§ (1) Where it appears to the appropriate Government Department that the financial position of any undertaking to which this Act applies has been adversely affected by circumstances arising 1536 out of the present War, the Department may, if they think fit, by Order provide for the modification of any statutory provisions regulating the charges to be made by the undertakers, and of any statutory provisions consequential on or supplemental to any such provisions as aforesaid, for such period during the continuance of this Act, in such manner, and subject to such conditions, as appear to the Department to be just and reasonable:
§ Provided that—
- (a) where the undertakers are a local authority no modification shall be authorised which will increase the statutory maximum charge by more than fifty per cent., or which is more than sufficient so far as can be estimated to enable the undertaking to be carried on without loss; and
- (b) in any other case no modification shall be authorised which is more than sufficient to enable a dividend on the ordinary stock or shares of the undertaking to be paid at half the standard or maximum rate of dividend, if any, prescribed for the undertaking, or at half the pre-war rate of dividend, whichever is lower.
§ (2) An application to a Department for the purposes of this Act shall be accompanied by such information, certified in such manner, as the Department may require with respect to the financial position of the undertaking in question.
§ (3) The undertakings to which this Act applies are tramway undertakings, including light railways constructed wholly or mainly on public roads, and undertakings for the supply of gas water, and electricity.
§ (4) For the purposes of this Act—
§ The expression "statutory provisions" includes the provisions of any Order having the force of an Act;
§ The expression "appropriate Government Department" means, in relation to gas and water undertakings carried on by local authorities, the Local Government Board, and in relation to other undertakings the Board of Trade;
§ The expression "local authority" includes any commissioners, trustees, or other public body of persons carrying on, otherwise than for purposes of private profit, any undertaking to which this Act applies;
§ The expression "pre-war rate of dividend" means the average rate of dividend for the three financial years immediately preceding the War.
§ Sir D. GODDARD
I beg to move, in Sub-section (1), after the word "fit" ["if they think fit"], to insert the wordsafter considering (in the case of an application under this Act by a company) any representations which may be made to the Department by the local authority for any district in which the undertaking of the company or any part thereof is situate.This Amendment, I admit, is not a very important one, but it is submitted, in view of the fact that there is another Amendment on the Paper, to add a new Clause requiring the Board to Trade to hear the local authority upon any representations made by them with reference to a com- 1537 pany's application. It seems to me the effect of that would be that whenever any such representation was made there would have to be an inquiry by the Department involving the attendance of witnesses and possibly of counsel as well, and I venture to submit that while it is quite proper that local authorities should have full opportunity of making their representations, it might be sufficient if those representations were made in writing, or at all events in some less cumbrous form, than by the holding of a formal, full, and costly inquiry. The whole difference between this Amendment and the one subsequently on the Paper is in the avoidance of the expense involved in full inquiry. I do not know what the view of the right hon. Gentleman may be, but I can conceive that he would favour anything that would simplify matters instead of complicating them. This Amendment fully admits the right of the local authorities to make their representations, but suggests that it be done in a simpler form than by holding a full inquiry.
§ Mr. ROWLANDS
I am one of those in whose name the Amendment further down on the Paper alluded to by the right hon. Gentleman stands, and I wish to state our position in connection with it. To the Amendment of the right hon. Gentleman the Member for Ipswich (Sir D. Goddard), as far as it goes we have no objection, but unfortunately it does not go quite far enough, and if he and his friends can see their way to meet us under certain conditions, we would be prepared to accept their Amendment. I think, however, this could be done better on the Amendment which stands in my name. We do not think it absolutely necessary that in all eases an inquiry should take place, but we do believe that local authorities should be so safeguarded that in any instance where they have a very strong case to put before the Board of Trade it should be open for them to do something more than submit it in the form of a letter, which could not possibly carry the same weight or have the same influence as if the case was stated before the Board of Trade. We want to strengthen the position taken up by the right hon. Gentleman the Member for Ipswich, and, as I suggest, it could be better done on the later Amendment.
§ Sir FORTESCUE FLANNERY
I think it would be better if the hon. Gentleman who has just spoken (Mr. Rowlands) were 1538 to state his opinion a little more definitely. All he has given us has been a pious expression of opinion; he has said nothing quite definite, and before this Amendment can be withdrawn it is necessary he should more precisely state his position. Our view is that in the Bill the Board of Trade takes power to make certain decisions and even awards in such manner and subject to such conditions as appear to the Department to be just and reasonable. We have no lack of faith in the Board of Trade; on the contrary, it will appear, before we get through this Committee stage, that we have a very great deal of faith in it. But we feel that before it can be sufficiently advised as to what it ought to do in the matter of an application by, say, a gas company, they should at least have the support and assistance of statements made by the local authorities; they should know what the local authorities desire and what arguments they have to put forward. We, in the case of an application by a gas company to the Board of Trade, suggest it should be decided in the light of the opinions of the corporations or rural district or urban district councils concerned. If my hon. Friend has any modification to suggest, let him state it now. Unless we know what he desires, I think we must press our Amendment.
§ The PRESIDENT of the BOARD of TRADE (Sir A. Stanley)
I think it is desirable that some such Amendment as has been moved should be inserted in the Bill, but I am very doubtful whether this is quite the appropriate place for it. I think, further, it will be necessary to somewhat widen the scope of the Amendment, and later on we intend to propose an Amendment which I hope will meet the case. The Amendment as drawn now does not deal with cases where a local authority has powers of supply in the area of another local authority. It would be better that the Amendment should be made in Sub-section (2), at the end of which I propose to move the following additional words,and the Department before making an Order shall consider any representations which may be made to them by any local authority appearing to them to be affected.If the right hon. Gentleman the Member for Ipswich will withdraw his Amendment, I shall be glad at the proper place to move the addition of these words.
§ Sir H. HARRIS
I should like to point out, first of all, that this Amendment has been introduced, not by those who desire to assist the local authorities, but by those who are in the other interest. [HON. MEMBERS: "NO!"]
§ Sir F. FLANNERY
My hon. Friend has no right to say that. He ought not to say that, because, as a matter of fact, we have gone out of our way to show that we desire that the local authorities should have the fullest opportunity to make representations.
§ Sir H. HARRIS
I am afraid my hon. Friend did not hear what my right hon. Friend the Member for Ipswich (Sir D. Goddard) said in moving the Amendment.
§ Sir H. HARRIS
He frankly said he moved the Amendment in order to anticipate and defeat an Amendment standing later on the Paper in my name and that of my hon. Friend. However, I do not want to go into that, but only to ask my right hon. Friend the President of the Board of Trade whether something ought not to be done to secure that local authorities should have notice when application is made under this Act, otherwise they might not know about it.
§ Sir D. GODDARD
Under the circumstances, and after the expression of view of the right hon. Gentleman in regard to this matter, and the Amendment he proposes to move, I would ask leave to withdraw this Amendment.
§ Amendment, by leave, withdrawn.
§ Sir W. MIDDLEBROOK
I beg to move, in Sub-section (1, a), to leave out the word "loss" ["to be carried on without loss"], and to insert instead thereof the words "involving a charge on the rates."
I move this Amendment on behalf of my hon. Friend (Sir M. Barlow). The Amendment carries out an object the Committee had in view, and I think is rather better than the word in the Bill.
§ Sir A. STANLEY
I am very sorry to disagree with my hon. Friend the Member for South Leeds (Sir W. Middlebrook). I must confess that when I first saw this Amendment it did appear to me that it more adequately met the case than the words inserted in the Bill, but on a closer investigation of all the facts, it was quite 1540 clear to me that the words now suggested would not meet all the instances where it might be desirable that some relief should be given. There are instances, I think, confined almost exclusively to Scotland, where these undertakings are carried on year by year under what, perhaps, might be called an annual budget. The local authority estimates as nearly as possible what will be the cost of carrying on the undertaking for the ensuing year. If their estimate is correct, no change is necessary, but, on the other hand, if their estimate does not work out accurately, and they under-estimate the cost of carrying on the undertaking, then a loss arises. But it does not follow that, because there may be a loss in any particular period in respect of any particular undertaking, that that loss becomes a charge upon the rates. On the contrary, that loss is carried over to the next year, and provision is made by increasing the charges to cover that loss. Therefore if the words suggested in the Amendment were introduced, it would be impossible to have a loss in that case charged upon the rates to make it good. I trust, with this explanation, my hon. Friend, who was a member of the Committee dealing with this matter, will not press this Amendment.
§ Sir W. MIDDLEBROOK
I am quite prepared to accept that explanation, and beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. J. HENDERSON
I beg to move, in Sub-section (1), to leave out paragraph (b), and to insert instead thereof,(b) in the case of an undertaking for the supply of electricity, such modification only may be authorised as shall be sufficient to enable a dividend on the ordinary stock or shares of the undertaking being paid at the pre-war rate of dividend.I move this Amendment on behalf of my hon. Friend (Sir J. Harmood-Banner). This Bill, in my humble opinion, treats these undertakings somewhat shabbily. When you consider what they have had to endure in the way of extra wages which the Government Departments have put upon them—a bonus of 15s., a bonus of 5s., then a bonus of 12½ per cent.—I think it is very hard that they should be restricted to half the pre-war dividends. You have guaranteed the railway companies pre-war dividends, and you have given to shipping, engineering, and particularly to the production of food, all the 1541 advantages so that they may not only not lose, but that they may have gain. In the case of electric light companies, you have shortened the hours in which they can sell their product. By the Summer Time Act and also by the Lighting Order you have cut down a tremendous amount of their income. Surely, therefore, they are entitled to pre-war rates of dividends! I cannot see why they should be restricted to only one-half of the pre-war dividends. Another point the Committee will not forget is that a great many of these electrical undertakings are subject to be taken over at the "then value," whatever that may be, and there is very considerable dispute as to what that does really mean. I think the London County Council have a right to take over most of the London companies in 1931, and some of them a little earlier. If the people who have put their money in these concerns do not get something like a decent return, when they come to sell they will have a very serious loss. You say that munitions of war and food are national services. Surely electric light is also a national service! A great deal of your machinery for munition purposes is run by electric power. I know that a very large amount in London is. Why are they to be treated in this shabby way? They have had to suffer from the action of the Ministry of Munitions and other Government Departments in very heavy wages, largely increased price of coal, shortening of the hours of supply, and they have had to put down extra plant for supplying munition factories. They have done all that, which is as much a national service as any other service, and therefore I say, instead of cutting them down to half their pre-war dividends, they should at least be allowed to earn their pre-war dividends in full.
§ The CHAIRMAN
It seems to me that this Amendment as it is on the Paper cannot be quite in correct form, and the same thing applies to the following one, namely, to leave out paragraph (b) and to insert a particular service—in this case electricity—which would leave all the other services unprovided for. Therefore, the proper way to put this Amendment would be, after paragraph (a), to insert this as an additional paragraph. But I imagine it will be for the convenience of the Committee that on this Amendment we might discuss the question of whether these 1542 different services are to be treated alike or differently, and, secondly, in what manner they should be treated.
§ Mr. PETO
On the point of Order. As the second Amendment to which you refer is in my name, I may perhaps say that my main object in putting it down in that form was precisely to bring to the attention of the Committee the fact that there is a totally separate case in regard to the water companies, as I have no doubt there is in the case of the electric companies, and the foundation of the case is that, as there was a Committee set up by the Board of Trade to consider gas undertakings and another to consider tramway undertakings, there was no Committee set up to consider either electric undertakings or water undertakings, and, therefore, the proper form of the Bill, after dealing with local authorities, is that there should be a sufficient number of Sub-clauses dealing with companies for the supply of gas, water, electricity, and other public utility companies of that sort. Therefore, I have limited my Amendment to water, but I do not think it thereby precludes gas companies or tramway companies being considered. What is necessarily right for one is not necessarily right for another.
§ Sir R. BARRAN
There is an Amendment further on to leave out paragraph (b) altogether. That would leave it open to the Board of Trade to decide all of these on their merits. I think that would leave it open to these other Amendments to be dealt with. Would it not be for the convenience of the Committee to take that Amendment first and have the whole discussion on it?
§ The CHAIRMAN
I cannot adopt that suggestion unless the other hon. Members give way. It seems to me that if there were to be a series of paragraphs it would not be a case necessarily of leaving out paragraph (b), but of making insertions in front of paragraph (b). But if I put it in the form I suggest—namely, after paragraph (a) to insert a new paragraph (b)—then the discussion can cover the various proposals, and hon. Members will not be deprived of any of their respective rights.
§ Mr. TENNANT
Would it not be for the convenience of the Committee if the Government informed us whether they propose to consider all these subjects as one, or whether they wish to have them differentiated with a paragraph for each?
§ Sir F. FLANNERY
Before my right hon. Friend replies, may I say that it does seem to me that an omnibus paragraph dealing with electricity, water, and gas, all of which are services of public utility, would be desirable, and would be for the convenience of the Committee and in the public interest. Therefore, those who are with me would regard your suggestion as a convenient suggestion, and one that would be advisable, perhaps, to be adopted.
§ The CHAIRMAN
I feel sure it would be to the interests of the Committee to be able on this first Amendment to discuss the whole situation. I think that would meet the convenience of the Committee.
§ Mr. J. HENDERSON
Of course, all these various undertakings require separate consideration. The electricity companies, particularly in large towns, are subject to purchase in a certain number of years by the local authorities. That does not apply to gas or water. My idea of the whole thing is this—that they ought to be differentiated, and that, perhaps, a general Clause giving this power at the end of paragraph (b) could be introduced by my right hon. Friend. But I am quite willing to do whatever you think right, and to put this at the beginning or the end.
§ The CHAIRMAN
At present I wish to give to the Committee the fullest opportunity to deal with the general question, leaving aside for the time being points in dispute.
§ Mr. BURNS
On that, Mr. Whitley, the suggestion has been made by the hon. Member for Maldon, speaking on behalf of those interested in the gas companies, that he would not object to what he termed an omnibus Clause to deal with the gas and tramways on which we have had Committees and in connection with which we have had evidence collected, and also that electricity and water companies should be included in the general discussion. Is it fair for the gas or for the tramways? Cer- 1544 tainly it is unfair to both electric lighting and water undertakings that we should include them with gas and tramways when there has been no evidence, no Committee sitting, and no information imparted to the House on which we can decide, without investigation, whether it is fair for them to be grouped with gas and tramways, when different conditions apply to them to those which apply to gas and tramways which have been thoroughly investigated.
§ The CHAIRMAN
That is argument upon the merits of the case. I am putting the position so that the Committee may take one or the other course as it thinks fit—whether we shall deal in this Committee with the services by a different paragraph for each, or whether we shall deal with them by a general paragraph. Therefore I put the Amendment in the form I did, and which will not debar any subsequent proposals being debated, and it is for the Committee to say which of these two propositions shall be decided upon.
§ Sir A. STANLEY
If I understand your ruling correctly, Mr. Whitley, it will be in order for me to deal not only with this Amendment, but also with the other Amendments which deal with paragraph (b) in the Bill?
§ The CHAIRMAN
The right hon. Gentleman can only put his view before the Committee as to whether these services shall be dealt with together or separately. The hon. Gentleman may follow him and state his case.
§ Sir W. PEARCE
May I appeal to the Government not to pronounce a decision until they have heard the arguments in regard to these other undertakings? I should like to remind the Committee that there was a Select Committee appointed to deal with the tramways case. The Minister has not heard the case the Committee has presented in regard to having special treatment. I hope he will not make a definite pronouncement before he has heard the arguments.
§ Sir F. LOWE
May I ask whether it would not be better for the President of 1545 the Board of Trade to say, first, whether he intends to differentiate between the services or whether he intends to treat them all in the same way? If so, then I cannot see any reason for any separate discussion on them. I think we ought to know that before we go any further.
§ Sir A. STANLEY
I will deal, first of all, with the particular point just put to me. I think I can now in a very few words convince the hon. Member that it would not be possible—certainly it would be very difficult indeed—to distinguish or to mete out separate treatment to each of these public utility undertakings. This is a matter to which I have given a great deal of thought. We have familiarised ourselves with all the relevant facts in dealing with the different undertakings, and we have come to the conclusion that these undertakings should be grouped for the purpose of relief. Might I illustrate the point in this way: If you take local authorities who own electric and tramway undertakings, and possibly the gas, there can be no reason, so far as I can judge the situation, why we should distinguish in the measure of relief that it may be desirable to afford any one of them. We have therefore, come to the conclusion that, generally speaking, the case that can be made out for any relief in respect of any one of these public utility undertakings can practically be made out for each of the others. In dealing with these undertakings, therefore, we have come to the conclusion that for this particular purpose they can be grouped, and whatever form or measure the relief may take in respect of any one of them shall be applied to all alike.
The Amendment that paragraph (b) be deleted from the Bill would mean that the whole onus and responsibility of determining whether or not any relief should be given to any of these statutory undertakings should be decided by the Board of Trade, and that it is for the Board of Trade, on its own responsibility, to determine what shall be that measure of relief. When we came to this House and asked that a Select Committee should be appointed to deal with the question of gas and tramways undertakings we determined then—and rightly—that the responsibility should not lie with the Board of Trade. Statutory undertakings are operated under various Acts of Parliament which from time to time have been granted by this House in the years gone by. It is 1546 for the Members of the House to determine whether there shall be any temporary modification during the War, and for a little time afterwards, from the provisions of these various Acts of Parliament. It is for that reason that we asked the House to appoint Select Committees to deal with these problems. It is true that only two Select Committees were appointed, one to deal with gas and the other with tramway undertakings. It is true, as hon. Members know, that the Report of these two Committees were not identical. The Report of the Gas Committee was that there may be instances where some relief should be afforded. Having said that, they went on to indicate what the measure of relief should be, provided application were made to the Board of Trade for such relief. The Tramways Select Committee also agreed that some measure of relief in respect of tramways undertakings was probably necessary. That Committee, however, left it entirely to the discretion of the Board of Trade as to the extent of the relief granted.
If the Gas Committee had made a Report identical with that of the Tramways Committee. In other words, if they had left it to the discretion of the Board of Trade as to the amount of relief to be afforded, I cannot help thinking that if the Board of Trade had submitted a Bill to this House which left it entirely at their discretion what the relief should be, the House would have demanded to know what sort of relief it was proposed by the Board of Trade to give to these undertakings. I cannot believe the House would desire, nor should I be willing, that the Board of Trade should take full responsibility for altering a bargain which was made by the House in years past, without this House having an opportunity to indicate how far they thought that relief should go. Therefore, whether or not the Tramways Committee made the same recommendation as the Gas Committee, I felt in drafting the Bill we ought to accept the recommendations of the Gas Committee and include all the undertakings within the provision. In other words, they ought all to be drafted quite alike. The Gas Committee recommended that where there were cases of hardship where it was necessary that relief should be afforded, that the relief should be limited, and that no company—I will deal with the companies first—should be allowed to charge for their service, whatever it might be, a sum which 1547 would be more than sufficient to earn a dividend on the ordinary shares of the company in excess of half their pre-war dividend, or their standard dividend, whichever it might be. In other words, that the amount of the dividend which might be paid by these undertakings during the time this measure of relief is in force is to be limited to that extent; that they are not to earn more money beyond what is necessary to pay all their reasonable expenses, all their fixed charges, and leave what will pay a dividend not exceeding half their pre-war dividend, or their standard dividend, whichever may be the lower.
§ Sir A. STANLEY
If the statutory undertaking does not desire any relief they can go on operating as before and earn whatever their powers of earning permit. I understand that these gas undertakings represented to the members of the Committee that in all likelihood their expenses will be increased so that in all probability they would practically wipe out the whole of their ordinary dividends. That, I understand, is the measure of their anticipation in respect to the financial position of these undertakings. Obviously, one must recognise that that is a very grave outlook, indeed, and one that anybody associated with these undertakings can hardly look forward to with any particular degree of pleasure. They, therefore, suggest that their statutory limitations should, for the first time being, be laid aside, and that they should be empowered to increase their charges so that they may be able to maintain, during the period that this relief is given to them, practically their pre-war rate of dividend. Those who have spoken for the gas undertakings argue—and I think those who have spoken for other undertakings argued similarly—that there is no reason, no justice, in distinguishing between one class of statutory undertaking and another. They refer in particular to the railway dividends which have been guaranteed by the State—not wholly, but something very close to their pre-war rate of dividend. Therefore, it is argued, if the railways, being taken over by the State, are guaranteed practically a pre-war dividend, the statutory undertakings ought not to be put 1548 under so severe a limitation as is suggested by the Report of the Select Committee, and for which the Bill under discussion provides.
As regards the railways it should be borne in mind that while it is true that very nearly the pre-war dividends of the railways are assured so long as the railways remain under the control of the State, that was an arrangement come to when the railways were taken over by the Government. At that time the railway companies were earning their pre-war rates, and in so far as those who represent the railway companies and those who represent the Government in the negotiations which resulted in the agreement could possibly judge, there was every likelihood that the railway companies would be able to continue to earn sufficient money so that a pre-war dividend could be maintained at the old rates. There was no suggestion that the State should subsidise the railway companies, and there was no suggestion that the rates or charges should be advanced. As a result of that arrangement up to within a very recent time—I should not like to say it is true to-day—after making a fair allowance as we are entitled to make for the cost of carrying goods and passengers on the Government account, the railways are earning sufficient to meet all their expenses and to meet the pre-war dividend which has been guaranteed by the State, and that has been done without advancing any of the rates or charges. [HON. MEMBERS: "Fifty per cent. increase on passenger fares!"] I am going to deal with that point.
In January, 1917, the Government authorised the railway companies to advance all their passenger rates with certain exceptions, and unfortunately season tickets were left out, and workmen's tickets, and one or two other minor exceptions, and all ordinary fares were advanced by 50 per cent. The object of that advance was not for the purpose of securing additional revenue; on the contrary, the object was to stifle and to hold back traffic on the railways and not to secure additional revenue. It is only very recently that the Government has, with respect to any particular class of traffic on the railways, made any advance in the rates. What transpired recently in regard to season tickets is, I am sure, sufficiently so fresh in the memory of all hon. Members, and certainly in my own mind, as to make it unnecessary for me to go into 1549 details. In this case the Government advanced the rates to secure additional revenue, but it was a revenue proposition, and the advance was made with the object of bringing the rates charged within measurable distance of the cost of that particular traffic. Apart from that no advance has been made on passenger rates or charges with the object of securing that the bargain made between the Government and the railway companies shall be solvent or shall balance without any subsidy from the State.
Another illustration would be the coal mines taken over by the Government. There the Government, with certain exceptions, has guaranteed the pre-war profits of the mines which have come under their control. It should be borne in mind that coal mines can hardly be compared in this respect with statutory undertakings. I think it is correct to say that the coalmine owners have periods of very severe depression, and that there is very severe competition, and occasionally it is very difficult to make a profit. There are other periods, no doubt, when the profits are quite satisfactory, but they are subject to fluctuations of the market, whereas in regard to statutory undertakings the position is different, and they are sufficiently wide for it to be possible for them to earn for their shareholders a fair return upon the money invested. They have a monopoly, and it is only under such very exceptional circumstances as we now find ourselves in that the conditions under which they are working make it impossible—it would be true in most instances to say impossible—for them to earn for their shareholders an adequate return for their money.
As I understand the position taken up by those who represent the gas undertakings, and I have no doubt the same argument applies with almost equal force to undertakings like the tramways and the water supply, their position is that the very small dividend which it is proposed they shall be permitted to earn is not sufficient to secure the stability of those undertakings, and that it will be impossible for those undertakings to borrow money to secure that they shall be able to manufacture and carry on at the lowest possible cost. I think from that point of view I should doubt very much whether any hon. Member of this House would dispute that statement. I think it would be agreed at once by everyone that a dividend of 1¾ per cent. or, at the most, 1550 2 per cent. upon the ordinary shares of the undertaking is not sufficient to attract money into that enterprise. That statement we can all accept. The Committee did not suggest that such a rate of dividend would secure the necessary stability and attract money to those undertakings, and it is only purely as a temporary matter that the members of the Committee have made this particular recommendation. I think it is quite clear that whatever relief is given to these undertakings, after the War it will be necessary for the Government to very seriously consider the whole situation, not only with respect to the undertakings now under discussion, but also with regard to all statutory undertakings which are limited in their charges by Acts of Parliament, in some instances passed many years ago. After the War it is very likely that we shall be living under entirely different conditions, and therefore it will be necessary to consider whether the basis upon which statutory limitations have been established are under the altered circumstances reasonable and fair.
The second point, which is, perhaps, somewhat less important than the first, is that this very modest dividend is unfair to the vast number of shareholders, and particularly to those undertakings where they have a co-partnership arrangement, and the earnings of the employés would be prejudiced by this arrangement. If I were asked to give my first impression, and my most lasting impression, of the House of Commons, I should say, without the slightest hesitancy, that the thing that struck me above everything else has been the sense of fairness that this House desires to display on every occasion, and I feel quite certain that this particular instance will be no exception to that rule. We have to consider not only the interests of the shareholders of those undertakings, and they run into very many thousands, but we must also consider the interests of the consumers, who also run into many thousands. [An HON. MEMBER: "Eight millions!"]
The members of the Committee considering this matter no doubt have had to consider not only the interests of the shareholders but also the interests of the consumers. I understand that the representatives of the gas undertakings who presented the case before the Committee very strongly emphasised the extreme 1551 likelihood of the dividends of those companies being completely wiped out. Therefore they felt that for that situation to arise would be eminently unfair to those who are interested in those undertakings. On the other hand, it was suggested that the Government should come forward and release these undertakings from their statutory obligations with respect to charges, so that they might, through the relief the Government would give them, be in a position to increase their charges to their customers, so that they might maintain their pre-war profit. As so often happens in instances of this kind the Committee appear to have split the difference, and they came to the conclusion that this very heavy burden should be borne equally by the shareholders and the consumers, and that if the dividend's of those undertakings were to be sacrificed that the undertakings should be afforded an opportunity of earning sufficient to pay off all their pre-war dividend or standard dividend, and, on the other hand, the customers should be relieved of what would be the additional burden necessary to make up the full pre-war standard. Therefore, in that way it really would mean if that advice is followed that the consumers would be taking a part of the burden and the shareholders would be taking the other.
As was pointed out by those who object to the decision it is alleged that this will seriously prejudice their position. Well, the Acts of Parliament under which these undertakings are working have been passed by this House from time to time. The arrangement was come to in this place, and I feel if there is to be any change of a temporary kind—and it can only be temporary—it should be left to the House to decide. I quite understand that on this point there might be a very considerable difference of opinion, but I am sure everybody will desire to be fair to the shareholders and to the consumers, and I feel it would perhaps be desirable that there should be an opportunity given for the House to decide this matter for itself. I would like to make this reservation. The Government would not be willing that the Board of Trade should be given the full responsibility of determining what relief should be given. On that point we must maintain our position according to the Bill. I understand that those who 1552 are opposing this Bill are prepared to withdraw their Amendment, which provides for the withdrawal of paragraph (b), and that at a later stage an Amendment will be moved which will provide for something more than half of the pre-war or standard dividend, whichever it may be.
§ Sir A. STANLEY
But not the full. If that course is agreeable, then the Government will be prepared to withdraw the Whips on that particular Amendment and to leave it to the members of the Committee to vote freely upon it.
Colonel Sir F. HALL
May I ask one question. Would the right hon. Gentleman also be prepared to withdraw the Whips in order that the House might decide fully whether dividends on the pre-war basis should be paid?
§ Mr. J. HENDERSON
There are some companies that will not be able to provide for expenses and fixed charges. May I ask my right hon. Friend whether we are to understand that the dividend is to be after providing for those expenses and fixed charges?
May I ask whether the Government would be prepared to withdraw their maximum prices for the by products of these companies?
§ Mr. ALBION RICHARDSON
May I ask whether there is any objection to stating now exactly what the Government do propose in their Amendment? The right hon. Gentleman is making a bargain. He is asking for an Amendment to be withdrawn as one of the terms of that bargain. Cannot he tell us what we are to get in its place?
§ Sir R. BARRAN
Will the right hon. Gentleman leave to the House the question whether they are to get their pre-war dividends?
§ Sir W. PEARCE
I want to appeal to the right hon. Gentleman with regard to his complete change of attitude with respect to tramway undertakings, which are in an entirely different position. In December last the Board of Trade established a Statutory Committee to deal with tramways, and they have great powers under an Order in Council. They are able to do what they please with tram- 1553 way undertakings. They are able to take rolling stock from one tramway to another and to reduce their running powers. They can absolutely close them and make any regulations that they please. The Chairman of the Committee presented a Memorandum pointing out to the Committee that under the powers they already possess they are the proper people to decide what relief should be granted, and he asked the Committee to recommend that the Board of Trade should be clothed with powers to vary the statutory charges, and that each case should be remitted, to the Committee by the Board of Trade to decide what relief should be given. I submit that this is a complete change of attitude on the part of the Department. Tramways are in an entirely different position from other undertakings. Besides the variations which have been already pointed out, they have a limited tenure and no sliding scale. A Committee having been established and armed already with drastic powers by an Order in Council, it seems to me that they are undeniably the right people to decide the measure of relief. That was the attitude of the Board of Trade, and personally I think that their departure from it is unfortunate. I hope that even now it is not too late for the Board of Trade to alter their decision in this respect.
§ Mr. TENNANT
I listened with great interest to the speech of the right hon. Gentleman, and he has met such opinion as I have been able to arrive at very fairly. My hon. Friend who has just sat down (Sir W. Pearce) wishes to have a differentiation for tramways. I understand that the Government are not willing to accept it, and, that being so, it seems to me really unnecessary to argue it. [HON. MEMBERS: "Oh!"] Perhaps I ought not to have said that, but the Government do not want to have it, and the probability is that they will succeed in their desire. I am inclined to agree with the right hon. Gentleman that it is almost impossible to differentiate between these various public utility companies. It is not really fair that you should put one in one position and another in another position. That is my view, and I entirely agree with the President of the Board of Trade in that argument. There are a large number of Members who have come here to take part in this discussion in order that they may represent their constituents, many of whom have written to them saying that it is exceedingly hard upon poor people who have invested their 1554 small savings in these companies that their dividends should be cut down by one-half. Most people realise that it would be equally unfair to the consumer to insist that there should be the full dividends of pre-war times, and I should like, at the conclusion of this Debate, to move to insert the words either "two-thirds" or "three-quarters" instead of "one-half." I think three-quarters would be a fair amount. I should like to know what hon. Members think of that suggestion. I understand that there are a good many Members sitting in this part of the House who would be prepared to agree to three-quarters.
§ Sir F. LOWE
On a point of Order. The Amendment before the Committee simply deals with electricity. The right hon. Gentleman said that he does not propose to differentiate between any of these services. Therefore, I very respectfully suggest that the proper course for the Committee to adopt would be to consider whether the word "half" should stand part of the Clause. That would bring us to a direct issue on the whole question relating to all these services. It is absurd to discuss them separately when the right hon. Gentleman says that he proposes to take them together and not to differentiate between them. With your permission, if the Amendment were withdrawn, I should like to move that the word "half" should be left out of the Clause.
§ Sir J. WALTON
We are supposed to be in Committee on this particular Bill, but it would appear that we are having a Second Reading Debate. Is it the idea that we should discuss the whole of the Bill in a sort of Second Reading Debate, or where do we stand? What particular Amendment have we under consideration?
§ Mr. HENDERSON
I should like to ask the right hon. Gentleman whether he has considered the case of the statutory companies that are subject to pre-emption by the local authorities in a certain number of years. In 1914, when the War broke out, the London County Council had power to buy some of these undertakings in 1931. Four years have gone, in which they have been unable to make any provision towards the replacement of their capital by 1931. Other companies go on for ever. Has the right hon. Gentleman thought of that point?
§ Sir A. STANLEY
I can assure my hon. Friend that very careful consideration was 1555 given to this and all other relevant points, as well as to the question of dealing with tramways as distinct from other public utility undertakings. After all, all that is involved in this matter now is to secure to those who are interested in these undertakings, whether local authorities or private individuals, some return for the money which has been invested, but only for the period of the War and for a short time afterwards. There is nothing permanent in this legislation. Obviously, at a later date this matter must be brought forward by the Government, and some decision must be come to which will secure the stability of these undertakings in relation to the conditions as they will exist after the War. I myself can see no reason whatever why those who are interested in tramway undertakings, whether local authorities or private individuals, should secure any better terms than those interested in gas, electricity, or water undertakings.
§ Mr. R. MCNEILL
On a point of Order. This Amendment dealing with electricity-alone has been moved by the hon. Member for West Aberdeenshire (Mr. Henderson), and we have had a general statement with regard to the whole question from the Government. Would it not be for the convenience of the Committee if we could know at once whether my hon. Friend is going to take the opinion of the Committee on his Amendment or whether he is going to withdraw it? Let us have it one way or the other. If, notwithstanding what the right hon. Gentleman has said, my hon. Friend still wishes to take the opinion of the Committee as to whether there shall be differentiation or not, let us discuss that point, but if my hon. Friend is going to bow to the decision of the Government, however reluctantly, and withdraw his Amendment, would it not help us if that were done now?
§ The CHAIRMAN
Perhaps I may be able to assist the Committee. I have purposely allowed this discussion to run over more than one question in order that the Committee might see that it was arriving at an opinion. The first question is whether these services are to be dealt with together or separately. That issue is raised by the present Amendment. It would appear to be the desire of the Committee to get that question out of the way, and to reach the point as to whether the word "half" should stand part of the 1556 Clause or whether some other figure should be inserted. Perhaps the hon. Member will inform me whether he wishes to proceed with his Amendment.
§ Mr. NEVILLE
On a point of Order. The hon. Gentleman's Amendment covers two points. One is the elimination of electricity from separate treatment, and the other is whether they are to have their pre-war dividends. Those are two distinct points, and both are included in the Amendment. If he withdraws the Amendment, I take it that the point with regard to pre-war dividends has gone? [HON. MEMBERS: "No!"]
§ The CHAIRMAN
Surely it is quite clear that it will remain entirely within the power of the Committee to decide under paragraph (b) whether the rate is to be one-half, or the whole, or any other proportion.
§ Sir F. FLANNERY
May I respectfully make a suggestion? Supposing the hon. Member for West Aberdeenshire (Mr. Henderson) were to desire to give full effect to all that has been said by the right hon. Gentleman, he would be able to do so by slightly amending his Amendment by inserting after the word "electricity" the words "gas, water, or tramway services."
If this Amendment were put to the sense of the Committee, after what my right hon. Friend has promised with regard to the withdrawal of the Government Whips, the whole case as suggested by you in the first instance, dealing with all these public utility undertakings together, will be presented to the decision of the Committee.
§ Mr. HENDERSON
May I intervene a moment? Of course, I see the Committee wishes to settle this point, but at the same time I do not wish to press it to a Division. If the right hon. Gentleman would make it 80 per cent. we could settle the point at once.
§ Mr. J. W. WILSON
May I say, as a matter of procedure, that I appreciate your view as Chairman in encouraging the Committee to have as wide and long a discussion on this Amendment as possible. I see there will be grave difficulties in the matter of procedure supposing the hon. Member withdraws his Amendment and we get on to the suggestion of the hon. Member for the Edgbaston Division (Sir 1557 F. Lowe) that "half" stand part. If we decided that "half" shall not stand part, then we should have "two-thirds" proposed, and if that were defeated "three-fourths," and then you might go on to the whole, and that might be knocked out. You cannot go on in that way. The House is so divided about considering all these together that it might be possible, after moving 10s. and then not agreeing to propose any proportion—two-thirds or three-fourths, or anything else—afterwards. It is very much more desirable, if possible, to have a measure of consent on the fraction to be substituted before we come to the actual technical point of removing the one which is in the Bill. I think it is quite possible, in a House constituted as it is, to have those who advocate two-thirds or three-fourths and those who want the whole or those who want the Bill to remain as it is in the interest of the consumers. It is all very well to say that Members have had letters. We have all had letters, some from needy shareholders, some from rich shareholders, and some from the consumers. They are all appealing this way and that way. At any rate, I hope the discussion will not be terminated too soon.
§ The CHAIRMAN
Perhaps what I am going to say may make it clear. If the Committee desires to proceed on that point I do not think there will be the difficulty which the right hon. Gentleman anticipates, because I understood the right hon. Member for Berwick to say that he proposes to tender an Amendment to leave out "half" and insert "three-quarters." If this is done it would take precedence over the Amendment on the Paper, simply taking out "half," according to our custom, and the Committee will vote first of all whether "half" is to stand part; secondly, whether "three-quarters" is to be there inserted; and if no other figure is to be inserted it would remain that the whole should be. That is quite clear—if no proportion is inserted the whole will stand.
§ Sir R. BARRAN
There are several Amendments down dealing separately with these undertakings. If we pass this Amendment now it will not be possible to bring them up again. The right hon. Member says, "Leave it to the House," but the Committee does not understand whether he suggests leaving the whole to the House to decide upon anything up to 1558 the pre-war standard, or whether he will leave it to the House to decide something below the pre-war standard. If he would leave it to the House to determine anything up to the pre-war standard I think hon. Members would not be encouraged to press their Amendments. On the other hand, if he proposes to make it less than the whole, then we are entitled to have a Division on each of those questions.
§ Mr. PETO
On a point of Order. I have an Amendment which provides that in the case of water undertakings the Board of Trade shall have discretion up to the full pre-war rates of dividend. Unless the President makes the point clear I shall be bound to move my Amendment, but clearly I shall be precluded altogether from raising the question of the full dividend by the motion that "half" do not stand part and that "three-quarters" shall.
§ Sir A. STANLEY
I am sorry to intervene so often in the Debate. I thought I had made it quite clear in what I said previously, that, speaking for the Government, we are not prepared to consider the substitution of the whole of the pre-war dividend for the half. If something between half and the whole of the pre-war dividend could be agreed upon, then the Government Whips would be withdrawn. Whether it is two-thirds or three-quarters would be for the members of the Committee to decide.
§ Mr. NEVILLE
Supposing the pre-war dividend of a gas company to be 5½, but the standard dividend 4 per cent., the difference is a great deal. If it is to be three-quarters of the standard dividend and not of the pre-war dividend, it would be much less favourable for the company.
§ Sir F. FLANNERY
May I ask whether my right hon. Friend would be prepared to take off the Government Whips upon the understanding of "three-quarters," and the substitution of the word "higher" instead of the word "lower" later on? That would be a compromise which would end matters.
§ Mr. GILBERT
Are we not in an extraordinary position after the speech the President of the Board of Trade has made. I am a new Member of this House, and perhaps not au fait with the procedure. But the Government have appointed a Select Committee in order to consider a 1559 matter like this, and I should have thought the Government always supported the Report of the Select Committee.
§ Mr. GILBERT
The other one does not make any recommendation as to the amount to be paid. But the Gas Committee was set up by the Government in order to consider the point of the sliding scale of these private company bills. The Committee has reported unanimously to the House, and I understand it has always been the practice of the Government, when they appointed Committees like that, to get the recommendations of the Committee carried out. We are met here to-night by the speech of the President of the Board of Trade, that he is going to adopt part of the Committee's Report, but when he comes to the fraction of the amount of the dividend which is to be paid, the Government Whips are to be taken off and he is going to leave it to the House. [HON. MEMBERS: "Why not?"] Hon. Members ask, "Why not?" I am trying to put my case as a new Member, because I always understood that when the Government appointed a Select Committee to consider a difficult problem the Government adopted the Report. To me as a new Member of the House it seems an extraordinary proceeding that the Government should come down here, not to adopt the Report of the Select Committee, but, as I understand from the second speech of the President of the Board of Trade, to propose an Amendment, though they do not say exactly what Amendment they are going to propose. They only tell us they are prepared to consider an Amendment for something between what the Select Committee recommended, and the whole of the dividend which was paid by the gas companies before the War. As the hon. Member for Maldon immediately interjected, does that mean the highest or the lowest dividend which was paid before the War? The Government are treating the Committee very badly on this matter altogether, and I am very much surprised.
§ Mr. R. McNEILL
On a point of Order. Would you inform the Committee, Mr. 1560 Whitley, whether the hon. Member (Mr. Gilbert) is speaking to the Amendment or whether he is rising to a point of Order?
§ The CHAIRMAN
The hon. Member (Mr. Gilbert) was quite in order. I suggest that when he has concluded his remarks the hon. Member for West Aberdeenshire (Mr. J. Henderson) might withdraw his Amendment. That would enable the Committee to decide the effective point.
§ Mr. GILBERT
When the hon. Member for St. Augustine's Division (Mr. R. McNeill) rose to a point of Order, I was trying to explain to the Committee that I understood from your previous ruling we were to have a general discussion. I am very much interested in gas from the London point of view. I again say that the Government have treated the House very badly in not keeping to the Report of the Select Committee.
§ Mr. HENDERSON
I am rather at a loss to know what to do. [HON. MEMBERS: "Withdraw the Amendment!"] This is a very serious matter. If my right hon. Friend would give us an indication that he would accept 75 per cent. I would withdraw the Amendment.
§ The CHAIRMAN
That would be a matter for the Committee to decide. If the hon. Member withdrew his Amendment we could get on to that point.
§ Mr. HENDERSON
Then on the understanding that it is going to come up again—that is, the question of the half or the three-fourths or the whole—I will withdraw. Do I understand, Sir, that you propose that the Division should decide what is the rate now, or on what Amendment?
§ The CHAIRMAN
I have already informed the Committee that I propose to entertain an Amendment of the right hon. Gentleman the Member for Berwickshire (Mr. Tennant)—to leave out the word "half," and to insert the word "three-fourths"—which he has tendered.
§ Amendment, by leave, withdrawn.
§ Mr. PETO
I am sorry I cannot take the same view as the hon. Member for West Aberdeenshire (Mr. Henderson), and I beg to move, in Sub-section (1), to leave out paragraph (b), and to insert instead thereof,(b) in the case of any other undertaking such modification only may be authorised as shall be sufficient to enable a dividend on the ordinary stock or shares of the undertaking to be paid at the pre-war rate of dividend.
§ Sir R. ADKINS
On a point of Order. May I ask you, Sir, whether, in accordance with the obvious desire of the Committee, if the crucial issue of the particular proportion between one-half and the whole were now put to the Committee, it would not be open to my hon. Friend the Member for Devizes (Mr. Peto) afterwards to move the substance of his Amendment as an exception or an addition confined to the particular class of undertakings for which on this occasion he is speaking? Because I submit it would be more convenient for the Committee to come to a conclusion on the general amount as soon as possible, and that whatever limiting exceptions might be proposed by my hon. Friend should be considered by the Committee afterwards.
§ Mr. PETO
If the hon. Member for Middleton (Sir R. Adkins) had listened to the few opening remarks I was trying to make, he would have seen that I did not propose to move the Amendment exactly in the form in which it stands on the Paper, but to give the Committee at once an opportunity of settling one of the main propositions which must be considered. I want to leave out of my Amendment as it appears on the Paper the words "for the supply of water." It will then read:In the case of any other undertaking such modification only may be authorised as shall be sufficient to enable a dividend on the ordinary stock or shares of the undertaking to be paid at the pre-war rate of dividend.It would be simpler and would avoid a position of great embarrassment if the Committee would settle the question whether the Board of Trade should have authority to deal with these questions of the alterations of statutory conditions up to the whole pre-war rate of dividend. Therefore I wish to move the Amendment.
§ The CHAIRMAN
That cannot be done here, because that is precisely and exactly 1562 an equivalent to leaving out the words and not inserting any other words. That Amendment would not come at this stage. It would not be competent to leave out paragraph (b) and reinsert it with the exception of the word "half."
§ Mr. PETO
I only rose to move my Amendment in that form because I understood you, Sir, to say that you were going to put an Amendment, which is not on the Paper at all, to leave out "half" in order to insert "three-fourths." If you are going to put the Amendment on the Paper to leave out "half," and let the Committee vote on that first, I am perfectly satisfied.
§ The CHAIRMAN
When two Amendments are tendered, one simply to leave out and the other to leave out and insert something, the latter class of Amendment comes first, as the hon. Member will see by comparing his Amendment with the one standing next to it. That is the reason why I said that. That will not debar the Committee from coming to a decision, if it so desires, to leave out from the word "half" to the end. It is competent for the Committee to do that.
§ The CHAIRMAN
At the present moment there is no Question before the Committee, I am trying to lead it to an Amendment on which it can debate the matter. The next effective Amendment is that in the name of the hon. Member for South Paddington (Sir Henry Harris).
§ Sir H. HARRIS
I beg to move, in Subsection (1), paragraph (b), after the word "enable" ["more than sufficient to enable a dividend"], to insert the wordswith due care and management.The sliding scale was devised to provide a company with an incentive to due care and management, but when the present Bill is applied to a company the sliding scale becomes suspended, and the company becomes entitled to fix the dividends. 1563 The companies will then be able to throw on to the consumer the whole of the increased charge in order to maintain the rate of dividend without the incentive to due care and management. The object of the Amendment is to ensure the consumer against any laxity on the part of the management. It follows the existing Acts.
§ Amendment agreed to.
§ Mr. TENNANT
I beg to move, to leave out the word "half" ["at half the standard or maximum rate"], and to insert instead thereof the words "three-quarters of."
§ Mr. BURNS
May I say how sincerely I regret the action the President of the Board of Trade has taken on this subject? First, he came to the House of Commons with twenty-four private Gas Bills, and he said, substantially, that these Bills contained within them matters of such importance and urgency that it was necessary for him and for his Department to secure the guidance of a special Committee. That special Committee was instituted. It sat for eight or nine days. It gave close technical application to a subject on which knowledge, evidence and information is absolutely essential to come to a wise and just decision. The Committee sent their Report back to the House. The Board of Trade took the Report and embodied its recommendation in a Bill. We were under the impression that the Board of Trade would at least have shown sufficient respect to the decision and the appointment of that Committee not to use this the first opportunity to run away from it. What is the attitude of the President to it? He says, first, I do not object to you mixing up electricity and water, on which there was no Select Committee, on which the House lacks evidence, advice and information, with gas and tramways, on which we ask for and got special guidance, evidence and information. The result of doing that is this. You can get a combination of four interests as against the consumer to-day that you probably would not have got on gas and tramways with the evidence and information which had been brought before the Committee. The result is that we are face to face with a vicious extension of Government liability for private property, for speculators, for company concerns which are using the War as an opportunity of getting privileges and preferential consideration which no 1564 other interest, because it is small and un-organised and non-statutory, could hope to get.
See the disadvantage of this course. The President of the Board of Trade probably does not know how he is widening the scope of compensation, other than that recommended by the Committee, by widening this reference from gas and tramways to electricity and water. I am going to throw a little light upon the inexpediency, I think the injustice to the consumer, the taxpayer and the ratepayer, of water and electricity being included with gas and tramways. The inclusion of electricity as an object for privileged and preferential and, I believe, too generous compensation, adds 300 electric light concerns owned by municipalities only, apart from companies, and brings within the ambit of this consideration for generous treatment £50,000,000 more capital than was considered by the Committee upstairs, whilst the simple proposal of the hon. Member (Mr. Peto), which was taken, in my judgment, too lightly, so far as local authorities alone are concerned, brings in 1,200 water undertakings with anything from £300,000,000 to £400,000,000 of capital. So we have this result. First we have the railways, and there is no comparison between the case of the railways and the case of water and electricity. The railways are the military veins necessary to carry munitions, men and materials. They are vitally necessary. You could not have begun the War, you could not prosecute it for a day without them. They stand in a special position of their own, and the President of the Board of Trade has told us that there is no probability of the State being damnified by the control of the railways undertaken by his Department at the beginning of the War.
§ Mr. BURNS
The hon. Member has given an example of what an explosive can do at the wrong time. What about explosives? Important though explosives are, my own view is that if the Ministry of Munitions, against whom the gas companies from the point of view of explosives, have some claim, the Treasury and the other Departments concerned had given the gas companies probably a slightly higher price for the residuals necessary for the making of explosives, probably the difficulty in which some of 1565 the gas companies are placed would have been removed by more generous treatment on that head. But whether that be so or not it is impossible to say that either gas, electricity, or water, for the purpose of conducting the War and carrying on the economic and social life of the people, is at all comparable with the railways, which have in my judgment a special case in which it will be proved, for the four or five years that the War lasts and for six or seven years afterwards, from the point of view of the depreciation of their roads, locomotives, and material, that they have not made anything like the good bargain for themselves that some people speaking on behalf of gas, electricity, and water undertakings say the railways have made. Whether that be so or not, what I do respectfully protest against is the procedure of asking the House for guidance, that guidance taking the form of a Select Committee and the Select Committee recommending, as in Sub-section (b), a minimum of half the pre-war dividend, and then the President of the Board of Trade throwing them over, taking off the Whips, and letting us have a general stampede as prejudice or interest may dictate, with the result that we may see interests sufficiently well organised to put aside half or three-quarters the pre-war dividends, and to establish the absolute dividend that was paid before the War. If that were done, in my judgment, it would be a scandal, it would be unfair to the consumer, and it would involve us in a further expansion of two or three vicious things—I am talking now of financially vicious things—that have been done apart from the railways. You led off with the railways, and followed with a subsidy, it is estimated, of £45,000,000 for the land. Then you bring in the coal mines control, which we were told from that box would mean nothing from the State and probably little from the consumer. What is the result? Vast financial compensation to well-organised interests at the expense of the consumer or the taxpayer, which is snow-balling every day, every week, every month. First the railways, then the land, then the coal mines, and now we have the gas companies asking not for the half—which, by the way, other people cannot claim, and, therefore, will not get—but three-quarters of the pre-war dividends, and some even suggest a minimum of 5 per cent., or alternatively, as put by the hon. Member for Aberdeen, some 80 per cent.
1566 I respectfully protest against the course that we have been advised to take by the President of the Board of Trade, and I am going to give one or two reasons why I do protest. I have a special claim to speak as a London Member, and I would ask the Committee to listen to the facts as regards cost and consumption measured from the standpoint of London. London, which will be very prejudicially affected if the Government depart from this Bill, subscribes 49 per cent. of the total capital in England and Wales which is in the gas industry of this country. London makes and consumes 40 per cent. of the gas made and consumed in the country. If what is sought to be given by this Amendment of more than what the Committee recommended at least £500,000 will be added to the consumers' gas bill in the county of London. Let us examine that for a moment, and see what already has been done during the War. Before the War London paid for and consumed £6,000,000 worth of gas per annum from all the companies. In 1918, only four years after, that £6,000,000 worth had grown to £10,500,000, and for not a great deal more gas. [An HON. MEMBER: "And a lot worse!"] That is an increase of charge to the consumer of £4,500,000 in four years. The quality is poorer. The amount of incombustibles in the gas has grown on an average from 10 and 11 per cent. to 22 and 24 per cent., and measured by the increase in the price per 1,000 cubic feet we have the South Metropolitan Gas Company, whose gas has risen from 2s. 3d. per 1,000 cubic feet to 4s., and the Gas Light and Coke Company from 2s. 7d. per 1,000 to 4s. 4d.
§ Mr. BURNS
The consumer is not responsible, qua consumer, for the War. That is the Government's business. The consumer is not responsible for the rise in the price of coal. The consumer, qua consumer, is not responsible for the rise in the price of labour or of residuals, or any of the elements that go to this increase in the price of gas. The fact is that there has been an increased cost to the consumers of gas in London of £4,500,000 in four years, and in the price of gas from 2s. 3d. to 4s., with poorer quality. Wages have gone up from 50 to 90 per cent., and other elements of production have also increased, and here we are confronted with 1567 this fact, that of the increased cost in labour and other materials which have led to the increased cost of gas six-sevenths of that increased cost in the four years has already been put on the consumer. Now the proposal is made by the right hon. Member for Berwick (Mr. Tennant) and others that the amount to which the companies should be entitled should be increased beyond what the Committee recommended, which will mean that from £500,000 to £1,000,000 will be added to the price of gas that has already been imposed upon this long-suffering, and in this particular relatively inarticulate, community of people in London, who have a right to appeal to the House of Commons to resist the logrolling of sectional interests, of well-organised trades, of well-manipulated monopolies. We have a right to appeal to the Board of Trade to stand up for the 8,000,000 of gas consumers in the United Kingdom as against the well-directed logrolling of the few well-organised interests. Compare these people with the shopkeeper, who puts into his business the only capital he has—his life. He is taken by the recruiting sergeant and sent to the trenches. These minor, subordinate, and unorganised interests are not to have any compensation or protection, while, on the other hand, these organised industries come here and say, "We do believe in war in Flanders, but do protect our pre-war dividends." It is not fair, it is not just, it is grossly inequitable, and, as my hon. Friend from Ireland (Mr. Field) says, it is not patriotic, that you should give this preferential consideraton to these well-organised interests, who already have exploited the country and put upon the people of London burdens to the extent I have indicated by an increased charge of £4,500,000, by an advance in the price of gas from 2s. 3d. to 4s. 4d. per cubic feet, and by a further £500,000 or £1,000,000, if this proposal is passed to increase the amount from ½ to ¾ per cent. of the pre-war dividend.
It is nothing to me that a few workmen come to the Lobby of the House of Commons, and ask us not to support the Government Bill and the Committee's Report. They do not come as consumers. They do not come as workmen. They come as shareholders with a microscopic amount of profit, a small amount of capital as compared with the millions held by the other ordinary shareholders, and the preference 1568 and debenture shareholders. There are 6,000 workmen in round figures. They have only got £425,000, or an average holding of £75. They do not on an average draw £8 in dividends, but during the period of the War these men have had their wages increased from £697,000 in 1913, to £1,200,000, so that even if they were deprived of the whole of their £8 per annum dividend their rise in wages in the period of the War would be equal to a net addition of £200 over the four years, which compensates them for any slight loss they might have had in their annual receipt of £8 per annum. The fact is that there is not any case for them, when they are appealing to people as consumers and not as workmen, and when working people enter into a financial operation of any kind they are no more entitled to the sympathy of this House than any other shareholders who put their money into a concern for an entirely different purpose. To listen to the gas directors in this House anyone would be under the impression that they had nothing during the War to improve their position. All I can say is that the working man in the gas industry has made not a bad thing out of the War.
His wages have risen from 1s. per thousand feet, which labour cost before the War, to 1s. 9d. [An HON. MEMBER: "Do you object to that?"] I do not particularly object to that. The consumer pays for it. But I do object to working men who were getting £2 per week before the War, who are in a special trade of which large numbers are exempted from a certain service, and who have had their wages raised to £4 and £5, increasing the difficulties of the man who has not similar exemption, who not only has had no increase in his wages but whose wages of £2, £3, or £4 have dropped down to 1s. 2d. a day with from 12s. to 14s. per week for his wife and family. I do not object to the gas stoker or any other working man improving his condition to a reasonable extent during the period of the War, but he ought not to improve it disproportionately at the cost of people who are not earning high wages, who are subject to such disabilities as are the men who are in France, and who have not the privilege of exemption from certain military and naval services. Now, I come to the shareholder. Take residuals. Residuals which yielded 9d. per 1,000 feet before the War now get 1s. 4¾d. Coke, for which they only got 14s. 5d. before the War, now brings 23s. 4d., and in some cases 3s. or 1569 4s. more. In a word, gas is from 50 per cent. to 70 per cent. dearer. Coke is better paid. Labour is better paid. Tar has risen in price. Ammonia is better. Benzol and the other ingredients for explosives have also risen.
§ Mr. BURNS
The price of coal has risen, but that has not been due to the 7,000,000 or 8,000,000 consumers. It has been due to causes for which either the Board of Trade, the Ministry of Labour, or other Government Departments are more or less responsible. It is not the business of either the miner, the gas stoker, the Government Departments, the shareholder, the Ministry of Labour, or the Ministry of Munitions to unload on to the unprotected, unorganised consumer all the cost that the War has imposed upon all sections of the community, and which all of us in proportion to our ability ought to bear. My complaint against the Government is this. The Government, to quote scripture, giveth to him who hath, and taketh away from him, who hath not. If the consumers had an organisation capable of bringing Members to this House, of Lobbying to the extent that Lobbying has gone on during the last three weeks in the Central Lobby, the Government probably would listen to them more than it now does. But may I point out the disadvantage of this particular course. When this War is over—and I hope that it will be over some day, and I hope that it will be over very soon—you are going to have a number of social and industrial problems, and it will require not only all the boldness and capacity and initiative of which statesmen are capable, but it will require the greatest moral courage and financial wisdom on the part of those who are responsible for national finance, to resist the claims that will come with insistent, almost irresistible demands from 5,000,000 or 6,000,000 of demobilised men. The first thing they will ask for is work. The second thing they will ask for will be wages—not the pre-war wages, but war wages on the high scale of the South Metropolitan Gas Company, the railways, and the miners. Something else they will ask for, more persistently, in a clamant way which you will have great difficulty in resisting, if you yield 1570 now. They will ask for bigger allotment notes for their wives and children. They will ask for higher pensions for the disabled; and better treatment for the widows and dependants, who no longer have the full wage of either the dead or the crippled soldier to rely upon.
There is my point. What reply can you give to the discharged soldier, the demobilised munition worker, or the sailor or the soldier, after you have instituted this form of generous compensation for gas, electricity, water, and tramway undertakings. The claim to sympathetic consideration that these men can have and will press cannot be denied, and in pressing it they will say, "What was good enough for the gas companies ought to be good enough for soldiers and sailors who have fought for their country." When that claim takes the form of large and perhaps disorderly gatherings of men in the throes of suffering in winter you will have the greatest difficulty in not meeting their claims. You will be up against your own lack of courage, your lack of wisdom, your lack of boldness in not saying, as you ought to say to-day, that war is a disturbing, deteriorating, and dislocating element, and that it is fair that no section of society, rich or poor, should be the subject of differentiation in treatment—that sections should get generous terms because well organised and clamant, while others, who have not their wealth, their ability, or their power of organisation have to pay for that preferential and exceptional treatment. If I had been President of the Board of Trade—[An HON. MEMBER: "Thank God you are not!"]—I hear an hon. Member, "Thank God that I am not!"—I should not have given any more consideration to the gas shareholder or any other investor than to the small greengrocer or the milkman in a back street of London, who has invested his only capital, his life, in the cause of his country, and who receives if he survive, maimed and disabled, or his dependants receive, if he is killed, a comparatively small pittance. The poor man gets only insignificant compensation and consideration as compared with capitalists who have not themselves, in many cases, risked their bodies and lives in this War, though their workpeople, be it said to their credit, have done so. These capitalists receive in cash far beyond what can be given either to the greengrocer, the navvy, the builder, the bricklayer, and the 1571 unskilled labourer, who, to their credit, patriotically responded to their country's call.
I ask the House to remember what is happening in the country. I see in the papers a notice of Motion by Lord Inch-cape to call attention in the House of Lords to the financial condition of the country. I only refer to that to emphasise this point: It is estimated that the capital value of the United Kingdom ranges from £16,000,000,000 to £18,000,000,000. We have already spent or mortgaged, either in expenditure or debt, nearly half the capital value of the United Kingdom. If this War goes on for another two or three years we shall have incurred in debt or in war expenditure or mortgage, not half, but probably three-quarters of the capital value of the country. One Member has suggested that the War may go on for six or seven years longer. That is a contingency I dread to face, but it is not at all improbable that it may continue for two or three years, and that we shall have either spent, mortgaged, or contracted to spend three-fourths or four-fifths of the capital of the United Kingdom. That ought to make us pause before we still further burden the taxpayer, the ratepayer, and the consumer, who are the only three people from whom you can get money by taxation to carry out the War, to pay compensation to the dependants of the dead, the pensions for those who are disabled and crippled in doing service for their country. You are differentiating between the rich and the poor by giving preferential and generous compensation to well-organised interests in a form and in such proportion that you can never give to your guardsman, your sailor, your Highlander, or your men in the English regiments. I believe that the human claim should come first. I believe that there are calls upon us more clamant, more justly put forward, than are those claims which we now hear so much of today. It is because London is going to have at least £500,000—in my judgment it will be £1,000,000—more added to the £4,500,000 the consumers of London have already paid—that I ask this House to pause and to consider well what it is doing. It is because I believe the burden which you seek to impose by this Amendment is unjust, inexpedient, grossly unfair, and I think immoral, that I beg the House of Commons to think twice, and not to budge one iota from the very generous recommendations of the Select 1572 Committee. It is because I object to this preferential treatment and deplore the log-rolling of various well-organised interests—log-rolling that has been more or less successful—to create an opinion on their side which is favourable to them, but which can only be given effect to at the cost of others, that, in the interest of the soldier, sailor, and over-burdened taxpayer and shopkeeper, I put the appeal and claim that I now address to the House.
§ Mr. ROBINSON
I want to say a few words on this matter, as one of the members of the Committee which specially-dealt with this question. All through we tried to hold what we considered a fair balance between the gas shareholders and the consumers. How far we have succeeded the House must determine. I must express my regret that the President of the Board of Trade, after accepting the recommendations of the Committee, has left this to the House owing to the ominous growl we have heard in this House from capitalists who are interested—[HON. MEMBERS: "NO, no!"]—who have got up on one side alone when no voice had been heard from the consumers. I still want to hold a fair and just balance as between the two. We have heard speeches on one side alone, with the exception of one voice which was raised on the other side. The President of the Board of Trade made two speeches. In the first he accepted the recommendations of the Committee, but when hon. Members became more clamant he left the subject to the House to consider, and perhaps to give a greater proportion than half of the profits, as recommended. I should like to go back a little into the history of this matter. We had evidence put before the Committee as to the sliding scale and its operation. I will not go into the details of that question. Under the sliding scale, gas companies were enabled, by reducing the price of gas, to raise their dividends, and, on the other side, if they increased the price dividends had to be reduced. In the words of the Chairman of the Committee which dealt with this question in 1874 and 1875, it was a fine for bad management and a reward for good management. The sliding scale came into operation about the year 1875. From that time on, the sliding scale companies, generally speaking, did pretty well. They soon got up to their 10 per cent., and the evidence showed that they went up to 13 per cent. or 14 per cent. Good management was no doubt partly responsible, but one of the reasons was 1573 that the price of coal between 1875 and 1877 fell from 19s. 5d. a ton to 14s. 10d. There was no suggestion then to give back to the consumers any special part of that profit. As a result of this sliding scale, the evidence showed that one company-alone was able to gain during the period we are considering an added amount of no less than £3,748,000, and the companies as a whole gained under that scale something over six and a half millions. These are very material figures, and if now we say that they ought to share the hard times which fall on many other companies I think it is only fair. So well did these companies fare that they found it advisable to split their shares, and in some cases they gave about £250 in shares for the nominal £100. Now, of course, the dividend drops to 4 per cent. or 5 per cent. It is true that new people have come in and that the original shareholders have got off with the best part of the profits, but I think I am not called upon to make good that financial transaction. I do not think it is the duty of this House to make up those dividends to anything like the old level.
I should like to say a word more about the price of coal, because it is said that it is so high on account of the action of the Government. To some extent that may be right, but I hold, and I think that most men who know anything about the coal trade will agree, that but for the interference of the Government in the price of coal and their attempt to keep it at something like a reasonable level it would have soared very much above the present figure, and if the gas companies claim that owing to the action of the Government the price of coal has been raised, I say it would have been raised very much higher if the Government had not interfered at all. We are asked to bear in mind that if these companies want more capital they will find great difficulty in getting it if the dividends are so low. That is very true, but we must remember that the Committee was set up to consider this matter for the period of the War, and we have nothing to do with what is to take place afterwards. I agree that after the War, if the price of coal remains at its present level, it may be reasonable to come and ask this House for special consideration, but that is quite another matter. We are not talking about after the War, but about this present temporary measure which we are now considering. It is said that we are dealing specially with this one industry, and that many other 1574 industries have done very well. That may be so, but, on the other hand, I ask the Committee to remember that some of these other industries are doing very badly indeed, and those are the ones that we have to consider, quite as much as the others. At the beginning this Committee set out to try and hold a fair and even balance, and I think that on the whole they succeeded in doing so. I am exceedingly sorry that the President of the Board of Trade has expressed his willingness to depart from the Committee's recommendation. Surely it would have been better to have thrown the recommendation of the Committee on one side altogether! We should then have understood where we were. I am bound to say that I have been very much surprised at the number of widows and orphans whom we have found as shareholders in these companies. Whenever a financial interest thinks itself assailed in any way, immediately all the shareholders appear to be widows and orphans. I hope this Committee will stand by the recommendations of the Committee upstairs, which, after all, spent a great deal of time and over a dozen meetings considering this matter and hearing evidence from both sides.
§ Mr. NEVILLE
I do not know that I need follow what has been said by the last speaker or by the right hon. Gentleman the Member for Battersea (Mr. Burns). The latter made a very impassioned speech, in which he alluded to a large number of topics which seemed to have very little to do with the matter before the Committee. The one position which nobody on the other side seemed to lay any stress at all on is that if there is any monopoly at all—and it is suggested that the gas companies have a monopoly, although they are competed with by the electric lighting companies and all other means of light and heat—if there is any monopoly at all at present there is only one, and that is that the gas companies have a dividend which goes down as their price goes up. Nobody else, so far as I am aware, in the whole of England is in that position, and if a butcher, for instance, before the War charged 1s. a lb. for his meat and got 3d. profit, what would he say if the Government said, "You must charge 2s. a lb. for your meat, and you will only get a ½d profit"? He would go out of business. He would say, "I am not on in this scene; 1575 I am off on something else." That is what the butcher, the baker, and the candlestick-maker would do. The only people in England who are in this miserable position are the gas companies. The price of everything which they get is put up against them. The right hon. Gentleman the Member for Battersea alluded to the fact that they were getting a very much larger sum for their residuals, but he never mentioned the coal for which they have to pay; and when you come to see that the extra cost of the raw material which they require is only compensated for to the extent of one-quarter by the extra price which they get for their residuals, you will see that it is not so very big a compensation as is suggested. At all events, I do not think the right hon. Gentleman himself would go into business on those terms, that everything he bought should go up in price, and that for all he could sell he should only get a quarter of the extra cost of his raw materials.
§ Mr. NEVILLE
Let me give a concrete instance. I will take the case of the company with which I am concerned. Coal, oil and raw material have cost us £500,000 extra. That is the extra amount we had to pay last year. The residuals, which are entirely in the hands of the Government, only brought us in £140,000. There is a difference of £360,000 or £370,000 which has to be made up.
§ Mr. NEVILLE
Of course we have to. We have to find the extra money; we have to find the extra capital for meeting this increased expenditure, and where are we going to find it? We do not discover it in the hedgerows. People do not come running to us and saying, "Here is money with which to carry on your concern." But we want double the amount of our ordinary floating capital and we have to get it somehow, and when hon. Members come here and speak of the wickedness of these gas companies one is surprised. One can only marvel at the enthusiastic way in which the right hon. Member for Batter-sea dealt with these companies. He hit them high and he hit them low. I do not say he hit them below the belt, but he certainly dealt with them as though they were grossly wicked. Yet they have been 1576 doing everything the Government has asked them to do. They have made everything the Government wanted. They have utterly changed the whole of their manufacture. They have gone into new lines of business. My company were approached early in the War and asked, "Can you make shells?" We had never made shells in our life, but we said we would try, and we put down the plant, we got a lot of women together and trained them. We got the men, we got raw material, and we made, I forget how many thousands of shells, to the satisfaction of the Minister of Munitions. If anything had gone wrong our shareholders would have been liable for the loss, yet not one farthing have they got out of it. Most astonishing to say we did make a profit. I do not believe any other gas company ever did that. But we have a most clever engineer, and he made a profit of £3,500. But then in comes the sliding scale and not one farthing of the profit goes to the shareholders. The price of gas has gone up. The price of coal has gone up, the price of everything has gone up, and therefore not one farthing of the money came to our shareholders, although it was made entirely outside our regular business at the risk of the shareholders, who came in and did the work from patriotic motives. When the price of gas goes up, down goes our dividend, and when the price goes down the dividend only goes up if we are able to earn it.
The right hon. Member for Battersea alluded to the fact that the Ministry of Munitions had something to do with this matter. It seems to me that when the Government took up their position in this matter they were only looking at it from the point of view of the consumer. Look at the price we receive for our residuals. These things are extraordinarily important. The right hon. Member for Battersea talked about the railways being indispensable to the country. He said we could not carry on the War without them. Well, we could not carry on the War without cold drinking water, and we could not carry on the War without gas and electricity. Where would your munition works be if there were no gas and electricity? The right hon. Member for Battersea said not a word about that. It is not possible to harness the sun or the air to do the work in the munition factories; we must use gas and electricity, and without the power thus provided it would be impossible to carry on the War. 1577 Therefore, so far as that is concerned, I think there is sufficient to differentiate the case of the railways from the case of those who supply power. With regard to residuals, is the House aware that the price of residuals in the market, if there were a free market, would be very much higher than that which is received by my company? It has been calculated that what we receive for residuals represents 3d. or 4d. per 1,000 cubic feet. I spoke with an "expert" to-day who was talking about its being 10d. I do not know anything about that, but if the Government are holding the balance between the consumer and the shareholders, let them remember that it is the shareholder who has supplied the capital for carrying out this business in the interests of the country. He has done it for the sake of the country; he is getting no dividend. I know it has made a difference of £57,000 per annum to my company because the Government do not pay a proper amount for munitions. If the Government do consider the consumer's interests they should consider them from a proper point of view. There is no need to shed crocodile tears over him. Surely it is only fair that proper interest should be paid for money which has to be raised. This money is used for the benefit of the whole community, and it is not right to attempt to prejudice the interests of the shareholders in the way the right hon. Member for Battersea has done. He said that these corporations had not submitted their bodies for the Army. He must have forgotten that the only part of a corporation which exists in fact is that part to which one applies one's toes. I think really the right hon. Gentleman was very hard upon the companies when he talked about their having done nothing for the Army. Reference has been made to the stokers and to their exemption from military service. But there is hardly a stoker in existence at the present time. The women have taken the places of these men, and they are doing the work magnificently, God bless them! I forget how many, but at least 1,000 or 1,200 of our men have been taken away for the Army. The right hon. Member for Battersea has spoken of us as privileged persons. He has spoken of us as log-rollers, and that sort of thing, but my reply is that we have done everything we can to send men into the Army.
§ Mr. NEVILLE
At any rate, we never stood in the way of their going. We did not claim exemptions for them. We did not put in all sorts of pleas. We did not make frivolous claims on behalf of the people who were called upon to go. They have done everything that they can, at all events, to help the country in every possible way, and it does seem extraordinarily ungracious, if I may say so, that not sufficient recognition should be taken of the industries which have been doing these things. There is no other industry in the world, or in England at all events, which is handicapped in the way we are. We are not masters in our own house in any particular whatever. We are utterly without any power of ameliorating our position.
§ Mr. NEVILLE
I do not follow the hon. Member. This is a matter in which the House has a perfect right to consider what is just and fair for capital, and what is just and fair for labour. The right hon. Member for Battersea pointed out that the labourer is worthy of his hire. Is not also the man who finds the capital? He is not asking for anything out of the way, but what every Member of this House would ask for himself and nothing more, and I cannot see why there should be this differentiation, and why we should not have fair remuneration for capital. Unfortunately, we do require to raise capital. An hon. Member talked about not raising capital during the War. Then, perhaps, he will explain to me how works are to be carried out which require instant extension, when the chief consumer is the Government, who require an enormous increase of our materials for the purpose of their munition factories! We cannot do it on air. We must do it on capital, and if we go into the market for capital, what are we to pay for it? Everyone knows the important matter for all industry is, What are you going to pay for your capital? If you are going to make everyone say that this is the one venture in which it is not worth his while to pat his capital, you are going to put us in a position which is almost outside the money market, and we shall have to pay very much more for our capital. Who is the person, then, who suffers? The consumer, and anyone who thinks he is acting for the benefit of the consumer by cutting down dividends in this way is really acting against him, because, although for the consumer there 1579 may be a temporary advantage in the fact that less money has to be provided for dividend, he has got to pay in perpetuity, because capital has been inflated by reason of the fact that it cannot be raised at a reasonable and economic rate. Another thing which the House does not understand is what the standard dividends amounts to in figures. I have here the figures of five or six of the London companies. The standard rate of dividend, which is quite different from the pre-war dividend, which of course was very much higher than the standard dividend, which was a low-earning dividend that could be increased by good management and economy. Therefore the pre-war dividend is considerably higher than the standard dividend, but in the five companies the difference per 1,000 cubic feet between standard and half-standard dividend amounts to 1¾d., and in the highest case to 2½d. You may say the average is about 2 1–10d. for the whole area dealt with by the right hon. Member for Battersea. The difference between paying standard price and half-standard price is about 2 1–10d.
§ Mr. NEVILLE
I will give the figures. The Gas Light and Coke Company's standard dividend, 4 per cent. They have got £16,000,000 of capital and half the standard dividend is 2¾.
§ Mr. NEVILLE
The hon. Gentleman does not understand—2¾d. per 1,000 cubic feet. The Commercial is 2 6–10d.; South Metropolitan, 2 2–10d.; Brentford, 1¾d.; Croydon, 1¾d. So that you get between 1¾d. to 2¾d.
§ Mr. NEVILLE
That is a very difficult matter to tell you, because in the first place, a great deal of capital has been raised by the Auction Clause. I can only tell you, in the case of the company with which I am connected, that the net result is that the capital raised under the Auction Clause has been at 19.1 per cent. for £100 worth of stock. But what the percentage of the capital is I cannot tell you without notice. Of course, it was more than the standard rate. I do not think I need say another word to the 1580 Committee. It seems to me the matter is entirely one for the House of Commons, in which they must deal fairly with all the interests, and I do submit the interests of gas shareholders ought not to be lost sight of in this matter. You ought to consider from a business point of view, do you wish, or do you not wish, to give stability to those companies? If you give them the half standard, what will be the effect with regard to the company with which I am connected? The half standard does not apply to this company until the price of gas has been raised 13d. That amounts to this, that until you have charged the consumers £270,000 the shareholders get no benefit, and then they get £918. That amounts to 7–10ths of a penny per cent. on the increased cost. It amounts to something which is wholly infinitesimal. That is your half-standard dividend. It is illusory and impossible, and it shows that the whole suggestion which comes from the Board of Trade will have nothing whatever to do with the stability, at all events, of the company I represent.
§ Mr. ANDERSON
I was myself a member of the committee which sat to investigate the whole question of the gas undertakings, and whether any modification ought to be made with regard to price; but in this Bill we find that this particular issue is mixed up with the tramways, with water and electricity. It is brought forward under conditions that might, in my opinion, have dispensed with the preliminary inquiry altogether, because it would have been easy, without inquiry, to put the question to the House in regard to these various statutory undertakings: "Do you think they ought to have pre-war dividends, or three-quarters of them, or what?" That issue could have been voted, upon just as well without an investigation as after the inquiry that has actually taken place. So that to a very large extent I feel that the work of that inquiry has been thrown away. I also feel that the discussion to-night in this House is a very mixed sort of jumbled discussion, because we are discussing all sorts of things. We are discussing the pros and cons of the tramways, the pros and cons, of electricity, of water, and gas, and it is most unsatisfactory. It is not possible, under those conditions, to get anything like a clear statement one way or the other. We have limited the whole question altogether; in my opinion, we might have gone a great deal further, because if 1581 we are going to give the relief to those who are mentioned in this Bill there are any number of other companies who would be very glad to come to the House of Commons in order to ask that a measure of financial relief should be guaranteed to them, or at any rate that three-quarters of their pre-war dividend, or the whole of it, should be guaranteed. There are any number of undertakings that have suffered as the result of the War, and why should we——
§ Mr. ANDERSON
I will deal with that point in a moment. Why not deal with these other cases, and give a general measure of relief? We are, it seems to me, taking a step which will once more end in our going round and round and round in the same old vicious circle. There will be a general and heavy increase in the price of gas to many of the poor consumers. Once more there will be begun agitations for increased separation allowances, or increased wages to meet the increases the Government has put upon them. If these rich and very powerful corporations can come to this House and make these demands in favour of such modification why should not relief be granted to every shopkeeper or business which has suffered as the result of the War? As a matter of fact, many of the small shopkeepers and one-man businesses ha re been ruthlessly smashed without any kind of compensation; whereas, we have got these various strong companies, well organised, with any number of representatives in this House, as we have heard to-night. They can make their power felt so far as the Government is concerned, and the Government is willing to meet them in a very substantial way. What we are asked to do to-night really is this: to break agreements which have been in operation in regard to gas undertakings and the like, since 1875.
§ Mr. HOLT dissented.
§ Mr. ANDERSON
Yes, the gas agreements. So far as the sliding scale is concerned, it is a very easy thing to break down that arrangement, but it will not be so easy to put it back on its feet once it is broken. It is perfectly true—and those of us who served on the Committee did not shirk the fact but faced the issue—that the War has imposed many heavy burdens 1582 upon the gas companies. I speak more particularly of them. I am not at all giving an opinion upon the water or electricity companies, as I have not had the same opportunity to go into the facts of the case. In regard, however, to the gas companies, there is no doubt the costs have gone up. The cost of coal, oil, transport, repairs, labour, and materials generally have gone up. Some of the costs in connection with the gas companies have gone up very heavily indeed, but it is quite a mistake to imagine that the public have escaped their share of the burden of these increased costs. In point of fact, the public to-day is paying in London substantially 50 per cent. more for its gas than it was paying before the War; in some cases considerably more than that. The hon. and learned Gentleman who spoke last and who represents one gas company—and apparently speaks for one in this House—that company of which he is a shareholder, and apparently a director, has increased its price of gas to the consumer during the War from 2s. 4d. to 4s. Therefore, the public has already been hard hit by the increased price of gas. What we are being asked for now is that they shall bear substantially the whole cost, because if we do carry the Amendment proposed, it means that practically the remaining protection will be taken from the public, and that the public, who have already had to bear such a heavy charge, will find the charge substantially increased. It is not only that the price has been greatly raised, but, as has been said again and again in the House, the quality of the gas to-day is enormously lower than it was. I do not hesitate to say that the quality of the gas is at least 20 per cent. inferior to what it was in pre-war times. I do not blame the gas companies for that. They have carried out the instructions of the Ministry of Munitions and so on in order to extract certain ingredients from the gas for explosive purposes. Therefore the companies are not in the least to blame—in most cases, at any rate—for the quality of the gas But this fact remains: that the public are charged a greatly increased price for a greatly inferior quality of gas. Side by side with that the companies are gaining financially from this arrangement, because they are selling their ingredients to the Ministry of Munitions.
§ Mr. ANDERSON
My hon. Friend shakes his head over that. Can there be any doubt as to the fact? If he and others interested in gas companies have a quarrel with the Minister of Munitions about the price, that is their affair. Why should the consumer have to pay because hon. Members interested in gas companies cannot agree to a proper arrangement with the Ministry of Munitions with regard to the price of residuals?
§ Mr. ANDERSON
I cannot answer half a dozen questions on different points at the same time. The fact is that at present, when there is any extra cost, that the price of gas is raised so that six-sevenths of the burden falls upon the consumers. Only one-seventh of the burden at present falls on the shareholders. That fact is incontestable. What we are now proposing to do to-night is that substantially this remaining one-seventh shall also fall upon the consumer. We were told by the last speaker that the sliding scale has been a most unfortunate thing for the companies, and that the companies are the only people that have to bear the terrible burden of this sliding scale. Who was it that asked for the sliding scale? It was the gas companies.
§ Mr. ANDERSON
Yes; it was. The great advocate of the sliding-scale arrangement were men like the late Sir George Livesey, who was one of the greatest gas engineers in this country. It was not challenged. I am quite sure my colleagues on the Committee would say that it was never contested that the sliding-scale arrangement on the whole had worked well. It is forty-two years old. Nobody desires lightly to change that arrangement. That arrangement is a partnership. It has always been claimed to be a partnership, a partnership between the gas producer and the gas consumer. Under that partnership for many years past, in London particularly, the gas companies have been able to pay substantial dividends of over 10 per cent. on their original capital. In addition to that, they, as has been pointed out by my hon. Friend, who also sat with me on the Committee, have paid dividends to the extent of between £6,000,000 1584 and £7,000,000 in excess of the standard dividend during the time the sliding scale has been in operation. Therefore there was no complaint at all whilst the sliding scale was yielding over 10 per cent. and millions in excess, but now when it begins to operate to the disadvantage of the companies they come and say, "We want you to relieve us of our responsibility; it is no longer a partnership, and the public must endure the whole cost." I do not think that is fair, and this House has no right to take a step of that kind in the interests of the gas producers and against the interests of the consumers, many of whom are very poor people. It has been pointed out that besides the great increases in the cost of gas there are other compensating factors, there is an extra income from residuals, such as coke and materials for explosives, and even if the price is controlled it is substantially higher than it was. The South Metropolitan Gas Company had an income from residuals in 1914 of £517,000, and last year their income from the same source was £1,000,081. The residual receipts of 1914 were equal to 9d. per 1,000 cubic feet of gas, whereas last year they were equal to 1s. 6¾d. per 1,000 cubic feet. [An HON. MEMBER: "How much is profit?"] I am mentioning these as compensating factors. When you are estimating the increased price of coal you must not leave out any of these factors. In addition to that many of these companies have considerable reserves and insurance funds. The South Metropolitan Company have a reserve of £142,000 and an insurance fund of nearly £100,000, both of which are available for paying out certain sums to keep the dividend up to a certain standard.
It is very often argued that the companies are not to blame for the present circumstances, and that they are suffering for reasons over which they have no control, and therefore are entitled to relief. Surely the reply to that is if the companies are not to blame, neither are the gas consumers. Amongst these gas consumers on whose shoulders you are proposing heavier burdens to-night there are any number of poor women, the wives of soldiers earning their separation allowances, and they are going to bear a substantially heavier tax by the action of this House in taking the steps suggested with regard to all these various concerns. In point of fact, we found that there was every degree of hardship and variation. 1585 You had maximum-price companies and sliding-scale companies, and you would find it difficult to apply some simple principle of legislation like you now propose or some simple measure of relief. There are 830 gasolene companies, representing £128,000,000 capital, and there are 519 private companies, representing a capital of £102,000,000. Therefore it is well to face the exact charge involved in the proposal before the House.
I admit that sometimes there are very hard cases in regard to some of these companies which are quite exceptional. Sometimes in the case of the East Coast towns they occur, and one case brought before us was the case of Southampton, where undoubtedly the companies have suffered directly as the result of the War. They cannot get their coal conveyed, for reasons which hon. Members will readily appreciate, over the railways, and the price has gone up enormously. I believe the increased cost of coal in Southampton for the gas companies is 1s. 5½d. per 1,000 cubic feet, and I believe they have paid £3 7s. 6d. per ton for coal. Is it proposed that the whole of that should be put upon the gas consumers of Southampton? That is due to military and other national reasons, and that burden ought not to be put upon the consumers of Southampton, but it should be met by some arrangement with the Government to help that company by securing them certain facilities. We have been trying to reach an arrangement that would, as we think, be just to the companies and fair to the public at the same time. It would be easy to do a good thing for the companies and help the shareholders, but I am convinced that the proposals made by the Committee are such as would enable the companies to carry on temporarily, and see to it that the public get the service in regard to these gas concerns. You do open up the whole question in this way, and if this matter does go forward it will not end by the decision this House will take to-night. You have had a great deal of agitation from the companies' point of view, and you will very quickly reach an agitation from the consumers' point of view, and it may be in the end we shall find it imperative that, if this kind of thing is going on, to take over these concerns out of private hands altogether and organise them from the standpoint of the nation itself.
§ Mr. McCURDY
I do not intend to follow the previous speakers in all the intricate questions relating to the finance of the gas companies, or such technical questions as the uses they make of their residuals. I want to ask the attention of the Committee to a few observations from a totally different standpoint. I submit that the Amendment now before the Committee raises a most important question of principle, and that our votes ought to be given upon that question of principle. We are asked to-night, as we have been asked before, and shall be often asked again, to compensate financial interests at the expense of the public. That is not a pleasant task for hon. Members of this House to be called upon to perform, and the least that we owe to ourselves is that whenever that duty is put upon us—to-day it is the case of the companies asking to be compensated at the expense of the consumers and to-morrow it may be the case of the employés of those companies asking to be compensated at the expense of the employers—in all such cases it is not enough that this House should act, as I am sure this House always would act, fairly to the best of their belief and ability, but it is also necessary that this House should act with such decorum that its actions are not capable of being misrepresented or misunderstood outside the walls of this Chamber.
I submit as a general principle, which I think will commend itself to the members of this Committee, that when we are asked to deal with such a question as that which is brought before us to-night, the question of whether upon a full consideration of the financial position, and the varying financial position of different public undertakings and public utility companies up and down the country, a consideration of how that position has been affected by the progress of the War, and they are asked to determine what would be a fair and proper allowance to make them in respect of their statutory obligations so as to enable them at the expense of the consumer to recoup some part of the extra charges which are thrown upon them not through any fault of their own but in consequence of the War, we should all recognise that it is not a subject very suitable to be thrashed out upon the floor of this House.
It is all very well for hon. Members like the hon. Member who has just spoken (Mr. Anderson) to be talking about something that costs 1s. 5½d. per 1,000 feet and 1587 something else that is £3 7s. 6d. per ton. I do not know whether hon. Members were able to follow the argument and draw a proper conclusion, but for my part I was not. It is not the kind of subject matter that it is possible for us to do justice to or convenient to decide after a brief Debate at a late hour of the evening. It is precisely the kind of subject which, if proper justice is to be done, should be referred to a Select Committee which has time at its disposal properly to inquire into it, to examine witnesses, to weigh the financial considerations, and to come to an unbiased and balanced judgment. I submit that the only safe rule for us to lay, down for ourselves in all these questions—whether it be a question between a gas company and the consumers, or whether it be a question between the employés in a trade union and a private company—when we are asked to put our hands into one man's pocket to take out money to present to somebody else, is to say that before we do anything of the kind we shall always insist that there shall be a judicial and dispassionate inquiry by a Committee. What is the alternative? This is the alternative that presents itself to-night in all its naked crudeness. After a Select Committee of this House has patiently investigated this subject—nobody suggests that they were not competent and that they were not desirous of arriving at a proper recommendation—His Majesty's Government, acting through the Board of Trade, come to the conclusion that the recommendations are sound recommendations which they are prepared to submit to the House in the form of a Bill. Then what happens? Then we have gentlemen representing not the public at all, but private interests lobbying outside the walls of this Chamber, and hon. Members rising here not as representing their constituencies, but because they are gas directors, electricity directors, or water directors.
§ Mr. HENDERSON
On a point of Order. This is the second time that I have been referred to as a gas director.
§ Mr. HENDERSON
I was not referring to the hon. Member. I said the right hon. Gentleman. I introduced this Amendment, and I beg to say that I am not a gas director. I do not hold a gas share, and I never did.
§ Mr. McCURDY
I wish at once to assure my hon. Friend the Member for West Aberdeenshire that I had not him in mind at all when I made the observation. I had in mind certain highly technical speeches to which we have recently listened. I venture to express the hope that the time will come when it will be regarded as contrary to the practice and to the procedure of this House that any person occupying the position of a director in a public company should intervene in a Debate in which the interests of that company are affected.
§ Mr. McCURDY
My remarks apply equally to the case of representatives of trade unions using their position as representatives of constituencies in order to press the pecuniary interests of their clients upon the House. I submit two propositions, first, the members of the Committee are not in a position to form a proper decision as to whether half or three-quarters, or any other quota of the pre-war dividend or of the standard dividend, would be a proper allowance to make in this Clause. Secondly, the members of this Committee would do well to take their stand upon the plain principle that in a financial question of this kind that has been referred to an impartial Committee of the House of Commons, the only safe course is to accept the recommendations of that Committee.
§ Major BRASSEY
I agree with the hon. Member, who has just addressed the Committee, that it is very difficult in a full House to discuss technical details such as arise on this point, and, notwithstanding his warning, I venture to rise as a director of a water company and to endeavour to put before the Committee some of the facts relating to a water company with which I am very well acquainted and which has suffered very much in consequence of the War. I am emboldened to do so by some remarks which fell from the hon. Member for the Attercliffe Division (Mr. Anderson) and the right hon. Gentleman the Member for Battersea (Mr. Burns) both of whom expressly said that the Committee had not had put before them any facts relating to water companies. As the 1589 right hon. Gentleman opposite and other Members know well, the first duty of a provincial water company is to provide an ample supply of water for its district. The company with which I am connected has fulfilled that obligation, but not without great difficulties, and not without considerable loss to the shareholders. The town of Southend and district in the twelve years before the War increased in population more than any other district in England, and the difficulty with which our company has had to contend has been to keep pace with the enormously increased demand for water. That has been specially difficult, for whereas in some parts of England two or three good wells supply all the water that is required, in our district we have had to sink twenty-eight wells and make twenty-eight pumping stations as well as lay enormous lengths of main. During the summer months the population at Southend used to double itself, and special provision had to be made for that.
I apologise to the Committee for having given these details, but I think it was necessary, after so much had been said against these statutory companies, that someone should endeavour to put before the Committee some of the difficulties which we have had to contend with. This has necessitated much capital expenditure and considerable risk to the shareholders. May I say one word about the shareholders? In the case of my company, they are mostly, almost entirely, very small people. They are not people who have invested their money in the company with the prospect of earning high dividends, because, after all, the maximum dividend on the bulk of the ordinary shares is only 5 per cent. They have been content with moderate returns, thinking they were investing their money with safety. Many hon. Members have expressed the opinion that under the provisions of this Bill those shareholders are sufficiently remunerated by half the dividend, which would be 2½ per cent., but I would remind them that these people in the past have provided the money for one of the prime necessities of life. Many districts, such as the one I have mentioned, have undoubtedly benefited enormously; prosperity has increased by having in their district an efficient water company. Provided good and economical management can be afforded to such companies, they are entitled to have consideration meted out to them. What has happened 1590 in the case of Southend? All buildings and developments have ceased. Large sums of capital which have been expended in anticipation of increased demand for water are lying unremunerative, revenue has decreased, and all the time the expense of fuel, labour, material, and everything else has largely increased. Whereas before the War we were earning 4½ per cent., during the past year only 1½ per cent. has been earned. I would venture to put one other point to the Committee. If we are to lay down by our decision tonight that a dividend of something like 2½ per cent. is sufficient remuneration to shareholders in a well-conducted statutory company which has fulfilled all obligations, we are not only doing a great injury to the shareholders of the company, but something much more serious in my opinion—making it almost impossible to raise capital for the future development of these companies, except on the most onerous terms. These undertakings are absolutely necessary in providing the prime necessities of life, and people will not invest in them unless there is a reasonable prospect of a fair return. There is one other point in conclusion, and that is this: I understand this Bill is brought forward mainly to get over the expense and delay occasioned by Private Bill legislation. In the case of my company we had decided to promote Private Bill legislation in the coming Session, but it appears to me that if a decision is given in this House to-night that the rates should not be increased so as to provide a higher dividend than 2½ per cent., the opinion of future Private Bill Committees and the future opinion of this House would be overshadowed very much by that decision. Moreover, in the future it will be almost impossible for a company like the one I have referred to to provide money for water, gas, or for any other service.
§ Sir R. ADKINS
Many speakers have supported this proposal, and whatever else be true about the controversy it is not forwarded by tawdry rhetoric and cheap and inexpensive references to capitalists and to which side, whether producer or consumer, is the chief sufferer. I am not prepared to compete in this field of rhetoric in which so many previous speakers have disported themselves to the enjoyment of their audience. Any controversy of this kind lends itself to that sort of treatment by persons in their 1591 moments of relaxation; but does it really help the House of Commons towards a decision on a matter which is grave, which is complex, and which, at the same time, is acute at the present moment? These various statutory undertakings, as they are called, are not undertakings either framed or adapted to put large fortunes into the pockets of individuals. They are regulated by the State in the interests of the State. Each one of them has had to go through—and properly go through—searching tests by Committees of this House and of the other place as to the terms upon which it ought to be allowed to exist. When you are dealing with regulated commercial undertakings, I do not think that metaphors and comparisons from private trading or from other unregulated enterprises are of much use. The persons concerned in carrying on gas or water or electric light undertakings under very strict and proper regulations are not in a position to let them come to an end. That would be very much against public policy. As they really cannot put up the shutters when they are no longer satisfied with the business, as they cannot bring it to an end, they are bound to be in the position, quite as full of disadvantages as of advantages, of coining to Parliament at almost every turn if they seek any alteration whatever in any of the multiple conditions by which they are properly bound. What are the facts in this case? Take the famous issue of the sliding scale. The sliding scale has been of benefit to both shareholders and consumers.
§ Sir R. ADKINS
It was a device. I care not who invented it. Even the right hon. Gentleman the Member for Battersea (Mr. Burns), coming for a moment out of that cloud of heated feeling in which he has lived during the evening, agrees with me that the sliding-scale method has been of benefit to all concerned. It was developed, conditioned, and articulated under peace conditions. Any alteration of those under peace conditions would demand the most careful investigation, and there would be a great burden of proof on those who sought to alter them. But we are at war and we are in a war which has lasted a long time and which has brought about, in almost every aspect of public life, entirely novel conditions to which old formulas do not 1592 apply. The condition of war, where the sphere of Government action is extended all round, is bound to affect regulated companies or municipal undertakings even more than it affects the private trader. It may and does very often injure the private trader. It may and often does make the private trader a wealthy man. But when you are dealing with municipal undertakings or with statutory undertakings, the very extension of Government action—the control of prices, the regulation of freights—all these things fetter, hamper and injure these undertakings, be they private or be they municipal, through no fault of the undertakers, but as an inevitable and direct result, not only of the War, but of Governmental and Departmental action. If that be true, is it not reasonable to come to Parliament and say, apart from the ordinary chances of war, apart from the inevitable risks and uncertainties of war, we are specially affected in a prejudicial way by regulations and conditions which arose out of the War and out of the Government's considered action. Therefore we ask Parliament to look into the matter and to give such relief as is fair to all concerned, but such relief as at any rate is appreciable and as far as possible consistently with the public interest, is adequate. That is the case presented to the Committee, on lines of principle, as it affects this matter. The only approach to argument which I have heard from the opponents of the Amendment was that of the hon. and learned Gentleman (Mr. McCurdy), in which he developed with great forensic skill the elementary maxim that difficult and complicated matters are best discussed by Select Committees. Let us all agree with that. We find that the Committee which has gone into this, I have no doubt quite sincerely, has presented a report which helps the House, which is going largely to be adopted by the Committee without question, but which in one or two particulars has not really touched the grievance of those at whose instance this matter was raised, and the Government is criticised and almost abused by fervent Members of the Committee, because to-day it has not said precisely ditto to all the recommendations of the Committee, because it has not crossed all its t's and dotted all its i's, and become the mere executive agent of that Committee. I should be the last person to wish to condemn the Government for showing such independence.
§ Sir R. ADKINS
That makes my point ail the stronger, because I am quite sure my hon. Friend, who never says ditto to anyone, and who is a positive model of amiable independence, will agree with me that when the Government says ditto it is wrong. Have I not the pleasure of his support? Therefore surely the Committee will take into account the view which the Government has expressed through my right hon. Friend. They are not asked to put any of these companies, municipalities, or undertakings, public or semi-public, in the position they were in before the War, but they are asked to give them rather more relief from difficulties directly due to Governmental action than the Committee itself desired. While I listened to the speeches of the hon. Member (Mr. Robinson) and the hon. Member (Mr. Anderson) with great interest and admiration, I am bound to say that, considered as exponents of impartial treatment, they appeared to me to leave something to be desired. I have never known the hon. Member (Mr. Robinson), whom I have known since we were boys, so full of fervent feeling as he was in the speech with which he delighted the Committee. Fervent feeling by members of a judicial committee in defence of their decision is apt a little to reflect on the mind of the spectator the opinion that possibly there was more fervour than impartiality. Therefore, I ask the Committee, in view of this exceptional situation, in view of the fact that if they pass the Amendment, they are not putting things back to where they were before the War, but they are giving appreciable relief for a grievance and an injury which comes out of Governmental action to support it and in doing so they will merely be striking out the actual line of justice to all concerned.
§ Sir W. MIDDLEBROOK
As Chairman of the Select Committee whose recommendations have been the target for a good many charges I should like to say a few words. The last speaker has urged that it is the duty of the Government to deal fairly with these gas undertakings. I cordially agree with him, but he has forgotten to point out that the proposal is to deal fairly with the gas undertakings at the expense not of those who, he very properly says, are mainly responsible for the present conditions, but at the expense 1594 entirely of other parties—the consumers, who have nothing whatever to do with the cause. It is upon that point mainly that the Committee differ from the view taken by the gas authorities. May I point out that the position of the sliding scale undertakings entirely, and in some others mainly, is that in effect of a partnership, which has been the outcome of years of arrangement of the conditions upon which those undertakings are carried, until they arrive at a point when there was to be, in effect, a partnership between the consumer and the producer. The terms of that partnership have been settled for many years gone by and have been modified in the Statutes that have been passed in respect of those undertakings. Now we come to a state of affairs when the gas authorities find that the conditions, financially, are not what they have been up to the war time, namely, most favourable to themselves—not unduly so; I am not throwing stones at them—but thoroughly favourable to themselves. We come now to the point when those conditions are not financially favourable to the gas undertakings, and there is, therefore, a proposal that the burden of the unfavourable conditions should be shifted entirely from one partner to the other.
§ Sir W. MIDDLEBROOK
The proposal as embodied in the Amendments put down, particularly by the hon. Member for Wigan (Mr. Neville), who represents one of the gas companies, is that the whole of that burden is to be transferred from the producer to the shoulders of the consumer. The Committee considered that question. Nine members of that Committee sat on eight different occasions and heard fully the gas representatives and other parties. After that they spent a considerable time in considering the course to take. They were extremely anxious to arrive at a balance that was favourable to the consumer on the one hnd and to the producer on the other. But their conclusions have never been put in their true light by those who advocate the interests of the gas undertakings. It has been represented to-night that the Select Committee propose to restrict the dividends of the gas undertakings to half their amount. That is not the proposal. The facts are simply these. The gas authorities came to that Committee and said: "Conditions to-day are causing 1595 a decline in our dividend and we foresee that as these conditions continue to increase, that decline will increase until not-only the dividends on the ordinary shares will disappear altogether, but the dividends on the preference shares.
§ Mr. NEVILLE
That is impossible. The debenture interests are not touched at all by the sliding scale, and must be paid.
§ Sir W. MIDDLEBROOK
I am putting the evidence that was given before that Committee. That evidence was that conditions to-day were causing a decline of the dividends on the ordinary shares, and that such decline would continue possibly to the extent of extinction and would then touch the dividends upon the preference shares also. The evidence was distinctly put before the Committee—whether right or wrong my hon. Friend from his more intimate knowledge can say. We said, "You gas companies come to our Select Committee and ask for relief. You draw for us a picture of declining dividends about to arrive at the point of extinction, and what we say is we will safeguard your position by our recommendations so that that possibility can never become an actuality, and we will safeguard it, in justice to you and your consumers, by saying this, 'You are at liberty to-day to increase your prices beyond what you are actually charging right up to the maximum given under your Statute.'" Practically every gas undertaking has so increased its price during the period of the War. I believe that the gas company which my hon. Friend (Mr. Neville) represents is one of them. The pre-war charge of 2s. 2d. or 2s. 4d. per 1,000 cubic feet has been made as high as 4s. within the statutory powers. But the proposal of the Select Committee is to give power to increase beyond the statutory limit. If this relief is given to them they can go beyond the maximum statutory price. They can get relief beyond that which will ensure to them that the dangers which they fear will never arise, and they will be made secure of their full dividend on their preference shares, and of not less than half the dividend on their ordinary shares. That is a very equitable decision. It is endorsed by the Government who have brought in their Bill basing it entirely upon the recommendations of the Committee, and, with the utmost desire to give 1596 full weight to the wishes of this Committee or of the House itself, that we should find some compromise. I, as Chairman of the Committee—and I believe that in this I speak for almost every member of the Committee—cannot see my way to depart from the position which we have taken up and accept the suggestion that has been made in the Amendment. We feel that it is not necessary for the fair protection of the gas undertakings themselves. The position is not nearly so hopeless as it has been put before us. The great illustration put before us is, "You are going to cut down my dividend to 2 per cent., or it may be 1¾ per cent." What dividend is that? Originally it was a dividend of 10 per cent. upon the capital of £100, but by the consent of Parliament that capital was split up and it was made a capital of £250, bearing a dividend of 4 per cent. instead of a capital of £100, bearing a dividend of 10 per cent.
§ Sir W. MIDDLEBROOK
The answer to me on that point no doubt is that the people who held £100 and got the £200 have disappeared and are not existing to-day, and their money is gone into some other line. That is an answer, and you have to weigh how far that should go. But we have to bear in mind this, that the original capital of £100 which was paid into that undertaking is not to-day bearing the 4 per cent. represented to us, and the inequity is not, therefore, so great as it would be if this were not so. I hope that the representative of the Board of Trade will feel that this Amendment goes so far beyond what is reasonable that he will not see his way to accept it.
§ Sir F. FLANNERY
One or two points have been made in recent speeches which I think ought not to go unanswered. First, my right hon. Friend (Mr. J. Burns) complained that the President of the Board of Trade had left the question to the unfettered decision of the House. His complaint was that the Government, in the interests of the Government's Bill, had not put on the Government Whips, but decided to leave it to the free and unchallenged opinion of the House. Here we have a leading democrat thirsting for the lash of the Government Whips, and he complains because he does not get it. I believe that the Government have taken the right course in leaving the matter absolutely to the discretion and judgment of the House of Commons, quite apart 1597 from political or other considerations. My right hon. Friend referred to the difference between the gas companies and the railway companies, speaking of the latter as the military veins of a country in war. Let me read a statement by Lord Moulton, the official responsible for the supply of explosives. He said:It was the gas industry which had supplied the country with the means of self-defence. Without the direct aid of the gas industry, and the assistance and knowledge which had been acquired by those who had devoted their lives to it, it would have been perfectly impossible for this country to wage the campaign of the last three years, or even for any but a trifling time to resist the overwhelming flood of enemies that was poured upon it.It is on public grounds, and not for the relief of shareholders, not out of consideration for the workers in the gas industry, that I appeal to the House of Commons to maintain the stability of this industry, so that when the time comes for enlarging the operations of the gas companies they may not be crippled by financial ruin such as would have followed if the original intention had been carried out. I say without any hesitation whatever that the compromise which has been arrived at, namely, that instead of asking for the whole of the dividend that the gas companies had before the War, we are satisfied with the terms suggested by the Government, that we shall have only-three-quarters of the dividend formerly given instead of the whole. That is a compromise of a moderate character, and
§ one that is wise and right in the interests of the nation, not in the interests of the shareholders.
§ Brigadier-General HICKMAN
I hope the Committee will bear with me for one moment while I make two points. I have been deluged with letters from all over the country from the two different sides, and it appears to me that one of them is from the corporations, whose only object is to ruin the poor gas companies so that they will be able to take them over for an old song. My second point is this, that this depreciation of the profits of the gas companies has greatly come about by the action of the President of the Board of Trade, in that he has raised lately the price of coal, and as the coal owners do not get any profit out of that, but the Government get it, the gas companies are the victims, and I ask this Committee to think whether, if the coal owners or any other trading people are able to get their pre-war profits, the shareholders of the gas companies should not, in fairness, get them as well?
§ Mr. DENMAN rose——
§ Mr. BOOTH claimed to move, "That the Question be now put."
§ Question put accordingly, "That the word 'half' stand part of the Clause."
§ The Committee divided: Ayes, 52; Noes, 123.1599
|Division No. 70.]||AYES.||[10.49 p.m.|
|Allen, Arthur A. (Dumbartonshire)||Harris, Percy A. (Leicester, S.)||Roch, Walter F. (Pembroke)|
|Anderson, W. C.||Jones, Henry Haydn (Merioneth)||Rowlands, James|
|Banbury, Rt. Hon. Sir Frederick G.||Jowett, Frederick William||Scott, A. MacCallum (Glas., Bridgeton)|
|Beale, Sir William Phipson||Kiley, James Daniel||Shaw, Hon. Alexander|
|Booth, Frederick Handel||King, Joseph||Smallwood, Edward|
|Burns, Rt. Hon. John||Lambert, Richard (Cricklade)||Smith, Albert (Lancs., Clitheroe)|
|Carr-Gomm, H. W.||Lloyd, George Butler (Shrewsbury)||Strauss, Edward A. (Southwark, West)|
|Chancellor, Henry George||M'Curdy, Charles Albert||Sutton, John E.|
|Collins, Sir Stephen (Lambeth)||Macmaster, Donald||Toulmin, Sir George|
|Collins, Sir W. (Derby)||Maden, Sir John Henry||Watson, John Bertrand (Stockton)|
|Cotton, H. E. A.||Pearce, Sir Robert (Staffs, Leek)||Wiles, Rt. Hon. Thomas|
|Denman, Hon. Richard Douglas||Peel, Major Hon. G. (Spalding)||Wilson, Rt. Hon. J. W. (Worcs., N.)|
|Dickinson, Rt. Hon. Sir W. H.||Price, C. E. (Edinburgh, Central)||Wilson, W. T. (Westhoughton)|
|Ferons, Rt. Hon. Thomas Robinson||Price, Sir Robert J. (Norfolk, E.)||Wing, Thomas Edward|
|Field, William||Rattan, Peter Wilson||Yeo, Sir Alfred William|
|Gilbert, J. D.||Rees, G. C. (Carnarvonshire)|
|Glanville, Harold James||Roberts, Charles H. (Lincoln)||TELLERS FOR THE AYES.—|
|Gulland, Rt. Hon. John William||Robinson, Sidney||Sir W. Middlebrook and Mr. Fletcher.|
|Harris, Sir Henry P. (Paddington, S.)|
|Adkins, Sir W. Ryland D.||Barran, Sir Rowland Hurst (Leeds, N.)||Bird, Alfred|
|Agg-Gardner, Sir James Tynte||Bathurst, Col. Hon. A. B. (Glos., E.)||Blake, Sir Francis Douglas|
|Baird, John Lawrence||Beauchamp, Sir Edward||Boles, Lieut.-Col Dennis Fortescue|
|Baker, Col Sir R. L. (Dorset, N.)||Bellairs, Commander C. W.||Boscawen, Sir Arthur S. T. Griffith|
|Baldwin, Stanley||Benn, Sir Arthur S. (Plymouth)||Bowerman, Rt. Hon. C. W.|
|Barnett, Captain R. W.||Bigland, Alfred||Boyton, Sir James|
|Brassey, H. Leonard Campbell||Herman-Hodge, Sir R. T.||Pollock, Sir Ernest Murray|
|Bridgeman, William Clive||Hickman Brig.-Gen, Thomas E.||Pratt, J. W.|
|Brunner, John F. L.||Holier, Gerald Fitzroy||Pretyman, Rt. Hon. Ernest George|
|Bryce, J. Annan||Holt, Richard Durning||Pryce-Jones, Col. Sir E.|
|Butcher, Sir John George||Hope, James Fitzalan (Sheffield)||Pulley, C. T.|
|Carew, C. R. S.||Hope, Leiut.-Col. Sir J. A. (Midlothian)||Randles, Sir John S.|
|Cave, Rt. Hon. Sir George||Horne, Edgar||Rees, Sir J. D. (Nottingham, E.)|
|Coates, Major Sir Edward Feetham||Hunter, Major Sir Charles Rodk.||Richardson, Albion (Peckham)|
|Coats, Sir Stuart||Jackson, Lt.-Col. Hon. F. S. (York)||Richardson, Alexander (Gravesend)|
|Colvin, Colonel||Jones, W. Kennedy (Hornsey)||Roberts, Sir S. (Sheffield, Ecclesall)|
|Cory, Sir Clifford John (St. Ives)||Kellaway, Frederick George||Samuel, Samuel (Wandsworth)|
|Cory, James H. (Cardiff)||Knight, Captain Eric Ayshford||Sanders, Col. Robert Arthur|
|Cowan, Sir W. H.||Lane-Fox, Major G. R.||Seely, Lt.-Col. Sir C. H. (Mansfield)|
|Craik, Rt. Hon. Sir Henry||Levy, Sir Maurice||Shortt, Edward|
|Dairymple, Hon. H. N.||Loyd, Archie Kirkman||Spear, Sir John Ward|
|Davies, Sir W. Howell (Bristol, S.)||McCalmont, Brig.-Gen. Robert C. A.||Stanier, Capt. Sir Beville|
|Du Pre, W. Baring||McNeill, Ronald (Kent, St. Augustine's)||Staveley-Hill, Lieut.-Col. Henry|
|Falconer, James||Malcolm, Ian||Swift, Rigby|
|Falle, Sir Bertram Godfray||Mallalieu, Frederick William||Talbot, Rt. Hon. Lord Edmund|
|Fell, Sir Arthur||Manfield, Harry||Terrell, Henry (Gloucester)|
|Fisher, Rt. Hon. W. Hayes (Fulham)||Marriott, John Arthur Ransome||Thomas, Sir A. G. (Monmouth, S.)|
|Flannery, Sir J. Fortescue||Mason, David M. (Coventry)||Walsh, Stephen (Lanes., Ince)|
|Foster, Philip Staveley||Mason, James F. (Windsor)||Watt, Henry A.|
|Gibbs, Colonel George Abraham||Mason, Robert (Wansbeck)||Weston, J. W.|
|Gilmour, Lieut.-Col. John||Morgan, George Hay||Whiteley, Sir H. J.|
|Goddard, Rt. Hon. Sir Daniel Ford||Mount, William Arthur||Williams, Col. Sir Robert (Dorset, W.)|
|Greenwood, Sir G. G. (Peterborough)||Munro, Rt. Hon. Robert||Williams, T. J. (Swansea)|
|Greer, Harry||Neville, Reginald J. N.||Willoughby, Lieut.-Col. Hon. Claud|
|Gretton, John||Newman, Sir Robert (Exeter)||Wilson, Colonel Leslie O. (Reading)|
|Guinness, Hon. W. E. (Bury S. Edmunds)||Nicholson, William G. (Petersfield)||Wilson-Fox, Henry|
|Hall, Lt.-Col. Sir Fred (Dulwich)||Nield, Sir Herbert||Wright, Henry Fltzherbert|
|Hamilton, C. G. C. (Ches., Altrincham)||Parker, James (Halifax)||Yate, Colonel C. E.|
|Hancock, John George||Pease, Rt. Hon. Herbert Pike||Younger, Sir George|
|Hardy, Rt. Hon. Laurence||Pennefather, De Fonblanque|
|Haslam, Lewis||Perkins, Walter Frank||TELLERS FOR THE NOES.—|
|Havelock-Allan, Sir Henry||Peto, Basil Edward||Mr. Tennant and Sir F. W. Lowe.|
|Henderson, John M. (Aberdeen, W.)|
Question, "That the Question be now put," put, and agreed to.
§ Question proposed, "That the words 'three-quarters of' be there inserted."
§ Mr. ROWLANDS
I desire to move an Amendment, that instead of "three-quarters" we insert "two-thirds."
§ The CHAIRMAN
That is not an Amendment to the Amendment; but if the insertion of "three-quarters" be negatived by the Committee, then I will take the hon. Member's Amendment to insert "two-thirds," in order that the Committee may have its opportunity of deciding between those two propositions.
§ Sir W. DICKINSON
On a point OF Order. Three-quarters is larger than two-thirds, and I submit that if you put "three-quarters," it would prevent us from taking "two-thirds."
§ The CHAIRMAN
I do not think so. I accepted the only Amendment which at that time was tendered to me to insert something instead of one-half, but it would be quite competent for the Committee on a Division to decide not to entertain the "three-quarters." Thereupon, if that is the decision of the Committee, I will accept the Amendment and take as a further Amendment whether "two-thirds" should be inserted.
§ Mr. ROWLANDS
We have had what has been a most extraordinary Division. 1600 It is a Division such as I have never seen before, and I do not speak with a short experience of this House. You have had, by an overwhelming majority, I admit, backed by the Government, whether the Whips were on or not, the Report of a Select Committee entirely thrown over, and I feel it is necessary before any further steps are taken, that the representatives of the Government should give us a clear and definite explanation of what their conduct is to be on this Bill. [Some laughter.] Hon. Gentlemen may laugh now. Some of us will be able to laugh after them. I have in my memory only one example that occurred many years ago with regard to a Committee's Report being thrown over by a Government. If I remember rightly, it was in connection with a Railway Bill in Cornwall, and I remember the indignation of the members of that Committee, and the indignant speech of the chairman of the Committee, when they found their Report turned down by the Government of that day. The Government has not given anything like a clear explanation of why they have thrown over the Report of this Committee. To take off the Government Whips when a Select Committee Report comes down is an exceptional thing for which the President, I venture to say, cannot quote a precedent.
§ The CHAIRMAN
That really does not Arise now. The hon. Member is criticising the decisions of the Committee. It is the Committee, not the Government, that gives the decision.
§ Mr. ROWLANDS
I accept your ruling. What I want to point out now is that the Committee, having decided that the recommendations of the Select Committee in regard to the half is not enough, and it now being an open question as to what should take its place; it is for the Committee to consider whether there is not some means less than the three-quarters that is proposed in this Amendment. Three-quarters is far too large and cannot be defended. The Government ought to have time to consider the situation, and the Amendment. It has never been clearly stated by them what amount they were prepared to put in the place of the half of the dividend which has been struck out by the vote of the Committee. It is the duty of the President of the Board of Trade to give us some explanation of what action the Government are prepared to take. Otherwise we may have other and more exaggerated Amendments. There has been no defence in any of the speeches for anything like the three-quarters. I do not want to go over the explanation that has been given by the members of the Select Committee as to how they arrived at their decision after an examination of the evidence, but I sincerely hope that the Government will give us an explanation, so that the House may know where they are.
§ Mr. FIELD
I desire to support the Amendment. I have had twenty-five years' experience here, and I never remember an occurrence like this. I do not remember the Government turning down the Report of a Committee like this. The House is entitled to receive an explanation from the President of the Board of Trade before the Vote is taken.
§ Mr. DENMAN
I beg to move, "That the Chairman do report Progress, and ask leave to sit again." [HON. MEMBERS: "Divide, Divide!"]
I do so in view of the very curious and exceptional position in which the Committee finds itself. It is a very rare and an unusual thing for the Committee to
§ have the Whips taken off, and for the vote-to take place without any guidance. Hon. Members in favour of certain Amendments came down in great force, while the Committee relied upon the Government to follow the normal procedure. To-morrow we are to enjoy the full summer of which the hon. Member opposite is the first swallow, and if matters of this kind are going to be left to the House it is only reasonable that the Irish Members should be able to take part.
§ The CHAIRMAN
The House has already decided not to suspend its proceedings at eleven o'clock, and I cannot go contrary to that decision at five minutes after eleven o'clock.
I understand that the Amendment is to insert the words "three-quarters." Is it possible to amend the Amendment by moving to omit "three-quarters" in order to insert "two-thirds"?
§ The CHAIRMAN
Not as an Amendment to the Amendment, but I have already explained that if the insertion of "three-quarters" is negatived I shall accept an Amendment to insert "two-thirds."
§ Sir W. DICKINSON
Is it not possible to move to report Progress, because no such Motion has been made yet? The position is now entirely changed. We do not know now what figures we are dealing with and we did not know when we were dealing with "half." We cannot say what will be the general financial effect, and I submit it is only right that we should report Progress, in order that those interested may have an opportunity of considering the question.
§ The CHAIRMAN
When the hon. Member for Carlisle proposed the same Motion I thought it was not proper to accept it. We have had a long discussion upon this Amendment, which was to leave out "half" and insert "three-quarters," and the Committee must now be competent to come to a decision on the point.
§ Question put, "That the words 'three-quarters of' be there inserted."
§ The Committee divided: Ayes, 118; Noes, 42.1603
|Division No. 71.]||AYES.||[11.9 p.m.|
|Adkins, Sir W. Ryland||Baldwin, Stanley||Bathurst, Col. Hon. A. B. (Glouc., E.)|
|Agg-Gardner, Sir James Tynte||Barnett, Capt. R. W.||Beauchamp, Sir Edward|
|Baird, John Lawrence||Barran, Sir Rowland Hunt (Leeds, N.)||Benairs, Commander C. W.|
|Benn, Sir Arthur S. (Plymouth)||Hancock, John George||Pease, Rt. Hon. H. Pike (Darlington|
|Bigland, Alfred||Hardy, Rt. Hon. Laurence||Pennefather, De Fonblanque|
|Bird, Alfred||Havelock-Allan, Sir Henry||Perkins, Walter F.|
|Black, Sir Arthur W.||Henderson, J. M. (Aberdeen, W.)||Pollock, Sir Ernest Murray|
|Blake, Sir Francis Douglas||Harmon-Hodge, Sir R. T.||Pratt, J. W.|
|Boles, Lieut.-Col. Dennis Fortescue||Hickman, Brig.-Gen. Thomas E.||Pretyman, Rt. Hon. Ernest George|
|Boscawen, Sir Arthur S. T. Griffith||Hohler, G. F.||Pryce-Jones, Col. Sir E.|
|Bowerman, Rt. Hon, C. W.||Holt, Richard Durning||Pulley, C. T.|
|Boyton, Sir James||Hope, James Fitzalan (Sheffield)||Randles, Sir John S.|
|Brassey, H. L. C.||Hope, Lt.-Col. Sir J. (Midlothian)||Richardson, Albion (Peckham)|
|Bridgeman, William Clive||Home, Edgar||Richardson, Alexander (Gravesend)|
|Brunner, John F. L.||Jackson, Lieut.-Col. Hon. F. S. (York)||Roberts, Sir S. (Sheffield, Ecclesali)|
|Bryce, J. Annan||Jones, W. Kennedy (Hornsey)||Samuel, Samuel (Wandsworth)|
|Butcher, Sir J. G.||Kellaway, Frederick George||Sanders, Col. Robert Arthur|
|Carew, C.||Knight, Captain Eric Ayshford||Seely, Lt.-Col. Sir C. H. (Mansfield)|
|Cave, Rt. Hon. Sir George||Lane-Fox, Major G. R.||Shortt, Edward|
|Coates, Major Sir Edward Feetham||Law, Rt. Hon. A. Bonar (Bootle)||Spear, Sir John Ward|
|Coats, Sir Stuart A. (Wimbledon)||Levy, Sir Maurice||Stanier, Captain Sir Seville|
|Colvin, Colonel||Lloyd, George Butler (Shrewsbury)||Staveley-Hill, Lieut.-Col. Henry|
|Cory, Sir Clifford John (St. Ives)||Loyd, Archie Kirkman||Swift, Rigby|
|Cory, James H. (Cardiff)||McCalmont, Brig.-Gen. Robert C. A.||Talbot, Rt. Hon. Lord Edmund|
|Cowan, Sir W. H.||Macmaster, Donald||Terrell, Henry (Gloucester)|
|Dairymple, Hon. H. H.||McNeill, Ronald (Kent, St. Augustine's)||Thomas, Sir A. G. (Mon., S.)|
|Du Pre, Major W. Baring||Malcolm, Ian||Walsh, Stephen (Lanes., Ince)|
|Falconer, James||Mallalieu, Frederick William||Watt, Henry A.|
|Fade, Sir Bertram Godfray||Manfield, Harry||Weston, J. W.|
|Fell, Sir Arthur||Marriott, John Arthur Ransome||Whiteley, Sir H. J.|
|Fisher, Rt. Hon. W. Hayes (Fulham)||Mason, David M. (Coventry)||Williams, Col. Sir Robert (Dorset, W.)|
|Flannery, Sir J. Fortescue||Mason, James F. (Windsor)||Williams, Thomas J. (Swansea)|
|Foster, Philip Staveley||Mason, Robert (Wansbeck)||Willoughby, Lieut.-Col. Hon. Claud|
|Gibbs, Col. George Abraham||Morgan, George Hay||Wilson, Col. Leslie C. (Reading)|
|Gilmour, Lieut.-Col. John||Mount, William Arthur||Wilson-Fox, Henry (Tamworth)|
|Goddard, Rt. Hon. Sir Daniel Ford||Munro, Rt. Hon. Robert||Yate, Col. C. E.|
|Greer, Harry||Neville, Reginald J. N.||Younger, Sir George|
|Gretton, John||Newman, Sir Robert (Exeter)|
|Guinness, Hon. W. E. (Bury S. Edmunds)||Nicholson, William G. (Petersfield)||TELLERS FOR THE AYES.—|
|Hall, Lt.-Col. Sir Fred (Dulwich)||Nield, Sir Herbert||Mr. Tennant and Sir F. W. Lowe.|
|Hamilton, C. G. C. (Ches., Altrincham)||Parker, James (Halifax)|
|Allen, Arthur A. (Dumbartonshire)||Harris, Percy A. (Leicester, S.)||Rowlands, James|
|Anderson, W. C.||Haslam, Lewis||Scott, A. Maccallum (Glas., Bridgeton)|
|Booth, Frederick Handel||Jones, Henry Haydn (Merioneth)||Shaw, Hon. A.|
|Burns, Rt. Hon. John||Jowett, Frederick William||Smallwood, Edward|
|Carr-Gomm, H. W.||Kiley, James Daniel||Smith, Albert (Lanes., Clitheroe)|
|Chancellor, Henry George||Lambert, Richard (Wilts, Cricklade)||Strauss, Edward A. (Southwark, W.)|
|Cotton, H. E. A.||M'Curdy, Charles Albeit||Sutton, John E.|
|Dickinson, Rt. Hon. Sir W. H.||Maden, Sir John Henry||Toulmin, Sir George|
|Ferens, Rt. Hon. Thomas Robinson||Middlebrook, Sir William||Wiles, Rt. Hon. Thomas|
|Field, William||Price, Sir Robert J. (Norfolk, E.)||Wilson, Rt. Hon. J. W. (Worcs., N.)|
|Fletcher, John S.||Raffan, Peter Wilson||Wilson, W. T. (Westhoughton)|
|Gilbert, J. D.||Rees, G. C. (Carnarvonshire, Arton)||Wing, Thomas Edward|
|Glanville, Harold James||Roberts, Charles H. (Lincoln)|
|Gulland, Rt. Hon. John William||Robinson, Sidney||TELLERS FOR THE NOES.—|
|Harris, Sir Henry P. (Paddington, S.)||Roch, Walter F. (Pembroke)||Mr. Denman and Mr. King.|
Question put, and agreed to.
§ Further Amendment made: In paragraph (b), leave out the word "half" ["or at half the pre-war rate of dividend, whichever is lower"], and insert instead thereof the words "three-quarters of."—[Mr. Tennant.]
§ Mr. J. HENDERSON
I beg to move, in Sub-section (1), at the end of paragraph (b), to insert the words,Provided that in the case of a tramway or light railway as hereinafter defined any modification of fare so authorised shall not be less than one halfpenny.The additional tramway fare would have been ¼d., but it will now be five-sevenths of ½d., and there is no such coin. Perhaps the President of the Board of Trade will, therefore, do something to meet that point.
§ Sir A. STANLEY
it will be impossible for us to accept the Amendment; but I think, in view of the changes which have been made in the Bill by the last Amendment, by three-quarters being inserted in the place of one-half, it will be necessary to make a change to deal with the particular points of this Amendment. If the hon. Member will withdraw this Amendment I will undertake on the Report stage to bring forward a suitable proposal to meet it.
§ Amendment, by leave, withdrawn.
§ Sir H. HARRIS
I beg to move, in Subsection (1), at the end of paragraph (b), to add the words,If by reason of such modification the net revenue of the undertaking is in any half-year more or less than sufficient to pay the dividend 1605 at such rate as aforesaid, a corresponding reduction or increase in the authorised charge shall be made in the following or subsequent half-year.I think the Amendment explains itself. It cuts both ways and meets the advantage either of the company or of the consumer.
§ Mr. WARDLE
I hope the hon. Member will not press this Amendment. It really is not necessary. If any change takes place whereby the selling price has been increased slightly too high there will be a balance which will not be allowed to be paid in dividends, but will have to be carried over to the next half-year. In those circumstances, if it was substantial the price would certainly be reduced by the Board of Trade. If, on the other hand, it was too low, then of course they would be able to come to the Board of Trade to have an increase. It would be exceedingly difficult to hit upon the exact fraction which would enable the price to be settled if this Amendment were adopted. I hope, therefore, it will not be pressed.
§ Amendment, by leave, withdrawn.
§ Mr. WARDLE
In accordance with the promise made earlier, I beg to move, at the end of Sub-section (2) to add the words,And before making an Order the appropriate Government Department shall require the undertakers to give public notice of the application for an Order under this Act, and as to the manner in which and time within which representations may be made, and to give a similar notice to the council of each county, borough, or urban or rural district within which any part of the undertaking or limits of supply of the undertaking is situate, and the Department shall consider any representations which may be duly made.This Amendment is proposed in order to meet the promise which was made earlier in the evening, and I hope it will be accepted.
§ Mr. PENNEFATHER
I should like to congratulate the Government upon having put in these words, which go very far to remove any objections that might have existed in regard to substituting the three-quarters for a half. I myself would not have voted for that substitution if I had not known that substantially this Amendment was going to be moved by the Government. The effect of the Amendment is that it prevents any Department making an Order for an increase in cost until the case has been considered from the consumer's point of view. This is a great 1606 safeguard to the consumer. It ensures that when a gas company or any such undertaking is desirous of having a modification made, it has to give public notice of its intention to apply for an Order. Then all the bodies in the districts concerned and those representing the consumers will have the right to come forward and state a case against such an Order being made. That is a very simple and practical way of safeguarding the interests of consumers and ensuring that no Order shall be made which gives the three-quarters of the standard we have been talking about to any company or body unless the case for that addition has been fully made out in the light of a public inquiry.
§ Mr. ROWLANDS
So far as the hon. Member for South Paddington (Sir H. Harris) and myself are concerned, as we have an Amendment of this description on the Paper, I should like to say that, so far as we have been able to consider it, we think it meets the case, but we reserve-to ourselves the right to criticise it on the Report stage.
§ Amendment agreed to.
§ Clause, as amended, ordered to stand part of the Bill.
§ Clause 2 (Application to Scotland and Ireland) ordered to stand part of the Bill.