ELECTRICITY (SUPPLY) BILL.

§ Mr. G. BALFOUR

I find myself in a peculiarly difficult position. Being somewhat old-fashioned, I cannot forget that we are engaged to-day upon a Second Reading Debate, and have not yet arrived at the Committee stage of this Measure. Following that reflection, I cannot help congratulating the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham) who spoke yesterday upon making what was in fact a proper Second Reading speech, but I am afraid I can hardly go so far as to congratulate my right hon. Friend the Minister, for I did not hear fall from his lips one single word which would reconcile the principles embodied in this Measure with ordinary constitutional usage. There was not one word said by my right hon. Friend which would satisfy this House that the principles in the Bill, the Socialist principles of State control and State management, can be reconciled with the happiness and prosperity of the people. It is difficult indeed in these days of hustle and bustle to obtain the repose necessary in order 1872 to weigh up the considerations which knit the people into the social scheme and which create and maintain the happiness and prosperity of the nation, but I think it is the duty of this House —and as a humble Member of the Conservative party it is, in my judgment, the bounden duty of the Conservative party—to reconcile the Measure with those considerations. I believe the Conservative party in time of good repute and in time of bad repute, have always endeavoured to reconcile the fundamental principles of our old constitution, with the principles of any Measure which they submitted for Second Reading to this House. It will be a long time before I depart from that belief; but I must, say I failed to recognise in the speech of my right hon. Friend anything which could he considered as following that practice. His speech was wholly confined to submitting to the House that the details in this Measure were good and sound.

I cannot imagine a more unsatisfactory task for anyone who is familiar with the intricate details of a Measure like this, than endeavouring to explain it to the House of Commons—to an audience which we all agree is critical, and rightly critical, but an audience which is not only just but even more than just, generous. I cannot imagine a more difficult task than trying to explain even to such an audience a Measure of this kind and when it is remembered how in the discussion of a matter of this kind, a single loose phrase hurled across the Floor of the House, cannot he answered by one single fact hurled back in similar fashion, but may require a long speech and an elucidation of policy, it will be seen how difficult is the position. That difficulty will be further apparent to hon. Members if they cast their minds back to the obedient post-War Coalition days. Hon. and right hon. Gentlemen who were in the House at that time will remember all the great cures for social evils that were placed before them — agriculture, railways, canals, electricity, and not least, housing. It will be. remembered that not only was it a phrase in election manifestoes at that time, but it was one of the major Measures placed before this House that we should provide houses for all and homes for heroes. What a 1873 result? What a tragedy? And, yet, I would remind the House that housing is a subject about which every adult person in the country knows a great deal, and, even on that subject, when a Measure was produced and was objected to, we were over-borne, by what? By the ad vice and opinion of experts. Our experts assured us that the proposals then made would be all right, and this, I again remind hon. Members, was in relation to the question of houses, about which every adult man and woman in tin, country could come to some reasonable conclusion, and arrive at some reasonable opinion.

Therefore, I think it would be well all through this Debate to keep in mind the extent to which we are dependent upon our own direct knowledge and the extent to which, in this matter, we are absolutely in the hands of experts. We must ask ourselves, how far are we prepared to change the public Statutes of this country merely in order to carry out the advice of experts? Hon. Members opposite and I disagree absolutely in our political outlook, but I think they must agree with me in this proposition—that when a Statute is placed on the Statute Book we should be reasonably satisfied that we know what we are doing and that we are riot putting into an Act of Parliament something which affects the industry and the lives of the people without a full knowledge of that provision and all it means. The great housing scheme failed and produced chaos. This Measure must fail unless, indeed, it preserves liberty, preserves private rights, and is applicable to the general services of the country. Also it must be shown that the Measure does not in any way conflict with our traditional freedom and Constitutional practice. If it can be shown on a clear analysis that these qualifications are definitely proved, I certainly do not stand here as one who merely wishes to see the electricity industry left as it is.

It is quite true, and it is well known, that I am deeply interested in the electricity supply industry, but it is not because of that fact that I am speaking here to-day. It must not be assumed that I speak because of that circumstance. It is only when some vital public issue is involved, whether it be a question of electricity or gas or water, or any other 1874 matter, that I rise in my place as a Member of Parliament in order to attack any Measure which I regard as harmful. No hon. Member of this House has a right to intervene merely because an interest to which he is attached is affected, and because he wishes to see that interest left alone. An hon. Member has no right to oppose any Measure merely on that ground. He must act on the ground of large public policy and if he is not moved to act on those grounds, then he should remain silent in his place. He should allow the House to come to an unfettered judgment, if he is only concerned about a particular interest of his own. I have said that we must see that a, Measure of this kind, does not conflict with traditional freedom and constitutional practice. I submit that this Bill is contrary to that principle. It does conflict with traditional freedom and constitutional practice. It cuts right across our constitutional practice and sets up a new authority answerable only to a Department with a right to allocate a State subsidy.

4.0 p.m.

It may be contended that giving merely a guarantee of interest is not the same as giving a subsidy. If that be stated, I disagree. I see no difference whatever between guaranteeing a loan and actually handing out your own money. In the last resort, when you are called upon to pay the whole of the interest over a long period of years, your capital has gone. I would remind the House that there is no such thing as capital if it will not bear interest. That may be a reflection for hon. Gentlemen opposite. What is capital? It is merely something which has the capacity to produce an annual income, and, when you destroy it, you destroy the ordinary vehicle of civilised society, the medium at our disposal which takes us beyond the range of barter. But, supposing you say we could get over that difficulty by setting up a, department not answerable to Parliament; there is still something left to which, I think, we should take exception. You still have State management and State control left. You may say that is only jumping the first fence of Socialism, but, once you have got over a few fences, you will soon, no doubt, take the rest of the course.

I gather that this Bill is founded principally upon a belief that we are behind other countries, and notably America. 1875 is that so? I am not discussing a question of arithmetic. Because we are told that our consumption per head is so much lower than in America and other countries, it does not follow that we are behind America and those other countries. As a matter of fact, if we turn to the manufacturing side, we manufacture in the workshops in this country the very largest generator they have in America to-day. How then can we be so far behind? We do not send out to America in order to train our craftsmen, our artisans, and our designers. That is done here on the experience of Great Britain. It is fallacious to consider this question entirely on the basis of consumption per head. What was the position in this country in the years before 1914, and what was the position in America? Let us see, if we can, how we stood compared with America round about 1905 or 1907, or thereabouts. I do not wish to quote a lot, but, if the House will allow me, I should like to give one or two facts from the actual returns of the day in different parts of the country. I find that in 1912 private power companies supplied quite small consumers far out in the country areas at figures like these:.673, .712, .714, 1.030d. The biggest bill for any year runs into a few hundred pounds. So I could go on. That was in the county of Fife.

I now turn to Lancashire. I could give the customers' names, but it would be improper to do so on the Floor of the House. I will, however, show the record to anybody who is interested. Here is one: 100 horsepower beginning at 8d. and falling down to.68d. I could take another which works out at an average of 6d., and so I could go on. I am not selecting one or two isolated bills, but I am giving prices current in those days℄1905 —throughout quite a large area of Lancashire, prices that were never touched anywhere in the United States of America. I speak from experience. At that time, I tried to press a few customers in different parts of the country to give us their business. What was the real trouble? The real trouble was that in America they were making money, and in this country we were not. In America they could afford to disregard the difference in the bill.

1876 There is another contributing factor. In America they have this great advantage. From 1890 up to to-day's date America has received an addition to her population equal to the whole of the population of Great Britain. It is a population which has grown up entirely in the electricity age, and it has had to be housed in places that are not served by any other means of light or power. Even more startling, the United States, since 1910 has added half the population of Great Britain to its numbers. I ask in all seriousness, can there be any comparison between the two countries under conditions such as these? I have quoted some British figures; perhaps it is only right to quote a few American figures. I have the analysis, but I shall only touch upon one or two very briefly. They come from the statistical department of the, Commonwealth Edison Company, and I think the House can take them as quite correct. I am only going to take one line of figures, giving the gross income from what are called commercial companies—those are private undertakings —and municipal undertakings. These are the rates per unit: In 1902 the commercial companies averaged 3.41 cents and the municipal undertakings 3.56 cents; five years later, in 1907, the commercial companies averaged 2.90 cents and the municipal undertakings 4.84 cents; in 1912 the commercial companies averaged 2.53 cents and the municipal undertakings 4.32 cents; in 1917 the commercial companies averaged 1.99 cents and the municipal undertakings 3.87 cents. I have not the separate figures for 1922, but as the average for 1917—that is adding the private companies and the municipal undertakings together—came out at 2.07 cents, and as the total in 1922 came out at 2.66 cents, apparently the commercial companies would be a little over 2 cents and the municipal undertakings would be slightly over 4 cents.

§ Mr. CONNOLLY

Have you the complete figures for the Whole of the commercial companies?

§ Mr. BALFOUR

Yes, these are the complete figures for all the commercial companies. I have no desire to make any point regarding private versus municipal undertakings. I am simply quoting figures that may assist the House to have a review of the American position up to 1877 the year 1922, which is about the time of the Weir report data. I have a large number of figures, but I know it would only bore the House to refer to them, but I might give some current rates. The Commonwealth Edison Company, who are turning out 3,091,000,000 kilowatt hours—that is about three-quarters what we are turning out—supply at an average price of 1.9 cents., or as near as possible ld. per unit. Then I have a quotation here which I believe has been given effect to. The Commonwealth Edison Company contract to supply the Illinois Central Railroad on the following terms: If the load factor is only 25 per cent., the lowest scale they will come down to will be 1.45 cents., or .72d. per unit. If they get a 50 per cent. load factor they will come down to a minimum of 1.05 cents. or .l52d. The Detroit Edison Company—I am taking these as I come across them, and not selecting them—works out at an average of l⅛d. Another company, the Middle West Utilities Company, turning out 1,498,000 units, works out at an average of 2.50 cents. or 1.3d.

I have quoted these up-to-date figures, and the House will observe that for great railroads they are to-day getting the price which we were quoting comparatively small customers in rural areas in Lancashire, Fifeshire, and other parts of the country as far back as 1905 and 1912. Can there be any allegation that there is a desire on the part of these great enterprises to keep prices up or to bleed customers? The reverse is the case. It is a rather peculiar fact that we could not get ahead with our electricity supply in this country because we were in the hands of experts. They were constantly—I am sure no expert will resent this, because it is not at all a bad quality, though it has had disastrous results—advising companies, "If you can only get enough business, you can make it pay at these rates." They therefore started at low rates, the rates we might ultimately achieve, and everyone of these big enterprises was beggared and no money could be raised in the market for continuing these services. That is the true history of the matter. Wherever I went I was asked, "Why cannot we supply at the price of the North-East Coast, which at that time had a halfpenny unit. The North-East Coast emerged on totally different lines. They began, I believe, 1878 as the old Newcastle Supply at 8d. per unit. They built up their prosperity on this high price per unit, and they got to a prosperous condition where they could afford to lose money on their power business until they had gathered enough business to make it pay; but even they went through a very rough and bad time, notwithstanding the very favourable auspices under which they started.

I realise that I am trying, as no doubt the House will observe, to give what one would call popular facts. I realise to the full that it is quite useless for me to endeavour to assist the House in its deliberations by giving a great mass of technical material which I could not expect the average Member of the House to understand. I am, therefore, endeavouring to confine myself merely to common-sense facts, all of which are capable of proof. If we are left alone, and if trade is prosperous, we shall undoubtedly lead the world. If we give free play to our national aspirations, if we give free play to the genius of our people we shall succeed, provided we do not hamper the effort, the enterprise, and the push of our people. I cannot help remembering that only yesterday my right hon. Friend referred to the statement made by Lord Rothermere that electricity is the raw material of industry. Never was there a more stupid thing uttered. It might rightly be called the raw material of industry in certain eases such as ice-making, where power is 26 per cent. of the cost of ice. You might rightly call it the raw material of industry when it is 26 per cent. of the cost of the finished material.

I will not trouble the House with the figures, but I have a report by an American on the conditions in the United States, which shows that the cost varies from what is the equivalent in English money of a few shillings per £100 turnover up to about 2 per cent. or 3 per cent. in cases such as I was dealing with, or perhaps in some cases 4 per cent. or 5 per cent. I remember very well, when this matte' was being debated in this House, in March, 1919, that I dealt with this very matter from the benches opposite. I had very little time in which to prepare anything, but I read to the House on that occasion—and hon. Members will see it in the OFFICIAL REPORT if they care to look—answers to telegrams which I had 1879 sent at random to customers whom I was supplying in England, Scotland, and Wales, I sent them to all kinds of customers, dealing with hosiery, boots and shoes, canvas, tinplate rolling, shipyards, and collieries, and the answers varied from 8s. 3d. per £100 to a maximum of 2½ per cent. where the business was a night-and-day business engaged in tinplate rolling.

In the crisis of our history, with which we are faced to-day, can it be alleged by any serious-minded person that this is the first thing we want to attack to get the wheels of industry going? I suggest that it is the last. Let us get on and turn out our goods. I come back to the reference with which I started, namely, the words of Lord Rothermere, quoted by my right hon. Friend, that electricity is the raw material of industry. I remember reading an article by Lord Rothermere a month or so ago, to which my right hon. Friend referred also, entitled "Through Power to Prosperity." I would ask the Noble Lord to reverse that title, if he would give an appropriate and true title, and it would then be "Through Prosperity to Power," which is the truth of the situation. Anyone who knows American conditions knows that when they had to go out in 1905 and 1906 and up to 1912, they did not have to ask people to take power. No; people went there to start their industries, and they came for the power, just as you go now, when you go to a new district, to the water authority to lay on the water, and in most cases never even bothered what the price was. After they had paid their bill they had the service, and they could pay our bills four or five times over and still get a very satisfactory profit.

Now I turn for a moment to the Weir Report. The Government, if I understand them rightly, rest their case on the Weir Report. Some of my hon. Friends yesterday asked the questions "Why was this not printed six months ago? Why was the House kept in ignorance of it until close upon the time when it was confronted with the Second Reading Debate? "It took three able business gentlemen a long time to prepare and submit this Report, and this House to-day has not even the advantage of knowing who were the witnesses, and far less has it a print of the evidence given. How 1880 can this House, even assuming that it is a good Report, which I deny, come to a reasonable conclusion based on that Report, without having a full print of the evidence and knowing the weight of the opinion which is behind it? Yet we are asked blindly to accept this Report, containing all the wisdom of all the experts, and we are asked, as I think my right hon. Friend said yesterday, to accept it because it is the verdict of Lord Weir, Lord Forres, and -Sir Hardman Lever. I for one, decline to accept it, because I know, that in its main conclusions—and when I say "I know," I mean that I have every reason to believe, from my experience—it is utterly untrustworthy. Whatever this Report says, it is limited by one statement at the beginning, which I suppose most hon. Members have read, but I think it should he in the mind of every hon. Member. The Minister puts this inside the front page of the Report: With reference to the scheme contained in the Report and the estimates and diagrams accompanying it, he desires to call attention to paragraph 31, which states that this scheme must only be regarded as a broad picture subject to modifications and improvement when the fully detailed and comprehensive survey which we advocate has been completed.' Then the Minister adds: This scheme does not, therefore, represent a definite proposal which would be adopted if the Electricity (Supply) Bill were passed into law. Under that Bill a scheme would be prepared by the Board to be constituted under its provisions. Where does that lead us? The Board is set up, and that Board is to be answerable to the Electricity Commissioners, and I am bound to direct attention to this point, because I feel confident that very few hon. Members have had the tithe or opportunity, and perhaps many have not had the inclination, to follow this matter through. Let us see about these Commissioners. They are set up under the Act of 1919 specially for the purpose of dealing with this matter, and in Section 1 of that Act it states that they shall be five in number, that two of the Commissioners are to be appointed for such term as may he fixed by the Board of Trade; and that three of the Commissioners shall be selected for practical, commercial, and scientific knowledge and wide business experience, including that of electrical supply. 1881 It will be found that Sections four and five, but Section five in particular, point out that these Commissioners are to delimit electricity supply areas, and, having done that, they are to make inquiries and set up authorities, which shall submit schemes. What happens if they do not submit schemes? Subsection (3) says: If no such scheme is submitted within the time so allowed, or if no scheme submitted is approved by the Commissioners, the Commissioners may themselves formulate such a scheme. Where are the schemes? Remember that this has been going on for six years. In 1919 these Electricity Commissioners wore set up, with special powers to appoint authorities in delimited areas, and if those authorities did not formulate schemes, the Commissioners were empowered to do so themselves. What has happened? We have this Bill with a proposal to set up a Central Board. The Bill is founded on the Weir Report, which specifically states that they have not been able to frame a scheme, even with the advice of the Electricity Commissioners, after six years of exploration. All they have been able to do has been to paint a picture, and they are going to hand this painted picture, which is not going to be available to the public, over to this Board of eight gentlemen, who, no doubt, will be estimable gentlemen, hut whose identity, we assume, is unknown at present, and will be unknown until this Bill is passed into law. They are to frame, this scheme. The Electricity Commissioners have not produced a scheme in six years. What would be a reasonable period of time for these eight gentlemen, starting for the first time on the job, to produce a scheme? Would it be reasonable to assume ten years? If so, I think we might well omit the financial provisions from this Bill until such a scheme is produced and approved.

One word about the Williamson Report, and here again I have a few lines to quote. but I am sure the House will forgive me. The Weir Report is founded on the Williamson Report, which was issued, I think, in March, 1918, but under war conditions, with the country submerged, quite properly, in an atmosphere of war control and Government control. The Weir Committee accept 1882 this Report, simply add some observations to it, and call it the Weir Report, plus certain Reports by the Electricity Commissioners. Could one carry a farce further? But there is one valuable thing in the Williamson Report which, I think, even under the clouds of war control, and the conditions obtaining during the War, could quite properly be assessed, because it has not been changed at all, and that is on the question of rating. In the Williamson Report, paragraph 80, it states: The local rating system as applied to electric transmission mains must greatly, and, we think, unjustifiably, interfere with the supply of cheap power and enhance its cost. As the use of electricity has come in since the Acts on Valuation and Rating were framed, it seems necessary that they should be revised. Their application to electricity undertakings and appliances should he settled on economically sound principles and clearly defined. The matter is one which calls for the immediate attention of the Government. That is perfectly specific, and a matter which is well understood by every hon. Member of this House. It calls for the immediate attention of the Government. I will not quote the Weir Report further. but hon. Members will find that the Weir Committee refer to the rating question and. tell us that they think that the selected stations, the new stations, and the main transmission lines should be exempted from rating, but they do not propose to exempt the electricity supply industry from rating, and what does that mean? They throw the whole odium of it on the distributor. They say: "Do not let the Central Board have any of the odium, but throw it all on to the distributor." When I mention this question of rates in comparison with the cost of coal, hon. Members will realise what a serious matter it is, and I am not going to take for the principal purpose of illustration some small, unfortunate undertaking where the rates, Calculated at a rate per unit of electricity, work out particularly high, but I will take some of the large undertakings, undertakings turning out 130,000,000 units per annum. The House will be astonished to know that the amount paid in rates is as high as 25 per cent., 30 per cent. and 35 per cent. of the coal bill. Why all this wonderful machinery in order to reduce the price of electricity to the consumer when you have at hand, immediately, an 1883 instrument, by means of the revision of the rating system, which you let go by default, notwithstanding the clear recommendation of the Williamson Committee, made so long ago, and which came to a clear conclusion on such a simple matter?

I suppose I should be speaking with a certain amount of natural pride. Yesterday my hon. and gallant Friend the Parliamentary Secretary to the Ministry of Transport said that if private enterprise were to take over the whole electricity supply in the country they would have to look round for some super-man to manage it as a private undertaking, and my hon. and gallant Friend said he would turn to the hon. Member for Hampstead, on whom would fall the mantle of Faraday, or the coat of Mr. Insull, and that he would regard him practically as an electrical Mussolini. I think it was extraordinarily kind of my hon. and gallant Friend to say such undeserved things about me. But, surely, I am entitled to say, after that compliment paid to me in this House, that it might have been useful if my opinions had been ascertained before the decisions were taken regarding this Bill. Was it because, in fact, I was eminently qualified to act as a Mussolini of private enterprise, but not quite fitted for such a Socialistic scheme as this?

I want, briefly, to touch upon a few of the principal points in the Bill. I have tried, as far as possible, strictly to avoid dealing with what are Committee points, and to deal with the subject as a Second Reading Debate. I must say a word about change of frequency. Some of the largest non-standard companies, with the Birmingham Corporation leading the way, the Clyde Valley Power Company—at any rate, a list of about eight nonstandard undertakings, representing the whole of the East Coast non-standard undertakings, met at Birmingham last Friday, and unanimously resolved to oppose the change of frequency, pointing out that the cost of the change would be many times the cost calculated by the Government. The Parliamentary Secretary was good enough to congratulate me on having changed the frequency at the week-end. That is quite true, but the programme, to begin with, was an 18 months' programme, and it was only by bringing together very enthusiastically a 1884 large body of our men, who looked at it as a sport, that we were able to get this thing done. By means of the enthusiastic co-operation of a vast range of intellect, we were able to change over in a week-end, and cause practically no disturbance. But try to do that throughout the vast city of Birmingham, or the vast territory of the Clyde Valley, and you will find a different story. These figures have been checked. The people who are operating non-standard areas say it will cost several times the price put down by the Government. My rough calculation is that it will cost between two and three times the calculated figures of the Government to change over the frequency alone, and when you subtract that from the figure to be guaranteed of £33,500,000, you will not find much left for acquiring your stations or building.

Just a word in passing as to load factor. My right hon. Friend said yesterday that we must give the benefit of improved load factor to the customer—utter nonsense, if I may respectfully say so. You cannot give the benefit of the improved load factor except in some very infinitesimal fraction if you honestly deal with other customers. Take big power stations running a 20 per cent. load factor, and one customer whose factory has a 40 per cent. load factor, do you think that customer is going to put his load on that power station to give someone else the advantage? Let us assume that the cost of running the station falls from ld. to ½d. You have got to give that customer who has added to that power station the benefit. He is probably paying you less than ½ in other words, less than your actual cost of running the station, but he has incidentally brought the price of the station down from 1d. to ½d. He already, however, has got everything possible you can give him, but you have to distribute to your other customers according to the load they give. I think on analysis it will be found to be true, that the power station will give a lower cost when you have a diversity of customers paying from ld. down to ½d. You cannot do justice to the high load factor customer, and at the same time have something to give away to somebody else.

With regard to what has been called the "gridiron," in which Conservative principles, apparently, are going to be roasted, I was led to assume that we were to 1885 follow the example of America. I think you will find that America has not a grid iron. I think you will find in America that rather different conditions prevail. I will give a short quotation from the remarks of a gentleman who has been selected as one of two Americans quoted in the Weir Report. Mr. Alexander Dow, who is running a very large undertaking, the figures of which I quoted earlier in my speech, says: Our system is not a closely connected unity served by several power houses. Instead, I like to think of it as several contiguous areas having their own sufficient power houses interlinked primarily for mutual assistance, and, secondarily, for attainment of maximum economy. That is, one power company can help out the other. Loose linking throughout the entire Detroit Edison system is an ideal toward which we have been striving for five years. but which we have not entirely attained yet, although we are very close to it. Again, he reiterates:

Economy is subordinate to the first, purpose of interlinking, namely, mutual assistance. For the information of the House I may say this is not old history. It refers to a striving over five years, and this was said by Mr. Dow on the 16th January, 1926. Then, again, there is a reference in an essay submitted by Mr. A. K. Baylor in the Bonbright Competition. It is absolutely the most comprehensive thing I have come across. Mr. Baylor says: Interconnection affects rates only to the extent that duplication of physical and financial provisions are avoided. Interconnection of power lines, as a natural development, was under way, and on an extensive scale, before 1920.

It has been made clear that the outstanding effect of interconnection is greater availability and reliability of power rather than any startling reduction in the cost of supply. There is no reference to a gridiron there, no reference to tying these power houses rigidly one to the other, but working all the power houses of any use, the larger ones, all floating on the system, supplying their own region, and not throwing great surges from one area to the other. I do not wish to trouble the House with more quotations from Mr. Dow, or I might have given information about the danger of locking too large regions together, and causing trouble over a large area.

1886 One word as to the problem relating to rural districts. It is implied that wherever the grid goes, the rural areas will be supplied. Surely that is said under a misapprehension. The grid, I presume, is going to be the 120.000 volt line, bringing in large houses. Imagine one of these lines passing through 50 miles of territory, with scattered farms in scattered rural districts. It might happen in one place or in two places, but even when you have done that at tremendous expense, you have got to lay down your complete distribution system. I will quote a few words of Mr. Baylor in this connection, and I value his opinion, as it is the result of very complete study. This is what he finds on an analysis up-to-date: Approximately 60 per cent. in the cities and 90 per cent. in rural districts is for delivery. Therefore, if the energy could be generated for nothing, the charges for rural supply would not be materially affected. Why is it we have none of these things dealt with in the Weir Report? Why is it these considerations were not brought forward, so that hon. Members in this House, and the public outside, would have some material to entitle them to come to some conclusion, some reasoned judgment on this matter? Instead of that, there is nothing at all about these rural practical problems, which must be within the knowledge of experts, if not within the knowledge of those who made up the Report. Before I conclude, I will say a word with regard to the number of power stations there are in America. I think, if looked into, it would be found there are more power stations relatively to the population and distribution in America than we have in this country. There is no sense necessarily in closing down a power station because it is small. The hon. and gallant Member for Luton (Captain O'Connor) referred yesterday to the municipal undertaking there, of which he is rightly proud. The all-in price to customers at the Luton station is 1.05d. And that is a thing that is aimed at under the Weir Report somewhere about the year 1940 Of course they will not shut down, but what will happen is that the Board, when it functions, will say to the chief engineer of the Luton Corporation, "We will supply you at a certain price." Then, if the chief engineer cannot meet that price, he will have to reduce his own prices to the consumer. But it does not necessarily follow that 1887 the Central Board can actually produce at that price. That will be very little satisfaction to the Luton Corporation seven years after, when they have no alternative source of supply but the Central Board.

The main principle of this Bill, as I see it, is the Executive against the people. The clamour for this Measure was formulated by the Executive. It is not and never has been a cry from The people. Viscount Grey recently made in a book which he has written some references to the qualification of men for the Front Bench. He says: Their business is not to be an expert hut to be trained in capacity for public affairs. The theory and practice of Parliamentary government is not that of government by experts, but by men of general experience and proved capacity, presiding over experts who are civil servants in our public affairs. I am driven to the conclusion that this Bill is merely a competitive political stunt, pressed by the Executive. I feel almost ashamed that the Conservative party, to which I belong and to which I even yet owe and give loyal support, should desert what I regard as the cause of the people and espouse the cause of the Administration. My right hon. Friend the Prime Minister, with his high sense of duty, declined to proceed with Protection, and rightly so, and keeps within the limits of the Safeguarding of Industries scheme and the McKenna Duties because he has no mandate from the people. Will he on a matter far more important than the solution of any economic problem attempt to destroy the proper functions of Parliament, and establish a bureaucracy of departmental control? Will he destroy the birthright of the electors? Edmund Burke once said: The power of control was what kept Ministers in awe of Parliaments and Parliaments in reverence with the people. If the use of this power of control on the systems and persons of administrators is gone, everything is lost—Parliament and all. I must congratulate the right hon. and hon. Gentlemen on the Socialist benches, because it appears to me that the leaders of all political parties are degenerating to the level of their aspirations. If this continues, Socialists have only to sit still and watch with amused 1888 interest to witness the triumph of their policy and the disintegration of a great Empire.

§ Sir PHILIP DAWSON

I have listened with great interest to the statement which has just been made by my hon. Friend the Member for Hampstead (Mr. G. Balfour). He referred to experts, and to the way in which the members of the Weir Committee have been led or possibly misled by experts. I do not know anybody who is a greater expert in the electrical industry than my. hon. Friend. Therefore perhaps I may say that, if he distrusts some experts, I may possibly distrust others? I will not attempt to deal with the great constitutional questions and questions of policy to which my hon. Friend has referred. I have no doubt they will be ably dealt with by the right hon. Member who will reply at the conclusion of this Debate. I will content myself with trying to show what I believe to be the merits of this Bill, and by saying that when passing through Committee it will probably receive a number of alterations in certain Clauses. In my opinion those alterations are necessary in order to make those Clauses more clear, and to carry out the intentions with which I believe they were framed. Our industry has been greatly hampered in the past by parochial legislation. As regards our being equal to the United States or to any other country as far as industry is concerned, no one who knows anything about the English electrical engineer and the workmen can doubt but that we are the equal at least of any other nation, but because we have great manufacturing and engineering experts, it does not follow that we have allowed them in the past to equip this country with electrical apparatus to anything like the extent that is to be found both on the Continent of Europe and in the United States of America and in Canada.

A very old acquaintance of mine is in one of the chief electrical manufacturing concerns in the world—he is the head of the A.E.G. Company in Berlin—and whenever I travel abroad I make a point of visiting him and discussing the progress of electrical engineering and the application of electricity to industry. He constantly says to me, "You have in 1889 England an entirely unexploited gold mine. But your works are not anything like so well equipped as are those of the United States. The instalment of electrical apparatus in your works give greater power, it diminishes the cost of fuel and increases the efficiency and the speed of the engines. But you have not installed these electrical plants, although they would increase your output, and make your works more efficient. You have a splendid opportunity if you will only take it, and if you can induce your manufacturers to instal electrical plant and apparatus of every kind wherever possible." We are behindhand in this country in the application of electricity to our industry.

My hon. Friend the Member for Hampstead raised a point to which I should like to refer. He has referred to the very low cost at which electricity can be produced, and to the important place which it still holds in our industrial system. No one can deny that some of our modern stations are some of the most efficient stations which can be found anywhere in the world, hut what we have to face is that at the present moment there are some 4,000,000 of people who benefit by the installation of electricity, when we should like to see that number extended, so that out of the other 36,000,000 of inhabitants in this country a larger proportion may have cheap electricity and may be enabled to carry on their work by electricity and to improve their homes. The Parliamentary Secretary to the Ministry of Transport last evening, in reply to the Debate, mentioned the question of the application of electricity to homes. There is an example in Scotland in a house which I have visited, and which I know well, where a professor of electrical engineering has fitted up his whole house entirely electrically, and has demonstrated that both for heating and cooking. and even for heating water, it is generally more economical for householders to utilise electricity than any other means, and that has only been rendered possible because of the very cheap cost at which electricity is available in the City of Glasgow. If we can reduce the price all over the country—not all at once, for that is an impossibility—but if we can gradually go on reducing the cost of electricity throughout the country, it will increase the 1890 installation of electricity in our homes, it will encourage our industries and our factories, and supply them with the power which to-day they get from coal.

I consider that technically and economically the proposals in this Bill will be useful to the spread of our electrical industry. I would remark that this Bill has been founded on the Weir Report. My hon. Friend the Member for Hampstead belittled the Weir Report, and suggested that the Report of the Balfour-Williamson Committee which was brought in at the end of 1918 should have said the Report of Lord Forres Committee—was brought in at a time of stress, and when we were accustomed to Government control, and that therefore the conclusions which were unanimously arrived at by that Committee were misleading, and no longer held good to-day. I venture to traverse that statement because that Committee consisted of representatives of all those, whether municipal, or companies, or manufacturers or traders or users, who were interested in electricity in any form or shape. They had all the evidence they could possibly collect from all those interested in the free use and supply and distribution of electricity and in the manufacture of plant required for that purpose. The conclusions they arrived at then are in my opinion just as, correct to-day as they were at that time. I think that to-day the need of making certain alterations in our methods are even more necessary than at that time. In addition to having at their disposal the Report of this Committee, the Weir Committee had the benefit of the experience gained during six years by our Electricity Commissioners. That experience has been of great value, and there is no other country in the world where information at first hand is available as it is here, because of these Reports and because of the work done by our Electricity Commissioners. The greatest credit is due to them for the way in which they have carried out in many cases a very thankless task and for the way in which under great difficulties they have been able very materially to improve the supply of electricity in this country.

I would like to call the attention of the House to the fact that the Electricity Commissioners are men of great experience. They are not merely experts who 1891 have acted almost the whole time before they become Commissioners as expert advisers, but they are men who have had practical experience of running big stations and distributing current. There is Mr. Pearce, who was chief engineer of the Clyde Company; Mr. Lackie, who was chief engineer to the Glasgow Corporation, and who designed the Kilmarnock station which to-day is one of the most efficient stations in the country.

5.0 p.m.

We have also Mr. Pearce, a member, who till quite recently was the chief engineer of the Manchester Corporation, and responsible for their station, one of the most efficient stations in this country. Are these gentlemen likely to be misled? Do they know their business, the cost of generation, the cost of distribution, and the advantages to be gained by interlinking and standardisation, or do they not? They quite rightly desired that the opinion which they expressed should be endorsed by outside authorities, and Lord Weir called in experienced engineers to advise the Committee. He called in Messrs. Merz and McLaren. Those engineers are to-day consulted by nearly all the big power companies and many of the municipalities of this country. They think that their advice is sound, and they follow that advice. Why should not the advice tendered to Lord Weir be equally sound when it is given by the very gentlemen whose advice is taken by the municipalities and power companies? Not only are they consulted, but they are directly responsible for the management of the North-East Coast. It was through them and through Dr. Merz, Mr. Merz's father, that that station came into being. They had had the closest acquaintance with the design and installation of large plants and also with their operation. They also called in Sir Alexander Kennedy, the consulting engineer to the Westminster Company and many other companies which he advises. Why should his advice be taken in one case and refuted in the other, when given to the Weir Committee, as untrustworthy? The Report of the Weir Committee is based upon mature experience and reliable facts because the information given to the Weir Committee by the Electricity Commissioners is not hypothesis or estimates. It is information that they were able to 1892 collect which represents actual facts. Those who have read the Weir Report will see that the estimates of capital expenditure are based on the actual expenditure of one of the big power stations recently constructed. The costs of production are based on existing power stations like Delmarnock and Barking. It is a Report that cart be taken very seriously, and which we shall make no great mistake in following.

There are others besides myself and the hon. Members who have spoken from both sides of the House who have given consideration to this matter. We have heard so far the views of those who are interested in the production of electricity. There is no one who is more anxious to see that those views should receive acceptance or that those who have done so much for the country should be treated with all fairness than myself. I suggest to the House that there is another party, whom we have not heard at all in this House, and of whom nothing has been said—that is the unfortunate consumer. I say the unfortunate consumer, although that does not apply in all cases, because there are cases of people who are already in the fortunate position of being supplied by those most efficient stations to which the hon. Member for Hampstead referred. There are others who are not in an equally fortunate position. I should like to read a part of a speech recently made by Colonel Murcombe, chairman of the British Electrical and Allied Manufacturers' Association, in connection with this very Bill. His opinion should certainly count for something: Our position as an electricity consuming nation is unworthy of us…Critics rushed in with condemnation, ignoring greater meaning and attacking from a narrow point of view of self-interest. If we emasculate the Bill. a definite and perhaps fatal delay may be given to electrical progress. The arguments in favour of pooling, interconnection, creation of joint authorities, and standardisation are convincing. The Weir Report gives a true picture of what is needed to stimulate electrical development in this country. That opinion is certainly worthy of some consideration. I should like to read a reference to this proposed Bill in a German paper because, whatever we may think of Germans one way or the other, everybody must admit that they are a highly efficient nation, that they have a high standard of industrialisation, and 1893 that their opinions on matters of that sort are worth listening to. I will read a short quotation from the "Berliner Tageblatt": If the proposed measures, which include the creation of a central authority for the electrical industry, a far-reaching concentration of power stations, standardisation, and a considerable extension of the industry, succeed, of which there is no doubt, Government initiative will be responsible for a development which in Germany and the United States has been reached long ago, to the advantage of the entire economical situation. Mr. Baldwin's action is of considerable practical importance, because it marks the first step of Great Britain which has been delayed too long in spite of the general unsatisfactory position of English business. That is the view held on the other side and it is worthy of the consideration of this House. My hon. Friend the Member for Central Leeds (Sir C. Wilson) proved one thing in his speech last night and that was the absolute necessity of having a Bill of this kind. What he said in effect was this, "We, in Leeds, do not want to be interfered with by anybody. We are going to run our own show. We want to supply all those around us whether they like if or not." That is a proposition which shows the necessity of co-operation between all the various interests. He also said, and I hope he did not do so with any real belief, that in the circumstances cheap electricity could not be expected and therefore railway electrification could not come about. There are other hon. Members who made statements to that effect, but not long before that, at a dinner of the British Electrical and Allied Manufacturers' Association, the General Manager of the North Eastern Railway, Sir R. L. Wedgwood, stated that if electricity could be made sufficiently cheap in price he had no doubt that main line electrification would come about. Cheap electricity for power purposes, with cables along our main lines of communication, will make railway electrification feasible and at the same time assist the electrical industry by the load taken by our railways.

I would like, for a moment, to refer to the very able speech made by my hon. Friend the Member for Greenwich (Sir G. Hume) last night. Some years ago when I was a member of the London County Council I sat with him on an electricity committee which had to consider the whole question of the supply of electricity 1894 to London, in which the London County Council was very much interested, because it was the purchasing authority. I had, therefore, an opportunity of seeing how the various suppliers of electricity, be they companies or local authorities, were at sixes and sevens, and that nothing on earth could bring them to co-operate. What was the result? Nothing was done, although the London County Council did everything in its power to get matters into a better position. It was only when practically compulsion was used and when the companies were afraid that their undertakings would be purchased that last year an agreement was reached in the London power area. In connection with those Bills I would like to say that some time before I was a member of an engineering committee, with Mr. Rider representing the London County Council, Mr, Wordingham representing the local authorities, Sir Alexander Kennedy and Mr. Partridge representing the companies and I representing the railways. We went into the whole question of Greater London supply in the most complete and thorough manner, we spent large sums in making investigations, we had all the calculations necessary, we had all the evidence before us because we had representatives of all the supply authorities of London before us, who gave us all the information that we required. What was the conclusion we arrived at? It can be read in a report signed by us which was published some years ago by the London County Council. The conclusion that we arrived at was that to have a cheap supply in Greater London, a very vast area, it was necessary first to scrap all the small and inefficient stations, and, secondly, it was necessary to have what are called capital stations, the selected stations of this Bill, and to have those capital stations interlinked for mutual assistance and mutual improvement.

The statement, read just now by the hon. Member for Hampstead, of Mr. Alexander Dow, of the Detroit Edison Company, confirms the objects of this Bill. It is not a question of whether you should put one first and the other second, but there are the two conditions, safety and economy. Surely that is the very reason why these stations should be inter-linked, It is stated that there is an idea that these stations should be solidly con 1895 nected up. I see no statement anywhere to justify each a hypothesis. I believe that if this Board is constituted, with the technical advice it will have, with the information at its disposal as to the experience of other countries where this has already been carried into effect, it will be able to introduce the system without repeating the mistakes that were committed in other countries, where for the first time that system has been tested. What was the other conclusion of the Committee whose report was published by the London County Council? It was that the operation of those capital stations should be controlled by one central authority, that one should work full load for 24 hours a day all the year round, another from Monday to Saturday, another for one shift, another for two shifts, and that another should take the peak load. That was done for efficiency and economy. I suggest to the House that if various stations, who would be mutually assisted, knew that they were bound to co-operate there would be no difficulty whatever in getting that co-operation. I speak with some knowledge of this subject, although I have not the cloak of Faraday. I am perfectly convinced that if you take three big super-stations, which to-day will not co-operate for reasons which I leave to the House, and if they know that they have got to co-operate there will be no difficulty whatever in a very short time in those stations coming together and through their engineers working out an efficient system most advantageous to all of them.

The hon. Member for Hampstead has suggested that the Commissioners, though they have been at work for years, have produced no schemes, or very few. What is the reason? Because everything was voluntary, and the people would not work together. That is the main reason; and for the benefit of the consumer, whose interests must be considered as well as those of the suppliers, it is most desirable that they should co-operate.

§ Mr. BALFOUR

Will my hon. Friend allow me to remark that there is in the Commissioners' office a linking-up scheme for large areas, which is still awaiting their approval, and they say they cannot move because there is legislation pending.

§ Sir P. DAWSON

That is another reason why this Bill should be passed as 1896 quickly as possible. As regards the question of inter-linking, we had a quotation by my hon. Friend the Member for Hampstead of a statement made by Mr. Dow, and also an extremely interesting statement about Mr. Baylor. I was very glad to hear that, because Mr. Baylor was for some 25 or 30 years in London with the British Thomson-Houston Company, and was a very great friend of mine, and we lived together for some time. We have beard, also, the opinion of Mr. Insull, the gentleman who has done so much for Chicago. I would like to remind the House that Mr. Instill is an English born man, who went over to America when he was a young man, and that he has a great knowledge of England as a country, and has made a very deep study of the electricity conditions in this country. I know that, for I have talked with him frequently, and I know that he has taken the very greatest interest in the supply question in this country. What does he say in the Weir Report? Anyone who refuses inter-connection— I will not exclude England—does not understand the fundamental economics of the business. The system of inter-connection has been carried out in the United States and in Germany. With some difficulty I have procured a map showing all the inter-linking of the big German stations with the smaller stations, with large substations and the distributing system. Anyone who can get a copy of that map and studies it will find a complete network all over the country of inter-connection between the large power stations, the smaller stations and the distributing centres. That is the aim of this Bill, and I hope. that it will be of material benefit to this country.

Now we come to the question of the standardisation of frequency. Everybody must admit that that is desirable, and that it will be most efficient for us to have only one standard of frequency in this country. Our aim must be, as soon as may be, and with the smallest possible dislocation of trade and industry. to bring about that condition of affairs. But there is nothing in this Bill. so far as I can see, which says that this body is going immediately to change the frequency everywhere. I take it that this body will change the frequency if and when it sees that it is a commercial necessity and will 1897 be financially successful, just as my hon. Friend the Member for Hampstead changed the frequency in his case. If it can be done in one case it can be done in another.

§ Mr. HARDIE

What do you assume the £33,500,000 will be used for?

§ Sir P. DAWSON

I suggest that that is the amount they may spend in the end, whenever they want to spend it, but it is riot suggested that they have to raise that sum at once or to spend it at once. They will spend it as, if and when required. But in order to inter-link, change of frequency is not essential so far as power stations are concerned, because if the amounts to be transmitted an, not excessive it is quite easy to put in a frequency changer, thus enabling one to connect two systems with a different periodicity. There are frequency changers dealing with leads up to 75,000 horse-power in operation to-day in the United States of America.

The right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham) made an extremely able speech. I am in agreement with the statement of my hon. Friend the Member for Hampstead as far as the ability which marked that speech is concerned, but, as regards the effect of the speech, I think it was the intention of the right hon. Gentleman to try to create the greatest possible amount of fear in all hon. Members on this side of the House so that they might destroy this Bill and enable hon. Members opposite in due course to bring in their own form of legislation when they have the opportunity.

§ Mr. WALLHEAD

As we shall do in any case.

§ Sir P. DAWSON

I do not think anybody who knows the facts will suggest, nor do I see it suggested in the Weir Report, that we shall immediately reduce the cost of electricity all over the country. It will be done gradually and in stages. It is suggested that a very large reduction in the cost of electrical energy will be the result in the industrial centres. Interlinking will certainly not make things worse in connection with the industrial centres, I believe it will improve them, but it will very materially improve the conditions in the other centres where they 1898 have not the same cheap electricity available that they have in the industrial centres; and I suggest that those people who are producing cheaply and economically should be willing and anxious—and I would remark that it will not be done at their own expense —to do everything they can to support other people who supply electricity, so as to enable them to reduce their costs. The question of the relation of the sale of energy to the returns of the generating stations is, I think, one of detail, but one thing must be done, in my opinion, and that is, there must be some arrangement whereby electricity generated by all the big stations can be pooled and sold by one selling authority, and some arrangement made between that selling authority and the people from whom they purchase which shall be equitable to both sides. That is very much the same condition of affairs that exists in the coal trade. As hon. Members are aware, in Germany there is a coal syndicate which purchases coal from all the mines, fixes the price and then sells it. It seems to me that this suggestion with regard to electricity is on somewhat similar lines. If there are any rights of existing companies or local authorities which are endangered by any of the Clauses of this Bill, then I, for one, will oppose the Clauses in the Committee stage, and I hope to find some way of getting round the difficulties. If it is a question of wording or of making arrangements which shall not damage the rights of existing authorities, I do not see why that cannot be done.

Another thing I would point out is that the selected stations will be in a most favourable position—in a position which they are not in to-day. A selected station will be selling practically the whole of its output, and it will be certain of selling it, and it will be certain to be paid for it, so that it will become the most gilt-edged security that anybody can hold; and under those circumstances I am certain that if new stations have to be built there will be no difficulty in finding private enterprise to build them, putting up the money at a comparatively low rate of interest in view of the gilt-edged security they will possess. There has been a suggestion that country areas will not benefit. I do not think it is suggested, either in the Weir Report or in the Bill, that there will be immediate 1899 benefit for all rural areas, but I am satisfied from the experience not only of the United States, but also on the Continent of Europe—and in Germany, where a large amount of the power is generated by steam—that the benefits will become available bit by bit to the various rural areas, as is the case in Germany to-day. In that connection I may tell the House of a little experience which my hon. Friend the Member for the Moseley Division (Mr. Hannon) and I had when we visited Germany at the end of 1921. Amongst other people we met representatives of the farmers, and other similar industries. What was the great, complaint of the farmers? In a district that was non-industrial, their complaint was that they could not buy transformers, because England had got in the way. Is there any English farmer who would kick up a row because he could not get a transformer The position was that electrical lines of high tension, semi-high tension, and lower tension were passing through their districts, and practically all the work on the farm was carried out by means of electricity, bringing a great saving to them both in work and expense and increasing their output. If such a result can be achieved in Germany, there is no reason why eventually we should not see the same state of things in this country.

In regard to big capital stations in London, it is obvious that any new capital station which is situated higher up the river, where only barge coal can be got, cannot generate as cheaply as stations which are on tidal water where steamers can come alongside; and I also suggest to the House that the development of the coal industry in Kent may make a very great revolution in the supply of electricity in the southern part of England, and ought to be borne in mind in connection with that extension. The Bill makes a provision, which I think a very wise one, which will enable all the waste heat to be used up in the form of electrical energy. I would like to tell the House, though I am sure many hon. Members will be aware of it, that that is a system in vogue in many parts of Germany. In the Ruhr Valley and in Westphalia, one finds great steel and iron works with coal mines adjoining. All the waste heat out of the coke ovens which 1900 is not utilised in the works and not utilised to produce electricity is sent into mains and distributed as gas over many miles round the towns; and the electricity generated by their power plants which these concerns do not require for their own purposes is also sent into those mains and distributed all over the country in connection with the large distributing system of the big electrical works in. that part of Germany. The same sort of thing will come about in this country, with great benefit to everybody, because if there are mains into which this electrical energy can be diverted then there is every inducement for those who manufacture electricity to send any excess above their requirements into those mains.

I come now to some criticisms of this Bill. I trust the Electricity Commissioners will not think I am casting any reflection upon them. Far be it from me to do so, because there is no body of men who have rendered greater service under more difficult conditions, or have helped the electrical industry, more than the Electricity Commissioners. I think a fundamental error will be committed if this new Board is going to be a department of the Electricity Commissioners. If the new Board is going to be of any service at all, it must be an entirely independent Board. We want a Board with the very best men the country can find; they ought to be business men, and in my opinion we shall not be able to get a very good body of men together if they feel they are simply a department of another quasi-Government department. It should be made perfectly clear that that body will be entirely independent and not under the Electricity Commissioners; and under these circumstances it is essential that there should be an appeal, and that it should lie either to His Majesty's Judges or to some body which is entirely independent—some body which can be appealed to in the case of a dispute between the Commission and the Board and the people with whom they are working.

I consider those are two most important conditions to be fulfilled. I think that the Electricity Commissioners with their advisers will continue to carry out their functions, but the great questions of policy and commercial management should be entirely in the hands of that Board and not subject to the Electricity Commis 1901 sioners or any other body. May I just read a resolution arrived at by the Federation of British Industries on 24th March which I am authorised to read, and which was agreed to nem. Con. by a large number of representatives forming the electrical committee of the Federation of British Industries who had been asked to express their view in regard to this Measure: The Federation of British Industries, while in favour of the Electricity Bill receiving a Second Reading, is not in agreement with various important Clauses in the Bill as at present drafted, including those governing the relations of the Board with the Electricity Commissioners. Might I suggest to the Government that ii would make matters better and remove some of the difficulties if the Board to be set up was elected by the various interests connected with electrical supply such as the Chambers of Commerce, the local authorities and the electrical power companies, and that an independent chairman shall preside over it.

§ Mr. LLOYD GEORGE

We have just witnessed a very interesting duel between two experts. It has been a very instructive one to Members of this House who have not so much knowledge and experience of this problem. I suppose there never has been any proposition or subject affecting the human race either in this world or the next upon which experts have ever been agreed. In that case all we can do is to trust to the commonsense of normal people like ourselves, see what the experience of other countries has been, and then look around and compare it with our own experience. The bon. Member who has just sat down speaks with authority, and he has made a very interesting speech. We have had a speech from the hon. Member for Hampstead (Mr. G. Balfour), but I think I have heard that speech before. I believe it was delivered in 1919 and it has been repeated at suitable intervals since that time. As far as I can see he seems to be the only Member of this House who has come to the conclusion that nothing can be done at all except to trust one another in this matter, which means that the electricity companies escape altogether. I do not think there are many who agree with him in that respect. I will come to the subject matter of the Bill a little later on, but here I take it we are discussing merely the second 1902 reading and questions of principle. We have to decide whether the House is going to take the responsibility of throwing out this Bill, and it is not a question of whether we approve of some very important details in the Measure itself.

I should like to make one or two observations upon what fell from the hon. Member for Hampstead. He said that in 1919 we emerged from the War with very great illusions as to what might or might not be done. We were in a very exalted mood as a result of the great endeavours and sacrifices of the War, and everybody felt that great things ought to be accomplished and could be accomplished for the improvement of the conditions of life in every respect. The hon. Member took two examples to show why these results have not been realised in the course of the years which have elapsed since the War, but I do not think he was on very sound ground. I will take housing, for example. During the three years that immediately followed the passing of the Housing Act 222,000 houses were built and completed in this country. Since then, I believe, houses have been built at a very considerable rate, both when the Labour Government was in power and since, when still more have been built. There has been a steady process of development, and we have to remember that it was the first time we have ever had a great undertaking like that carried out by the State. I hope the Government will go on increasing the number and improving the quality of the houses. It was difficult to mobilise at first. It is true that the houses were also very expensive, but so was everything else at that. time, because all kinds of material were three or four times dearer than before the War. We were building in a period of great inflation, and, consequently, the cost was high. Nevertheless, they were very excellent houses, and they relieved the congestion, although we are not by any means at the end of the scarcity.

Now I come to the Bill of 1919. The hon. Member for Hampstead quoted that Measure as an example of the failure of experts, but I would like to remind him that the only expert responsible for the failure of that Bill is the hon. Member himself. In so far as that Bill has failed it has done so because it was destroyed 1903 in the House of Lords, and the hon. Member for Hampstead himself was partly responsible for that, and even largely responsible. What happened was that the hon. Member, in conjunction with a number of others—and he has organised the same destructive raid now upon this Measure—worked very hard for many months to delay the Bill. First of all, he tried to stifle it and then delay it, and he delayed it so long that he played into the hands of his confederates in the House of Lords, and they used the excuse of it being too late for not allowing it to go through.

I have seen the House of Lords pass Bills in 24 hours which they wished to see passed, and they were Bills of rather a different character. If the House of Lords really wanted that Bill they could have passed it. What happened then is a warning to all those who make it difficult to carry through this Bill. Once a Government finds that a whole Session has been wasted on a Bill it is difficult to get them to face such an ordeal a second time because there are other Ministers waiting at the pool to be put in. Therefore it would be very difficult, and that ought to serve as a warning to those who are still disposed to oppose this Bill. It will be an incitement to the hon. Gentlemen opposite, but it ought to be a warning to others who, on the whole, would prefer to see this Bill through rather than see it fail.

I am glad that the hon. Member for Hampstead is here, because I have heard before his diatribes against interference with private enterprise, the dangers of control, and of interference. Those arguments were all used in 1919. I have heard them again to-day with the same dour insistence, and when the bon. Gentleman passes away from this sphere I have no doubt that he will still be protesting against outside interference with constitutional practice and traditional liberty, and he will probably be right. I ask him to take the words which appear here showing what happened as the result of the operations of himself and his friends in 1919. They are very salient words. The hon. Member said he would not read the Weir Report, but again I think it is worth while quoting to the House of Commons a passage from that Report. They point out that 1904 If the Williamson Committee's Report had been adopted and those recommendations formulated in the Bill of 1919, which were in the Bill as it left this House, in spite of all the criticisms of the right hon. Gentleman if they had been carried then very substantial savings would have been made, electricity would have been cheaper, and our task would have been infinitely easier. We have been greatly impressed by the time element involved in this subject, and regard it as the dominating factor. We have already lost six vital years of electrical progress on a really national scale, and I hope hon. Gentlemen opposite will not listen to the appeals made from the Labour benches or again listen to the appeals of the hon. Member for Hampstead. There are some of these things which are very humiliating. I have never seen a more humiliating Table than that on page 5 of the Report, dealing with the consumption per head of the population in Great Britain and certain other industrial towns in the country. It is not a fair comparison to call in the United States of America, because that is a country with infinite resources and abounding wealth, and probably they do not care how many cents they pay if they want a, thing. On the other hand, when you find Great. Britain with a consumption per head of the population one-seventh of Switzerland and one-fifth of Van Diemen's Land, and about the same proportion in relation to Norway and Sweden, and below Shanghai, by scraping together all the units from private generating stations—

Sir JOSEPHNALL

Is the right hon. Gentleman not aware that there are English cities which are very much above Shanghai?

§ Mr. LLOYD GEORGE

I have never visited that country, but if the hon. and gallant Member does not like to be Shanghaied, let us take Sweden and Norway. [An HON. MEMBER: "They have water power"] If they have water power, we have coal power, and it is by no means settled that water power is cheaper than coal power. We have got the greatest coal power in Europe.

When you find that nine-tenths of our undertakings run to 3d. a unit, and that the average is 2d., and that, if we had this system in operation, we might reasonably anticipate its being brought down to ld., I think it is about time that we should get along with the job. If the Govern 1905 ment can make a better job of it, we shall all be delighted to see it when they give us an opportunity in Committee. Above all. I hope that they will resist strenuously Amendments moved with the sole intent of destroying the Measure, and that they will give greater heed to those who want to get along with the business -Linn to those who want to thwart it. I know perfectly well that the hon. Gentleman will say that this is nationalisation. Well, yes, and so is the Post Office. No doubt it may lead to nationalisation if the thing develops; but what is the good of hon. Gentlemen beginning to get frightened about nationalisation? They are going to have a shower bath of it; they are going to be drenched in it. Take the cash on delivery. What is that but a diversion, by State action, of the trade of a certain class of individuals to others without compensation? These traders in the outer districts, naturally, are not shareholders in great corporations, and that is being done without any compensation. Again, take the coal proposals, which the Prime Minister has swallowed whole, and upon which there is going to be legislation.

I is no use quarrelling about a small measure of nationalisation like this; the hon. Gentleman has got to steel himself for a much greater effort. There is the nationalisation of the whole of the material of one of the greatest industries in this country, and the Prime Minister is pledged to it. There is a proposal for the purpose of municipal trading in coal, and the Prime Minister is pledged to it. With this huge camel, which the hon. Gentleman and his friends have to swallow, what is the good of straining at this little. Easter lamb" The hon. Gentleman has all these things to look at. I must say it is rather a joke that the President of the Anti-Socialist League should have introduced this Bill. He has short-circuited his own opinions. I can see he is wearing a red flower in his buttonhole, which is very significant. Of course, this no doubt is to a certain extent nationalisation, but it is nationalisation in a rubber sheet, so that those who handle it should not be shocked.

The Minister of Transport is very proud of it. He said something about stealing my clothes when I was bathing. I forgive hint I hope they fitted. There is, however, a straight waistcoat here 1906 that did not belong to me. The right hon. Gentleman, in the very peroration with which he concluded, said that the Tory party had a number of very bright ideas which they had generated and which they are prepared to place at the disposal of my hon. Friends here at a very low cost per unit. I have a great respect for the right hon. Gentleman, but I never thought he was a generating station of sparking ideas. I am not at all sure that he is altogether responsible for all this. However, I do not care, provided he really sticks to it and puts it through; that is the thing that matters. With regard to some of the criticisms, I agree with the hon. Gentleman who has just sat down. I hope there will not be these appeals to the Electricity Commissioners. That is really the maximum of interference with the minimum of efficiency. You may have these safeguards and restrictions in order to make the thing absolutely safe, but the danger is that you will have so many safety valves that your steam will be out before it reaches the machine. That is the real danger of this Bill. Therefore, I hope the right hon. Gentleman will not listen to the appeals which were made by hon. Gentlemen sitting behind him.

I should also have liked to have some explanation about how the electricity is to be brought into the rural areas. I was rather terrified, as a countryman, at the alarming prospect of 120,000 volts being turned on to a farmhouse. Instead of milking the cows, they would be electrocuted. I listened with very great interest to the hon. Gentleman the Member for Hampstead, who is an expert, and I thought he was going to explain. There is no doubt at all that the picture given by the hon. Gentleman is not merely an imaginative one of what could be done for the country districts by means of electricity, and I believe that that has been done in the North-Eastern area on a very considerable scale and with very great success; but it would be very desirable if it were explained how it is proposed that this system should convey electricity to the farmhouses of the country. Then there is another point that I should like to put. I am not complaining in the least of the Amendment that has been moved from the Labour benches, in a speech which I thought was a very fine Parliamentary performance, by the right. 1907 hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham). Examining it in detail, I am not sure that there is much in it of which I should not approve, but the point, when you come to a Second Reading, is that you must consider your vote as if it were the determining vote in the Division. You must accept the full responsibility of your vote. You must assume that your vote will either kill the Bill or put it through. I think that that is the only right principle when you are determining the way in which you are going to vote.

I say quite frankly that I would not myself accept the responsibility of this Bill not going to a Committee and an opportunity being given there for examining it. Of course, you might take up the attitude that you will vote against any Measure coming from a Government of which you do not approve; but that, I think, is an impossible position in any Parliament. Therefore, I look at the matter from this point of view: Do I wish to see this Bill go into Commitee, and to see an opportunity afforded to hon. Members, who think in the way that I do, to move Amendments and press them, with a view to improving it, or would I rather that the Bill should be killed? If I thought that the Bill ought to be killed, I should vote for an Amendment, and my right hon. Friend's Amendment is as good a one as you could possibly have for the purpose, because it is unobjectionable from my point of view, though there are one or two things in regard to which I would not go so far. In my view, however, it is a very serious responsibility for anybody to vote against the Bill.

Supposing that this Bill were thrown out, I know it would be said that the Government would have to introduce a better Bill, but, if the majority were so small as to make the Government feel insecure in pressing the Measure through, they would naturally not be as keen about finding time for it as if they knew that it was a fairly safe Measure to be carried through. After all, my right hon. Friend the Prime Minister is fairly prudent in that respect, as all Prime Ministers and ex-Prime Ministers are. Supposing that it were thrown out, supposing that it were not proceeded with, the Government would naturally have in their minds that they would have to face the same set of 1908 difficulties next year and the following year, and, in these circumstances, there is a real danger that nothing would be done. As far as I am concerned, speaking for myself, I will not take the responsibility of delaying for a single year an effort to deal with this problem, although I may not regard it as an adequate Measure in many respects. I think it is vital, in the interests of the industry of this country, that something should be done. We are behind all other countries, in spite of what has been said by the hon. Member for Hampstead. I admit at once that he knows far more about it than I do, but I have been following what has been happening in other countries. They are making greater efforts to link up—

§ Mr. J. JONES

Under public control.

§ Mr. LLOYD GEORGE

Not always under public control.

§ Mr. JONES

Nearly all.

§ Mr. LLOYD GEORGE

Not in Germany or in France, and not in America, though I agree we cannot quite quote America. I am taking continental countries, where the conditions are not very unlike ours. We are not through our trade difficulties by any means. I hope we will get through them in the course of a year or two, or it may be, three. What matters is that, when we come to better trade conditions in the world, we shall be, not merely as well equipped, but better equipped than any of our rivals on the Continent of Europe to take advantage of the demand which will be coming from every part of the world. We are not now. We are behind, and those who were responsible for wrecking the Bill of 1919 must accept responsibility for that. I will not say it is absolutely futile without compulsion, because I heard the speech of my right hon. Friend the Member for Colne Valley (Mr. Snowden), in which he pointed out that some progress had been made: but double the progress could have been made if there had been compulsory powers behind it. What was said by the hon. Member for West Lewisham (Sir P. Dawson) is perfectly true. You will not always have to use the compulsion: but, with the knowledge that it is there, that the power can be exercised, that there is a Board of Commissioners who have in a certain case exercised it, and exercised it drastically—one case would be enough— 1909 the rest would come to terms. Speaking for myself, I feel that, although there are many things in this Bill that I would like to see amended—I would like to see it go very much further still—it represents such real progress in the matter of electrification in. this country, and the equipping of our industries with the electric power that is vital to their progress and prosperity, that I shall be bound to vote for the Second Reading.

§ Mr. WALLHEAD

I do not share the fears which have been expressed by the right hon. Gentleman who has just spoken with regard to this Bill. In my opinion the reason why greater powers were not given in 1919, and why the operations of the hon. Member for Hampstead (Mr. Balfour) were successful, is because of the different psychology of the commercial class of this country and the different economic situation at that time. Then, the commercial class undoubtedly believed, and I think it is a fair thing to say, sincerely believed, that we were in for a fairly long spell of high-power prosperity. Men with whom I came in contact, in Manchester in particular, took the view that we were in for about the biggest 10 years of trade prosperity this country had seen. That has gone. If they had believed we were entering on a period such as we have passed through since 1920, it is fair to assume that there would not have been behind the hon. Member's action the same powers that he did display. This Bill again is based on the economic factors obtaining in this co nary. Our manufacturing class have been compelled by sheer necessity to recognise that they are entering upon a period of international competition in which the factors have changed considerably since the beginning of the War. There is not the slightest doubt that the War, in the minds of many people, has unexpectedly changed the economic current. In our own coal trade we see that arising out of the War various countries have begun to develop powers that enable. them to do without purchasing our coal.

Italy, Argentine, Chile, the South American Republics, have changed their economic character in consequence of conditions brought about in Europe by the War. The same thing obtains here. We 1910 have now got to meet competitors armed with conditions synonymous with our own at the beginning of our own trade change in the earlier nineteenth century. Italy was not behind us in manufacturing power because her workmen lacked skill. Italy is the classic home of artistry and handicraftsmanship in Europe. She is the home of those wonderful City States that produced the great craftsmen of the Renaissance—the States that produced Raphael, Titian and Michael Angelo, and it is not a right assumption that Italy failed to succeed commercially or from the point of view of manufacture, because she had not inherent skill. She had, but she lacked good economic conditions. She had not got access to coal. She had not access to power which will operate machinery to the extent that we had. She had to purchase these things at a price that made their use prohibitive, so far as the production of commodities is concerned, for the international market where we could operate in the way we did. These conditions are passing away. Italy has now begun to manufacture with a power that is as cheap as any power we can have. She has applied electricity, and it is that new economic factor that is behind the Bill here. It may be that this Amendment would destroy the Bill, but I am quite confident that the economic pressure which will be exerted in this country would compel some other Government to bring in a Bill which would be an improvement upon the one we are now discussing. I think that is a factor which needs to be borne in consideration.

I should like to refer to the speech of the hon. Member for Hampstead. The exigencies of his case led him into some most interesting contradictions. He told us we were not behindhand from the electrical point of view, that from the point of view of electrical appliances and machinery and the power to manufacture all the things required for electrical production, we were practically supreme in the world, and that our engineers were equally competent with the engineers of any other country. He told us the reason we were behind was that we had been governed by experts. I should, imagine if one were to. take a look round the country one would wonder where the expert had been brought in, and of what the expert advice had consisted upon which our manufacturers and producers had acted. I am amazed that that kind 1911 of opposition should still come from Members of the party opposite. I should have thought our experience in various walks of life, and in various periods, would have been enough to show that it was about time we began to act very definitely upon the advice of experts. We are all concerned at present in the question of the transportation of people from London to the outskirts, and their ingress in the next 12 hours.

If, some comparatively few years ago, the expert advice of Brunel, the Great Western engineer, had been acted upon, and if vested interests had not stood in the way of the adoption of the wide gauge railway, the condition of our cities would have been vastly different from the point of view of transportation. We should have had wide railway carriages, and engines of greater power drawing greater loads, bringing in more people per train, and travelling at a higher speed, and the difficulty we now have of transporting our people in and out of the great centres of industry, and of London in particular, would not have existed if expert advice had been acted upon and the operations of vested interests had been rejected. It is, I believe, an admitted fact that if the advice of Brunel had been taken, our trains would have been travelling to-day at 100 miles an hour instead of the maximum of about 60 that they are doing. That would have been a tremendous advantage from every point of view, and, although it might have been at the moment perhaps rather more costly to accept the wide gauge and reject the narrow, in the end it would have been a profitable thing. It would have paid succeeding generations. It would have saved them the loss to which they are subjected now. From every point of view the advice of the experts would have been better.

The right hon. Gentleman himself brought about some rather serious conditions contradictions. I cannot for the life of me understand, if he admits that we lead the way so far as electrical engineering is concerned, why he should suppose that the electrical engineering experts who are going to advise this new Board should at once become impotent. I had the pleasure of serving for four wars on the Electricity Committee of the 1912 Manchester Corporation. I was a member of the Committee when we inaugurated one of the great super-power stations in the country, and the engineer upon whose advice we acted, Mr. S. L. Pearce, has now joined the expert Commissioners who are going to advise this new Board. I refuse to believe that he is any less wise or clever now than he was then. I refuse to believe that his advice will be less valuable than it was six or seven years ago. As a matter of fact, it would appear to me that we have in this country a body of experts to whom we can turn for advice second to none in the world, and I am quite prepared to believe that we shall not fail, so far as expert advice is concerned, so long as these gentlemen have the advice to offer which is at their disposal.

The hon. Member for Hampstead wont on to tell us we were making a very great departure in constitutional practice. I admit that this Bill is a departure from what I should consider constitutional practice, but from a totally different point of view from that which he mentioned. We are not departing from constitutional practice because this Bill contains an element of nationalisation. That is not new. We are not departing from constitutional practice because there is an element in it of municipal Socialism either. None of these things are new to our practice. They are old. They have been acted upon almost for a century, and so far as they have gone, ill-effects have not followed on their operation. Where we are departing from constitutional practice—it is a part of the Bill that I view with tremendous apprehension-4s that we are for the first time in the history of our public life setting up a body of private persons, operating as a private company for private gain, who have powers of control and dictatorship over the municipalities.

That is a departure which cannot be regarded with equanimity by those who watch with jealous care the advance of our municipal administration. I cannot find any justification for that. It is admitted in this Report of the Committee that our great municipalities have, with rare exceptions, supplied electricity at cheaper rates than any other power-producing concerns. Glasgow, Liverpool, Manchester and Leeds supply electricity at ½d. a unit plus a quarterly charge, and 1913 current can be supplied to houses for heating, lighting, cooking and cleaning purposes at about 2s. 9d. per week. That these should be placed under the control of a private concern, whose shares have become gilt-edged securities and which operate for private gain, is to my mind an unthinkable proposition and one which I shall oppose with all the powers I have at my command.

I am supporting the Amendment. My objection to the Bill is not that it is not an improvement upon the present condition, but that it does not give us the best results. We are all going to admit that electricity is a very desirable thing to have. It is something that ought to be supplied in the widest possible form and to the widest possible extent. It is a clean and a healthy light. From the optician's point of view, it is goad to use as an artificial light. It is from every point of view desirable. We are not getting the best results that we possibly could. Even if the recommendations of the Weir Report were carried out to the fullest extent, we are not likely to get electricity at less than an average of l⅓d, per unit until 1940, and to get that there is to be an expenditure of nearly £250,000,000. After the experience which the Government have had already, I think they might just as well have gone the whole hog instead of being shot at for what they are doing. They would not have been more attacked in their own party had they accepted the logical outcome and have brought in a Bill that would have given us absolute national control.

The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) twitted the Prime Minister on the fact that he was pledged to the Coal Commission's Report. He said that the Prime Minister hail to swallow municipal trading in coal and that he had to swallow a good many other things in that Report. If the Government accept the Coal Commission's Report, might I direct their attention to page 223 of that Report, which states: The development of electrical supply under the new proposals of the Government should be closely co-ordinated with the generation of electricity at the mines. That is where this scheme breaks down, that there is not that co-ordination which is necessary and essential if we are to have the best electrical supply and trans 1914 mission system that can be obtained. In this country we are second to none as far as the power to produce electricity cheaply is concerned. When the Canadian electrical engineers visited the great Stewart Street station in Manchester some years ago, they said that Manchester had got Niagara Falls beaten to a frazzle, and that from the point of view of cheapness of production Manchester could produce cheaper than could the engineers operating at Niagara. If that statement were true, and I have no reason to doubt it, and Manchester had to bring its coal in some cases long distances, it seems to me that if generation were carried out as near to the source of coal supply as possible, we might be proceeding from a more efficient point of view. The proposals that were put before the Coal Commission hold the field so far as logic is concerned. Then party to which I have the honour to belong have put before the country their own proposals for dealing with this matter. They say: The question is not merely the coordination of two industries, coal and electricity, but of several—coal, electricity, gas, oil, chemical products, blast furnaces, coke ovens, etc. Two or more methods, dealing with two, three, or more of these, may be used simultaneously in Combination, one feeding the other. But the point of importance is that no obstacles, whether of State regulation or industrial organisation, should be placed in the way of the development of such combinations, in whatever manner engineering and chemical skill, and the economic conditions, may indicate as the most suitable. That seems to be the logical outcome of the situation. If this country is to regain its position we must see that our development is maintained at a higher point of efficiency. I am eager to see certain economic changes made in the economic structure of the country. I want to see production come to the point when wealth will be so plentiful that there shall be plenty for all, and not the skimpy portion that some people get at the present time. It should be our business in this House, with the supreme power that this House carries with it, to use our power to the fullest possible extent to co-ordinate every atom of energy we possess in all these various forms, for the public and the national good, in order that we may get the expansion which is necessary for the bringing about of a fuller life than our people 1915 enjoy at the present time. It is for these reasons that I have the greatest possible pleasure in supporting the Amendment.

§ Major Sir RICHARD BARNETT

I wish to state very briefly the reasons why, as a loyal supporter of the Government, I find it difficult, if not impossible, to vote for the Second Reading of this Bill. My first difficulty is that I am a Conservative and I do not consider that it is any part of the work of the Conservative party to set up a great bureaucracy to control and dominate one of our key industries. It is matter of common consent that the main purposes of the Bill are good—the coupling up of power stations and the standardisation of frequency. Cheapness is alleged to be the great motive of this Bill. If we examine the Bill closely we see that any cheapening of electricity is only to be arrived at after 14 years, when the average cost of generation all over the country is to be twice what it is at our best stations in London today. The hon. Member for Luton (Captain O'Connor) laid stress yesterday upon the fact that neither in the Bill nor in the speeches in support of it bad any reference been made to cheapness to the consumer.

§ The MINISTER of TRANSPORT (Colonel Ashley)

Provision is made in the Bill that economies effected are to be passed on to the consumer.

§ Sir R. BARNETT

Any economy in the cost of current brought about by this Measure will have to be paid for. There are large capital charges involved in this Bill, and those charges must eventually increase the price of current. It is extremely doubtful whether after 14 years there will be the saving of 40 millions which is claimed or even four millions. The hon. Member for Lewisham West (Sir P. Dawson) quoted a good many authorities, electrical engineers and others, in favour of the principle of the Bill. I will quote anot