HL Deb 29 July 1954 vol 189 cc399-410

6.51 p.m.

Order of the Day for the Second Reading read.

THE MINISTER OF STATE, SCOTTISH OFFICE (THE EARL OF HOME)

My Lords, although this Bill is, I agree, complicated, its main purpose is simple and, I hope, sensible. It is to transfer to the Secretary of State the responsibility for electricity matters in Scotland and to set up a new public authority for the generation and distribution of electricity in the South of Scotland. The South of Scotland will then be in line with the North of Scotland which, for the purpose of generation and distribution, is covered by the Hydro-Electric Board. Scotland will, therefore, have control of its own electricity undertakings, and the responsibility for adequate performance will lie, in the last resort, with the Secretary of State, except for some small and purely technical matters.

The fact that the South of Scotland will be one area for the purposes of generation and distribution will, we hope, lead to some administrative simplification. At present, there are two British Electricity Authority divisions for generation, based, respectively, on Glasgow and Edinburgh. There are also two area boards for distribution, responsible to the British Electricity Authority and to the Minister of Fuel and Power. We feel that the new arrangement, whereby there will be one board for the South of Scotland, able to cover the whole area, will bring a definite administrative advantage which should be reflected in a more efficient service and in closer attention to Scotland's needs.

I think it is important to say that this measure of decentralisation which we propose will not mean that there is in any sense a barrier at the Border. Supplies will continue to flow in both directions, as they do at present—that is to say, between England and Scotland and Scotland and England; and between the North of Scotland and the South of Scotland. This kind of exchange of electricity supply presents no technical problem whatever. It has been suggested, and we thought at one time, that one Board might have been preferable for the whole of Scotland, but as this exchange of current is a commonplace procedure, and as the North of Scotland Board is, in the main, dealing with the harnessing of water power and is working well, we have decided not to disturb either its position or its authority. So we merely take the opportunity in this Bill, so far as the North of Scotland Board is concerned, to make certain comparatively small changes.

In future, the Board will be appointed by the Secretary of State alone. The Board will no longer have to submit its schemes for construction to the British Electricity Authority for approval; it will submit them to the Secretary of State direct. The South of Scotland Board, and not the British Electricity Authority, will have to purchase at a guaranteed price the surplus electricity from the North. Decentralisation must not be a dogma; it must be a convenience. Although for the main purposes the Bill places a direct responsibility upon the Secretary of State, nevertheless with certain functions it is desirable that he and the Minister of Fuel and Power should exercise joint responsibility—for instance, so far as safety regulations are concerned. Responsibility for the certification of meters, a very technical matter, will remain with the Minister.

Again, and more important, by an amendment of Section 53 of the Act of 1947, we require the three authorities—the British Electricity Authority, the North of Scotland Board and the South of Scotland Board, which will now, as independent bodies, have equal status—jointly to consult with the trade unions in any matters which concern wages and conditions of service. The necessary modifications to achieve that are in the First Schedule, and they are acceptable to the trade unions and all concerned. The Explanatory Memorandum attached to the Bill is so full that I do not think I need trouble your Lordships very much with the details of its clauses. Many of them deal with the technical matter of the transfer of assets and liabilities, and there is only one figure that I need bring to your Lordships' notice: that is, that there is a limit of £75 million placed on the borrowing powers of the new Board. We anticipate that that will see it through the first four years of its life.

The transfer of responsibility to the new Board next April from the British Electricity Authority and the two Scottish Area Boards will involve a good deal of preliminary work. Accordingly, the Bill provides that the new Board may be appointed as soon as the Bill becomes law. That cannot now be, I am afraid, until the autumn. It may, however, be helpful if I let it be known now that, if the Bill becomes law in substantially its present form, it is Secretary of State's intention to appoint Mr. J. S. Pickles, the present Chairman of the South-West Scotland Electricity Board, and Sir Norman Duke, the Chairman of the South-East Scotland Electricity Board, to be the Chairman and Deputy-Chairman, respectively, of the new Board. I cannot at present say any more about the other members of the Board.

It will not have escaped your Lordships' notice that this is an amending Bill. It is the most convenient way of modelling the new arrangements for the South of Scotland on the same lines as those for the North of Scotland which have, on the whole, been so effective. The best way to do that was to apply the same legislation, with such amendments as are necessary to achieve that end. We could have introduced an amending and consolidating Bill at once, but I remember the noble and learned Earl, Lord Jowitt, saying on a previous Bill that I introduced last year: "I would much rather take two such steps—that is to say, bring in a Bill showing what amendments to make in the law and then, having made these amendments, bring in a Consolidation Bill." That advice we intend to follow, and the Secretary of State in another place has given assurances that a Consolidation Bill will follow these amendments as soon as it is possible to introduce such a Bill. Although this Bill is complicated, nevertheless, as I say, the object is simple. I hope that your Lordships will find it sensible. I beg to move.

Moved, That the Bill be now read 2a.—(The Earl of Home.)

7.0 p.m.

LORD MATHERS

My Lords, the Bill which the noble Earl has introduced with his usual capacity and lucidity—and he has explained the purpose of it very clearly indeed—arises from an election pledge on the part of the Government, a promise made in 1950 and again in 1951, that separate committees for the fuel and power industries would be set up. It seemed to be clearly intended (and I think it was made evident by the speech of the noble Earl) that the electricity set-up would provide for the responsibility of one body for all electricity production and transmission in the whole of Scotland. This Bill, as has been indicated, does not carry out that declared intention but is a kind of semi-detached or Siamese twin structure.

THE EARL OF HOME

They are Scottish twins.

LORD MATHERS

Yes, they are both to be of the same nationality, but I think the term "Siamese twins" is the usual one to use about those who are joined together in a somewhat unnatural manner, although I would hardly say that it is unnatural for these two boards to be joined in this way. It has been a matter of speculation as to why the original intention was not carried out. The question is put in this way: Was it that the redoubtable parent and guardian of the North of Scotland Hydro-Electricity Board would not allow his bairn to be adopted? If that were the reason, I would have great sympathy with him, for Mr. Tom Johnston has laboured valiantly for the important development of which he is the chairman, and he is entitled to safeguard it in every legitimate way.

Since the Bill was first introduced in another place, Clauses 4 and 5 have been dropped from it and the Bill has thereby, I believe, been improved. There are those who would say that this Bill is of so little account that not only might Clauses 4 and 5 be dropped, but Clauses 1 to 3 and 6 to 17 might also be dropped with no great loss to Scotland. It is obvious that no great haste is being made by the Government with the Bill. It had its Second Reading on February 3 and its Third Reading only on July 12. That is a period of more than four months. The Government themselves were responsible for that delay, because they overloaded the programme of work. Obviously, there was no hurry for the Bill. It could very well have awaited the report of the independent inquiry to be carried out by the Committee announced by the Minister of Fuel and Power on July 9, which is an inquiry into the organisation of the electricity supply industry in England and Wales. I cannot see why that inquiry should not have covered Scotland as well as England and Wales. Armed with the recommendations of such a Committee, the Secretary of State for Scotland would have had something concrete to work upon. As I see it, he is pressing forward with this Bill without any expert opinion to go upon. May I put the question to him, whether competent technical advice has been taken and whether it is favourable to what the Bill is designed to do?

It is claimed for the Bill that it will bring Scottish consumers of electricity into closer touch with the new South of Scotland Board to be set up by the Secretary of State, but I fear that the terms of the Bill do not prove this. I ask the question: Does the disappearance of the South West and South East organisations and corresponding consumer-consultation machinery mean that there will be only one consultative council after the Bill is passed? I urge that, for the convenience of consumers by keeping the new Board in touch with the needs of the community, there should continue to be two consultative bodies as before, one in the East and one in the West. I hope I can have a favourable answer to that inquiry, to which I attach considerable importance.

I am glad that the noble Earl has made reference to the solving of the trade union difficulty and that we are not to have the kind of attitude taken towards this Bill that was taken when it was sought by the Railway Amalgamation Bill of 1920, or thereabouts, to set up the grouping of the railways. The first intention then was to have a separate group for Scotland, but both the railway workers and the traders were opposed to that idea because of the possible repercussions upon them. It was their insistence that caused the longitudinal grouping to be adopted. It will be remembered that the L.M.S. took one side of Scotland and the L.N.E.R. took the other side, and ran to London and elsewhere in conjunction.

The borrowing powers have been mentioned by the noble Earl, and I think these are satisfactory. He has given us an indication of those who are to be in charge of the new Board and I am sure that the names he has mentioned are names which will give great confidence to those who will look to this new Board to do good work in Scotland along the lines that are intended. That is all I have to say on the Bill. I concur in giving this measure a Second Reading.

LORD MACPHERSON OF DRUMOCHTER

My Lords, I should like also to give a welcome to this Bill. Quite apart from its merits, to which my noble friend, Lord Mathers, has referred, there is, to my mind as a Scottish Peer, one very pleasant aspect of it, and that is, the important contribution it makes to restoring to Scotland the management of some of her Scottish affairs. You will observe that the control of her electricity industry is being transferred from London to Edinburgh. That, I think, is a welcome step and one which I am sure will be hailed with enthusiasm in Scottish circles. The noble Earl who introduced the Bill made some reference to the retention of the management of the meters by the Ministry of Fuel and Power. Did he mean the meters for measuring the flow or the meters which take the shillings?

THE EARL OF HOME

The testing meters.

LORD MACPHERSON OF DRUMOCHTER

I see. I was going to say that it would be a pity if we were not going to restore to the people of Scotland the right to look after their own meters as well as to manage their own industry. With those remarks, I also wish to welcome this Bill.

7.9 p.m.

LORD POLWARTH

My Lords, it is notoriously hazardous for Members of your Lordships' House to meddle in matters electrical, as witness the fate of our lamented and, I must admit, apocryphal noble colleague, Lord Finchley, who, you will remember, in the words of the late Mr. Hilaire Belloc, tried to mend the electric light Himself. It struck him dead and serve him right. It is the duty of the wealthy man To give employment to the artisan. In spite of that warning I think I must say a word on this Bill. Before going further, I should like to welcome the apparent change in heart of the Party of the Members who sit on the Benches opposite. The Bill has received a much warmer welcome from your Lordships than it did in another place, and I am delighted to think that noble Lords opposite are changing their minds on this matter.

LORD MATHERS

Would the noble Lord allow me to say that this Bill is not the Bill to which such great exception was taken. Improvements have been made and assurances have been given which make it more palatable.

LORD POLWARTH

I am glad that we have been able to meet the noble Lord and his friends.

At this late hour one cannot spend long on this subject, but I should like to concentrate on one field, with regard to which I think this new Bill is going to bring Scotland quite considerable advantage—that is, in the field of rural electrification. We in the South-East and South-West of Scotland have a large area of countryside, comprising fine farming country, which at present is one of the most meagrely electrified areas of all the country areas in the United Kingdom. In considering this matter of rural electrification I do not think anyone will deny that it can never be wholly economic—that is to say, it can never pay for itself; and I think it is accepted on all sides that part of the cost of carrying electricity to these more remote districts must be borne by consumers in the towns, just as the town dweller bears part of the cost of delivering the mail to the country dwellers. I think it is generally agreed that this bringing of electricity to the country is one of the most potent forces available towards a prosperous agriculture, both from the point of view of providing the amenities which will keep our country population living in the country and of the power which it will brine to enable the farmer to do more work on the farm and to do it more efficiently.

I come from the South-Fast of Scotland. Perhaps I speak with a certain amount of bias, but I feel that we in the South-East have come off worse than the South-Western area. In the South-West, before the war, some enlightened local authorities took powers to distribute electricity, or made schemes for the distribution of electricity themselves; and as a result the South-West area is electrified to a much higher degree than the South-East. So long as these two areas, the South-West and the South-East were under the control of a Board situated 400 miles away, quite obviously it was difficult for that Board to assess the relative needs of those two areas. I have felt all along that they said "Well, here are these two areas. Obviously they are very similar; their needs are the same, they can both have the same capital and the same materials." I think that they tended to overlook the fact that the South-West was already in a much more advanced stage than the South-East, and I believe that this is one thing which the Bill will rectify, because our one Board in Scotland is close to the country and knows the position.

The economics of supplying these South of Scotland rural areas are, I think, more serious than in many others, owing to the geography of the land. Most of the farms and rural communities are scattered over the length of long valleys and are not grouped round the villages, as they are, in general, in England. The valleys run away up into the hills like the fingers of a hand, and the resemblance to the fingers of a hand is even more marked when you look at the map which I have seen, showing the proposed schemes for carrying electricity to those districts, because you will find that the valleys are marked off into joints—as it were, the joints of a finger. There is, first, a large area low down in the valley, where there are good farms, fairly concentrated, and where there is a good demand for electricity. That is marked off as one scheme. As you go further up, and the farms become more scattered and the population lower, you will find another area marked off; and that is another scheme.

This raises a difficult problem, because the present policy of the Boards has been to take the lower parts of the valleys—the palm so to speak—and to electrify them first, which is a quite natural inclination. But in the future this is going to run them into serious difficulty. In the first place, it is the remote farms that in many ways are in most need of electricity, because unless it comes to them soon a great many of the people living there will have given up the struggle and will have moved into the towns. Quite apart from that, there is another practical difficulty: once all the lower reaches of the valley, the more lucrative areas, have been electrified, the future Board will be faced with the problem of dealing with all these outlying areas one after the other; and as a result a heavy burden will fall on the town consumer of electricity to subsidise the cost of taking the current up to the valley heads. I do not know what the solution is, but it is a problem that will clearly have to be faced by the new Board. I believe that it would bring great hope to the people living far out if the Board would take the current right up some of these valleys, even if they could do only some of them now, because that would at least give hope to the people living up the other valleys that before long they will possess the current.

My Lords, the noble Earl who moved the Second Reading mentioned the question of capital. Of course that is the first essential in all these schemes of development. There is to be £75 million of borrowing power made available at the start. I agree that this should be adequate for quite a time to come. Speaking on the Bill in another place, the Joint Under-Secretary of State said (OFFICIAL REPORT, COMMONS, Vol. 523 (No. 46), col. 488): The House may be quite sure that the southern Board will be able to engage in capital development as hard as it is capable of going for some years to come. If, in the end, the £75 million is found to be not sufficient, and more is required, we shall have to take steps. That is a most encouraging statement, because so often in the past we have been told that these schemes could not be proceeded with owing to restrictions on capital development. But I think that in the last year or two the pendulum has been swinging the other way. In fact the position is that the Boards have not been able, with their physical resources, to carry out the work for which they received authorisation from the point of view of expenditure. I believe that, taking the southern sub-area of South-East Scotland, that is true. They have been allowed this year to expend the sum of £167,000 on rural development. That sounds all right, but it also turns out that there was a considerable amount their previous year's balance unexpended at the end of the previous year, and that that has just been cancelled. So presumably this fresh allowance will really include schemes that were originally approved for the previous year and with which they have not caught up.

Three things, as I see it, are needed to remedy this position. First of all, the new Board must take a long-term view of its budgeting for these schemes. It must not work on the Government principle of working for a year ahead, on a cash basis, and then having to pay back anything that has not been spent. It must not think that it can complete schemes and run them economically within a financial year; it must look further ahead. Secondly, I think the Board can do a great deal more by putting this work, both the construction and the surveying, out to contract, instead of trying to tackle it with its own resources. Thirdly, and I think most important, the Board must have the determination to treat this matter of rural electrification as one of real urgency and not merely pay lip service to the need for it.

There is another matter which I would have raised but for the announcement of the noble Earl regarding the appointment of a new chairman and deputy-chairman of this new Board, to both of whom I should like to offer my congratulations. There will be an interval before the new Board can take over, and presumably there would have been a natural inclination for the old Boards to wish to get a pat on the back for handing over a good balance sheet and a full bank account, instead of pushing on with this slightly uneconomic development as rapidly as they might otherwise have done. I am delighted to hear that these two chairmen of the old Boards are to head the new Board, for they will realise that they can go full steam ahead: they might, indeed, have a competition to see which of them can have the greater amount of new work in hand before the new Board takes over.

Progress is a strange thing; it is very uneven in its incidence. Some noble Lords may be unaware that 130 years ago a very famous Borderer, Sir Walter Scott, was one of the pioneers in pioneering artificial lighting in the South of Scotland; he was chairman of the Edinburgh Gas Company and he installed gas lighting in his house at Abbotsford. Today, 130 years later, there are still houses and farms within a few miles of Abbotsford with no other means of lighting but oil lamps. This Bill, if put into operation intelligently, with the new Board taking a proper view of their duties, foreshadows the end of a reproach on our present standard of living.

7.22 p.m.

THE EARL OF HOME

My Lords, by leave of the House, may I acknowledge the speeches which noble Lords have made? The speech of the noble Lord, Lord Polwarth, will no doubt be read with great advantage by the Chairman and Vice-Chairman of the new Board. There are major generating projects in prospect. These include a new power station at Barony in Ayrshire, extensions at Portobello and at Braehead in Renfrewshire, and also at Clydesmill and Dalmarnock. Planning has been proceeding for an entirely new generating station on the biggest scale at Kincardine-on-Forth. That news is doubtless welcome, as it shows that we are getting ahead with our capital works in toe South of Scotland. Expenditure on distribution has been running at over £5 million a year; if expenditure continues at this rate there will be about £50 million available for other capital expenditure over the next four years. It is right, as my noble friend said, that there is no shortage facing the new Board in this respect. I have no doubt they will apply their minds seriously to the problem of electricity distribution in the Border country.

Lord Mathers twitted me slightly, saying that there was an election pledge that we should set up one Board for the whole of Scotland. We must not be doctrinaire. Take a completely hypothetical case: it might be that some political Party said they would nationalise all the industries in this country, and when it came to the point, in spite of all the facts being against them, they went on with it. I have looked into the indication we gave that there might be one Board; but we came to the conclusion that the sensible, practical way of doing things, the system which would work best, would be to have two Boards. It is felt that, for the time being, that is the better way to proceed. The noble Lord then said that he thought it would be of advantage to drop the whole Bill, without great loss to Scotland. What would Robert Burns say? Here I come along and offer him the glorious privilege of being independent of the British Electricity Authority and the noble Lord asks me to drop the Bill. We may go for our holidays in complete harmony because I remember Mr. Woodburn saying in his election address (I have made my researches too): It is clearly desirable that we should press for more and more devolution and Scottish administration of Scottish affairs. Here is a modest contribution: so perhaps we can proceed happily to our holidays. The technical advice we have received has indicated that this new setup will work perfectly satisfactorily from the technical point of view. So far as the consumer is concerned there will be one consultative council, but the obligation is laid upon the consultative council by the Secretary of State to set up local committees or representatives to keep, it in touch with all parts of the area; so although there may be only one consultative council it can he completely representative of consumers over the whole area.

LORD MATHERS

I thank the noble Earl.

On Question, Bill read 2a, and committed to a Committee of the Whole House.