CENTRAL ELECTRICITY BOARD (INCREASE OF BORROWING POWERS) ORDER, 1930. (Hansard, 26 June 1930)

§ THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF TRANSPORT (LORD PONSONBY OF SHULBREDE)
My Lords, this Order which I am about to move, the Central Electricity Board (Increase of Borrowing Powers) Order, 1930, I think requires some brief explanation, as it is not quite the formal Order that usually comes under this category. It is a Special Order made by the Electricity Commissioners and confirmed by the Ministry of Transport in pursuance of the powers conferred by Section 26 of the Electricity (Supply) Act, 1919. The Order was presented to your Lordships' House on May 29 of this year, and the time for petitioning against it expired on June 19. The Order is applied for by the Central Electricity Board for the purpose of increasing their borrowing powers. Under Clause 2 the Central Electricity Board may borrow £50,000,000 (inclusive of the sum of thirty-three and a half million pounds mentioned in Section 27 of the Electricity (Supply) Act, 1926). The necessity for this has arisen because the work of preparation of schemes by the Electricity Commissioners has proceeded very rapidly and has now advanced almost to completion, with the result that, whilst the capital outlay will probably not have reached the £25,000,000 by the end of the first five years—that was the sum regarded as the Board's initial capital outlay by the Weir Committee, on whose recommendations the Electricity (Supply) Act of 1926 was founded—the Board is already faced with prospective commitments amounting to over £28,000,000. Extra expense has been incurred both by the substitution of underground cables—while the estimates were based on overhead lines—and through a deviation from routes originally selected.
It must be further taken into account that the total net costs of standardising the frequency throughout the country will eventually reach a figure of over £16,000,000. When the schemes came 179 actually to be prepared by the Electricity Commissioners, it was found that the estimates would be largely exceeded, due in great part to the lapse of time having led to a large increase of developments and apparatus installed. While there is still a wide margin between the borrowings to which the Electricity Commissioners have given consent and the maximum statutory borrowing power of £33,500,000 the completion of the schemes in hand or before the Board will involve capital expenditure in excess of that sum, and it is necessary that the statutory borrowing powers of the Board should be increased up to a sum of £50,000,000 in order that their commitments in carrying out the schemes adopted and to be adopted should be fully covered. No objections or representations were lodged in respect of the application for the Special Order or of its confirmation by the Minister of Transport, and the Treasury, to whom a copy of the Draft Order was sent, have intimated that they have no observations to offer thereon. I therefore beg to move that the Special Order as reported from the Special Orders Committee on Tuesday last be approved.

§ VISCOUNT HAILSHAM
My Lords, I should like to ask the noble Lord, as I took some little part in the passage of the Act of 1926, just two questions. First of all, can he tell us whether or not the increased borrowing to which he refers is to be covered by any Treasury guarantee? With the original £33,500,000 I think there was power to obtain the guarantee of the Treasury. I suppose that power does not extend to the increased amount for which he is now asking. Secondly I would like to ask whether the increase of capital costs which he indicates is likely adversely to affect the financial benefits accruing from the scheme, or prejudicially to affect the estimates as to the savings to the consumer which were anticipated when the Bill passed through Parliament.

§ LORD PONSONBY OF SHULBREDE
With regard to the noble Viscount's first question, the Treasury guarantee does not extend to this further sum; and with 180 regard to the second question, I do not think that the financial results will be in any way adversely affected by this new scheme.