, I should like to say one word in support of what my noble friend Lord Thomson has said. It is quite clear that there may be difficulties in the application of the Amendment moved by Lord Askwith (which I entirely support) but that has only been brought about by the absurdity of the original proposal. However, I am not going into that at the present time. When you look at the absurdity of the original proposal you realise that it is almost impossible to begin setting it right, except by some such proposal as is now before the House. It is similar to the sliding scale in operation in the case of gas companies. Its object is to provide a scheme whereby the consumer shall get the benefit of this proposal. That is at the bottom of what Lord Askwith really means, and I sympathise with him and shall support his proposal.

LORD ASKWITH

My Lords, I will say a few words in answer to what the noble Viscount has said. He has grounded his opposition to a certain extent upon the expense. Although it may cost a comparatively small additional sum I would point out that it is carrying out the policy of the Electricity Acts, and is giving justice to one consumer as against another. It would be penny-wise and pound-foolish not to pass an Amendment of this kind, and so put the consumers on an equality in order that they may obtain electricity at equal rates in the same industry. The noble Viscount also laid great stress upon the difficulties. As I have already said in general terms it is the easiest matter of accounting possible. I am informed that it would be done in this way. The revenue received from the supply hereditament will be a known sum, the rates relief to the supply authority will be a known sum, and the percentage of relief to the revenue will be easily ascertained so that the industrial hereditament shall receive its proper abatement. That is as easily done as any ascertainment made upon the returns of companies to the end of the year, and it would give the consumer who takes his supply from the central generating station the same rate as the consumer who generates by a private plant. Otherwise you get inequality and unfairness. I do not think the Government have given sufficient consideration to this Amendment, which Lord Gainford mentioned on the last occasion and which the noble Viscount then said he would consider. I propose to stick to the Amendment and to take the opinion of your Lordships' House upon it.

Resolved in the affirmative and Amendment disagreed to accordingly.

Then, Standing Order No. XXXIX having been suspended:

VISCOUNT PEEL

My Lords, I beg to move that this Bill be now read a third time. There is just one observation I want to make, because the noble Lord, Lord Thomson, asked me to look into the question of the meaning of the word "staith" again to see whether or not it was covered by the words in the Bill. It has been looked into very carefully and I am advised that it is covered. If it is not covered by the word "wharf" or "jetty" it certainly is covered by the words "other works in or at which vessels can ship or unship merchandise." The noble Lord may rest assured that in the opinion of high technical authorities the word "staith" is covered.

LORD THOMSON

I thank the noble Viscount.

Moved, That the Bill be now read 3a.—(Viscount Peel.)

On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.

On Question, Whether the words proposed to be left out shall stand part of the Bill?

Their Lordships divided:—Contents, 35, Not-Contents, 16.

CONTENTS.
Canterbury, L. Abp. Iddesleigh, E. Darling, L.
Lucan, E. [Teller.] Dawnay, L. (V. Downe.)
Hailsham, L. (L. Chancellor.) Malmesbury, E. Fairlie, L. (E. Glasgow.)
Plymouth, E. [Teller.] Gage, L. (V. Gage.)
Salisbury, M. (L. Privy Seal.) Sondes, E. Greenway, L.
Stanhope, E. Hamilton of Dalzell, L.
Argyll, D. Stradbroke, E. Hayter, L.
Howard of Glossop, L.
Bath, M. Hutchinson, V. (E. Donoughmore.) Hunsdon of Hunsdon, L.
Merrivale, L.
Airlie, E. Peel, V. Merthyr, L.
Bradford, E. Younger of Leckie, V. Mildmay of Flete, L.
Cranbrook, E. O'Hagan, L.
Grey, E. Cushendun, L. Wraxall, L.
Howe, E.
NOT-CONTENTS.
Reading, M. Bertie of Thame, V. Illingworth, L.
Elibank, V. Olivier, L.
Beauchamp, E. Arnold, L. Parmoor, L.
De La Warr, E. Askwith, L. [Teller.] Stanmore, L.
Drogheda, E. Clwyd, L. Thomson, L. [Teller.]
Russell, E. Forester, L.