§ Order of the Day for the Second Reading read.
§ LORD TEMPLEMORE
My Lords, I beg to move that this Bill be read a second time. It has been drafted largely to give effect to the unanimous recommendations made in the Reports of the Gas Legislation Committee, a Committee generally known as the Wrottesley Committee, which was appointed by the President of the Board of Trade in 1931. As your Lordships are aware, almost the entire gas supply of the country is furnished by statutory undertakers who operate under powers conferred directly upon them either by special Acts or Orders. The fundamental Acts upon which these powers are founded are the Gasworks Clauses Acts, 1847 and 1871, which are incorporated when Parliamentary authority is given. This somewhat old legislation has, on the whole, operated extremely satisfactorily but, as a result of development in the industry and of the changed demand which it has to meet, the legislation in question in some respects became inadequate to meet the requirement of modern conditions. Such a change is naturally to be expected and the fact was recognised by the 78 passage of the Gas Regulation Act, 1920, which authorised charging for gas on the basis of the heat which it will provide instead of on the volume of gas consumed.
This alteration in the method of selling gas gave an impetus to development in gas manufacture, and the industry, in 1926, made representations through the National Gas Council, in a memorandum addressed to the President of the Board of Trade, urging that fresh amending legislation should be introduced at an early date to facilitate still further the work being carried on by this great industry. The memorandum in question was, in 1927, referred for examination to the National Fuel and Power Committee, of which the late Lord Melchett was Chairman. This Committee appointed a sub-committee to consider and report upon the questions raised by the National Gas Council, and the sub-committee reported in August, 1928, that they had "been impressed by the representations of the National Gas Council," and urged that steps should be taken without delay to promote legislation to give effect to its recommendations. The sub-committee's report was approved by the main Committee in the Second Report of the National Fuel and Power Committee, which was issued as Command Paper 3252. To the more simple of the proposals thus approved effect was given by the Gas Undertakings Act, 1929, while the others were left over for further detailed examination which was deemed necessary because the National Fuel and Power Committee had considered the matter only on the general ground of broad national policy. Such a detailed examination has been carried out by the Gas Legislation Committee, who were appointed under the chairmanship of Mr. Wrottesley, K.C.
The Committee have presented three unanimous Reports. The proposals in the First Interim Report, relating to powers of gas undertakers to invest capital in other gas undertakings and allied industries, have already been dealt with in the Gas Undertakings Act, 1932, which I had the honour to conduct through your Lordships' House. This Bill, with your Lordships' approval, will give effect to the recommendations in the Second' Interim Report (Command Paper 4237) and the Final Report (Command Paper 4288). Your Lordships will find that all the recommendations which require legislation 79 in these two Reports have been dealt with in this Bill, with the exception of two. The first of these is that gas undertakers should be empowered to impose a minimum quarterly charge upon consumers, and the second, a recommendation that, where an application for a Special Order is unopposed, it should not be necessary to lay the Order in draft before both Houses of Parliament and obtain an affirmative Resolution approving the draft before the Order is made, but that the Board of Trade should make the Order and then lay it.
To come to the clauses of the Bill, the first group, Clauses 1 to 4, deals with capital and renewal funds. These clauses are based on the recommendations of the Final Report of the Gas Legislation Committee. Similar clauses have recently been embodied in Private Acts approved by your Lordships and these clauses will extend the additional powers to all undertakers to whom they are appropriate. The second group of clauses (Clauses 5 and 6), relating to charges for gas, gives effect to the recommendation in the Second Interim Report of the Gas Legislation Committee, with the exception to which I have directed the attention of your Lordships. These clauses will, by liberating the industry from unnecessary restrictions in entering into contracts with consumers desirous of contracting out of the normal conditions of sale, facilitate the use of gas by industrial and other special contract consumers, and will tend to develop the use of home-produced fuels, which your Lordships will agree is much to be desired.
The third group of clauses (Clauses 7 to 9) gives effect to the recommendations of the Gas Legislation Committee with respect to non-statutory undertakers and undertakers other than thermal unit undertakers. These undertakers, who are operating on a small scale, sell gas on the old system, that is, by volume, and the requirement is placed upon them that after January 1, 1939, gas supplied by them should be at a pressure not less than a specified minimum. Non-statutory undertakers are defined in the Bill and quite roughly are persons whose principal business is supplying gas to the public and who have not statutory powers. It is proposed that non-statutory undertakers that supply more than 30,000,000 80 cubic feet of gas a year shall, after a short period, become statutory, receiving thereby the powers necessary to the efficient conduct of the business of gas supply and having imposed upon them the usual obligations. The clauses further impose upon all non-statutory undertakers and non-thermal unit undertakers a requirement to supply gas at a pressure not less than a specified minimum. The fourth group of clauses (Clauses 10 to 14) deals with various amendments to the Gas Regulation Act, 1920, some recommended by the Gas Legislation Committee, some consequential upon the provisions of the last group of clauses that I have mentioned, and some to assimilate the position of the standards utilised in the sale of gas to other commercial standards.
I may, perhaps, remind your Lordships that in 1920, when the sale of gas by the therm, that is to say, on the basis of the heat units which it will yield, was authorised, the measurement for commercial purposes of heat units was by no means in a satisfactory condition. Accordingly, it was at that time deemed necessary to place the responsibility for the necessary tests in the hands of the Gas Referees. To-day, as a result of the work of the eminent scientists, who have been appointed by the Board of Trade to the office of Gas Referees, the determination of calorific value is one which can be effected for commercial purposes with great precision. Representations were made last year by the industry through the National Gas Council, that the position should be reviewed, and the Government propose that the Board of Trade should be made responsible for this work just as they are now responsible for the maintenance of other commercial standards.
An interval of five years is, however, provided in the Bill to admit of certain improvements, now in process of development, being effected in the testing apparatus and methods of its use, but, after this, the office of Gas Referee will no longer be required and is, therefore, being abolished. When the Gas Regulation Act, 1920, was passed, provision was made for various appeals from the prescriptions of the Gas Referees and the reports of the Gas Examiners, and these appeals were all to be heard by the Chief Gas Examiner. Experience has 81 shown that some of these appeals are never required and has led to the view that the remaining duties attached to this post could be more reasonably carried out by the appointment, ad hoc, of a competent and impartial person to hear an appeal than by a single annual appointment. It is, therefore, proposed by the Bill to abolish the post of Chief Gas Examiner.
Clause 15 of the Bill makes provision for enabling a gas undertaker to give a supply of gas in bulk to another undertaker. This clause makes applicable the provisions of the Gasworks Clauses Acts, with respect to such breaking up of streets as may be necessary for its purposes. The remaining clauses make general powers which are commonly given to undertakers in Special Acts and Orders. The proposals in the Bill have to a large extent been asked for by the gas industry and have been considered favourably by two entirely independent Committees. The necessity of freeing the business of gas supply from restrictions, which, though possibly necessary when the industry was in a monopolistic position, are to-day but a handicap to efficiency, has long been represented on all sides. I think I have explained this Bill as far as I can to your Lordships. When we come to the Committee stage I shall have a certain number of Amendments, some of them, in fact I think most of them, of a drafting nature, to propose to the House. In conclusion I can only say I regret to have kept your Lordships longer than I had hoped on this somewhat dull but very necessary subject of gas. I beg to move that the Bill be read a second time.
§ Moved, That the Bill be now read 2a.—(Lord Templemom.)
THE CHAIRMAN OF COMMITTEES (THE EARL OF ONSLOW)
My Lords, may I add one word to the words which have fallen from my noble friend who has so eloquently and with such great scientific knowledge explained this complicated Bill to your Lordships? This is one of those useful Bills which further local legislation by embodying—as a great deal of the Bill embodies—clauses which have been introduced for some time past into Private Bills and are what is known as stock clauses in Private Bill legislation. That is a method by which our local 82 legislation has been developed, and usefully developed, for many years. Your Lordships had all example of it in Lord Falmouth's Electricity Bill of last year. This Bill, as my noble friend has said, has been carefully examined by the Board of Trade and it is based upon recommendations of what is known as the Wrottesley Committee. I have been through it in my Department very carefully, and I think it is a Bill which will further the interest of local legislation and simplify Private Bill legislation. Therefore I venture to recommend it to your Lordships.
§ LORD MOUNT TEMPLE
My Lords, may I say one word in support of this Bill? It is really necessary that some legislation should be passed in order to enable the gas undertakings to compete more on equal terms with the electrical undertakings. It was my privilege some years ago to pilot a Bill through the House of Commons to give more liberty and more advantages to the electrical undertakings. One always felt at the time that the gas undertakings were under a very substantial disability compared with electrical undertakings. This Bill does not give to the gas undertakings all that they are really entitled to, but at any rate it does go a good way, especially in Clause 15, to help them to carry on business more expeditiously and with greater economy. For that reason I support the Bill most enthusiastically.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.