ELECTRICITY (SUPPLY) BILL. [H.L.] (Hansard, 30 April 1934)

HL Deb 30 April 1934 vol 91 cc831-902 831

§ Order of the Day for the House to be put into Committee read.

§ Moved, That the House do now resolve itself into Committee.—(The Earl of Plymouth.)

§ On Question, Motion agreed to.

§ House in Committee accordingly.

§ [The EARL OF ONSLOW in the Chair.]

§ Clause 1:

§ Arrangements between Central ElectricityBoard and authorised undertakers.

§ 1.—(1) Notwithstanding anything in the Electricity (Supply) Act, 1926, the Central Electricity Board shall have power and shall be deemed always to have had power under that Act to make arrangements with any authorised undertakers who are the owners of a generating station which is not a selected station, for the following purposes, that is to say,—

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(a) for regulating the manner in which and the purposes for which the station is to be operated and maintained or for securing that the station shall cease to be used as a generating station;
(b) for the supply of electricity, on such terms as to payment and other matters as may be agreed,—

(i) to the Board by the undertakers;
(ii) to the undertakers by the Board;

§ (2) A generating station shall not be deemed to he a selected station for the purposes of this Act or the Electricity (Supply) Act, 1926, unless it is specified in a scheme for the time being in force under that Act as a selected station.

§ (3) Nothing in this section shall empower the Board to supply electricity directly to any undertakers to whom they would not otherwise be entitled to supply electricity directly.

§ THE MARQUESS OF BATH
had given Notice to move, in subsection (1), to leave out "arrangements" and insert "agreements on such terms as to payment and other matters as may be agreed." The noble Marquess said: As I understand that my noble friend in charge of the Bill has put down an Amendment which covers the point I had in mind, I do not propose to move this Amendment. I should, however, like to ask him whether he would accept the word "agreements" instead of "arrangements." I am not an expert, but I am told that the word "agreements" has a legal meaning, while nobody quite knows whether "arrangements" has a legal meaning.

§ THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR THE COLONIES (THE EARL OF PLYMOUTH)
I am advised that the way of dealing with this difficulty proposed in my Amendment is the better one. So far as the word "arrangements" is concerned I think your Lordships know that that word is constantly used in all the Electricity (Supply) Acts, and I am advised that for the sake of uniformity it is important that we should retain the word "arrangements" in this particular context. Your Lordships will notice that in my Amendment the word "agreed" appears and perhaps that may relieve any fear in the mind of my noble friend.

§ VISCOUNT FALMOUTH moved, in subsection (1), to leave out "with any authorised undertakers" and insert 833 "directly or indirectly through any authorised undertakers with any other authorised undertakers." The noble Viscount said: The object of this Amendment, is to clear up a certain amount of ambiguity arising out of Clause 1 as it now stands. At the present moment in areas operated by authorised undertakers in the form of a joint electricity authority or a power company there may be a number of non-selected stations owned neither by the joint electricity authority nor by the power company. As the clause now stands it would appear impossible for the Central Electricity Board to negotiate with non-selected stations operated by undertakers who are neither the joint electricity authority nor a power company in the area. If these words were inserted in the Bill it would clear up the situation and make obvious what I think is the intention.

§ Amendment moved— Page 1, line 9, leave out ("with any authorised undertakers") and insert ("directly or indirectly through any authorised undertakers with any other authorised undertakers").—(Viscount Falmouth.)

VISCOUNT ELIBANK
I hope the Government will not accept this Amendment because it goes very much further than was contemplated when the Bill was introduced. Your Lordships will remember that on the Second Reading of this Bill the noble Viscount, Lord Falmouth, dealt with a case in connection with Wimbledon which I mentioned. In the course of his speech he pointed out that arrangements had been made for the undertakers there to give supplies at reduced rates. This clause deals with arrangements made with authorised undertakers direct, and I can see no reason why the clause should be widened in order to include arrangements which may be made through other undertakers with those authorised undertakers. Already, as a result of this clause, it may be that consumers in other areas will have to bear additional charges because of arrangements come to under this clause, but why this should be widened to include arrangements made through other undertakers as well I cannot see, and I hope that my noble friend Lord Plymouth will not accept this Amendment.

§ LORD ASKWITH
I support my noble friend Lord Elibank in this matter. The 834 Central Electricity Board themselves do not claim such a power as this; they have not made any suggestion that it should be extended. Now it is put forward apparently in the interests of certain arrangements which appear to have been made, and it is proposed to give power for arrangements of that kind to be made in the future. ht is an invasion of the rights of other people and it is most unsatisfactory. I hope the Government will stick to the clause.

§ THE EARL OF PLYMOUTH
As a matter of fact the Government are prepared to accept in principle the Amendment which the noble Viscount has moved, though we do not like the wording of it. I would ask the noble Viscount not to press the Amendment now, but the Government will be prepared on the Report stage to put down an Amendment to carry out his intentions. As understand it, the main object of his Amendment is to meet the particular conditions which exist in the area of the London Joint Authority, though similar conditions might arise in other joint authority areas. In the London area agreements of the type to which this clause relates are made not directly by the Board with the undertaker, but by the joint authority with the undertaker. Under the terms of the Order constituting the joint authority they have already power to make such arrangements and if the joint authority were themselves the owners of a generating station generating their own current no question would arise; but since the joint authority derive the whole of their supplies from the Central Electricity Board they have to obtain supplies of electricity from the Central Electricity Board at prices which enable them to carry out these arrangements. As I said, the Government agree in principle with this Amendment, and if the noble Viscount will withdraw the Amendment at the present stage, they will bring forward an Amendment on Report to meet the point which he has made.

§ LORD GAINFORD
Before the noble Viscount withdraws this Amendment, may I draw the attention of the noble Earl in charge of the Bill to the fact that in subsection (3) of Clause 1 it is provided: Nothing in this section shall empower the Board to supply electricity directly to 835 any undertakers to whom they would not otherwise be entitled to supply electricity directly. It does seem to me that the principle which the noble Earl is prepared to accept would make that nugatory. I therefore draw his attention to the matter before he brings forward his Amendment on the Report stage.

§ THE EARL OF PLYMOUTH
I will certainly look into the matter further.

VISCOUNT FALMOUTH
In view of what the noble Earl in charge of the Bill has said, I ask leave to withdraw this Amendment.

§ Amendment, by leave, withdrawn.

§ VISCOUNT ELIBANK moved, in subsection (1), after the second "station," to insert "on such terms and conditions as may be agreed with such undertakers." The noble Viscount said: I had hoped that the noble Marquess, Lord Bath, would have proceeded with his first Amendment, but he has withdrawn it because of an Amendment which appears on page 2 on the list of Amendments, which is to be moved by the noble Earl, Lord Plymouth, which he believes meets the point contained in his own Amendment. Having read the Amendment of the noble Marquess, I regard it as being synonymous with mine, and I regret that I am not able to see eye to eye with him in his withdrawal, for reasons which I will give. "Arrangements" is a word which I am advised is of very wide legal interpretation, The clause as it stands says that there shall be "arrangements." Those arrangements are not limited by anything, and I understand that under judicial decisions which have been given in the past, the word "arrangements" might be held to include arrangements which have been come to without agreement with those specifically mentioned. I think that it is very important in this case that the intention of the clause should be fully carried out in the earlier part of it, and that the arrangements come to should be only on such terms and conditions as may be agreed with the authorised undertakers.

§ The Amendment to be moved by the noble Earl, Lord Plymouth, on the other hand (if I may be permitted to refer to it) refers only to the making of payments of such amounts as may be agreed. It does not refer to any other 836 arrangements, and there are all sorts of arrangements which might be come to and might be forced through outside the question of making such payments as may be agreed. For that reason I propose to move my Amendment; but before doing so I should like to refer to a point which was raised on the Second Reading, when my noble friend Lord Eltisley rather implied, by the remarks that he made, that I was casting a slur upon the reputation of the members of the Central Electricity Board. I made an interpolation at the time, but I was able to do so only in a few words, and I wish to say here that in anything that I said in the Second Reading debate and in anything may say this afternoon, I have no intention of casting any slur upon any member of the Central Electricity Board or the Electricity Commissioners. After all, in a matter of this kind individuals may come and individuals may go, but legislation goes on for ever.

§ We are not legislating this afternoon because there are certain members of the Electricity Board holding that position to-day—members for whom I have the very greatest respect and for whose work I have the very greatest respect, because I think, like my noble friend Lord Eltisley, that they have done admirable work for the country in this respect. I ask your Lordships in the Committee stage of this Bill this afternoon licit to look upon the question from the point of view advanced by Lord Eltisley in the Second Reading debate, but from the point of view that the legislation which is being passed this afternoon is coming to stay, and that it may be administered not only by the present members of the Board and the present Electricity Commissioners, but by members who may come after them, and who may not be imbued, perhaps, with the same spirit or ideas as members are who are in their places to-day. So I move this Amendment, and I ask the Government to bear that point in mind.

§ Amendment moved— Page 1, line 11, after the second ("station") insert ("on such terms and conditions as may be agreed with such undertakers").—(Viscount Elibank.)

§ THE EARL OF PLYMOUTH
As I said when replying to the noble Marquess, Lord Bath, I am advised that no such interpretation as the noble Viscount suggests 837 can be given to the word "arrangements" in this context. This word "arrangements" is used on innumerable occasions in other Electricity (Supply) Acts. I made it perfectly clear on the Second Reading that there was absolutely no element of compulsion in this Bill. No arrangements of this kind could be arrived at unless there was agreement. I agree that my Amendment refers to agreements only in connection with terms of payment, but those are vital terms, and if no agreements can be come to in regard to payments to be made under these arrangements it is absolutely clear that these arrangements will fall through. I hope that in view of the fact that the noble Marquess has accepted my suggestion, the noble Viscount will not press his Amendment.

THE MARQUESS OF ABERDEEN AND TEMAIR
I should like to take this opportunity of supporting the Amendment of Lord Elibank, and I pray your Lordships' indulgence in addressing this House for the first time. I can claim a considerable amount of municipal experience, and as such I feel it is essential that local authorities with undertakings should have confidence in the Central Electricity Board. After all, they have got to deal with them. They are authorities with responsibilities the same as the Central Electricity Board, and unless you have mutual confidence between the two it is obvious that there will be a great deal of trouble. It seems to me from what I have heard about the word "arrangements," that it is not a satisfactory word to put into a measure which is going more or less to govern the action of electricity undertakings in this country for a good many years to come. I am advised that the clause as it stands may be read as giving power to the Central Electricity Board to act in relationship to authorised undertakers with regard to the matters in Clause 1 without any restriction on the means by which they attain that result; that the term "arrangements" is a very wide and indefinite one, and that if unqualified it includes the settling of the relationship between the parties in regard to some matters without consent or agreement.
It is that important point "without consent or agreement" that I would urge the noble Earl in charge of the Bill very seriously to consider before he 838 rejects this Amendment. Municipal undertakings, like company undertakings, must be conducted on business lines. They cannot afford interference from outside, or uncertainty, which would mean inefficiency, and therefore very likely would bring loss to the ratepayers supporting any municipally-owned undertaking. The Central Electricity Board, I presume, is still out to cheapen the supply of electricity, but I hope not at the cost of the ratepayers. I trust that your Lordships will see your way to accept this Amendment, in order that there may be more confidence in municipal undertakings, which have a great deal of responsibility to their ratepayers, who are also taxpayers, from whom the Central Electricity Board derives its revenue.

LORD RANKEILLOTUR
I do not know whether any noble and learned Lord is present who can say what is the effect of the word "arrangements." Can they be cut off by either party at will? Is there any sanction? Supposing one party does not carry out the arrangements, has the other party any remedy? It is a matter of some importance. I do not know whether cases have arisen under former Electricity Acts, but I should imagine that the parties to such an arrangement might easily find themselves in a position which was never contemplated, unless there was a binding agreement. I think the question is worth asking.

VISCOUNT ELIBANK
I am afraid I am not satisfied with the reply given by the noble Earl. He says the word "arrangements has been used in former Acts, and that it has always been understood; but I am advised very definitely that the word "arrangements" can be used outside in an unlimited way, if I may put it in that manner, and that unless the word "arrangements" is qualified by the addition of the words "on such terms and conditions as may be agreed with such undertakers," it leaves the question in the air to some extent. The noble Earl has told us that it really does not matter. If it does not really matter why does he not agree to have this Amendment put in the Bill? On the other hand, I feel that it matters very much, and therefore I am sorry but I shall have to go to a Division if he cannot accept my Amendment.

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§ THE EARL OF PLYMOUTH
I think it is clear that the only point at issue is what actual meaning can he placed on the word "arrangements" other than the meaning which is ordinarily accepted. The reason why I ask your Lordships to retain the word "arrangements" is that I am advised that it is constantly used in these Electricity (Supply) Acts, and that for the sake of uniformity it is extremely desirable that it should be retained in this place.

VISCOUNT ELIBANK
I think the noble Earl misunderstood me. I do not propose to leave out the word "arrangements"; my Amendment is to add these words in order to make it quite clear that there is an agreement with the undertakers.

§ THE EARL OF PLYMOUTH
The object of the Amendment is to qualify the word "arrangements." I make this suggestion to the noble Viscount. If he is prepared to withdraw his Amendment now, and put it down on Report stage, I will undertake to look into the matter and see whether, in the view of the Government, there is any substance in what he wishes.

VISCOUNT ELIBANK
I will accept that suggestion, and thank the noble Earl very much.

§ Amendment, by leave, withdrawn.

§ LORD ELTISLEY
moved, at the end of paragraph (a) in subsection (1), to insert "and where arrangements are made for any of those purposes the arrangements may provide." The noble Lord said: The object of this Amendment is to make perfectly clear that the arrangements made under paragraph (b) of Clause 1 (1) for the supply of electricity to or by the Board, or to any authorised undertakers by arrangements they have made under paragraph (b), shall be contingent on arrangements being made under paragraph (a) of the subsection with respect to the operation of a generating station by the authorised undertakers, or for securing that such a station shall cease to be used as a generating station. The wide powers of making arrangements under paragraph (b) might, it is felt, be exercised to the serious detriment of other authorised undertakers if such arrangements could be made independently of 840 arrangements under paragraph (c). It is therefore desired to link up these various paragraphs. I believe that the Central Electricity Board intended, and do intend, paragraphs (b) and (c) to be contingent on paragraph (a). I am therefore rather hopeful that the Amendment may be accepted at any rate in principle, if not in the actual wording which has been drafted. In regard to the observations which fell from Lord Elibank, I was glad to hear the noble Viscount express enthusiasm for the Central Electricity Board and the Electricity Commissioners, and I am glad that he no longer fears the use of force majeure to which he referred previously.

VISCOUNT ELIBANK
I have never referred to force majeure being used by the Central Electricity, Board. I referred to the force majeure which is implied by this Bill, and I interrupted my noble friend on the Second Beading on that very point.

§ LORD ELTISLEY
I am extremely sorry if I misunderstood the noble Viscount for a second time. I beg to move.

§ Amendment moved— Page 1, line 16, at end insert ("and where arrangements are made for any of those purposes the arrangements may provide").—(Lord Eltisley.)

§ LORD ASKWITH
My name is also on the Paper as mover of this Amendment, and I agree with my noble friend that it makes it clearer that these paragraphs are dependent on each other. The noble Earl has down a similar Amendment in which he proposes to leave out of paragraph (b) the words "on such terms as to payment and other matters as may be agreed," and I suggest that the wording of my noble friend makes the matter clearer than does the Amendment of the noble Earl.

§ THE EARL OF PLYMOUTH
I accept this Amendment on behalf of the Government, but I do not think that makes my Amendment unnecessary.

§ On Question, Amendment agreed to.

§ VISCOUNT FALMOUTH had on the Paper an Amendment to insert in paragraph (b), after "supply," the words "directly or indirectly as aforesaid." The noble Viscount said: This is consequential 841 on my previous Amendment, and, in view of what the noble Earl in charge of the Bill has said, I do not move.

§ THE EARL OF PLYMOUTH moved to omit from paragraph (b) of subsection (1) the words "on such terms as to payment and other matters as may be agreed." The noble Earl said: The object of the Amendment is merely to make it perfectly clear that the financial terms of the proposed arrangement may refer to any matters covered by the arrangement, and not specifically to the supply of electricity.

§ Amendment moved— Page 2, line 1, leave out the said words.—(The Earl of Plymouth.)

§ On Question, Amendment agreed to.

§ THE EARL OF PLYMOUTH moved to insert after paragraph (b): (c) for the making of payments, of such amounts as may be agreed, to the Board by the undertakers, and to the undertakers by the Board, in respect of the matters provided for by the arrangements. The noble Earl said: This is the same point. I beg to move.

§ Amendment moved— Page 2, line 4, at end insert the said paragraph.—(The Earl of Plymouth.)

VISCOUNT ELIBANK
May I ask the noble Earl, in view of the withdrawal of my Amendment and his suggestion that I should put it down on the Report stage, whether he does not think it would be better that this Amendment should be held up, too? It seems to me that this Amendment and my Amendment are bound up with the same question, and if this Amendment were accepted it might block out mine altogether.

§ THE EARL OF PLYMOUTH
The effect of that would be to cut out any reference to an agreement. I think that perhaps it would be better if this were to go in. It would be open to the noble Viscount, in putting down his earlier Amendment on the Report stage, to move that this paragraph should be left out, but I think that some words mentioning the question of an agreement and the special terms of payment ought to go into the Bill.

VISCOUNT ELIBANK
I agree, but if this goes in I may be told on Report that it is all that is required. If the noble Earl will agree that this Amendment might be removed on Report in the event 842 of my Amendment being accepted, then I shall be content.

§ THE EARL or PLYMOUTH
I quite agree to that, if it is necessary.

§ On Question, Amendment agreed to.

§ LORD GAINFORD moved, after paragraph (c), to insert: Provided that, if under any such arrangement it is proposed by the Central Electricity Board to supply to the authorised undertaker concerned electricity at a price lower than the appropriate tariff fixed under Section eleven of the Electricity (Supply) Act, 1926, the Electricity Commissioners before giving their approval shall give any authorised undertakers appearing to them to be interested an opportunity of being heard.

§ The noble Lord said: This Amendment ought to be considered in connection with proposed Amendments by Lord Eltisley and Lord Elibank which appear a little later on the Paper. I regard this Amendment as of vital importance to the satisfactory passage of this Bill. What I, and those who think with me, seek is that when a body like the Central Electricity Board has fresh powers placed upon it which were not anticipated at the time of the Act of 1926, and that Board is apparently going to be given powers which will interfere very seriously with the rights and powers which already exist, and which have been given to the various undertakings under very careful supervision by Parliament, there ought to be some judicial body to whom reference can be made on points at issue. It seems to me that the Electricity Commissioners are the right authority to whom applications could be made by aggrieved parties, and that the matter should be placed before them by the various undertakers in connection with the powers which this Bill proposes to give them.

§ Of course, if the Electricity Commissioners think that no case has been made out, they will act accordingly and the central electricity authority will not be interfered with, but it is a somewhat serious principle to extend their powers beyond the definite and limited powers given them by the Act of 1926, merely because they have more or less completed their grid scheme, which enabled them to link authorised undertakings in this country with a view to a general supply of electricity. The powers which are 843 sought in this Bill are very considerable and apparently it would enable injustice to be done if these powers were acted upon in an unfair way. Like the noble Viscount, Lord Elibank, I am not making charges against Sir Andrew Duncan and his other able assistants on the Central Electricity Board. They have been, and are, I think, carrying out their duties to the satisfaction of the whole country. But I do say that where parties may be injured by autocratic powers given to a body like the Electricity Board they ought to be able to appear before a judicial tribunal such as the Electricity Commissioners and place their case before them.

§ I will give one or two illustrations. The Central Electricity Board want to sell electricity apparently under the provisions of this Bill at a price lower than the price paid by any other body under the Act of 1926, and it seems to me only reasonable that they ought to be able to prepare a case before the Electricity Commission in order to justify that extension of their powers. That has been a safeguard really for the Central Electricity Board themselves up to the present time. Any of the owners of non-selected stations can to-day apply to the Electricity Commissioners to enlarge their stations. If the Electricity Commissioners withhold their consent to that enlargement an inquiry has to take place under the Act of 1919. That gives an opportunity to the undertakers to press for a public inquiry and therefore to press the Central Electricity Board unduly, and it might be possible that in place of enlarging their station they might agree to quote very low terms. Those low terms might be very prejudicial to a substantial undertaker who has already provided electricity. It would mean loss of business, and where loss of business is concerned it would hit the consumers. It would also hit the shareholders indirectly, but it would be the other consumers who would have to bear the loss. It would be very unfair to the consumers if they were to have less generous terms quoted to them for electricity on account of unsatisfactory action being taken by the Electricity Board.

§ Then again, a preference might be given. Not only might they compel another authority to terminate a 844 contract, but they might also drive another undertaker to rely on the minimum clause in the contract. Nearly all these contracts have minimum clauses where large bulk supplies are involved, and they might be driven to supply at a minimum figure on account of an unfair price being quoted to one of these other undertakers. In any case large bulk suppliers would be at a disadvantage and would lose by the action of the Central Board, if there were no judicial tribunal to check it. Safeguards have been given to authorised undertakings by various Acts of Parliament—the Act of 1919, for instance, in which a non-selected station can be extended by the authorised undertaker; Section 13 of the Act of 1922, in which the Commissioners cannot refuse consent to an extension if it can be proved that local generation is cheaper than bulk supply; and Sections 10 to 14 of the Act of 1926, under which the Central Board cannot force themselves on an authorised undertaker unless they show that the statutory charge is cheaper than local generation. All these safeguards have been inserted in previous Acts of Parliament, and might go by the board unless there is some appeal to a judicial tribunal. I therefore propose to move my Amendment, but I am quite prepared to withdraw it in favour of those proposed by Lord Eltisley and Viscount Elibank which stand later on the Paper, and which are perhaps more sound because they create the judicial body that is preliminary to the words of my Amendment. Under these conditions I beg to move.

§ Amendment moved— Page 2, line 6, at end insert the said proviso.—(Lord Gainford.)

§ LORD ASKWITH
I would like to support the Amendment which has been moved by the noble Lord, Lord Gain-ford. I am sure the adoption of this Amendment would give satisfaction to the majority of authorised undertakers in this country. There would be a feeling that the Commissioners would be an over-riding body who would keep things upon a level basis, that there would be no secret agreements or suspicions which might arise of people or undertakings being undercut, and that there would be a general power of ventilation and inquiry in the event of any one feeling at all aggrieved. Therefore I strongly support this Amendment.

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§ THE EARL OF PLYMOUTH
In view of the fact that this is the first of a series of Amendments dealing with this particular point, it might be an advantage if I were to make a more or less general statement about the position. It is perfectly true, as the noble Lord has suggested, that this Amendment, if accepted, would really not make sense now because at present there is no provision in the Bill for these arrangements to come under the scrutiny of the Electricity Commissioners, but I think that can be very easily remedied later on. The general object of these Amendments which have been put down by the noble Lord and by noble Lords behind me is to limit the discretion of the Central Electricity Board in making agreements by requiring the approval of the Electricity Commissioners to these agreements, and further to direct the Electricity Commissioners as to the points they must take into consideration and as to the method of their investigation.
The Central Electricity Board is a public body not working for profit, and is admitted by all parties, I think, to be an extremely efficient business organisation. Any attempt to subject their operations to detailed supervision is, in the view of the Government at any rate, unnecessary and, I think, very undesirable. After all, the Board is a statutory body working within statutory limits laid down in the Act of 1926, and while they have wide freedom and discretion in executive action the general principles on which they work are properly laid down. In practice it is really impossible to believe that the Central Electricity Board would utilise the power of making agreements for any other purpose than to secure the general advantage. Even from their own point of view it is perfectly clear that the Central Electricity Board would not enter into arrangements of this kind which would be likely to prove a disadvantage to themselves and in consequence a disadvantage to all other authorised undertakers, because what is of advantage to them must react upon the rest of the authorised undertakers of the country.
If it is the general sense of the Committee that some further safeguard is necessary in addition to what is contained in the Bill, I am prepared to accept on behalf of the Government the 846 general principle of the Amendments which have for their object to bring all future agreements of this kind under the scrutiny of the Electricity Commissioners; but I want to add that in the view of the Government it is really essential that the scrutiny should be in such a form as not to hamper the smooth and rapid working of the executive functions of the Central Electricity Board as a commercial undertaking. The scrutiny in our view should be limited to ascertaining that any proposed agreement was not for the period of its duration prejudicial to the Board, and we feel that care ought to be taken not to hamper the Commissioners in the discharge of this duty as rapidly and as efficiently as possible.
The particular point which the noble Lord opposite has raised is in connection with the position of other authorised undertakers under this Bill, and he would wish to insist that any authorised undertaker who may be considered to be interested should have the power of appealing to the Electricity Commissioners and should have the right of being heard before them. We feel that that is quite unnecessary. The Commissioners will accord a hearing wherever it appears to them to be necessary and desirable, but since it might quite well be argued, as I am advised, that any authorised undertaker in the country receiving a supply from the Board might be interested in any agreement made of that nature, it is clearly undesirable to extend to all of them the statutory right to be heard, because it would very clearly make it impossible to get any of these special agreements through in a reasonable time if that were the case. But if it is the general sense of the Committee that further safeguard is necessary, I am prepared to accept the general principle that supervision by the Electricity Commissioners should be insisted on, and it was my intention on behalf of the Government to accept that portion of the Amendment of the noble Lord, Lord Eltisley, which deals with that particular point. I hope by making this general statement I have facilitated discussion upon this clause.

§ LORD GAINFORD
Before this matter is disposed of I want to say that it is very obvious, from the terms of the Bill, that on more than one occasion things have occurred in relation to the late Board which apparently require white 847 washing. There are two paragraphs in the Bill which allude to the past, and therefore one is a little suspicious even of a Board such as the Electricity Board if there is no authority of a judicial kind to which some appeal can be made. The last thing those interested in the production of electricity want is to allow the Statute to be drawn in a way which would allow frivolous complaint to be made. The noble Earl, I understood, was quite prepared to allow the Commissioners to be brought in under the words which the noble Lord, Lord Eltisley, desires to introduce in his Amendment; that is to say, as a body to which representations can be made; but the noble Earl made a condition, I think, that there should be no interference in matters connected with the discretionary powers of the Electricity Board. I do not know exactly what the qualifications of the Electricity Board are. What I am concerned about is the public interest. In many Statutes we have the words "public interest" brought in, and it seems to me that where the public interest is at stake, there ought to be an appeal to a judicial body, and it ought not to be merely with the acquiescence of the Board but by independent people who feel that they are aggrieved on special grounds.

§ LORD MERRIVALE
I hope the noble Earl will give some further consideration to what the noble Lord opposite, Lord Gainford, has said. Lord Gainford very concisely identified a possible cause of grievance among undertakings which supply electricity, and he proposed a mode of preventing that grievance from becoming effective and reducing the possibility of injustice by a statutory right of approach by persons concerned to the Electricity Commissioners in a specific case. I have great difficulty in seeing what objection in principle there could be to a process of elementary justice such as that. It is a specific matter, and it does not affect the principle of the Bill. It affects, as the noble Lord opposite said, the securing of the rights of those who are concerned in these undertakings without the possibility of an indirect interference with them.

§ LORD GAINFORD
At this stage I think it better to withdraw my Amendment leaving Lord Eltisley to move his Amendment.

§ Amendment, by leave, withdrawn.

848

§ LORD ASKWITH had an Amendment on the Paper to insert, after paragraph (c): Provided that the approval of the Electricity Commissioners shall not be given unless the Board satisfy the Commissioners that the supply of electricity at such prices will cover the expenses of the Board (including interest and sinking fund charges on any capital expenditure incurred) in providing such supply. The noble Lord said: I would ask leave not to move this Amendment. It has got into the wrong place. I support a similar Amendment to be moved by Lord Gainford or Lord Eltisley.

§ LORD ELTISLEYmoved, after subsection (1), to insert the following new subsection: () The provisions of Section fifteen of the Electricity (Supply) Act, 1926, and the Fourth Schedule to that Act, shall extend to and apply in the case of any officer or servant of any authorised undertakers affected by the closing (permanent or temporary) of a generating station or the cesser of the use thereof as a generating station or by the imposition of any restriction on the working or use of a generating station under or in consequence of any arrangement made under or in pursuance of this section, as if such closing or cesser were a closing authorised by that Act of a generating station and as if such restriction were imposed by or under a scheme referred to in that section.

§ The noble Lord said: I have tabled this Amendment on behalf of the Association of Local Government Officers, and also a joint committee representing the Association of Electrical Power Engineers and the officers and staff of the electricity companies and the municipal electrical engineers. All these important organisations are interested in Clause 1 of this Bill, and desire to insert in that clause a provision for compensation to officers and servants who may either suffer loss of employment or diminution of remuneration as a result of the arrangements which may be effected under that clause. Under Section 15 and the Fourth Schedule to the Electricity Supply Act, 1926, an officer or servant who suffers loss of employment or diminution of salary or wages as a consequence of the closing of a generating station under that Act or restrictions imposed by the Central Electricty Board by or under a scheme made in pursuance of that Act on the working or use of a generating station, would have a right to compensation for such loss. Those members of 849 your Lordships' House associated with the passing of the 1926 Act will remember that this matter was debated at great length in another place. This Amendment is really carrying out the principle which I think has already been accepted and which is given effect to in practically all Bills that are now placed on the Statute Book. In view of the fact of another Amendment being tabled in the name of the noble Lord in charge of this Bill which seems to me to cover precisely the same ground, I do not wish to weary the House with further argument in support of the Amendment. I beg to move.

§ Amendment moved— Page 2, line 6, at end insert the said new subsection.—(Lord Eltisley.)

§ THE EARL OF PLYMOUTH
I accept this Amendment.

§ On Question, Amendment agreed to.

§ THE EARL OF PLYMOUTHmoved to insert after subsection (1): () The provisions set out in the Fourth Schedule to the Electricity (Supply) Act, 1926 (which relates to compensation for deprivation of employment), shall apply and shall be deemed always to have applied in relation to every officer or servant of any authorised undertakers affected by the closing (permanent or temporary), or the imposition of restrictions on the working or use, of a generating station by or under any such arrangements as aforesaid.

§ The noble Earl said: I beg to move the Amendment in my name. It covers the same point and the noble Lord has made it very clear.

§ Amendment moved— Page 2, line 6, at end insert the said new subsection.—(The Earl of Plymouth.) On Question, Amendment agreed to.

§ LORD ELTISLEYmoved, after subsection (1), to insert the following new subsection: () Section twenty of the Electric Lighting Act, 1882, so far as it relates to the making of agreements by authorised undertakers shall apply to the making of arrangements by the Board under this section, and accordingly the Board shall not in making any such arrangements show any undue preference to any local authority, company or person. The noble Lord said: I think this Amendment is more or less self-explanatory. The Central Electricity Board was constituted by the Electricity Supply Act of 1926 and is subject to the 850 provisions of Section 20 of the Electric Lighting Act, 1882. There is a doubt in the minds of some of us as to whether that section would apply in relation to Clause 1 subsection (1) of the Bill now before us because, whereas the section in the Act of 1882 applied to the making of "agreements", Clause 1 of this Bill empowers the Board to make "arrangements," which the Court might hold is not the same thing. I beg to move.

§ Amendment moved— Page 2, line 6, at end insert the said new subsection.—(Lord Eltisley.)

VISCOUNT ELIBANK
I would like to support this Amendment. In view of the powers given in this Bill I think it is very important that this particular point as to the powers conferred in the former Act should again be emphasised. As it stands an agreement might be made, as the noble Lord, Lord Eltisley, has said, outside the provisions of the Act of 1882, and might be of disadvantage to other consumers either private or industrial. Therefore I hope the Government will see their way to accept the Amendment.

§ THE EARL OF PLYMOUTH
I am told that this is really absolutely unnecessary. I am told that there is not the slightest doubt that the Central Electricity Board are undertakers under the Act of 1882 and quite definitely under the Act of 1926.For this reason I hope the noble Lord will not press the Amendment, because it is a great pity to put in words which are redundant and might for that reason lead to doubt.

VISCOUNT ELIBANK
May I ask whether it is held that making an agreement is the same as making an arrangement? That is what we want to be satisfied about.

§ THE EARL OF PLYMOUTH
May I say that I will look into that before Report?

VISCOUNT ELIBANK
That means that this will be put down again on Report stage.

§ LORD ELTISLEY
In view of that will ask leave to withdraw the Amendment now.

§ Amendment, by leave, withdrawn.

§ LORD ELTISLEYmoved to insert the following new subsection after subsection (1): 851 ()(a) No arrangements made by the Board after the passing of tins Act for any of the purposes mentioned in subsection (1) of this section shall have effect, unless and until they have been approved by the Electricity Commissioners, and the Electricity Commissioners may approve the arrangements either without modification or subject to such modifications as they think fit or may disapprove the arrangements. (b) If any such arrangements be approved by the Electricity Commissioners subject to modifications the arrangements shall have effect subject to those modifications.

§ The noble Lord said: This Amendment is a rather long one, but I think it is self-explanatory. The association on behalf of which I put down this Amendment desires to protect its members and all other authorised undertakers against arrangements being made by the Central Electricity Board under Clause 1 with particular undertakers which would be unfair to other undertakers or which might result in loss to the Board. I would like to remind your Lordships that the Board's expenses can only be paid out of revenue received by the Board from the supply of electricity. The Act provides that the Board's general tariff for electricity supplied from the grid to authorised undertakers shall be fixed so that, for a term of years to be approved by the Electricity Commissioners, receipts on income account shall he sufficient to cover the expenditure on income account, including interest and sinking fund charges, together with such margin as the Electricity Commissioners may allow. It follows, therefore, that if the Board supplied some undertakers under the Bill on unremunerative terms the general tariff under the Act of 1926 would have to be raised. I think that is quite clear. I beg to move.

§ Amendment moved— Page 2, line 6, at end insert the said new subsection.—(Lord Eltisley.)

§ THE EARL OF PLYMOUTH
Surely the noble Lord is dealing with a different point from that covered by the Amendment. The Amendment which I understand he moved begins: "No arrangements made by the Board"—

§ LORD ELTISLEY
That is the point I was dealing with.

§ THE EARL OF PLYMOUTH
There is no reference to the question of financial 852 loss to the Board. Perhaps I had better read it: No arrangements made by the Board after the passing of this Act for any of the purposes mentioned in subsection (1) of this section shall have effect, unless and until they have been approved by the Electricity Commissioners, and the Electricity Commissioners may approve the arrangements either without modification or subject to such modifications as they think fit or may disapprove the arrangements. Is this the Amendment of which the noble Lord was speaking?

§ LORD ELTISLEY
I was.

§ THE EARL OF PLYMOUTH
I am prepared to accept the Amendment as far as I have read it. We accept the principle of scrutiny of these arrangements by the Electricity Commissioners. It goes no further than that. With regard to paragraph (b) of the noble Lord's Amendment, I am not at all certain that the noble Lord quite realises the full implifications of that part of the Amendment. That part of the Amendment would enable the Electricity Commissioners to alter any agreement made between the Central Electricity Board and another authorised undertaker and it would make that altered agreement compulsory upon the parties. I do not think that that is the intention that the noble Lord had in mind. If I may be allowed to offer some advice to the noble Lord I would suggest that perhaps he would be prepared to withdraw that portion of the Amendment. What it does is clear. It makes it possible for the Commissioners to impose an agreement upon the parties concerned, the Central Electricity Board and the authorised undertaker with whom they are in negotiation. It enables them to alter any agreement and impose it upon them. I do not think that was the intention of the noble Lord.

VISCOUNT ELIBANK
I have an Amendment standing next on the Paper which covers all the points brought forward by the noble Lord, Lord Eltisley, and also by the noble Lord, Lord Gain-ford. I would like to ask the noble Earl whether he would accept paragraph (a) of Lord Eltisley's Amendment, and then paragraph (b) which is really Lord Gainford's Amendment, and leave paragraph (c) which is in the clause. If the noble Earl will do that then I am prepared to forgo paragraph (b): 853 If any such arrangements be approved by the Electricity Commissioners subject to modifications the arrangements shall have effect subject to those modifications. I believe that paragraph might have the effect stated, and that it would give power to the Electricity Commissioners to modify an agreement already come to between the Central Electricity Board and an authorised undertaker.

§ THE EARL OF PLYMOUTH
And impose it upon them.

VISOOUNT ELIBANK
And impose it upon them. Therefore I think we ought to have an opportunity of looking at the Amendment again. If the noble Lord, Lord Eltisley, agrees, I will withdraw so far as my whole Amendment is concerned, and support the first part of Lord Eltisley's Amendment and also Lord Gainford's proviso.

§ LORD GAINFORD
I think it will be convenient not to accept the part of the noble Lord's Amendment which is going to impose new powers on the Commissioners but to leave it for consideration at a later stage. With regard to the Amendment which I moved and withdrew, on condition that it should come up later after the Commissioners had been created a tribunal, I feel very strongly on the point and I hope the noble Earl will accept it.

§ THE EARL OF PLYMOUTH
Of course that point does not arise on this Amendment moved by the noble Lord, Lord Eltisley. So far as this Amendment is concerned, I am prepared to accept the first portion, but I would urge the noble Lord to withdraw paragraph (b).

§ LORD ELTISLEY
At this stage I do not wish to press paragraph (b).

THE LORD CHAIRMAN
Does the noble Lord move his Amendment in this form: in line 6, at end insert the following new subsection (a) as printed on the Order Paper, and omitting paragraph(b)?

§ LORD ELTISLEY
Omitting paragraph (b), yes.

§ On Question. Amendment agreed to.

§ VISCOUNT ELIBANKhad given Notice that he would move, after subsection (1), to insert the following new subsection: () No arrangements made by the Board after the passing of this Act for any of the 854 purposes mentioned in subsection (1) of this section shall have effect unless and until they have been Approved by the Electricity Commissioners, and the Electricity Commissioners may approve the arrangements either without modification or subject to such modifications as they think fit or may disapprove the arrangements: Provided that, if under any such arrangement it is proposed by the Central Electricity Board to supply to the authorised undertaker concerned electricity at a price other than the appropriate tariff fixed under Section eleven of the Electricity (Supply) Act, 1926, the Electricity Commissioners before giving their approval shall give any authorised undertakers appearing to them to be interested an opportunity of being heard. If any such arrangements be approved by the Electricity Commissioners subject to modifications, the arrangements shall have effect subject to those modifications.

§ The noble Viscount said: My Amendment as it stands includes in the first paragraph the Amendment which has just been accepted, in the second paragraph the Amendment which was moved by the noble Lord, Lord Gainford, and in the third paragraph that part of the Amendment which has just been withdrawn. I agree with the withdrawal of that paragraph, and without giving all the arguments, because the noble Lord, Lord Gainford, has already done so at great length, I beg to move my Amendment omitting the first paragraph and the last paragraph.

§ Amendment moved—

§ Page 2, line 6, at end insert: Provided that, if under any such arrangement it is proposed by the Central Electricity Board to supply to the authorised undertaker concerned electricity at a price other than the appropriate tariff fixed under Section eleven of the Electricity (Supply) Act, 1926, the Electricity Commissioners before giving their approval shall give any authorised undertakers appearing to them to be interested an opportunity of being heard."—(Fiscount Elibank.)

§ THE EARL OF PLYMOUTH
I very much hope that the noble Viscount will not press this Amendment. I conceded a very great point when I conceded the institution of scrutiny by the Electricity Commissioners over the powers of the Central Electricity Board provided in Clause 1, and I would appeal to your Lordships not to tie down the Electricity Commissioners by too many detailed instructions. After all, the Electricity Commissioners are a body of business 855 men with the widest possible knowledge of the electrical industry; I doubt whether anybody knows more than they do. It seems to me that to fetter them with particular instructions may put an entirely wrong emphasis upon the duties which they are called upon to perform. If you draw attention to particular matters which they are expected or known to have to pay attention to in their decisions upon these schemes, it may tend to obscure a number of other questions which should also be taken into consideration by them when dealing with these agreements which come before them. That is one of the reasons why I very much hope that the noble Viscount will not press this Amendment.
In the second place, as I have said I very much hope that your Lordships will not agree to a number of instructions which will hamper the Electricity Commissioners and the Central Electricity Board in coming to arrangements which are essentially business operations, in which it is really of the utmost importance that time should be taken into account. As I said, it could quite well be argued, if this Amendment were passed, that any authorised undertaker in the country had an interest in any particular arrangement, and if that were the case and if they had a statutory right to be heard by the Electricity Commissioners, it would lead to a tremendous amount of delay. It is not at all the principle of this to which I object, it is the way in which it would work out in practice. I would venture to say in all earnestness that I think that in a matter of this kind a certain amount of discretion should be left to the Electricity Commissioners to see that these arrangements are not made in such as way as to be prejudicial to the Board itself and consequently prejudicial to other people. I would beg your Lordships not to press this particular point, because I do sincerely think that to leave them that discretion would be a far better way of achieving the objects which are in view.

§ LORD GAINFORD
I am sorry that I have to rise again, but I feel strongly upon this point. In practice, big undertakings are not going to raise frivolous points, and they are not going to create delay in connection with any action which may be taken 856 Which is going to be for the general benefit of the community. But to open the door to enable a body which may change as years go on to interfere with large established undertakings to their detriment may not only mean the loss of a great deal of money to the very big undertakings concerned, but may do a real injustice to them, and there will be no opportunity for this matter to be thrashed out in detail where all the interests are concerned. It seems to me to be fair that if an undertaking is under a sense of grievance, then in fairness to its shareholders and to the consumers generally, who may have to have the price of their own electricity raised in consequence of large pecuniary losses, it ought to have power to go to the Electricity Commissioners. It is because I think that that is fair in the interests of all concerned that I press this Amendment.

VISCOUNT ELIBANK
I feel very strongly on this subject, too. I know that the authorised undertakers in this country are very concerned about the terms of this Bill generally, and what they do desire is that there shall be inserted in this Bill safeguards, and definite and secure safeguards, which in the future will create a position about which there can be no uncertainty when cases come before the Electricity Commissioners. The noble Earl, Lord Plymouth, has told us that everything will be done by the Electricity Commissioners to see that justice is arrived at. I have not the slightest doubt that everything will be done by them, but if that is so, and if the insertion of this paragraph is going to allay the fears of a large number of suppliers of electricity in this country who, as the noble Lord, Lord Gainford, has pointed out, have a great amount of capital invested in these undertakings, then surely it is a very small thing to ask the Government to insert these words. The noble Earl himself has agreed that they will make really no difference one way or the other, because the Electricity Commissioners will probably carry out what we suggest shall be inserted in the Bill. I agree with the noble Lord, Lord Gainford, and I shall certainly he prepared to go into the Lobby with him if the noble Earl cannot see his way to meet us on this point.

857

§ THE EARL OF PLYMOUTH
I am afraid I have little to add to what I said before. It is impossible for the Government to accept a position in which it will be possible for any one of the 600 authorised undertakers in the country to claim to be heard before the Electricity Commissioners. We feel that it would make the position really impossible, and I hope that the noble Viscount will with-draw this Amendment and leave it to the Report stage, so that it can be discussed with my honourable friend the Minister of Transport, to see whether words can be inserted which would give to those with a substantial interest a right to be heard in the manner suggested by the noble Viscount. I am really afraid that I cannot accept this Amendment at the moment, in its present form.

§ LORD GAINFORD
I am quite prepared always to meet the Government reasonably in a matter of this kind, but I want them to realise, before the Report stage, that there is a very strong feeling that justice on substantial lines should be secured for any really aggrieved party. If the noble Earl can introduce words which will prevent undue delay, or frivolous objections being brought before a tribunal of this kind, we shall, of course, be prepared to meet him and not press a Division. I understand that he is prepared to consult with the responsible Minister in another place, and in those circumstances I am quite prepared to ask Lord Elibank not to press his Amendment at this stage, with a view to re-introducing it at a later stage if we find that the Government words do not meet the point.

§ THE EARL OF PLYMOUTH
I will willingly give that undertaking.

VISCOUNT ELIBANK
In these circumstances I am prepared to take Lord Gainford's advice and withdraw my Amendment.

§ Amendment, by leave, withdrawn.

§ VISCOUNT FALMOUTHmoved, in subsection (2), to leave out "for the time being in force." The noble Viscount said: It is clear that the object of subsection (2) is to prevent any of these non-selected stations coming under the operation of this clause as selected stations, and I think your Lordships will 858 agree that that is a very fit and proper purpose; but these words, "for the time being in force," do not seem really to be essential in any way to the main object of the clause and might be interpreted in a way which might be very prejudicial to the owners of selected stations. Under the 1926 Act, when once a station is included in the scheme as a selected station it always remains a selected station unless the owner is himself willing not to be selected, but under the 1926 Act the Electricity Commissioners have power—and these are the words of the Act— "to alter or extend the original scheme." So it might happen that the original scheme had been altered or extended under the powers given in the 1926 Act, and that would he held to fall under this particular clause as the scheme "for the time being in force," and this would have the effect of depriving the owners of selected stations which were not included in the altered scheme, of having the protection which they have got under the 1926 Act and which they would have had were it not for these words being included in this particular clause. I hope the noble Earl will see his way to delete these words.

§ Amendment moved— Page 2, line 10, leave out ("for the time being in force").—(Viscount Falmouth.)

§ THE EARL OF PLYMOUTH
I am afraid I cannot accept this Amendment. The words which the noble Viscount wishes to delete are, in the view of the Government, necessary, since the word "scheme" alone would include the schemes prepared by the Commissioners, which were, however, modified by the Central Electricity Board before adoption, and it is clear that schemes so adopted and in force are those to which reference is intended to be made in this subsection.

VISCOUNT FALMOUTH
I would like to ask the noble Earl if he does not think that those particular words have a prejudicial effect on the owners of selected stations.

§ THE EARL OF PLYMOUTH
I have not been advised to that effect.

§ Amendment, by leave, withdrawn.

§ Clause 1, as amended, agreed to.

859

§ Clause 2:

§ Amendment of s. 11 of Electricity (Supply) Act, 1926.

§ 2.—(1) Nothwithstanding anything in Section eleven of the Electricity (Supply) Act, 1926, the Central Electricity Board shall have power and shall be deemed always to have had power to supply electricity to authorised undertakers at prices and on conditions other than those specified in the appropriate tariff fixed under that section, in cases where they are satisfied that special circumstances exist and that those undertakers, or other authorised undertakers who are supplied with electricity by those undertakers, will thereby be enabled to supply, to persons whose needs for electricity are of an exceptional nature, an amount of electricity corresponding to the amount of the electricity so supplied by the Board.

§ (2) So much of any tariff fixed under the said Section eleven before the commencement of this Act as purports to reserve to the Board power in special circumstances to supply electricity at prices other than those specified in the tariff shall cease to have effect but no such tariff shall he deemed to be invalid by reason only that it purported to reserve such a power.

§ (3) Nothing in this section shall empower the Board to supply electricity directly to any undertakers to whom they would not otherwise he entitled to supply electricity directly.

§ LORD ERSKINEmoved, in subsection (1), to leave out the first "shall" and insert "may with the approval of the Electricity Commissioners." The noble Lord said: Clause 2 of the Bill enables the Central Electricity Board to give a special supply through an authorised undertaker for the purposes of a special consumer, at a price which is lower than the grid tariff, as directed in Section 11 of the Electricity (Supply) Act, 1926, and the clause leaves it to the discretion of the Central Board as to what the price shall be, and on what occasions they may quote such a lower price. My Amendment is designed to make the Electricity Commissioners the approving body in these special cases. The Electricity Commissioners were set up to supervise and regulate the supply of electricity under the Act of 1919, and they are in many respects a judicial body. The Central Electricity Board, on the other hand, are an executive body, just like other authorised undertakers. Again, the Electricity Commissioners are the body under the 1926 Act who have to express their approval in relation to the general grid tariff of the Central Board, and it will meet much of the criticism levelled at Clause 2 if the Electricity Commissioners are brought in as the approving body.

860

§ Amendment moved— Page 2, line 18, leave out the first ("shall") and insert ("may with the approval of the Electricity Commissioners").—(Lord Erskine.)

§ THE EARL OF PLYMOUTH
The Government are quite prepared, as they are with regard to Clause 1, to accept the principle that agreements made subsequently to the passing of this Act will be subject to the approval of the Commissioners, who will satisfy themselves that the agreements are not prejudicial to the Central Electricity Board, but the effect of the Amendment would be to make it necessary for the Board to obtain the approval of the Commissioners in every case, that is where an agreement has already been made and is working, and also in the case of future agreements. I think it would be entirely unnecessary, and indeed very undesirable, to require the Commissioners to make inquiries into all agreements which have already been made, but as I have said the Government are prepared to accept the principle that all future agreements should be under their scrutiny. I do not like the wording of the Amendment, and therefore I would ask your Lordships not to accept it, but I shall be prepared to put an Amendment down to the effect that I have indicated.

§ LORD ERSKINE
After what has fallen from the noble Earl I will ask leave to withdraw my Amendment.

§ Amendment, by leave, withdrawn.

§ VISCOUNT FALMOUTHhad an Amendment on the Paper to add to subsection (1): Provided that the prices and conditions at and upon which the Board may supply electricity under this section shall he fixed so that over a term of years to be approved by the Electricity Commissioners the receipts on income account shall be sufficient to cover the expenditure on income account, including interest and sinking fund charges, with such margin as the Electricity Commissioners may allow.

THE LORD CHAIRMAN
I have here a manuscript Amendment handed in by Lord Gainford. It is proposed by Lord Gainford to leave out the words after the word "shall" in the third line down to the words "be sufficient." The effect of the Amendment to the Amendment will be to leave out the words "be fixed so that over a term of years to be approved by the Electricity Commissioners the 861 receipts on income account shall." Then, after the word "cover," to insert the word "annually." The Amendment will then read: Provided that the prices and conditions at and upon which the Board may supply electricity under this section shall he sufficient to cover annually the expenditure on income account…. and so on.

VISCOUNT FALMOUTH
I understood that the words proposed by the noble Earl in charge of the Bill in dealing with similar Amendments in Clause 1 held good in regard to Clause 2. Before moving this Amendment I should like to have his views on the matter.

THE LORD CHAIRMAN
Will the noble Viscount move?

VISCOUNT FALMOUTH
Well, I want to know, but I will move the Amendment.

§ Amendment moved— Page 2, line 28, at end insert the said proviso.—(Viscount Falmouth.)

§ LORD GAINFORDmoved, as Amendments to the Amendment, to leave out "be fixed so that over a term of years to be approved by the Electricity Commissioners the receipts on income account shall," and, after "cover," to insert the word "annually." The noble Lord said: I quite approve of the Amendment of the noble Viscount, but I am at the moment proposing these Amendments to the Amendment with a view to making it quite clear that the prices and conditions on which the Board may supply electricity must cover annually "the expenditure on income account, including interest and sinking fund charges, with such margin as the electricity Commissioners may allow." Under the Act of 1926 where power is given to the Electricity Board in connection with the supply of electricity to an undertaking the matter can be arranged for a term of years, and the object of my Amendments is that the power should now be an annual one instead of over a term of years. Where a firm or a consumer is involved it is most important that the expenses should be calculated annually because of the great fluctuations in trade prospects and from that point of view an arrangement over a term of, we will say, ten years would be quite unfair. In the case of an undertaking which has a monopoly for the supply of electricity 862 it is another matter, but in the case of a consumer who may be here to-day and gone to-morrow, or who may be making profits one year and heavy losses another, it is most desirable that the arrangement should be an annual one, and it is only fair in the interests of all parties that the accounts should be fixed so that undertakers shall not unduly suffer owing to the expenses incurred by the Electricity Commissioners.

§ Amendments to the proposed Amendment moved— line 3, after ("shall") omit all words down to ("be") in line 5, and in line 5, after ("cover"), insert ("annually").—(Lord Gainford.)

§ THE EARL OF PLYMOUTH
I should like first of all to inform the noble Viscount who moved the original Amendment that my remarks on Clause 1 were intended to apply to this clause also. In dealing with Lord Erskine's Amendment I made it clear that the Government were prepared to put down an Amendment on the Report stage accepting the principle of a scrutiny by the Electricity Commissioners, and also to the effect that it should be an instruction to them (if it may be put in that way) that any arrangement which was come to between the Board and an authorised undertaker should not be prejudicial to the Board. But I would ask the Committee not to accept this Amemdment, because once again it ties down the Commissioners and places upon them certain detailed instructions which I think should not be placed upon them. There are also some real practical objections to this Amendment in addition. As I have said, it is naturally intended that the Commissioners should satisfy themselves that the price at which supply is given is not prejudicial to the Board; that is to say, that it should not throw upon the Board any financial loss; but cases might quite well arise, I am told, in which the price, while contributing to the overhead charges of the grid, which (I would remind your Lordships) have to be borne in any event, do not cover the average of those charges.
This principle applies with even greater force in the cases which will arise under Clauses 2 and 4, which provide for giving special prices to large industrial consumers and railway companies, as those supplies are 863 necessarily given at rates which, while pf general advantage to the Board, do not make the full contribution towards interest and sinking fund charges and overhead expenses which have to be borne in any event. I am told that it is the ordinary practice of all electrical undertakings catering for large industrial supply to make special contracts at reduced rates which contribute less than the average to the overhead charges, including interest and sinking fund. To give specific directions of this kind is, in the view of the Government, quite inappropriate when the whole purpose of the clause is to enable special arrangements to be made.

VISCOUNT FALMOUTH
In view of what the noble Earl said, that he would bring up an Amendment on Report stage, I beg leave to withdraw my Amendment.

§ LORD GAINFORD
Having made my point I do not desire to interfere with the withdrawal of this Amendment, seeing that the noble Earl is going to consider the whole matter again before Report.

§ Amendment to the proposed Amendment, by leave, withdrawn.

§ Amendment, by leave, withdrawn.

§ LORD ELTISLEYmoved, after subsection (2), to insert the following new subsection: () Nothing in this section shall affect the application to the Board of Section 20 of the Electric Lighting Act, 1882, and accordingly nothing in this section shall empower the Board to supply electricity to any authorised undertakers at prices or on conditions which would give any undue preference to those undertakers. The noble Lord said: This Amendment is very similar to my Amendment on Clause 1, page 2, line 6, and, as I think the observations I made in support of that Amendment meet the case, I will not repeat them. The noble Earl accepted the first part of that Amendment.

§ Amendment moved— Page 2, line 35, at end insert the said new subsection.—(Lord Eltisley.)

§ THE EARL OF PLYMOUTH
This is the Amendment dealing with undue preference and I am advised that there is no question of the Central Electricity Board not being an authorised undertaker under this Act, but the question of 864 arrangements arose and I undertook to look into the matter before the Report stage.

§ LORD ELTISLEY
I gather that the noble Earl said the Amendment is unnecessary. If that is so, I do not propose to press it.

VISCOUNT ELIBANK
I am not, quite clear as to what the noble Earl means. Under the Act of 1926 there is a specific procedure under which the charges to be made for electricity are laid down. That procedure is not to be departed from except under another special procedure, and this special procedure is, so far as I recollect it, that first of all the Electricity Commissioners shall agree and, subsequent to the agreement of the Electricity Commissioners, whatever is arranged Shall be embodied in a Parliamentary Order and placed before Parliament. Under this Bill as it is drafted the Central Electricity Board will be able to do away with all that procedure and merely make arrangements on preferential lines without any provision at all. Certain agreements have been made up to date which will be whitewashed by this Bill. We all know that is going to happen, but I submit to your Lordships that the agreements which are to be made in the future should be subject at least to the same procedure as is laid down in the 1926 Act. That procedure is a very reasonable one. It is not one to which anyone ought to take exception, and that is that the Electricity Commissioners should approve of such arrangements. I would go so far as to say that I see no reason why such arrangements should not be embodied in an Order, as has been done in the past. I feel that the noble Earl is asking rather much of your Lordships when he asks that these agreements should be entered into by the Central Electricity Board without any arbitration at all.

§ Amendment, by leave, withdrawn.

§ Clause 2 agreed to.

§ Clause 3:

§ Amendment of s. 12 of Electricity (Supply) Act, 1926.

§ 3.—(1) if it is made to appear to the Electricity Commissioners by persons appearing to them to be interested, that it is in the general interest of the persons concerned so to do, the Commissioners may direct that the charges and allowances to he included in the price to be charged for electricity under Section twelve of the 865 Electricity (Supply) Act, 1926, by the undertakers to whom the direction relates shall be computed as if all such electric lines used by the undertakers (for whatever purpose) as are specified in that behalf in the direction—

(a) were transmission lines; and
(b) were used for all the purposes for which any of them were used;

and, unless and until the direction is revoked by the Commissioners, the said charges and allowances shall be computed accordingly.

§ (2) In ascertaining for the purposes of the said Section twelve the terms on which any undertakers receive a supply of electricity from the Central Electricity Board, any supply which is by virtue of the provisions of the last foregoing section given to the undertakers at prices other than those specified in the appropriate tariff shall be disregarded.

§ LORD ELTISLEYmoved, at the beginning, to insert the following new subsection: () Section twelve of the Electricity (Supply) Act, 1926, shall have effect as if—

(i) the words 'in bulk' where those words secondly occur in the section were omitted, and
(ii) the following words were inserted in the section after the words 'the Third Schedule to this Act' viz.: 'and also in the case of a supply for haulage or traction purposes to a railway company a fair proportion of any sums apportioned to or demanded from the undertakers giving the supply in respect of the expenses or estimated expenses of the Electricity Commissioners, including in those expenses any sums paid or payable by the Electricity Commissioners to the Central Electricity Board under subsection (3) of Section 9 of this Act."

§ The noble Lord said: This Amendment deals with the supply of electricity for haulage or traction purposes to railway companies. The Act of 1926 prescribes the price which the Board charges to various undertakers who pass on supply, plus the transmission charges incurred by the undertakers in passing that supply on. Clause 3 proposes to make provision for pooling the whole or part of these transmission charges. To that I am not making objection, but Clause 3 does not deal with another defect in Section 12 of the Act of 1926. That section is so worded as to raise doubt, particularly when read in conjunction with the Third Schedule of the Act of 1926,as to whether, when a supply is passed on to a railway company for haulage or traction purposes, the railway company has to pay for the transmission charges. It is believed that it was intended that the 866 railway companies should be obliged to make this payment under the Act of 1926, but as Section 12 and the Third Schedule appear not to carry out that intention this Amendment is desired. I beg to move.

§ Amendment moved— Page 2, line 40, at the beginning insert the said new subsection.—(Lord Eltisley.)

VISCOUNT ELIBANK
I have an Amendment down in similar terms and I should like to support the Amendment of my noble friend. I think it is only fair that the railways should bear the same expenses as private and industrial consumers do, and believe it has always been felt that the railways have been too favourably treated in this respect.

LORD ELTTSLEY
I do not care which Amendment is accepted, as we have both the same object in view.

THE LORD CHAIRMAN
The Amendments are identical except that Lord Eltisley has, after "expenses," the words "or estimated expenses." I do not know in which form the noble Lord wishes to move.

§ THE EARL OF PLYMOUTH
I am prepared to accept this Amendment in principle, but here again I am told the wording is not very good, and if the noble Lord is prepared to withdraw his Amendment, and the one dealing with a similar point later on, I will undertake on behalf of the Government to bring forward Amendments on the Report stage dealing with this particular point.

§ LORD ELTISLEY
Thank you. I ask leave to withdraw.

§ Amendment, by leave, withdrawn.

§ LORD ELTISLEY
moved, in subsection (1), to leave out "persons appearing to them to be interested" and insert "any authorised undertakers or railway companies." The noble Lord said: The object of this Amendment is to make it clear that these authorised undertakers and railway companies are to be entitled, and are the only persons entitled, to ask the Electricity Commissioners to authorise the pooling of transmission charges. I beg to move.

§ Amendment moved— Page 2, line 41, leave out ("persons appearing to them to be interested") and insert ("any authorised undertakers or railway companies").—(Lord Eltisley.)

867

§ LORD ASKWITH
I wish to support Lord Eltisley in what he has said. You want to define these people clearly. You cannot have a person coming forward who has a general interest. The whole drafting of these two or three lines is, I think, extremely poor.

§ THE EARL OF PLYMOUTH
I prefer the Amendment of my noble friend Lord Falmouth to that of my noble friend Lord Eltisley. I think "railway company" ought to be in the singular, and if the noble Lord is prepared to amend his Amendment in order to make it read "railway company" instead of "railway companies" I gladly accept.

THE LORD CHAIRMAN
The proper procedure would be for this Amendment to be withdrawn, and then for the House to take the Amendment which the noble Earl proposes to accept.

§ Amendment, by leave, withdrawn.

VISCOUNT FALMOUTH
moved, in subsection (1), to leave out "persons appearing to them to be interested" and insert "any authorised undertakers or railway company." The noble Lord said: I beg to move.

§ Amendment moved— Page 2, line 41, leave out ("persons appearing to them to be interested") and insert ("any authorised undertakers or railway company").—(Viscount Falmouth.)

§ On Question, Amendment agreed to.

VISCOUNT FALMOUTH
moved, in subsection (1), to leave out "it is in the general interest of the persons concerned" and insert "it is desirable in the interest of the general supply of electricity within an area specified by a scheme adopted by the Central Electricity Board under the Electricity (Supply) Act, 1926." The noble Viscount said: This is a very small Amendment. The object is to limit the number of people who are interested in one of these arrangements. I do not know whether the noble Lord will accept the Amendment, but it seems to me it contains very considerably better wording than does the Bill at the present moment.

§ Amendment moved— Page 2, line 42, leave out ("it is in the general interest of the persons concerned") and insert the said new words.—(Viscount Falmouth.)

§ THE EARL OF PLYMOUTH
I am afraid I cannot agree that it is better 868 wording. I should have thought this made it far wider and was inconsistent with the previous Amendment, which has taken out "persons…interested" and specified "authorised undertakers or railway company." After all this clause deals with Section 12 of the Act of 1926. It is with the interests of those who come under Section 12 of that Act that we are dealing here. So far as I can see there is no cause for adding to the number of people whose interests have to be taken into account when the Electricity Commissioners have to deal with a matter of this kind.

VISCOUNT FALMOUTH
The object was to reduce the number of people who would be interested in any one of the particular arrangements. As the Bill is drawn someone in Sussex would take an interest in Scotland, whereas by my Amendment it would be limited to the area specified by the scheme. I will ask the noble Earl to consider that point and will withdraw this Amendment.

§ THE EARL OF PLYMOUTH
I will consider the point, but I would point out that the words "in the interests of the general supply of electricity in an area" to my mind are far wider than those at present in the Bill. I see the noble Viscount's point, that anybody outside the area concerned might be able to make objection to a scheme of this kind, and I will look into it.

§ Amendment, by leave, withdrawn.

§ LORD ELTISLEYmoved, in subsection (1), to leave out "of the persons concerned." The noble Lord said: After what has been said I feel exceedingly diffident of suggesting any alteration in the drafting of the Bill, but I venture to move the deletion of the words "of the persons concerned" because they appear to me to be redundant.

§ Amendment moved— Page 2, line 42, leave out ("of the persons concerned").—(Lord Eltisley.)

§ THE EARL OF PLYMOUTH
I hope the noble Lord will not think too hardly of any criticisms I may have made with regard to his drafting capacity. At any rate, I can assure him I meant nothing at all insulting, and I accept this Amendment with the very greatest pleasure.

§ On Question, Amendment agreed to.

869

§ LORD ELTISLEYmoved, in subsection (1), after 1926, to insert "as amended by this section." The noble Lord said: I think this is consequential. I beg to move.

§ Amendment moved— Page 3, line 4, after ("1926") insert ("as amended by this section").—(Lord Eitisley.)

§ THE EARL OF PLYMOUTH
I am afraid I cannot agree to this because I think it is entirely unnecessary. If you amend, as we are amending, the Act of 1926, or a certain section of it, then in future a reference to that section is "as amended." It really is entirely unnecessary to insert "as amended"; that will make no difference at all.

§ Amendment, by leave, withdrawn.

§ VISCOUNT ELIBANKmoved, at the end of subsection (1), to insert: Provided that before giving any such direction the Commissioners shall give an opportunity of being heard to any other authorised undertaker or railway company affected who consider that such direction may be prejudicial to them. The noble Viscount said: The object of this proviso is to give other parties who may be affected by a direction of the Electricity Commissioners under this clause an opportunity of being heard. I should like to give an illustration. Suppose there is a large undertaking giving bulk supplies to other under takings, and one of these other undertakings happens to be situated quite close to the generating station of the suppliers whereas another undertaking supplied may be situated some forty miles away, it is obvious that the undertaking situated forty miles away will make an application under Clause 3 and endeavour to get the Electricity Commissioners to give a direction which will reduce the transmission charges to that long-distance undertaking and spread them over the other undertakers supplied from the same source. If that direction is given it is equally obvious that the undertaking situated quite close to the generating station will have to pay more for its supply. It is only right, before a direction is given, that the Electricity Commissioners should hear both sides, and it is with that object that I ask the Government to insert this Amendment.

870

§ Amendment moved— Page 3, line 13, at end insert the said provision.—(Viscount Elibank.)

LORD PENTLAND
I should like to support this Amendment, and in spite of the remarks already made by the noble Earl I hope it may be possible for him to accept it. As has already been explained, the principle of Clause 3 is that you have perhaps a large transmission system over which supplies are being given to a number of different undertakers. Instead of charging each one of these according to the economic cost, you are to pool the charges, which are re-allocated on an entirely artificial and, I think you might say, uneconomic basis. If you give preferential advantage to one consumer or undertaking you can only do that by taking away from another undertaker. We are proud of the record of the Electricity Commissioners, but there is no magic power about those Commissioners. If they give to one undertaking they can only do it by taking away from another. On those grounds I very much hope that this Amendment will be accepted.

§ THE EARL OF PLYMOUTH
This is really similar to an Amendment moved in connection with an earlier clause, and which the noble Lord agreed to withdraw on a certain undertaking which I gave. My objection to this Amendment is even greater than my objection to that of the noble Lord, Lord Gainford. To begin with, I cannot accept the proposition of the noble Lord opposite when he says that if you give a preferential advantage to one undertaker it must deleteriously affect another. To my mind that is an entirely erroneous assumption. It is not so at all. The Central Electricity Board, which is the body he was referring to rather than the Electricity Commissioners, would be the last people in the world to do a thing of that kind if its was going to prejudice and consequently react unfavourably on other people. A preferential arrangement is not by any means necessarily uneconomical or unadvantageous. I think in most cases it is an advantageous arrangement and an economical one. I feel certain the Central Electricity Board will not enter into such arrangements if they do not think it advantageous to do so.
871 May I add that this is an attempt to force a hearing and, possibly, an inquiry upon every occasion that a matter of this kind arises? As it is open to the Electricity Commissioners to vary their directions every year, this would enable one dissentient undertaker to attempt a hearing every year, with the probability that other undertakers would be forced to attend, thus putting every one in the area to great expense. The prices to be determined relate to a particular year, and the possibility of an indefinite multiplication of inquiries would seriously hinder the efficient working of this clause. If this Amendment were accepted I think it would be most undesirable. These are essentially business operations and time in a matter of this kind is of the utmost importance. I want to assure noble Lords that in practice the Commissioners are very ready to accord hearings where-ever necessary, and they invariably do so. I venture to say that provisions of this nature are really objectionable in a clause of this kind, because they entirely hold up arrangements for a period and would very detrimentally affect all concerned.

VISCOUNT ELIBANK
I hope that the noble Earl will regard this Amendment in the same light as the Amendment moved by the noble Lord, Lord Gainford. There is a feeling, as I said before, amongst the undertakers that in the future when there is a different Board and when the spirit of this Bill has disappeared, their position may not be so carefully considered as it would be to-day. It is perfectly true, as the noble Earl says, that the object of this Amendment is very much the same as the object of the Amendment moved by my noble friend Lord Gainford. I should like to ask him whether it would not be possible upon the Report stage to produce some Amendment which might satisfy the undertakers that they will be given a hearing when the occasion arises. Surely it is not beyond the wit of the legal advisers of the Government to devise some Amendment which will meet us if the noble Earl is not able to accept the Amendments which we have placed upon the Amendment Paper. I would ask the noble Earl to state whether he would do that, before I decide whether to withdraw or not.

§ THE EARL OF PLYMOUTH
I think I must, having regard to the undertaking 872 I gave earlier, undertake to look into this point as well. I cannot go further than that.

§ LORD ASKWITH
May I suggest that in dealing with this question the noble Earl should consider the procedure that appertains at the Board of Trade with regard to the railway companies? There this question of undue preference has always been a very vital one. Here it is becoming a very vital one, or at any rate it may become so, although there are not likely to be the same number of applications as in the case of railway companies. Occasionally there is a spate of complaints of undue preference against railway companies, but, as a matter of fact, they usually boil down to comparatively few. The trader making an application tries first to settle with the railway company, and if he is unable to settle he can then go to the Assistant Secretary who is the head of the Railway Department of the Board of Trade The Assistant Secretary has both parties before him and tries to see if there are any means by which an agreement can be come to, or if he thinks there is undue preference a hint can be given to the railway company of such a nature that the company is usually prepared to make a proper agreement. If this procedure at the Board of Trade does not yield a satisfactory result the trader can go before the Railway and Canal Commission and I think he can come to the House of Lords. No doubt that is an expensive business, but there are cases even now which come up before the Railway and Canal Commission. I do not see why an authorised undertaker should not have as much protection against undue preference as a trader has against a railway company.

§ LORD RANKEILLOUR
May I point out that it has been the traditional practice in Parliament and in all Parliamentary inquiries not to refuse a hearing to any person who can show a reasonable locus standi? The question of who can show a reasonable locus standi is not always an easy one, but in cases like this it should not be impossible to devise some plan whereby any parties who can make a prima facie case that they are affected should he heard. One plan would be that the parties should enter into a bond—a monetary bond if you like—that they would appear and oppose. To give the 873 Electricity Commissioners in a matter like this a power which is entirely against the practice of Parliament and against precedents in dealing with such matters is surely going too far. I suggest that the noble Earl might bear this suggestion in mind when he is dealing with the matter.

§ THE EARL OF PLYMOUTH
I do not know that the Commissioners are given any greater power than they have already. I can only assure the noble Viscount that I will look into this on the same basis as I said I would look into the point raised on an earlier clause.

VISCOUNT ELIBANK
In those circumstances I will ask leave to withdraw the Amendment, but I shall put it down again on Report stage in order to keep the matter open.

§ Amendment, by leave, withdrawn.

§ LORD ELTISLEY
moved, in subsection (2), after "twelve," to insert "as amended by this section." The noble Lord said: In view of the reception given to art Amendment in similar terms just now I am rather apprehensive as to the reception of this Amendment. I beg to move.

§ Amendment moved— Page 3, line 16, after ("twelve") insert ("as amended by this section").—(Lord Eltisley.)

§ THE EARL OF PLYMOUTH
I am afraid I cannot accept this Amendment. It is exactly the same as a previous Amendment.

§ On Question, Amendment negatived.

§ VISCOUNT FALMOUTHmoved, in subsection (2), after "supply of electricity," to insert "directly or indirectly." The noble Viscount said: A supply of electricity may be direct or indirect, or it may be both. I think it is fairly clear that the intention is that it should be both. I feel that it would considerably improve the lucidity of the Bill if these words were inserted.

§ Amendment moved— Page 3, line 16, after ("electricity") insert ("directly or indirectly").—(Viscount Falmouth.)

§ THE EARL OF PLYMOUTH
I will accept this Amendment.

§ On Question, Amendment agreed to.

§ VISCOUNT FALMOUTHmoved to leave out the last word in subsection (2) and 874 insert "regarded only in connection with the supply to any such undertakers or railway company for whose requirements such supply has been given." The noble Viscount said: As the Bill stands it is rather difficult to understand what is meant by the last subsection in this clause. There are several sources of supply and an undertaker may be getting a direct supply. In that case, apparently, according to this clause he is able to make full use of Clause 2 of the Bill. That is to say, if there is any big consumer who makes 'a contract with this undertaker he is able to supply this undertaker at a cheaper rate under Clause 2. If, however, there happens to be an undertaker who is receiving an indirect supply, that is to say, a supply under Section 12 of the 1926 Act, it would appear, according to the clause as drawn, that the advantage which ought to be given to the large consumer in Clause 2 shall be disregarded. It seems to me that this clause defeats itself by the word "disregarded." The words I move to insert will make quite clear what is the purpose of the clause.

§ Amendment moved— Page 3, line 20, leave out ("disregarded") and insert ("regarded only in connection with the supply to any such undertakers or railway company for whose requirements such supply has been given.")—(Viscount Falmouth.)

§ THE EARL OF PLYMOUTH
I am afraid I do not quite appreciate the full object of the noble Viscount's Amendment. I thought it was connected with the earlier Amendment on Clause 2 which he withdrew. I will undertake to look into the matter before the Report stage if the noble Viscount will withdraw now.

VISCOUNT FALMOUTH
I am very pleased to accept the noble Earl's suggestion. There is a definite distinction in the Bill between a supply of electricity directly from the Board and an indirect supply of electricity, and my Amendment seeks to eliminate that distinction. It is really a technical point, and perhaps the noble Earl will consider it before the next stage of the Bill.

§ Amendment, by leave, withdrawn.

§ Clause 3, as amended, agreed to.

§ VISCOUNT ELIBANKhad given Notice that he would move, after Clause 3, to insert the following new clause: 875 .The Third Schedule to the Electricity (Supply) Act, 1926, shall have effect as if—

(i) in the heading thereof the word 'bulk' was omitted and the words or for haulage or traction purposes to a railway company' were added at the end thereof:
(ii) in line four thereof the words or for haulage or traction purposes to a railway company' were inserted after the word 'undertakers'; and
(iii) the last sentence thereof were omitted and the following sentence substituted 'If a transmission line be used partly for giving a supply in bulk to an authorised undertaker and partly for other purposes (whether a supply in bulk to another authorised undertaker or a supply for haulage or traction purposes to a railway company, or a supply for any other purpose whatsoever) or if a transmission line be used partly for giving a supply for haulage or traction purposes to a railway company and partly for other purposes (whether a supply in bulk to an authorised undertaker or a supply for haulage or traction purposes to another railway company or a supply for any other purpose whatsoever) the charges and allowances shall be the proper proportion of such charges and allowances as aforesaid.'"

The noble Viscount said: I will not move this Amendment, in view of the assurance which the noble Earl in charge of the Bill has given that he will put down an Amendment on the Report stage to deal with this matter.

§ Clause 4:

§ Supply of electricity by Central Electricity Board to railway companies.

§ 4.—(1) Subject to the provisions of this section, the Central Electricity Board may supply electricity directly to any railway company upon such terms and at such prices as may be agreed:

§ Provided that the Central Electricity Board shall not enter into any agreement with a railway company for the supply of electricity to that company under this section at any point within the area of supply of any authorised undertakers who own a selected station without the consent of those undertakers, so, however, that such consent shall he deemed to have been given if, on the application of the Board, the Electricity Commissioners determine that the withholding thereof is unreasonable.

§ (2) Electricity supplied to a railway company under this section may be used for the haulage or traction of vehicles used on the railway on any part of the system of the company and for the lighting of the vehicles for the haulage or traction of which electricity so supplied is used, and, subject to the provisions of this section, shall not be used for any other purpose:

§ Provided that, with the consent of the Minister of Transport and subject to such 876 limitations, if any, as he may prescribe either generally or in any particular case, the electricity supplied under this section to a railway company at any point may be used partly for such purposes as aforesaid and partly for other purposes of the company's undertaking, being purposes for which the company are entitled to use electricity.

§ VISCOUNT ELIBANKmoved, in subsection (1), to leave out "Central Electricity Board may supply electricity directly to any railway company upon such terms and at such prices as may be agreed," and insert "Electricity Commissioners may if, having regard to all the circumstances, they think it expedient by a Special Order under Section 26 of the Electricity (Supply) Act, 1919, make provision for the supply direct to any railway company by the Central Electricity Board." The noble Viscount said: This clause is the most controversial clause in the whole Bill, as it attacks a most definite principle which was laid down in the 1926 Act—namely, that the Central Board should supply electricity only in bulk and not in retail; that railways should be placed in certain respects in a favoured position, but that definitely no supplies should be given directly to the railways by the Central Electricity Board but only through authorised undertakers. This clause as it stands takes away, or tends to take away, that right from the authorised undertakers. As the clause is framed it would enable the Central Electricity Board to supply direct, without any further application to a higher authority.

§ In regard to this clause I am speaking for the greater part of the electrical generation and supply industry of the country, and I can say quite definitely that the majority of those engaged in the industry are very much opposed to the principle contained in this clause. They are opposed to the infringement of the Act of 1926 as it stands, and they have absolutely no desire for a reversal of the policy which was laid down in that Act and which I have just described. I think it can be substantiated on all sides that the railway companies have received satisfactory treatment at the hands of the authorised undertakers and have not complained of the prices charged. In support of this I would instance the electrification which has taken place of the London to Brighton section and other sections of the Southern Railway, and I 877 would also ask your Lordships, if you have not already done so, to read a report, which has been published to-day, by Sir Herbert Walker, the General Manager of the Southern Railway, in which he points out the enormous strides which electrification has made in his railway system in the South of England, in certain dense areas and down to the coastal towns. He not only shows the strides which have been made, but he points out the advantages which have been derived from the electrification of those railways. But in that report there is not a single word which would indicate to any one that the Southern Railway is in any way discontented with the manner in which they have received their supplies.

§ In fact, the inference to be drawn from that report is that they have received their supplies in a satisfactory way, that the authorised undertakers have carried out all their obligations under the Acts, and that they have done everything possible to assist the railways to electrify those portions of their systems. Yet in spite of that, the Government are now asking Parliament to agree to an alteration in the system and to enable the Central Board to supply direct to the railways, thereby entirely reversing their policy and in some instances taking away from authorised undertakers the advantages which they derive from making those supplies. I, for one, cannot conceive what the railways have got to gain by this. In this debate we have heard no one on the side of the railways. Perhaps the noble Earl, Lord Plymouth, in his reply, or some noble Lord in the House who is a railway director, will tell us whether the railways are in favour of this change of policy and what advantages the railways will derive from it; because I am inclined to think that the advantages to the railways may not be as great as the Government seem to suppose.

§ This Amendment as it stands therefore makes certain suggestions. Whilst the undertakers and all those, or most of those, interested in that side of the industry, are very much opposed to this proposal, they feel, and I feel, that possibly it may be difficult to resist the proposal altogether. I frankly state that my inclination would be to move the omission of this clause from the Bill altogether, but I am not doing that. On the contrary, I am putting forward a 878 compromise to the Government which I hope they may see their way to accept, as being one of a reasonable nature. All I am asking is that where it is suggested that a supply is to be given direct to the railway companies, such a supply should not be given without a special order, after approval by the Electricity Commissioners, and after being laid before your Lordships' House, and presumably before another place.

§ That is a procedure laid down in the Existing Electricity Acts. It was a procedure which was laid down, as I have said, at a time when the principle was definitely agreed upon that there should be no supplies given direct to the railway companies. Now that that principle is to be reversed, which I venture to say is absolutely wrong, I can see no reason whatsoever why, at any rate, the procedure which was laid down under former Acts should not apply in the present position. The noble and learned Viscount the Leader of the House was Attorney-General in 1926 when the Act of that year was passed, and at that time he laid it down very clearly that there should be no reversal of this policy of supplying direct. But if it is to be reversed, then I submit that the proper thing is that the procedure laid down under the Act of 1926 should not be reversed at the same time. I hope that the Government will see their way to accept this Amendment. It is one which, as I have said, I am moving only because I am trying to meet the Government With a compromise in this matter. I feel sure that if they can see their way to accept this Amendment it will remove a great deal of the feeling which exists within the industry on account of this particular clause.

§ Amendment moved— Page 3, leave out lines 22 to 24 and insert the said new words.—(Viscount Elibank.)

§ LORD GAINFORD
Perhaps I may be allowed to speak on this Amendment, for the arguments are almost equally relevant to an Amendment which I have on the Paper a little later, which deals with an alternative power given to the Commissioners. My Amendment suggests that the Commissioners have to be satisfied that the supply of electricity to the company upon the terms and at the prices proposed to be stated in the agreement will not result in a financial 879 loss to the Board, and that the authorised undertaker in whose area the supply is proposed to be taken is unwilling and not in a position to give the supply on those terms and prices. It is to be recognised that we have had a very great number of Acts giving to undertakers certain powers, some by special Act, some by Provisional Order, and some by Special Order, and here it is suggested that it should be by Special Order, in the event of the Electricity Commissioners thinking that under all the circumstances it is expedient.
That seems to me to be in consonance and in harmony with past practice, but I would point out that in these various Orders which have been considered by Parliament, and given to undertakers, it has been very definitely defined that they had to have the power, over a defined area, of giving the supplies. As there was no competition they would all practically possess a monopoly in that district, but then Parliament has guarded very greatly these monopolies, and has prevented them from being able to declare more than a certain dividend and in the event of the profits being large the consumer is to have the benefit to a greater extent than the shareholders, after a certain percentage is given in dividends. All these undertakings are prepared, so far as I know, to supply, without the intervention of the Electricity Board, the railway companies with electricity at fair prices. It is to their interest to do so. Their great ambition is to secure as large a load as they can, in order to be able to produce more cheaply, and to make as high a profit as they are allowed by Parliament to make. Therefore it is to the interest of all these undertakings to do the work which it is now proposed under this Bill to hand over to the Central Electricity Board.
The point I want to urge is that no case is at present made out as against the existing undertakings. They are prepared to supply electricity on fair terms. This Bill, however, gives the Electricity Board power, at any price they like, to supply the railway companies, and when Lord Elibank a few moments ago suggested that a railway director might get up and say whether they were satisfied or not, I believe they are satisfied that electricity has been supplied when they wanted it. That, however, is quite 880 another point. If the Electricity Board are going to be allowed to supply electricity at their own price, the railway companies may be induced to take electricity all over the country, and people interested in the production of electricity want to supply it to the railway companies, but only at a fair price. It is in order to secure fair prices that we want either this Special Order or the limitation suggested in my Amendment. At the present moment I believe that the Electricity Board have indicated that the cost of electricity to the railways of this country is£70,000,000 or£80,000,000, but they have been very careful not to tell the public that the cost of work in connection with the electrification of the railways, quite apart from the scrapping of rolling stock and capital, is£200,000,000; and so your Lordships may take it that the electrification of the railway companies of this country would mean a cost of£300,000,000, and we are not in a position in this country to spend that amount of money.
It would mean, moreover, the diversion of coal from consumption by locomotives to electricity works. Now the amount of coal consumed by the railways at the present time amounts to about 5 per cent. of the output—about 9,000,000 tons a year. If you are going to adopt a principle of this kind, and give power to the Electricity Board to electrify our railways, you must be prepared for a number of things. You must be prepared to see several thousands of miners thrown out of work, and many collieries closed down, with the result that the distressed areas in this country are going to suffer, and I am quite sure that at the present moment the country is not prepared to electrify the railways in this way, or to give powers to the Electricity Board over the heads of the undertakers to provide cheap electricity at the public cost, and to the detriment of the electricity undertakings as well.
I am very glad to see the noble Viscount the Leader of the House in his place, because he made it quite clear when the Bill of 1926 was going through another place that the Government had no intention of interfering. He was then Attorney-General and he was at pains to allay any fears that Parliament was giving the Central Electricity Board a status by which they would compete with 881 ordinary authorised undertakers. This is exactly what is going to be done unless these Amendments are accepted by the Government. You are going to give the Central Board a status by which they will be able to compete with the ordinary authorised undertakers. The noble Viscount in another place said that the only power given to the Central Board was to supply any unoccupied area, and that as soon as such an area became part of an area of supply of an authorised undertaker, the right of the Board to supply direct would cease. It is in order to maintain that position that I think it is important that the Government should accept one of these Amendments, in order, at any rate, to limit the power of the Electricity Commissioners to treat unfairly the present undertakers, who are prepared to do all that is necessary to provide the railway companies with electricity.

LORD STRABOLOGI
I submit that we are not now considering whether the country can or cannot afford to electrify the railways. I quite agree with the noble Lord that the electrification of the railways will cause a lot of distress in the coalfields, but that is an argument for general planning, including the organisation of transport and using the savings to assist the men thrown out of work in other ways. But when the noble Lord says we cannot afford to electrify the railways, and uses that as an argument against Clause 2, with very great respect we are doing it now. As Lord Eltisley and other noble Lords have pointed out, the Southern Railway now has the biggest single electrified system in the world.

§ LORD GAINFORD
My point is that we are doing it now by the powers which have been conferred by Parliament on existing undertakings. In the Bill you are going to transfer those powers without any check to the Electricity Board.

LORD STRABOLGI
That is perfectly true. But the Central Electricity Board, I gather, is not going to do the electrification of the railways, it is for the railways in the first place to do it; and the conflict is as to whether in certain circumstances the Central Electricity Board shall be allowed to supply direct, or whether it shall remain the sole right and power of the undertakers. Now, the 882 Southern Railway is electrifying fast, and my information is that already the London, Midland and Scottish Railway has spent£10,000,000 on suburban electrification only. That is round the outskirts of London.

§ LORD GAINFORD
I do not think the noble Lord realises the point. It is a question of price. At the present time the undertakers are supplying the railways with all the electricity they want at an agreed price. What I am objecting to is that the power should be given to the Board to supply power for electrification at an uneconomic rate, in order that they may be able to expand their operations as an Electricity Board.

LORD STRABOLGI
I do not reply to the noble Lord because the point I was going to make is that in the case of the Southern Railway you only pass through the areas of a few undertakings. In the case of the London, Midland and Scottish Railway they have already spent the great sum I have mentioned. Suppose they now go on to electrify as far as York. Then they will pass through the areas of a great number of undertakings, and obviously it might in those circumstances be more efficient and more economical for the Board to supply to the whole of that great area, subject, to the safeguards of this Bill.
I do not know what reply the Government are going to make, but I think it is necessary to point out that it is not a question of what the country can or cannot afford, it is a question of what the railway companies can afford, and if the railway companies can raise capital, perhaps with Government assistance, to electrify, and we could provide electricity through the Board more efficiently by bulk arrangements, then all we in this House have to do is to see that no injustice is done to the separate undertakings. I am personally in favour of seeing that no injustice is done to the undertakings. They have embarked on great schemes of development on the faith of the promises made to them in 1926 in another place. But if you are going to hamper the objects of this Bill I am not sure that you are going to safeguard the undertakers, but what you will probably do is to delay the electrification of the main railways, which the country badly needs as a fillip to employment and for greater efficiency in running. Do let 883 us get the matter quite clear. The main principle of the Bill, as I said on behalf of my noble friends on the Second Reading, is very good, but do not let us whittle away all the good in the Bill by unduly hampering the operations of the Electricity Board under the well-meaning guise of safeguarding the rights of the private undertakers.

§ LORD ASKWITH
My name is also down on the Paper as mover of this Amendment, and after the interesting conversation that has taken place I must agree with the noble Lord who has just spoken when he says that he would like to do justice to the undertakers. That is the object of this Amendment—not to give too much work to the Electricity Commissioners (I trust that that argument will not be brought forward), not unduly to hamper the Central Electricity Board, but to give the protection of Parliament in this particular case, in order that grievous harm should not be done to authorised undertakings by permitting direct supply to be given, and refusing a say in the matter to the undertakers, and refusing them the opportunity to quote for and to supply the electricity that is required.
Now where is the complaint from the point of view of the railways When any big railway question has been before this House I have seen railway director after railway director spring up and put the case for the railways. Not a single one has spoken to-day. In the case of the Southern Railway—the chief case of electrification that has taken place in this country at present—no complaint has been made in the report which was made by the Chairman of that company about the electrification of the railway. The Southern Railway were able to get their supplies from four different points on their railway from authorised undertakers and from municipalities, and they have made no complaints. A railway company can take electricity at any point it likes, but if the Central Electricity Board had power to supply direct and in bulk to the railway companies there would be no saving of money; they will have to have their experts and their engineers and their accountants and so on, just as the authorised undertakers have to have theirs. They will have to produce a new system, and in doing so they will only do a great deal 884 of harm to authorised undertakers and not give them a fair chance of a cut from the joint.

VISCOUNT KNUTSFORD
Mention has been made that no railway director has said anything about this Bill. Railway directors are naturally shy and retiring individuals, and I certainly am one who does not like to speak in this House when he does not know so much about the forms and procedure of the House as he ought to know. I do not know, for instance, whether it is permissible to discuss the whole of Clause 4 on this particular Amendment. I imagine that Clause 4 was introduced by the Government to facilitate the provision of electricity to railways and to other big undertakings, and I know that if this first Amendment is carried it will delay any such undertaking for a very considerable time. I know that any Order or egg laid on that box has to be three weeks in its hatching at least. I know that this House often adjourns from July to November, and I anticipate therefore, if this first Amendment is carried, not only very considerable delay, which may be of great importance, but also that very considerable expense will be added to the carrying out of a wish to electrify part of a railway.
I do not know whether I may mention other matters. My noble friend opposite has mentioned the difficulty of passing through a large number of undertakings. He mentioned the London, Midland and Scottish going from London to York. It is quite true, taking Manchester, for instance, as a very small area, we might pass through eleven or twelve undertakings. Is a railway company to be hampered because one small undertaking objects to electricity passing through its area which it does not supply? It seems to me altogether unreasonable, and it seems to me that in this Bill the Government have proposed every sort of safeguard that humanity could ask.

VISCOUNT FALMOUTH
I have an Amendment down on this clause similar to the Amendments I have had previously. It seems to me that the authorised undertakers are taking an unnecessarily serious view of this matter. Supply of electricity to a railway company is done under Section 12 of the 1926 Act—that is to say, supply at cost, 885 plus certain additions for their charges and so on, so that the advantage to authorised undertakers with selected stations for a railway load is not very great, nothing like so much as it may appear at first sight. The chief advantage an authorised undertaker derives from a railway load is that he is enabled to improve what is called his diversity factor. It has always seemed to be unfair that a few authorised undertakers should be able to improve their diversity factors as the result of railway electrification which runs throughout the country. That improvement of diversity factor, in my opinion, properly belongs to the country as a whole. Another matter is the question that was brought up by the noble Lord opposite, and that is the question of taking on electricity at different places throughout the system, say from London to Manchester.
At the present moment railway companies take on supply at certain places if they want to, but they have to have their own transmission system; they cannot use the grid for this purpose. If this Bill becomes law they will be enabled to use the grid, and they will be able to take on the electrical supply at various points throughout their system, using the main grid transmission system of the country, effecting thereby very considerable economy. For these reasons I hope your Lordships will place no undue opposition in the way of the passing of this clause. My own Amendment meets the case perfectly fairly—that is to say, if the Electricity Commissioners are dissatisfied with the prices charged they may comment on this fact and take action. But apart from that I hope this clause will go through, because it will be a great advantage from the point of view of the electrification of the railways of this country, which is so urgently sought by traders.

§ THE EARL OF CARRICK
My name is also down on the Paper as supporting the Amendment. I speak not on behalf of the undertakers or the electrical industry: I speak as a member of the general public. After examining this clause I noticed that the Central Electricity Board are seeking to take powers by which they may supply the railways with electricity at an agreed price. The question of price is what worries me. By the Act of 1926 the Board are enabled 886 to supply electricity at bare cost of production plus the necessary overhead charges. Were this clause to be passed as it stands you would be giving the Central Electricity Board powers by which not only would it be possible but very probable that they would be supplying current to the railways at rates which would be definitely uneconomical. What would be the result? Somebody has got to make up the deficiency. It is obvious that it must be either the authorised undertaker or, in my opinion, it will eventually pass on to the general public. That is what I wish to prevent because, to put it in another form, it amounts to what one might almost say is a subsidy to the railways. What I wish to avoid, directly or indirectly, is any new form of taxation, and I wish to see every undertaking standing on its own feet. Therefore I support the Amendment.

§ THE EARL OF PLYMOUTH
During the discussion on this particular Amendment we have covered a large number of other Amendments suggested to the Bill. I do not make any complaint of that, but if I may I would take this opportunity to express the attitude of the Government towards those various Amendments. We are prepared so far as Clause 4 is concerned, as we were prepared so far as the other clauses were concerned, to accept the principle of the supervision of the Electricity Commissioners in this particular matter. I am indeed prepared to accept, possibly with certain verbal alterations, the first part of the Amendment of the noble Lord, Lord Gainford, to page 3, line 34—to insert another proviso in subsection (1).

VISCOUNT ELIBANK
Which page is that?

§ THE EARL OF PLYMOUTH
Page 12 of the Marshalled List of Amendments.

LORD STRABOLGI
Down to the last "Board"?

§ THE EARL OF PLYMOUTH
Yes, I am prepared to accept it in principle. Having said that, I think I had better deal with this particular Amendment. I do not like this Amendment for a number of reasons some of which have already been mentioned. The object of the Amendment of the noble Viscount, Lord Elibank, is to make it necessary that in order to obtain the advantages dealt with 887 under this clause the railway companies must proceed by means of a Special Order. I cannot see that there is any case for that. I cannot see that there is any case for differentiating as between one railway company and another. To begin with, I venture to say it is a question of the principle of whether this concession is to be made to the railway companies or not. That is the principle we have to decide in discussing this Bill now. I do not intend to discuss the general question of the electrification of railways and the various repercussions it might have. The case for the electrification of railways is put very clearly in the Weir Report. I do not wish to dwell upon it, but would merely say that the object of this clause is to facilitate the electrification of railways and to take away any impediments which at present exist, provided always that no injustice is done to any of the undertakers concerned.
What does this Special Order procedure entail? It is bound to entail a very considerable delay. The argument that I brought forward in dealing with the earlier clauses obtains just as much in this particular case. These are essentially business operations, and it is vital there should be no unnecessary delay. The effect of this Amendment would be to necessitate a Special Order. There would first of all be involved an application to the Electricity Commissioners for an Order. If that is contested, there would be an inquiry by the Commissioners. The Order then made has to be submitted to the Minister of Transport for confirmation. He, again, is required to hold an inquiry, and the Order, when confirmed by the Minister, requires an affirmative Resolution in each House of Parliament, which, as the noble Viscount rightly points out, might entail a very considerable delay, indeed, a delay of months.
I frankly admit, as I did on Second Reading, that this is a reversal of the policy that was maintained when the original Bill of 1926 was brought in, but it was made clear to us by the Report of the Weir Committee that there were certain matters which were impeding to a certain extent the electrification of railways. I suggest therefore that that principle should be decided in discussing this Bill, and so far as I can see there is no case for differentiating between one 888 railway company and another. What would actually happen? It would mean that every railway company which applied for these advantages would have to ask for a Special Order. In both cases, very probably, there would be two inquiries in regard to that matter, and even then you would only settle the principle. I do in these circumstances venture to say that this is not a satisfactory way of dealing with the difficulty that the noble Viscount has in mind. I would prefer to accept the limitations suggested by the noble Lord opposite, Lord Gainford. I hope, therefore, that the noble Viscount will not press his Amendment.

§ LORD GAINFORD
I do not know if might appeal to the noble Viscount, Lord Elibank, in these circumstances not to press his Amendment. I myself have realised that the Special Order might entail delay. The undertakers should be satisfied that no injustice is done to their undertaking, and they should be afforded an opportunity of going to the Electricity Commissioners and having the prices and terms considered. I think the noble Earl has fairly met me at this stage, and I am prepared to accept his offer to accept a portion of my Amendment, reserving to myself the right at a further stage, if I want to do so, to move a further Amendment. I should like to say that I appreciate very much the way in which the noble Earl has conducted the debate, and the way in which he has tried to meet us.

§ THE EARL OF PLYMOUTH
I thank the noble Lord opposite. May I also say that I also reserve to myself the right to move an Amendment to his Amendment?

VISCOUNT ELIBANK
I must say that I do not feel very satisfied with the reply that the noble Earl has given, but that is perhaps because I am so much opposed to the whole clause. Possibly if I had not such strong feelings about the whole clause I should have been more inclined to accept in another spirit what the noble Earl has said. In view of what my noble friend Lord Gainford has said, and in view of the fact that the noble Earl has conceded something in connection with this clause, I do not propose to press this Amendment to a Division, but I would ask the noble Earl once more to bring in on the Report stage the question of the Electricity Commissioners control and, 889 further, to make some arrangements under which authorised undertakers who are to-day supplying railway companies are not injured by this clause.
There is one other matter I would like to refer to before I sit down. The noble Viscount, Lord Knutsford, suggested that if this clause were not passed there would be delay and expense to the railway companies in connection with the further electrification of their railways. I only ask your Lordships to consider this one point. How is it that the company for which he was really speaking, the London, Midland and Scottish Railway Company, has within the last few months expended some£10,000,000 on the electrification of their line? They have done this without any difficulty or trouble and, I presume, with advantage to the company.

VISCOUNT KNUTSFORD
We make the electricity ourselves.

VISCOUNT ELIBANK
The reply is that the company make it for themselves and in future will take it from the grid.

VISCOUNT KNUTSFORD
Not necessarily.

VISCOUNT ELIBANK
Why have all these arrangements been made? I do not think the noble Viscount was really speaking with full knowledge. He made another point. He said one small undertaker might stop the supply for electrification over an area. Under the procedure at the present, moment there would be no stoppage, for the simple reason that a railway is enabled to take a supply at any point and pass that supply right along the line into the areas of other undertakers. In view of what the noble Earl has said I beg leave to withdraw.

§ Amendment, by leave, withdrawn.

§ LORD MIDDLETONmoved, in subsection (1), to leave out "railway company" and insert "company or authority being the owners or lessees of a railway, dock, harbour or canal undertaking." The noble Lord said: There are several Amendments standing in my name which all have the same purpose. They are tabled on behalf of the Canal Association in order that the provisions of this Bill may apply to canal undertakings equally with railways. Had I no reason to anticipate opposition I could 890 deal with these Amendments in a very few words, but as I am advised that there may be some opposition I must go into a rather longer explanation. The first three Amendments which I have put down are to Clause 4, subsection (1), of the Bill. The others I will refer to later. The object of the Amendments is to extend Clause 4 of the Bill so as to empower the Central Electricity Board to supply electricity directly to dock, harbour and canal undertakers as well as to railway companies for haulage or traction.

§ Clause 4 (1) of the Bill as it now stands will, if passed, empower the Central Electricity Board to supply electricity directly to railway companies. Clause 4 (2) empowers the railway companies to use electricity so supplied for haulage and traction on any part of their system and including any part of their dock, harbours and canals. Clause 4 is likely to be of considerable financial advantage to the railway companies because the Central Electricity Board will presumably be able to supply electricity on cheaper terms than an electric power company or other authorised electricity undertaker. I would remind your Lordships that by the schemes made by the Electricity Commissioners under Section 4 of the Electricity (Supply) Act, 1926, the more important generating stations in the country have been prescribed as "selected stations" for the purposes of the operations of the Central Electricity Board and their grid.

§ By Section 7 of the Act of 1926 the owners of a selected station are required to operate the station under the direction of the Central Electricity Board and to sell to the Board all electricity generated at the station at cost price. The owners of the selected station are then entitled to be supplied by the Central Electricity Board at their selected station with such amount of electricity as they may require for their undertaking, not exceeding the amount generated at the station, but for the electricity which they thus buy back they have to pay cost price adjusted according to load factor and power factor—commonly knows as "adjusted station cost"—or the Board's tariff as fixed under the Act of 1926, whichever is the lower. The adjusted station cost necessarily exceeds the cost price of generation, and as the Board's tariff is 891 required by Section 11 of the Act of 1926 to be fixed at such a sum as will make the Board's income cover their revenue expenditure, including interest and loan charges on capital raised for the construction of the grid, the tariff is likely always to be higher than the cost price of generation at the selected stations. It will thus be seen that the price at which the Central Electricity Board buy the whole of the electricity generated at all the selected stations in the country will almost certainly always be less than that at which the owners of selected stations can buy back electricity from the Board.

§ Therefore the Board ought to be in a position to supply a railway company at a lower price than that at which an owner of a selected station could supply. The railway companies will therefore derive a financial advantage under Clause 4 (1), and I maintain that other forms of inland transport should be given a like advantage. I admit that a supply of electricity for haulage and traction is of less importance to dock, harbour and canal undertakers than to railway companies, but these dock, harbour and canal undertakers do require electricity for haulage and traction on their dock railways and possibly elsewhere. Furthermore, several of the more important canal undertakers in the country have been expending large sums in recent years in the improvement and development of their respective undertakings. I have several examples of that which I can give if noble Lords so desire. A strong argument for extending Clause 4 of the Bill to dock, harbour and canal undertakers can be found in past legislation. There are several sections in the Electricity (Supply) Acts and many sections in local Acts of electric power companies which have placed a supply of electricity to railway companies and to dock, harbour and canal undertakers on the same footing.

§ If Clause 4 of the Bill is not extended to dock, harbour and canal undertakers it will not accord with former decisions of Parliament. I would draw your Lordships' attention briefly to the following sections of Acts of Parliament: the Electric Lighting Act of 1909, Section 5, the Electricity Supply Act, 1919, Section 12 (1), the Electricity Supply Act, 1922, Section 24, and the Electricity Supply Act, 892 1926, Section 47. To go on giving all the sections of various Acts bearing on this point would take up another half hour and I will not do that. I hope that I have convinced your Lordships that no new principle is involved. The purpose of these Amendments is merely to bring this Bill into conformity with previous legislation. It has been said that very little electricity is likely in the near future to be required for haulage on canals, but I am told that experiments are being carried out for haulage of barges on canals by electricity and even if difficulties do occur to-day they may be swept away to-morrow. It appears to me that acceptance of these Amendments would only be in accordance with justice and I hope that the noble Earl will see his way to accept them.

§ Amendment moved— Page 3, line 23, leave out ("railway company") and insert ("company or authority being the owners or lessees of a railway, dock, harbour or canal undertaking").—(Lord Middleton.)

§ LORD ASKWITH
The long statement which has just been made by the noble Lord clearly shows how dangerous it is to bring in one exception because it gives rise to a large number of others. The proposal of the noble Lord is quite contrary to the principle of the Act of 1926, and the argument that the Central Electricity Board will and must necessarily supply cheaper than authorised undertakers is begging the question and is not founded on fact. I hope the Government will not accept the Amendment.

§ LORD HUTCHISON OF MONTROSE
I wish to support the noble Lord's Amendment. Parliament again and again has linked up railways, canals and docks in Electricity (Supply) Acts. I see no just reason why canals and docks should not be included in this Bill. After all, the object of this Bill is to give railway companies cheap electrical power in bulk, and no doubt that is the object of the Government. It seems wrong to allow docks run by railway companies to be put on better terms than docks not controlled by railway companies. It seems to me that this Amendment is very well founded and that the arguments put forward by the noble Lord, Lord Middleton, are overwhelming. I do not want to detain your Lordships at this late hour by advancing long arguments, but I wish to say that 893 I think the Amendment is well founded and that I hope the Government will accept it.

§ THE EARL OF PLYMOUTH
I am afraid I cannot accept this Amendment. I would like to point out that the primary object of the clause is to facilitate the use of electricity for traction. That is the main point. One object of conferring on the Central Electricity Board power to supply direct to railway companies is to facilitate electrification of a line running through many areas. Parliament has already decided in 1926 that railway companies should have the rights of authorised undertakers as regards the price of their supplies, and the clause extends these rights as recommended by Lord Weir's Committee to cover the right of direct supply. These considerations do not arise in the case of dock and harbour and canal undertakings. I quite realise that it may be argued that the clause as drafted would enable direct supplies to be given for use in harbours and canals merely because they belonged to a railway company, but I am advised that this is not so. Supplies could only be given if required for use for haulage or traction on a railway within the harbour or canal area. If they were required for other purposes the consent of the Minister of Transport would have to be obtained, and it would not he obtained if there were any valid objection to it. So far as canals are concerned I would merely say that if a serious proposal were made for the application of electric traction to a long stretch of canal passing through many areas, the matter could be dealt with by this House when the proposal was put forward, but I gather that the only use of electricity by canal undertakers at present is of a local nature and that it is appropriately supplied by the undertakers in the particular area.

§ LORD HUTCHISON OF MONTROSE
Before the noble Earl sits down will he explain why it is that the Government have selected railways only and have departed from the phraseology of Section 47 of the 1926 Act, where they linked up railway, dock, harbour and canal undertakings? There must be some reason why they have suddenly cut out the other undertakings and stuck to railways only.

§ On Question, Amendment negatived.

894

§ VISCOUNT FALMOUTHhad given Notice that he would move, in subsection (1), immediately before the proviso, to insert: Provided that the prices and conditions at and upon which the Board may supply electricity under this section shall be fixed so that over a term of years to be approved by the Electricity Commissioners the receipts on income account shall be sufficient to cover the expenditure on income account including interest and sinking fund charges with such margin as the Electricity Commissioners may allow. The noble Viscount said: In view of what the noble Earl in charge of the Bill has said in connection with previous Amendments, I will not move this Amendment.

§ VISCOUNT ELIBANK had given Notice that he would move, in the proviso in subsection (1), to leave out "the Central Electricity Board shall not enter into any agreement with a railway company for the supply of electricity to that company under this section" and insert "no such Order shall enable a railway company to use electricity so supplied." The noble Viscount said: This Amendment is consequential on an earlier one, and in view of that I will not move it. I assume that will be on the same understanding as in the other case.

§ LORD ELTISLEYmoved, in the proviso in subsection (1), to leave out "at any point" and insert "for use." The noble Lord said: Those on whose behalf this Amendment has been tabled regard it as an important Amendment. As I understand that the noble Earl in charge of the Bill will be good enough to accept the Amendment, perhaps I need not weary the House by giving my reasons for moving it.

§ Amendment moved— Page 3, line 28, leave out ("at any point") and insert ("for use").—(Lord Eltisley.)

§ THE EARL OF PLYMOUTH
I think I may save time by saying that I am prepared to accept this Amendment in principle and to let it go into the Bill now, but I think the words may require some slight alteration.

§ On Question, Amendment agreed to.

§ LORD ELTISLEYmoved, in the proviso in subsection (1), to leave out "who own a selected station." The noble Lord said: The object of this Amendment is to extend to all electricity undertakers 895 the qualified veto given by the proviso to Clause 4, subsection (1), to a selected station owner on the supply of electricity by the Central Electricity Board to a railway company for use within the area of supply of the electricity undertakers. This Amendment has to be considered with a subsequent Amendment in Clause 4—to omit certain words from the proviso in subsection (1) and to insert another proviso—which it is hoped the Government will be able to accept. I beg to move.

§ Amendment moved— Page 3, line 29, leave out ("who own a selected station").—(Lord Eltisley.)

§ THE EARL OF PLYMOUTH
I am afraid that I cannot accept this Amendment. In the case of any substantial scheme of railway electrification the supply to the railways would require to be given at a number of points and to be used in the area of supply of various undertakers traversed by the electrified line. As I understand it, if a supply were given by a power company or joint authority, the other undertakers would have no veto, or qualified veto, as to the use of the electricity in their area of supply, and there is no reason Why they should be given a qualified veto if the railway supplies are effected direct from the grid system of the Central Board. In this connection it might be apposite to quote certain words used in the Report of Lord Weir's Committee on Main Line Electrification. That Report says this: A railway runs through the territory of many authorised undertakers, some small, others large. In a great main line electrification scheme it is clearly impracticable for a railway company to make individual agreements, which are necessarily elaborate, with a number of independent undertakers. Such divided responsibility and the difficulties of co-ordination would be definitely harmful to a comprehensive scheme of supply. Moreover, it is clear that the demand for electrical energy from the substations along the main line would not coincide in time, and were such individual demands to form the basis of the charge to be made by each undertaker, the result would be inequitable and uneconomical.

§ LORD ELTISLEY
I accept that, and beg leave to withdraw.

§ Amendment, by leave, withdrawn.

§ VISCOUNT ELIBANKhad given Notice that he would move to leave out all words in the proviso in subsection (1) after the second "undertakers." The noble 896 Viscount said: I do not propose to move this Amendment, because Lord Eltisley has an Amendment on the Paper following mine which covers my point and adds a proviso with which I am in entire agreement. I will not speak upon his Amendment.

§ LORD ELTISLEY
Why not?

VISCOUNT ELIBANK
The point is that under the law as it now stands the owner of a selected station is entitled to get back from the Central Board at his own station a sufficient supply at cost price for his own customers. If he is deprived of a railway supply, that is to say as one of his own customers, it must affect the cost at the generating station, and instead of his obtaining the advantage of that supply, which will tend to lower the cost at the station, the clause as it now stands might result in increasing his cost by giving to the Central Board all the benefits of that supply. It is proposed to alter that, and at the same time the proviso will interpret what is meant by the word "unreasonable."

§ LORD PONSONBY OF SHULBREDE
I do not want to interrupt the noble Viscount, but may I remind him that he has not put a question and that there is nothing before the Committee at the moment?

VISCOUNT ELIBANK
Then I will not move my Amendment so that Lord Eltisley can speak on behalf of his.

§ LORD ELTISLEYmoved to leave out all words in the proviso in subsection (1) after the second "undertakers," and insert: Provided also that where the authorised undertakers refuse or withhold their consent the Board may appeal to the Electricity Commissioners as to whether the consent is unreasonably refused or withheld and the Electricity Commissioners may dispense with such consent if in their opinion it is unreasonably refused or withheld, and the consent shall be deemed to be unreasonably refused or withheld if the authorised undertakers are not willing and in a position to give the supply within a reasonable time and at the price specified in Section 12 of and the Third Schedule to the Electricity (Supply) Act, 1926, as amended by this Act. The noble Lord said: I beg to move.

§ Amendment moved— Page 3, line 30, leave out from ("undertakers") to the end of subsection (1) and insert the said new proviso.—(Lord Eltisley.)

897

VISCOUNT ELIBANK
I will conclude my speech after that interruption. The noble Lord opposite was quite right to interrupt me. The point is this, that under the clause as it now stands there is no interpretation of the word "unreasonable," and what we wish to ensure is that the word "unreasonable" shall not be unreasonably interpreted by the Electricity Commissioners and that any authorised undertaker who is in a position to give the supply which is asked for by the railway company within a reasonable time and at the same price as, or perhaps at a lesser price than, the Central Electricity Board, shall have the power to supply that energy. That really sums up the Amendment, and I hope that in view of the fact that the Government would not agree to my first Amendment, which was to some extent along the same lines, they may be more sympathetic to this one.

VISCOUNT FALMOUTH
I hope the Government will not accept this Amendment, because it is completely a wrecking Amendment, and makes the remainder of the clause quite negative.

§ THE EARL OF PLYMOUTH
I am afraid I am unable to accept this Amendment. The object of Clause 4 is to enable the Board to make agreements with railway companies for the supply of the large quantity of electricity required for railway electrification at terms which may be below the ordinary rates provided by Section 12 of the 1926 Act. This proposed proviso would result in any undertaker being able to exclude the Board from giving a supply to a railway company if the undertaker was prepared to give the supply under the terms of Section 12, which is passing on at the same rate at which it was received from the Board, that is, in the case of ordinary undertakers, at tariff prices. It therefore might conflict with the object of the clause. The owners of large selected stations, however, who receive their supplies at "selected station costs" which are in the case of important stations below the general tariff, might be able to give supplies to railway companies at terms comparing favourably with those which the Board is able to offer. These undertakers are adequately protected by the clause as it stands. The satisfactory solution therefore, I venture to say, is that proposed in the Bill as it stands.

§ On Question, Amendment negatived.

898

§ LORD GAINFORDmoved to add to subsection (1): Provided also that the Central Electricity Board shall not enter into any agreement with a railway company for a supply of electricity to that company under this section unless and until the Board have satisfied the Electricity Commissioners that the supply of electricity to the company upon the terms and at the prices proposed to be stated in the agreement will not result in a financial loss to the Board. The noble Lord said: I beg to move this Amendment, which I understand the Government are prepared to accept in this modified form.

§ Amendment moved— Page 3, line 34, at end, insert the said proviso.—(Lord Gainford.)

§ On Question, Amendment agreed to.

§ LORD ELTISLEYmoved to add to subsection (1): Provided also that the Central Electricity Board shall not enter into any agreement with a railway company for a supply of electricity to that company under this section unless and until the Board have satisfied the Electricity Commissioners that the payment for such supply on the terms and at the prices proposed to be stated in the agreement will cover all expenses of the Board (including interest and sinking fund charges on any capital expenditure incurred) in providing such supply. The noble Lord said: I am not quite clear how far the Amendment just accepted covers the ground which I desire to cover by my Amendment. The object of the Amendment which I have tabled is to secure that the Central Electricity Board shall not supply electricity to a railway company on terms which are unremunerative to the Board.

§ Amendment moved— Page 3, line 34, at end, insert the said proviso.—(Lord Eltisley.)

§ THE EARL OF PLYMOUTH
I think that the Amendment of Lord Gainford really covers the point raised by the noble Lord behind me. I am not in a position to state the exact words in which I think this clause will be found after passing through this House, but I have accepted the principle of the Amendment and only reserved to myself the right to make such verbal alterations as may be thought necessary.

§ Amendment, by leave, withdrawn.

899

§ LORD ELTISLEYmoved, in the proviso in subsection (2), after "limitations," to insert "and conditions." The noble Lord said: I beg to move.

§ Amendment moved— Page 4, line 2, after ("limitations") insert ("and conditions").— (Lord Eltisley.)

§ THE EARL OF PLYMOUTH
I accept that.

§ On Question, Amendment agreed to.

§ LORD ELTISLEYmoved to insert the following proviso: Provided that the Minister of Transport shall not in any case give any such consent until notice of the application for the consent has been given by advertisement or otherwise in such manner as he may direct and an opportunity has been given by him to any person affected of making representations and being heard thereon. The noble Lord said: This Amendment relates to the power proposed to be given to the Minister of Transport by the proviso in subsection (2) of the clause, to permit a railway company supplied with electricity by the Board under Clause 4, for haulage or traction, to use electricity so supplied for other purposes of the railway company's undertaking—for example, the lighting of stations, and so on. The object of the Amendment is to secure that authorised undertakers affected by the use by a railway company, for ancillary purposes such as the lighting of stations, of electricity received under the clause from the Board, should have the right of objecting to such use before the Minister sanctions it. The proviso is identical with the proviso to Section 47 of the Act of 1926, which section similarly provided that a railway company receiving electricity from authorised undertakers for haulage or traction could, with the consent of the Minister, use the electricity so supplied for any purposes of their undertaking. I hope this explanation is sufficient.

§ Amendment moved— Page 4, line 8, at end, insert the said proviso.—(Lord Eltisley.)

§ THE EARL OF PLYMOUTH
I think this is covered by a later Amendment of mine. The wording is not exactly the same, but it is preferred by the Government, and therefore I hope that the noble Lord will accept my Amendment.

§ Amendment, by leave, withdrawn.

900

§ THE EARL OF PLYMOUTHmoved, at the end of the proviso, to insert: but the Minister shall not in any case give any such consent until notice of the application for the consent has been given by advertisement or otherwise in such manner as the Minister may direct, and an opportunity has been given to any person who appears to the Minister to be affected of making representations thereon. The noble Earl said: This is the Amendment to which I have just referred.

§ Amendment moved— Page 4, line 8, at end insert the said words.—(The Earl of Plymouth.)

§ On Question, Amendment agreed to.

§ VISCOUNT FALMOUTHmoved to insert the following new subsection: (4) The Board shall pay to any authorised undertakers directly affected by any action taken by the Board under this section such sum as may be agreed between the Board and the undertakers, or, in the absence of agreement, as may be determined by the Electricity Commissioners as compensation in respect of the value depreciated in accordance with a scale fixed by the Electricity Commissioners of any capital expenditure which may have been incurred by such undertakers in giving a supply to a railway company, and which by the action of the Board shall be rendered wholly or partly unremunerative to the undertakers. The noble Viscount said: The object of this Amendment is this. An authorised undertaker who has been giving a supply of electricity to a railway company for lighting stations, or for use with cranes and other machinery, may suddenly be told that the supply will be taken away from him, and that the company will in future take from the Central Board. Many of these contracts are terminable at forty-eight hours notice, and I feel that considerable injustice may be done to authorised undertakers if they are not protected in some way. I beg to move.

§ Amendment moved— Page 4, line 8, at end, insert the said new subsection.—(Viscount Falmouth.)

VISCOUNT ELIBANK
I shall now be glad to support my noble friend. I think it is an Amendment which is most reasonable, and one which should be incorporated in the Bill. It really would be most unfair, as I said at an earlier stage, if authorised undertakers who are supplying electricity to railway companies are suddenly deprived of that supply without any form of compensation at all. I hope the Government will see their way to accept the Amendment.

901

§ THE EARL OF PLYMOUTH
I am afraid I cannot accept this Amendment. I think it would be very objectionable in principle to load the Electricity Board with commitments of this kind. So far as I can see there is no reason why the Board should be asked to pay compensation which any other authorised undertaker taking over supply would not be obliged to pay. If the clause refers to supplies given for traction purposes any contract is made on the basis that if it is terminated at the end the suppliers will have recouped themselves for any necessary outlay, and they should have no claim for any further compensation. If the reference is to supplies given by local undertakers for lighting or other purposes at Board points, then if any hardship appears to arise the Minister before giving his consent for the use of a traction supply for other purposes would take this into consideration.

VISCOUNT ELIBANK
If an authorised undertaker took over a concern from another authorised undertaker who was supplying power to a railway company he certainly would be compensated by that authorised undertaker, because, as the noble Earl knows, the diversity factor involved in that supply is a certain advantage to the authorised undertaker. Therefore, that argument of the noble Earl does not seem to me to stand on all fours.

§ Amendment, by leave, withdrawn.

§ Clause 4, as amended, agreed to.

§ LORD ELTISLEYmoved, after Clause 4, to insert the following new clause:

§ Central Electricity Board to contribute to expenses of Electricity Commissioners.

§ ".Notwithstanding anything in this Act the Central Electricity Board shall continue to be authorised undertakers for the purposes of the apportionment of the expenses of the Electricity Commissioners in pursuance of Section 29 of the Electricity (Supply) Act, 1919, as modified by Section 7 of the Electricity (Supply) Act, 1922, and subsection (3) of Section 9 of the Electricity (Supply) Act, 1926."

§ The noble Lord said: I desire to remind your Lordships that the Central Electricity Board are authorised undertakers within the meaning of the Electricity (Supply) Acts, and in that capacity are liable to bear part of the expenses of the Electricity Commissioners on the like basis as all other authorised undertakers. But so long as the Board only supply electricity in bulk to authorised under 902 takers the apportionment against them of the Commissioner's expenses is nil. If, however, the Board commence to supply electricity to railway companies under Clause 4 they will then be supplying electricity otherwise than in bulk to authorised undertakers, and with respect to the supply to the railway company they ought to bear the proper apportioned part of the Commissioners' expenses. It may perhaps be urged that this clause is unnecessary because its object is already provided for in the existing Acts. Nevertheless, undertakers would be glad to have the Amendment, or in any case to have a definite statement from the Minister to this effect.

§ Amendment moved— After Clause 4 insert the said new clause. —(Lord Eltisley.)

§ THE EARL OF PLYMOUTH
I am quite prepared to give that assurance. It is the view of the Minister that this is entirely unnecessary and redundant, and that the position is perfectly covered as the Bill at present stands.

§ LORD ELTISLEY
I beg leave to withdraw the Amendment.

§ Amendment, by leave, withdrawn.

§ Remaining clause agreed to.