HL Deb 31 July 1947 vol 151 cc858-70

3.0 p.m.

Read 3a, with the Amendments (according to Order).

Clause 3:

Constitution of Central Authority and area boards.

(5) The Minister shall appoint one or more of the members of the Central Authority to be deputy chairman or deputy chairmen of that Authority, and shall appoint one of the members of each of the area boards to be deputy chairman of that hoard.

LORD WOLVERTON moved, in subsection (5), after the second "shall" to insert "after consultation with the Central Authority." The noble Lord said: My Lords, I beg to move this Amendment which was discussed on the Report stage. Unfortunately we made an error, and the Lord Chancellor said he would accept the Amendment if we put that right on Third Reading.

Amendment moved— Page 7, line 3, after ("shall") insert ("after consultation with the Central Authority").—(Lord Wolverton.)

THE LORD CHANCELLOR

My Lords, I am very happy to accept this Amendment. As the noble Lord, Lord Wolverton, has just said, there was a clerical error before which made obscure what was actually wanted. When the noble Lord, Lord Hawke, told me he did want this, I wrote to him and said that if he could put it down in this form I would be pleased to accept it.

On Question, Amendment agreed to.

Clause 14:

Special provision for electricity holding companies.

(2) Every company to which this section applies shall be deemed not to be an electricity holding company for the purposes of the provisions of this Act.

VISCOUNT SWINTON moved, to add to subsection (2): and accordingly the company shall be entitled to be compensated in respect of the securities held by them in like manner in all respects as is by this Act provided for the compensation of other holders of the like securities. The noble Viscount said: My Lords, if it would not be out of order I should like to express appreciation at the able way in which the authorities of the House have managed to produce a revised version of this Bill. We only finished our deliberations, it seems, but a few hours ago. I was consulted, and I took it upon myself to say that, with the enormous amount of work which the officers of the House, the printers and everybody else had upon them, I thought we could quite well proceed on the old Bill and the Amendments on the Paper. However, the officers of the House, and everybody else thought that was not the kind of service which they gave, and so this completely revised version has been produced in an incredibly short space of time with complete accuracy. I would just like to say that I do not think you could have a better example of day and night service than that, which is characteristic of the service which we get from them all.

This Amendment covers a very brief point. The words which I propose to insert are a suggestion which I venture to make in order to make it clear beyond any doubt what is the effect of subsection (2). I was advised—I think rightly, but I am not sure—that actually the words of Clause 14 (2) as they stand would have this effect. I was, however, left in some little doubt owing to some observations that fell from the noble and learned Viscount, the Lord Chancellor. There is no doubt at all as to what we do mean, and I would very much like the advice of the noble and learned Viscount as to whether it is wiser to put in these words, and to declare in terms what I believe would be the effect of subsection (2) even if the words were not there. I think the House would like to take his advice. I know that we do not all agree about the substance of this Amendment, but whatever it is we ought to get it into the right form to make sure that it does express in the best possible language what we intend to do. I beg to move.

Amendment moved— Page 18, line 44, at end insert the said words.—(Viscount Swinton.)

THE LORD CHANCELLOR

My Lords, I cannot say that I have had oceans of time in which to consider this and kindred matters, but I think that I have had sufficient time and sufficient advice to enable me to assure your Lordships that this Amendment really adds nothing. I think the effect of the clause as we have got it to-day would be just the same whether these words were added or not. I do not know whether that is sufficient to satisfy your Lordships. If it is, I will abstain from further lengthy observations.

VISCOUNT SWINTON

I am obliged to the noble and learned Viscount. That is the advice that I have received, and if it is endorsed by the noble and learned Viscount we certainly cannot have a higher authority for what is the right thing to do in the way of drafting. I think it would be wrong to add words unless they are necessary and, therefore, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 30:

Reopening of transactions resulting in dissipation of assets.

Provided that this section shall not apply:

  1. (i) to any payment or other transaction to which section twenty-six of this Act applies;
  2. (ii) to any payment or other transaction made or entered into for any charitable purpose; or

THE LORD CHANCELLOR moved, in subsection (1), after paragraph (ii) of the proviso, to insert: (iii) to any payment or other transaction trade or entered into in connection with the determination of any question, dispute or matter falling to be determined under any provision of this Part of this Act or any regulations made thereunder"). The noble and learned Viscount said: My Lords, this is an Amendment which I put clown in order to meet a point raised by my noble friend Lord Rennell. He wanted some words of this sort. I rather think that I have shown these words to him, and that he has approved them. However, I cannot hold him to that, because I really cannot remember. But I do think they carry out the noble Lord's desire, and that, accordingly, it would be the wish of your Lordships that these words should be inserted. I beg to move.

Amendment moved— Page 50, line 35, leave out ("or") and insert the said paragraph.—(The Lord Chancellor.)

VISCOUNT SWINTON

My Lords, I was also concerned in this, and I think these words do entirely cover what both my noble friend Lord Rennell and I had in mind. They are to cover the boards of directors as long as they are in business in doing everything which is right and proper.

On Question, Amendment agreed to.

3.7 p.m.

THE LORD CHANCELLOR

My Lords, I beg to move that this Bill do now pass, and, following precedent, this is the occasion on which we make such brief statements as are necessary. As is appropriate in the case of an Electricity Bill, this Bill has occasioned a good deal of energy, but I am glad to say has given rise to no heat. We shall have to wait for the Gas Bill to do that, I have no doubt.

I am very grateful to all your Lordships for the assistance which you have given me in going through this Bill. All I ask for on these occasions is for some statistics about Amendments, and so on. May I just say here that I made some observations the other day which might have been misinterpreted, when I commented on the fact that this Bill, unlike the Town and Country Planning Bill, had had a very full hearing in another place and that many Amendments had been moved. I did not mean by that to suggest for one moment that that in any way limited or prejudiced your Lordships' right to consider every line of the Bill. But I did mean this. When you are considering my statistical survey, which I am about to give—the number of Amendments which I have been able to accept, and so on—it is obviously not legit mate to compare this Bill with the Town and Country Planning Bill, large chunks of which had never been considered at all. On this Bill every line was carefully gone through, and in another place a large number of Amendments moved by the Opposition were, in fact, accepted. That is all I meant.

In the three days which were spent in Committee, I am told that there were notices of 203 Amendments, 72 by the Government and 131 by the Opposition and other noble Lords. Of these 5o were withdrawn after discussion, and of the remainder that were moved 87 were agreed to, 16 being Opposition Amendments. Sixteen out of 87 may not sound a high proportion, but your Lordships must remember that many of the Government Amendments were put down in order to meet difficulties which were indicated to them before. On the Report sage, notices of 49 Amendments were given, 35 by the Government, all of which were agreed, and of those 13 were put down to meet points made by the Opposition. Of the 14 Opposition Amendments, 6 were agreed to, so the score is 22 for the Government and 19 for the Opposition. To-day on Third Reading I have accepted an Amendment by the noble Lord, Lord Hawke and another to meet a point raised by the noble Lord, Lord Rennell and the Amendment of the noble Viscount, Lord Swinton, would have made a tie between the two.

I think that gives a fair indication of what we have been able to do working in this way. All I can do is to thank .your Lordships for the help you have given. I do not refer to the two clauses upon which we did not see eye to eye, because there are always bound to be clauses upon which we do not see eye to eye, but so long as we state our point of view frankly and fully and try to understand each other's point of view, that is all we can do. However, I am very grateful to Your Lordships, and I beg to move twat this Bill do now pass.

Moved, That the Bill do pass.—(The Lord Chancellor;)

3.12 p.m.

LORD BALFOUR OF INCHRYE

My Lords, on behalf of those who sit on these Benches I would like to express our appreciation to the noble and learned Viscount on the Woolsack for the remarks he has made, and particularly for the statistical information which he has given us. He remarked that the Bill had absorbed energy and developed no heat. He has now completed the matter by throwing a bright light upon our work. We are to-day saying good-bye to this major measure. I would like to remind the House that we registered, on Second Reading, our dislike of the policy contained in the Bill. We made that quite clear. But having done that, all of us who have been concerned with this Bill have done our very best to try to improve it so that if it is passed into law it shall be the best possible measure.

A great many changes and improvements have been made. I think probably the biggest one is the postponement of the vesting date for six months, and the decision that the area boards should not be set up less than three months before the vesting date. The next improvement which pleases us on this side of the House is the concession the Lord Chancellor gave that the Minister will consult with the Central Authority before setting up the area boards. We naturally regret the basis of compensation, but that was debated and we can do nothing more about that. We are glad that the position of the directors has been ameliorated to the extent which is possible within the main provisions of the Bill, and we are also glad that the £5,000,000 for the local. authorities is to be distributed upon some other basis than that which was contained in the previous proposal.

There is one clause which the Government do not like, and the fate of which is unknown in the future. That is the Appeal Tribunal clause, upon which I would enter a last plea for its favourable consideration by the Government. The Appeals Tribunal will do something that no area consultative council can possibly do. The Appeals Tribunal will be a national body which will, in the course of its work, build up a national practice, a national structure, as regards rates and complaints, and no area body can possibly do that. You will have fourteen unco-ordinated bodies considering complaints, as against one national body which would build up a national code. I am sure we would like to thank the Ministers of the Government who have worked with us on the Committee stage of this Bill. We should feel happier about the future of the electricity industry if this measure had not been introduced. But now it has been introduced and passed, I feel quite certain that noble Lords on all sides of the House have one dominant wish in their minds, which is that the consumers of electricity shall have satisfactory service and efficient service, and that those engaged in the industry, from the highest executive to the most junior man, shall be engaged in work in which they are both proud and successful in the national interest.

3.16 p.m.

LORD RENNELL

My Lords, may I apologize to the noble and learned Viscount for not having been here at the beginning of his remarks. I am very happy to have taken a small part in the consideration of this Bill, especially in regard to the one Amendment which has earned great support from my noble friends on other Benches. Yet to me, the Bill is perhaps more disappointing than it is to others in your Lordships' House, because I cannot help regretting that a Bill with this very wide scope—even though my noble friends on these Benches are entirely in agreement with the nationalization of the electricity industry in this country—should pass into law with what I must regard as certain blemishes. Those blemishes have been discussed at great length in Committee, and I do not wish to detain your Lordships again on what might be called the administrative structure of the Bill and the industry. That is not to say that I am not profoundly grateful for the Amendments which the noble and learned Viscount and his colleagues were good enough to agree to on my suggestion and on the suggestion of others.

There remains, however, one aspect of the Bill to which I am afraid I cannot refrain from alluding. That is the basis of compensation which I still regard as unjust. Many of us were not happy—it might perhaps be discourteous to refer to it as inconsistent—with regard to the attitude of the Lord Chancellor upon compensation. The subject is all the more pertinent having regard to certain events which took place while these deliberations were going on in your Lordships' House.

The noble and learned Viscount on the Woolsack said quite clearly, explicitly and concisely, that apart from the Transport Bill (and in the Transport Bill there were certain special considerations) this was the first occasion upon which compensation for property taken over had been paid not to the persons who owned the property, but to other persons. I refer to compensation being paid on the taking over from companies by paying out the shareholders instead of paying the corn-panics compensation for property taken over from them.

In that context I cannot refrain from referring to a case before the Courts which was going on at the time when these deliberations in your Lordships' House were in progress. It will not be unknown to the noble and learned Viscount that there was, on Tuesday of last week, a case of the Treasury against Short Brothers going on where learned Counsel representing the Crown was taking a very different attitude on the subject of compensation for the retaking over of the shares of that company, from that which was taken by the noble and learned Viscount on the Woolsack on this Bill. If your Lordships will recollect various statements were made in another place, one of which was that there was no distinction between taking over the assets and taking over the companies. I will not detain your Lordships by making quotations from the various speeches delivered from the Government Benches. There was, however, a clear inference that His Majesty's Government, both in another place and in your Lordships' House, were telling the public that there was no material difference between purchasing an undertaking and purchasing the shares of that undertaking.

That attitude was not taken by Counsel for the Treasury in the case to which I have referred, nor was it the attitude adopted by the learned Judges who heard that case on appeal. If I may be allowed to quote one sentence from the judgment given on appeal on June 22—the day on which we were discussing compensation in your Lordships' House—Lord Justice Evershed said: Shareholders are not in the eyes of the law part owners of the undertaking. The undertaking is something different from the totality the shareholders. That is the basis on which I and my friends on these Benches and others have argued. That is the attitude which was taken in the Court of Appeal and that the attitude on which I and ray friends stand. We regard it as a blot on tins Bill that any other attitude should have been adopted in the taking over of and the paying of compensation for, assets by the Central Electricity Authority and the boards. It seems to me a pity that this should be so in a scheme which was necessary which, as I said on Second Reading was perhaps overdue and which indeed is possibly the only scheme for the nationalization of this industry—an industry which it is in the interests to all classes of the community should be taken over. I never believed, and I do not believe now, that it was possible to go back or to adopt any of the alternative schemes set out in the McGowan Report or elsewhere.

Having regard to the support we have given to the general principles of this Bill, it is to me and others all the more disappointing that the Bill should be blemished by what I cannot but regard as an injustice to the owners of property in the removal of that property to this Authority. In conclusion, I ask noble Lords opposite whether they believe that it is possible that "Justice can from injustice spring, or good from evil flow," because I do not.

3.23 p.m.

VISCOUNT RIDLEY

My Lords, would like to take the opportunity of making one comment on the policy in this Bill. The point arises from the discussion of a number of Amendments concerning the area boards. We question the suggested appointment of persons responsible for the generation of current, tariffs as between the centre and the areas, arid matters concerning reserves and the finances generally of the boards. I feel with the noble Lord, Lord Rennell, that it would not be practical politics to go back now to what was contained in the McGowan Report, but I would again remind your Lordships that there was another alternative suggested. What is desired could have been achieved by building up larger units locally and giving them independence of operations. That matter was argued on Second Read: rig and in Committee, and I do not want to elaborate the point now except to say in regard both to this Bill and to the Transport Bill that I believe that once having accepted the necessity—I will not say the desirability—of public ownership, the real question is how the administrative machinery is to be set up.

The noble and learned Viscount, the Lord Chancellor, in the debate in Committee, said that the Government had decided to nationalize rather than to regionalize. With all respect, I doubt the validity of that expression, because one can well imagine that nationalization means national ownership and that in any system of properly decentralized local administration there will still remain the national ownership element, the element of Government control of policy as to how best the machinery of the industry can be made to work. I am convinced that the present organization in the Bill is the wrong one. I believe the conception of the central ownership and control of generating stations with area control of distribution is completely unsound, and I fear that it may be necessary to change it. In the same way, I feel that the organization in the Transport Bill is also faulty. It is not so clear there, because with transport you are selling one service by two or three different means—tramways, railways and so forth—whereas electricity is a commodity which is being sold in one form throughout. On the other hand, there is the rather parallel question of the distance between generation and distribution which is made in this Bill.

I draw attention to these points because of the talk there has been of the Government's policy including a Bill for the nationalization of the gas industry. I do not know what the policy is to be, and I am not speaking in favour of such a course; but if it is proposed to nationalize the gas industry I urge the Government to think again about their policy. After all, the gas industry is different from the electrical industry, in that though gas cannot be so economically transported over distances, it can, in fact, be stored, at least in small quantities. There is no excuse for central domination of affairs in this matter, and it would be less excusable if those who framed the Bill were to take that line. I hope that if there is to be nationalization of that industry the Government will seriously consider the harm that may be done by tying up the administration in an over-elaborate centralized machine.

We had a short debate yesterday on a question concerning Scottish affairs, and there seemed to be a very general feeling of the real necessity of considering this question of decentralization. My submission is that it applies not only to the structure of nationalized services such as electricity or transport or anything else, but also to the administrative work done by Government Departments through the various war time controls and in other ways. I feel that it is becoming a vital and burning question for this country, and I deplore the fact that the Bill has been constructed in the way it has.

3.28 p.m.

LORD BARNBY

My Lords, I express my regret to the noble and learned Viscount, the Lord Chancellor, for the fact that I was not present to hear his remarks. This Bill has certainly been fully debated. It has brought into relief the experience and knowledge that there is in your Lordships' House on this subject, and also the admirable mastery of detail of the Bill by those many noble Lords who took part in the debate. I am going to ask the indulgence of the House for a few moments while I refer to the Central Electricity Board. I understand that it is an unusual precedent for a great experiment in socialization already in being in this country to be eliminated by subsequent legislation. I associate myself with the remarks of the noble Lord, Lord Rennell, in company with most members of the House that there was need for something to be done. Where we differ is as to the manner in which this Bill carries out the alterations, and some of us particularly feel that all the experience which the Central Electricity Board has behind it could have been included to better effect in the Bill.

I do not think it would be out of place to remind your Lordships of that great experience in socialization. The Central Electricity Board was neither nationalized nor a nationally-owned undertaking. It was carried out under the authority of Parliament by a civilian commercially managed enterprise without Treasury money or guarantee. It was the result of the courage of the Government of the day in 1926 and the foresight of the Parliament which endorsed those recommendations. It was a great experiment in central direction which has been a model to socializers in this and in other countries since that date. . It was piloted with great patience and urbanity through the Commons by Sir Wilfred Ashley, later to become a member of your Lordships' House, and since then it has achieved substantially what it was intended to do. A tribute was paid to it indeed by the Lord Chancellor in the course of these debates, and reference was made in temperate language by the noble Viscount, the First Lord of the Admiralty, to the success of the chairmanship of Sir Andrew Duncan who took over a new experiment in an uncharted sea. This was then an entirely different setting from that in which the new authority is to take over. Certainly the achievement leaves behind it a record which has brought nothing but credit to itself.

My original misgivings on reading the Bill have been confirmed while attentively following its passage through this House. I have a lively anxiety as to the effects of bureaucracy and all its slowing-down tendencies and the red tape which it involves. Certainly Sir Andrew Duncan's direction was that there should be freedom entirely from that. My anxiety is increased by long residence in the United States. There we see great efficiency under private enterprise. If the telephone here exemplifies the difference between private enterprise and public ownership then there are grounds for misgivings about what will happen under this Bill. It is only last week when we were discussing this that I came straight from a luncheon at the American Chamber of Commerce where William Knox, President of Westinghouse International, had said "You should pay less attention to nationalization and more attention to production." I would like also to quote a letter which I have just received from a very prominent American industrialist, himself a Democrat, who is very well in touch with affairs at Washington and with the Administration. I quote: Isolationism is gradually becoming more popular and giving away money less so. Many can see little difference between a British Labour Government that wants to nationalize everything in sight and a Red Government which has already shown just how it works. Americans generally do not like the way it works. I think this Bill is bad timing on nationalization.

I could have hoped that the Central Electricity Board might have formed a framework with added powers of gradual development to accomplish all that is wanted in generation and distribution. I speak as one who was appointed nineteen years ago as one of the original members of the Central Electricity Board by the Minister under the authority of Parliament. In that time we have achieved the standardization of frequency, the central control of generation, the construction of 5,600 miles of high tension transmission, the raising of manufacture of transformer equipment to the pinnacle of a world reputation, the security of electrical power under war bombing and a complete freedom from any charges of jobbery. It is that record and all the experience that has been built up which will be taken over by this new Authority which will be established by this Bill. The measure places great powers in the hands of the Minister and I hope that this Government, if they are still in office at the vesting date, will make it their aim to give encouragement to the Minister to direct the Central Authority so that their management will achieve ample supply to the small user and be as free as possible from the hamperings of bureaucracy and red tape.

On Question, Bill passed and returned to the Commons.