§ 7.41 p.m.
§ Mr. ALED ROBERTS
I beg to move, in page 4, line 40, at the end, to add:Provided also that the provisions of this sub-section shall not come into operation in the area to which the North-West England and North Wales Electricity Scheme, 1928, relates unless and until—We have put down this Amendment as the result of what happened in the Debate on the Second Reading, when I drew attention to the fact that the second portion of the Clause would operate very unjustly. I was able to point out how it would work in North Wales, and particularly the unfortunate way in which a community might be penalised by the high cost of electric current. The Minister said in reply, that if we could devise some Amendment which would come within the ambit of the Clause he would be prepared to look favourably upon it. Presumably, as it has been the Amendment comes within the ambit of the Clause, and I hope the Minister will look favourably upon it. In looking at the position broadly, I cannot. see any reason why the Amendment should not be agreed to, at any rate in principle. I do not want to go over all the points that I made last week in the Debate on the Second Reading of the Bill but I would remind the Committee that it is possible that while this provision will enable an authorised undertaker to pool the cost of transmission lines under his control, which would be a very good thing in the majority of instances, there are cases, as suggested in the Amendment, where it will work very hardly.
and in considering any similar matter or question which may be submitted to them under any existing enactment the Electricity Commissioners shall have regard to the terms of this proviso.
- (a) at least one existing or new generating station in the portion of that area which is situate in North Wales is a selected station; or
- (b) the Central Electricity Board shall have acquired or constructed such main or other transmission lines in the said portion of the said area as shall enable
1669 a supply of electricity to be afforded directly from such mains to any authorised undertakers therein;
In the North West of England and North Wales we have one electricity area set up under the scheme of 1928. That electricity area covers an area of 9,000 square miles, and nearly half of that area, some 4,400 square miles, are in North Wales, Monmouthshire, Cheshire and. Shropshire. We are a scattered area, but we have to take our supplies under the national scheme and the national grid. We are coupled with Lancashire, Westmorland and Cumberland The Central Electricity Board, under the terms of the Act of 1926, have selected certain stations in that area, but they have not selected one, in North Wales Where they have selected stations they have coupled them up by main transmission lines, as instructed to do in the Act, 1670 and they have laid other lines to join the central grid to authorised undertakers.
At the northern end of this area are Cumberland and Westmorland, whose geographical character is very similar to that of North Wales. When the scheme was approved we had in North Wales the North Wales Electric Power Company, which had been in operation for some years. They had laid down certain lines and entered into certain arrangements with authorised undertakers. Because those lines were in North Wales, the Central Electricity Board leaves us out of the scheme altogether. They say: "You have certain lines there, and you have to get on with them. You have gone a little ahead of the times, and because you have been enterprising, you have to pay for it. We are having nothing to do with your lines in North Wales." To Cumberland and Westmorland they said: "You have not been enterprising and have not a power company. Therefore, we will build your lines." Those lines have been put up and the cost of those lines and the cost of maintenance and interest upon them has to be added to the grid price of current for the North West of England and North Wales area. The consumers in North Wales have to pay a price which includes all the maintenance costs for Lancashire and the North. Because we have a selected station and lines of our own we have to pay for all these other lines. The result is that the grid price of electricity in the North-Western part of the area is £3 7s. 6d. per kilowatt—that is what they pay in Lancashire for electricity delivered to the undertakers—whereas in North Wales we have not only to pay £3 7s. 6d. but, on the top of that, the cost of our own lines, £4 15s. 0d. per kilowatt. That is grossly unjust to the area.
We have all the facilities in North Wales to enable us to develop our area as we should, and as we desire. We have coal, transport, water and agriculture, and if we want to develop we are entitled to do so. But every time we make any such suggestion we are asked: What is the price of electricity? It is in fact about two and a-half times the price paid in England, and it must always be remembered that it is the same electricity area. I cannot see any justice in such 1671 discrimination between two places carrying on the same kind of development. Some people may say that they do not object to Rhyl competing with Southport, but it must be remembered that Southport is getting its electricity much cheaper than Rhyl, as Rhyl has to pay the same price as Southport for electricity plus all the costs of the main transmission lines all over North Wales. Similarly, in Wrexham we have coal, but we have to pay much bigger prices for electricity from the same grid than the people in Wigan, a somewhat similar area. Again, Holyhead, which is a town carrying on a trade very similar to Heysham and Fleetwood, is placed at a very unfair advantage compared with these other towns.
The object of the Amendment is not to prevent or upset the operation of the Clause. Most of us agree that undertakers should be entitled to pool the cost of local transmission. lines, but we do say that North Wales ought to be put right before that principle is applied to North Wales. If we get left out now we shall have an awful job in getting back. We have done the best we can by approaching the authorities, and although we have been met very kindly it does not settle the principle. We want the House of Commons to settle the principle. We want conditions laid down in the Bill which will compel the authorities to give us fair play in North Wales. There are only two ways in which this can be done. One is by having a selected station in North Wales. If we got that then the Central Electricity Board would have to put up main transmission lines and connect local undertakers. Our difficulties would be at an end if we got a selected station.
It has been said that an hydro-electric power station is not very suitable, presumably because the amount of water necessary is not sufficiently reliable. We have had two of the dryest summers ever known and our hydro-electric plant has been running satisfactorily. There is a selected station in Lancashire and, therefore, there is plenty of room for the supply of additional current when we want to take a big load. At the present moment we have a line from Crewe for 93 miles, one transmission line going to Maentwrog where there is one of the biggest hydro-electric power stations in 1672 the country. We are supposed to be on the grid; it is there to supply us with electricity and to make sure that if one of our stations break down we shall be supplied with current. I was amazed, when the proposed terms for North Wales were published, to find that the maximum demand in North Wales is about. 26,800 kilowatts this year, and that in 1938 it would go up to 37,600 kilowatts, that is according to the scheme of the Central Electricity Board. The line which connects North Wales to the grid, and there is only one, will take only 15,000 kilowatts. Here you have a national scheme to make sure that everybody connected can get a supply of electricity, and the full capacity of the one line for North Wales—an area with a normal maximum demand of nearly 30,000 kilowatts—is only 15,000 kilowatts. The Central Electricity Board are not being asked to do anything out of the way when they are asked to put up main transmission lines in North Wales capable of carrying the amount of current required for the area. In other parts of the area, the lines are constructed to carry 50,000 kilowatts, and we are left with 15,000. The alternative to a selected station is that the Central Electricity Board should take over the line themselves. There is no considerable difficulty about that. There is a line belonging to the North Wales Power Company, but I do not suppose they would raise the slightest objection to selling if they got the right price.
The plain fact is that unless something be done quickly the consumption of electricity in North Wales will not increase, as it is in other parts of the country, because the price is too high. In that case you will not get the additional turnover which is required to reduce your overhead costs and to reduce the price of the current. The other day I gave the House an example of what is happening in our area. In my own division a firm of chemical manufacturers actually spent between £70,000 and £80,000 in putting up a plant because they could not afford to buy electricity from the board, and in other parts you have smaller firms who are running their plant down with a view to taking their supplies from the grid. When people in one part of an area pay three times as much for their raw current as those in another part there is something very wrong with 1673 the national scheme. The only other point referred to in the Amendment is that the North Wales Power Company have a private Act which was passed last Session, and in Section 8 they have power to pool the cost of transmission lines in North Wales. If the Government look favourably on the Amendment, it will be necessary to prevent that Section coming into operation. I hope the Minister of Transport will give us some encouragement.
§ 7.51 p.m.
§ Major OWEN
I desire to support the Amendment. The price of electric current in the North Wales area has been exercising the mind of all local authorities for a considerable period, and attempts have been made from time to time, by deputations to the commissioners and the Minister of Transport, to get some amelioration of the conditions obtaining in the area. So far we have had little encouragement. Parliament in an Act of Parliament decided that electric power and current should be supplied to the country at the lowest possible cost, and for that purpose they sub-divided the country into various areas. North Wales was coupled with Lancashire, Cumberland and Westmorland. Logically, if there were any sense at all in coupling North Wales with these three counties it was with the object of getting an equal price over the whole of the area, and I cannot understand why, having formed this one group, someone somehow should again sub-divide it with the result that those who require electric current in North Wales have to pay three times as much for it as those using the same current from the same grid in another part of the area. The price to the consumer in Lancashire is.347d., and that includes all distribution costs and everything else. In North Wales, without taking into account the distribution costs the price per unit is 1.101d., practically three times as much. An arrangement of that kind is bound to stultify the whole object of the legislation.
I was glad to hear the way in which the Minister of Transport referred to the speech made by the hon. Member for Wrexham (Mr. A. Roberts) a few days ago. For the first time for some years, during which many of us have been trying to remedy the conditions in North 1674 Wales, we heard some words of hope. They have been taken throughout the whole of North Wales as some indication on the part of the Government that the conditions are to be remedied. Let me read the words of the Minister of Transport:My hon. Friend the Member for Wrexham (Mr. Aled Roberts), in a most helpful speech, felt that the grid should take over the lines belonging to private power companies, in order that they might be charged less for their electricity coming from the Central Board. I say to him that that proposition is likely to be resisted by the power companies, but if within the ambit of the Clause he can devise an Amendment which would commend itself to the House, I shall be most happy to view it with favour."—[OFFICIAL REPORT, 29th November, 1934; col. 1134, Vol. 295.]I appeal to the Minister. He has been good enough to respond to some appeals that have been made to him during the course of the Debate to-night, and I appeal to him not to raise the bogey of the power companies. I think the actual consumption of units in the north-western area is over 3,000,000,000 per annum. In North Wales we consume a comparatively small amount of that. The extra charge involved, spreading the cost of the transmission lines over the whole area, would not raise the price of electricity to Lancashire, Westmorland and Cumberland more than a fraction of a decimal point. A line costs somewhere between £140,000 and £150,000. The estimate of the Central Electricity Board for the area was somewhere about 20 times as much. The power company has actually put up these lines at a much lower cost than the estimate of the Central Electricity Board.
I press upon the Minister that he should help the whole of North Wales in this matter. We are looking forward to establishing new industries there. Some are being established now. We require them badly. We have facilities in North Wales and ideal conditions for the establishment of new industries but we are up against this difficulty, that no industry of any value will come to that area so long as current is going to cost what it is costing there to-day. I ask the Minister therefore, not merely to give the matter favourable consideration, but to accept some proposal on the lines of the Amendment so that at last we may be able to get new industries into that area, so that individual consumers may get their light 1675 and power at a reasonable price and so that we may give some help to one of the most struggling of our industries, namely agriculture, which at the present time needs this help as much as any other industry.
§ 8.3 p.m.
Miss LLOYD GEORGE
I also ask the Minister to accept this Amendment. Speaking on an earlier Amendment, the hon. Gentleman told us how anxious he was that complete justice should be done in this matter. I think the situation as it exists in North Wales can neither be justified nor condoned. We are paying the penalty there of being progressive. We are paying the penalty of being enlightened. We laid down transmission lines before other areas had even contemplated doing such a thing. We are still paying for them and we are now paying also a proportion of the costs of the Lancashire and Cumberland transmission lines. We are not here asking the Minister to do something which is going to put an insupportable burden on other areas. It has been estimated that if the transmission lines were taken over, it would cost the consumers in the other areas probably an increase of 4 or 5 decimal points of one penny. I cannot help feeling that that is negligible compared with the burden, I might say the imposition, borne at the moment by consumers in North Wales.
The high price of electricity is a handicap upon business and trade. It is a handicap, first of all, on businesses which are already established. To give an example from my own constituency, the town of Holyhead has to pay more for its electricity than two of its important competitors, Heysham and Fleetwood, and yet they are all in the same area. It is no small difference. It is not a difference of 4 or 5 decimal points of a penny. It is the difference between £3 12s. 8d. and £8 7s. That is an enormous addition to overhead charges. These high prices are also a serious check to development. We have in North Wales several distressed areas which are seeking to attract new industries, but although we have many advantages, which other parts of the country do not perhaps possess, the price of electricity is hardly an inducement to new industries to go there. The Minister said the other day that the greater the 1676 consumption the cheaper would be the price. There is a point, however, at which the price is so high that consumption cannot increase to any extent, and that is the position in which we find ourselves at the moment in North Wales.
We have large agricultural areas which are undeveloped as far as electricity is concerned and they are very important potential customers, apart from the fact that agriculture has need of electricity as much as any other industry. But it is quite impossible, speaking for my own area at any rate, for the supply to be extended with prices at their present level. For all these reasons I most earnestly ask the Minister not merely to give this matter sympathetic consideration, but to give it serious consideration. If he cannot accept this Amendment perhaps he may find some other form of words which would be more acceptable to him and would achieve our object.
§ 8.8 p.m.
§ Major LEIGHTON
I do not propose to detain the Committee for long but I do not think that gallant little Wales should be allowed to conduct this fight entirely by itself. There is a, very important agricultural industry in North Wales and I think the Minister might give serious attention to this question with a view to helping it. If the costs are pooled it will not involve a very large charge on consumers in Lancashire and elsewhere, whereas if we can get cheaper electric power into our agricultural districts, it will be possible to produce food more cheaply. Thus while the Lancashire people might have to pay a. fraction more for their electricity they would, at the same time, be able to buy their food more cheaply. I would add my voice to those of the Members who have already spoken in asking the Minister not to turn down this proposal but to give it careful consideration.
§ 8.9 p.m.
§ Mr. HORE-BELISHA
There are many inequalities and injustices in life arising from different causes such as size, weight and geographical position and I am sorry that the geographical position of North Wales in this case puts it at some disadvantage—conpensatcd for, however, by the powerful eloquence with which it asks for some readjustment. When I heard the voice of my hon. Friend the Member for Anglesea (Miss Lloyd 1677 George) my heart was very much moved, and I cannot tell her what unbounded pleasure it would give me to concede what she asks, if I could really understand what it was that she required me to do. But I am in some difficulty about this matter. Section 12 of the Act of 1926 provides that where any authorised undertakers take a supply of electricity from the Board, the price to be charged by them for the supply of electricity in bulk to any other authorised undertaker shall be on the same terms as those on which they have received it, plus an allowance in respect of the transmission lines. This Bill, amending that section, says that if it is made to appear to the Electricity Commissioners by any authorised undertakers or railway company that it is in the general interests so to do, the Commissioners may direct that the charges and allowances shall be pooled. That is to say that instead of trying to isolate one particular line and to acid that to the cost of the electricity supply, they may pool the costs of the whole system.
That is a mathematical improvement in the method. It enables to be done easily what was previously done in a more difficult manner. In this improvement the North Wales Power Company were pioneers because before this Bill was ever introduced they came along with their own Bill and asked for that system, and Parliament conceded what they asked. Under their local Act of last Session, they obtained the right to have this pooling system. That was on the initiative of the North Wales Power Company. This Bill adds to their local power by enabling the Commissioner to act not only on the initiative of the power company but on that of any authorised undertakers or railway company. Therefore, at the request of any of those bodies transmission costs can be pooled as can be done now at the request of the North Wales company themselves. Now we find this Amendment which asks that there shall be no pooling in North-West England and North Wales—and therefore the Lancashire Power Company is calmly to be deprived of its advantages under the Bill although it is not in North Wales—that this Sub-section as to pooling on the initiative of any of these bodies, is not to come into operation until a generating 1678 station has been provided for North Wales or until the Board has acquired the transmission lines in the area.
To be perfectly candid with the Committee, that proposal does not seem to me to be reasonable. Why should the Commissioners in deciding, at the request of someone in the area, that the costs of transmission have to be pooled say, "That is very sound in principle; that facilitates our task in determining how to apportion these costs which cover a whole network of lines, but it must not be done in North Wales, nor indeed in North-West England until North Wales has been provided with a selected station or until the Board has brought up the lines belonging to the North Wales Power Company." I cannot see the logic of such a position. I can appreciate that there is a grievance owing to the geographical position of North Wales—owing to the fact that it is not on the main transmission lines going from England to Scotland or that it is not in some other part of the United Kingdom. But what that has to do with these proposals I cannot see. My hon. Friends who have spoken will believe me, I am sure, when I say that if there is anything that I can do for them, as I said on the Second Reading, within the ambit of the Bill, I shall be only too glad to do it. But I would ask them to put down a proposal which has some relation to the realities of the case.
It is because I cannot appreciate what is the relevance of the Amendment to this Clause that I am not, in a position to accept it. I would call attention further to this small detail: We were told on the Second Reading by the hon. Member for Wrexham (Mr. A. Roberts), in that helpful speech which he made in supporting the whole Bill, that the cost of the transmission lines in North Wales was £140,000 or £150,000. The hon. and gallant Member for Carnarvonshire (Major Owen) repeats that, and says that it is a very small cost to he put on the industrial population of Lancashire, which has to bear the charge. But I am told that they have left out a nought, and that the cost will be £1,400,000 to £1,500,000. That is quite a different proposition. What one might be justified in doing at a cost of £100,000 or £150,000 one would not be justified in doing at a cost of £1,500,000.
§ Major OWEN
Our reply is that we are paying for the cost of transmission lines which the Central Electricity Board built in Northumberland and Westmorland, but they pay nothing towards the cost of our lines.
§ Mr. HORE-BELISHA
That is easily answered. But I do not want to be guilty of any inaccuracy, because I am told that my words are awaited with much expectation in Wales and that the interpretation put upon them is not always confined to their literal intention. I base myself, as I must do, on the sound foundation of my general argument. I repeat that if I can help my hon. Friends within the scope of this Bill in some relevant manner, I will do it. They are quite right to call attention to their grievance and I am sorry that they have so quickly repented of the course they took in promoting their own local legislation last Session.
§ 8.18 p.m.
§ Mr. A. ROBERTS
The last thing I would like is that the Minister should think we are a, lot of illogical people and that he really cannot understand the object of this Amendment. I tried to make it clear and perhaps I may make it a little clearer still. It is a great mistake to mix up the North Wales Power Company with the people of North Wales. The North Wales Power Company is the North Wales Power Company. It has its job to do and money to pay. The people of North Wales are a different entity altogether. It may be of interest to the Minister to know that I understand that the representatives there, the Joint Electricity Authority, are playing up pretty high about this thing, and saying that they may as well go out of existence if they cannot do something better than is being done by the North Wales Power Company now. The real object in moving the Amendment was this: This is a national grid. We know that under Section 12 of the Act of 1926 the method of charging is laid down and that this Bill is going to amend that method of charging by enabling local pooling. Section 4 of the 1926 Act, which lays down the duties of the Central Electricity Board, clearly states that their duties are toprovide for interconnection, by means of main transmission lines to be constructed 1680 or acquired by the board, of selected stations with one another and with the system of authorised undertakers.We have not got main transmission lines now connecting us with selected stations, that is to say transmission lines which are capable of doing the job which North Wales is entitled to expect. I have said that our lines carry only 15,000 kilowatts. In the event of a breakdown they would have to carry 26,800 kilowatts, and eventually 38,000 kilowatts. Surely that is a justification for trying to get at the principle which the 1926 Act was introduced to provide. We want to get a national supply of electricity. The local Bills have nothing to do with us. We have to put up with them; we cannot avoid it. What we do know is that when the Bill of the North Wales Power Company came before a Select Committee upstairs the Clause which they asked for was turned down and another substituted. It had much the same effect, but the Committee would not have the company's Clause. Most of the local authorities in North Wales objected very strongly, before the Select Committee, to having that Clause put in at all. We should never have moved this Amendment if we had any hope of getting the 1926 Act applied. Section 4, sub-section (5) of the 1926 Act gives power to the commissioners to amend any scheme. We want the North Wales scheme amended so that we can come in on fair terms. But we have had little encouragement. We have seen the authorities and seen the Minister in the past, and the only thing left for us now is to ask the House of Commons to do it for us.
§ 8.22 p.m.
§ Mr. HORE-BELISHA
It is clear that what my hon. Friend wants is a revision of the whole scheme. He will never get that without calling attention to it. The Clause dealing with pooling and pooling only is not the Clause which I could use for the purpose of reviewing the provisions of the 1926 Act. I am told that there is no economic ground upon which my hon. Friend can base himself, and he will realise the difficulty he places me in by asking me to accept his Amendment.
§ 8.23 p.m.
§ Major OWEN
What we object to is the present method of pooling. We are left out of the pool in the North- 1681 Western area That is what we object to. In Lancashire and Cumberland and Westmorland they use more current than we do; it is a far bigger area. What we object to is that actually in the price that we pay for the grid supply we pay part of the cost of the main transmission lines in the North-Western area, and the North-Western area pays nothing towards the cost of our transmission lines in North Wales. What we ask for is a plain matter of common justice and common sense. What on earth is the object of creating an area and then splitting it up again? Why was not North Wales made an area by itself under the Act to begin with? The whole object of that legislation was to enable the whole area to get
§ its current at the same price and the lowest possible price. Instead of that, Holyhead, for instance, has to pay more than any place in the whole country, in spite of the fact that we have agreed to a pooling system which was introduced by the North Wales Power Company. We are not concerned with the company but with the consumers of North Wales, and what we ask is a very simple thing—that we get a selected station in North Wales, and of necessity the transmission lines will be taken over by the board.
§ Question put, "That those words be there added."
§ The Committee divided: Ayes, 52; Noes, 148.1683
|Division No. 10.]||AYES.||[8.26 p.m.|
|Acland, Rt. Hon. Sir Francis Dyke||Griffiths, T. (Monmouth, Pontypool)||Owen, Major Goronwy|
|Addison, Rt. Hon. Dr. Christopher||Groves, Thomas E.||Paling, Wilfred|
|Attlee, Clement Richard||Grundy, Thomas W.||Parkinson, John Allen|
|Batey, Joseph||Hall, George H. (Marthyr Tydvil)||Russell, R. J. (Eddisbury)|
|Bevan, Aneurin (Ebbw Vale)||Hicks, Ernest George||Salter, Dr. Alfred|
|Brown, C. W. E. (Notts., Mansfield)||Holdsworth, Herbert||Smith, Tom (Normanton)|
|Cocks, Frederick Seymour||Janner, Barnett||Strauss, G. R. (Lambeth, North)|
|Cove, William G.||John, William||Thorne, William James|
|Curry, A. C.||Jones, Henry Haydn (Merioneth)||Tinker, John Joseph|
|Daggar, George||Jones, Lewis (Swansea, West)||West, F. R.|
|Davies, David L. (Pontyprldd)||Lansbury, Rt. Hon. George||Williams, David (Swansea, East)|
|Dobble, William||Lawson, John James||Williams, Edward John (Ogmore)|
|Edwards, Charles||Leighton, Major B. E. P.||Williams. Dr. John H. (Lianelly)|
|Evans, David Owen (Cardigan)||Logan, David Gilbert||Young, Ernest J. (Middlesbrough, E.)|
|Gardner, Benjamin Walter||Lunn, William|
|George, Major G. Lloyd (Pembroke)||McEntee, Valentine L.||TELLERS FOR THE AYES.—|
|Greenwood, Rt. Hon. Arthur||Maclean, Neil (Glasgow, Govan)||Mr. Aled Roberts and Miss Lloyd|
|Griffith, F. Kingsley (Middletbro'.W.)||Mander, Geoffrey le M.||George.|
|Griffiths, George A. (Yorks.W.Riding)||Maxton, James|
|Acland-Troyte, Lleut.-Colonel||Dickie, John P.||Law, Richard K. (Hull, S.W.)|
|Adams, Samuel Vyvyan T. (Leeds, W.)||Duncan, James A. L. (Kensington, N.)||Leech, Dr. J. W.|
|Agnew, Lieut.-Com. P. G.||Edmondson, Major Sir James||Lees-Jones, John|
|Allen, Lt.-Col. J. Sandeman (B'k'nh'd)||Ellis, Sir R. Geoffrey||Lewis, Oswald|
|Amery, Rt. Hon. Leopold C. M. S.||Elmley. Viscount||Liddall, Waiter S.|
|Apsley, Lord||Everard, W. Lindsay||Lindsay, Noel Ker|
|Aske, Sir Robert William||Fremantle, Sir Francis||Little, Graham-, Sir Ernest|
|Assheton, Ralph||Gledhill, Gilbert||Loftus, Pierce C.|
|Baldwin-Webb, Colonel J.||Glossop, C. W. H.||Lovat-Fraser, James Alexander|
|Birchall, Major Sir John Dearman||Gluckstein, Louis Halle||Lumtey, Captain Lawrence R.|
|Bowyer, Capt. Sir George E. W.||Graham, Sir F. Fergus (C'mb'rl'd, N.)||Mabane, William|
|Brass, Captain Sir William||Grattan-Doyle, Sir Nicholas||Mac Andrew, Capt. J. O. (Ayr)|
|Broadbent, Colonel John||Grimston, R. V.||MacDonald, Rt. Hon. J. R. (Seaham)|
|Brown, Ernest (Leith)||Gunston, Captain D. W.||McEwen, Captain J. H. F.|
|Browne, Captain A. C.||Guy, J. C. Morrison||McLean, Major Sir Alan|
|Buchan-Hepburn, P. G. T.||Harvey, Major S. E. (Devon, Totnes)||McLean, Dr. W. H. (Tradeston)|
|Burghley, Lord||Headlam, Lieut.-Col. Cuthbert M.||Macmillan, Maurice Harold|
|Burnett, John George||Heneage, Lieut.-Colonel Arthur P.||Magnay, Thomas|
|Cadogan, Hon. Edward||Hope, Sydney (Chester, Stalybridge)||Manningham-Buller, Lt.-Col. Sir M.|
|Campbell, Sir Edward Taswell (Brmly)||Hore-Bellsha, Leslle||Margesson, Capt. Rt. Hon. H. D. R.|
|Chapman, Sir Samuel (Edinburgh, S.)||Hornby, Frank||Molson, A. Hugh Elsdale|
|Christie, James Archibald||Horsbrugh, Florence||Morgan, Robert H.|
|Clarke, Frank||Hudson, Capt. A. U. M.(Hackney, N.)||Morris, Owen Temple (Cardiff, E.)|
|Clayton, Sir Christopher||Hume, Sir George Hopwood||Morrison, G. A. (Scottish Unlver'ties)|
|Cooke, Douglas||Hurst, Sir Gerald B.||Normand, Rt. Hon. Wilfrid|
|Courtauld, Major John Sewell||Insklp, Rt. Hon. Sir Thomas W. H||O'Donovan, Dr. William James|
|Crooke, J. Smedley||Jamleson, Douglas||Orr Ewing, I. L.|
|Crookshank, Capt. H. C. (Gainsb'ro)||Joel, Dudley J. Barnato||Patrick, Colin M.|
|Croom-Johnson, R. P.||Ker, J. Campbell||Pearson, William G.|
|Crossley, A. C.||Kerr, Lieut.-Col. Charles (Montrose)||penny, Sir George|
|Dawson, Sir Philip||Kerr, Hamilton W.||Perkins, Walter R. D.|
|Denman, Hon. R. D.||Kirkpatrick, William M.||Petherick, M|
|Denville, Alfred||Lamb, Sir Joseph Quinton||Peto, Geoffrey K.(W'verh'pt'n,Bilston)|
|Pybus, Sir John||Siater, John||Todd, A. L. S. (Kingswintord)|
|Radford, E. A.||Smiles, Lieut.-Col. Sir Waiter D.||Train, John|
|Ramsay, Capt. A. H. M. (Midlothian)||Smith, Sit J. Walker (Barrow-in-F.)||Turton, Robert Hugh|
|Ramsay, T. B. W. (Western Isles)||Somerset, Thomas||Wallace, Captain D. E. (Hornsey)|
|Reed, Arthur C. (Exeter)||Somervell, Sir Donald||Wallace, John (Dunfermline)|
|Reid, David D. (County Down)||Soper, Richard||Ward, Sarah Adelaide (Cannock)|
|Reid, William Allan (Derby)||Southby, Commander Archibald R. J.||Wardlaw-Milne, Sir John S.|
|Remer. John R.||Spencer, Captain Richard A.||Warrender, Sir Victor A. G.|
|Renwick, Major Gustav A.||Spens, William Patrick||Williams, Herbert G. (Croydon, S.)|
|Rhys, Hon. Charles Arthur U.||Stanley, Rt. Hon. Oliver (W'morland)||Wills, Wilfrid D.|
|Rickards, George William||Stevenson, James||Womersley, Sir Walter|
|Roberts, Sir Samuel (Ecciesall)||Stewart, J. Henderson (Fife, E.)||Worthington, Dr. John V.|
|Robinson, John Roland||Strauss, Edward A.||Young, Rt. Hon. sir Hilton (S'v'noaks)|
|Rosbotham, Sir Thomas||Strickland, Captain W. F.|
|Ross Taylor, Walter (Woodbridge)||Thomas, Major L. B. (King's Norton)||TELLERS FOR THE NOES.—|
|Salt, Edward W.||Thompson, Sir Luke||Lieut.-Colonel Sit A. Lambert Ward|
|Shaw, Helen B. (Lanark, Bothwell)||Thomson, Sir Frederick Charles|
|Shepperton, Sir Ernest W.||Thorp, Linton Theodore||and Major Goeorge Davies|
Question, "That the Clause stand part of the Bill," put, and agreed to.
§ 8.34 p.m.
§ Mr. H. WILLIAMS
I beg to move, in page 4, line 40, at, the end, to add:(3) In ascertaining for the purposes of the said Section twelve the terms on which any undertakers receive a supply of electricity directly or indirectly from the Central Electricity Board, any supply which is by virtue of the provisions of the last. foregoing Section given to the undertakers at prices other than those specified in the appropriate tariff shall he disregarded.At first sight, this Amendment is not very intelligible, but I would remind the Committee that when the Bill was introduced originally, last Session, in another place it contained these words, or rather it contained them when the Bill left another place and came here. That is to say, the Bill that was read a First time last Session and never got to a Second Reading contained the words which I am proposing to add. I am therefore asking the Government to return to their original point of view. I am not asking them to make a change. May I explain the rather complicated arithmetic of this Amendment? Where a special bargain is made between the board and an authorised undertaker, the situation that may arise under the next Clause in regard to railways is that they have to pass on the terms of that bargain. If reference is made to Section 12 of the Act of 1926, it will be found that in the case of the ordinary supply not subject to the special arrangements, the undertakers sell at the prices at which they buy plus the cost which they have to add because of their transmission systems. Let us assume I am paying 1d. a unit for some electricity. The cost in which I am involved because of my transmission system is½d., and I sell to my customer at 1½d.
Now we come to he case of the special bargains, where I will assume that the 1684 board supplies electricity to the authorised undertaker at ½d. and his charges for distribution are ½d. That makes 1d. Suppose, however, I am taking some at 1d. for the ordinary consumers, and some at ½d. for these special people, how am I to calculate my charges in respect of the ordinary people when I am taking some of my supply at, 1d. and some at ½d.? I gather from what I am told that I have to average it. Therefore, in respect of my ordinary business, assuming that one-half is at ½d. and one-half is at ¾d. and the average price is 1d., I have to pass on that for which paid 1d. for ¾d. and therefore make a loss. I wonder whether I have made it clear. I will put it in another way. In the ordinary way, if there are no special arrangements, the authorised undertaker passes on the electricity which he buys from the board at the board's cost plus what he himself charges for his own services. If for any reason he is buying current at a variety of prices, he passes it on at the average. If, however, he is buying some on special terms, which he has to pass on, not at the average but precisely on the terms at which he buys, he has to pass on the whole advantage he is getting in buying cheaply, and he is compelled to pass on what he bought dearly as if it had been bought at the average price. He thus loses money. That is absurd and cannot be intended.
It may well be that the Attorney-General, who, from his experience in the courts, will be able to explain this complicated matter better than I can, will say that if we only read this Bill together with the Act of 1926 everything will be perfectly clear, and that the only reason the Government have dropped these words out is not that they object to them, but that they are unnecessary. I have heard many definitions of an 1685 optimist and a pessimist. This is not the place to quote all of them, but one of them is that a pessimist is a gentleman who wears both belt and braces. If the right hon. and learned Gentleman tells me that we shall find our braces in the Act of 1926, all I will ask is why it was not discovered in April and May last year when this Bill first saw the light. How was it that the Bill continued in existence all these months before it was discovered that the Act of 1926 furnished us with this necessary degree of support? Are the Government now certain that their interpretation of the law is correct? If their interpretation be correct, no harm is done. If there be any chance of their interpretation being proved in the courts to be incorrect, there is no harm in putting into the Bill words that will make it certain beyond any possibility of doubt that their intentions really become the law.
I remember about 1925 I put down an Amendment to the Finance Bill. I was assured that my words were unnecessary and that the Interpretation Act gave me all I wanted. I took the opportunity of consulting a friend who had had experience as a Law Officer of the Crown, and he said, "When I was a Law Officer I always used to say those things, but take my advice and insist that those words go into the Bill. Then there will be no possible doubt as to the interpretation of the law. There will be no need for people to go to the courts for an interpretation provided you have words in the Act which make it clear beyond a possibility of doubt." If the right hon. and learned Gentleman says these words are not necessary, I am going to ask him if they interpret the law as he believes the law is intended to be. If his answer be "Yes," I say that it is evidently the case that there has been some doubt in the past; the matter has never been before the courts, and in order to avoid the necessity of going to the courts to find out what the law means, we ought to put it beyond doubt by putting these words in the Bill.
§ 8.44 p.m.
§ The ATTORNEY-GENERAL
If a Bill is to be constructed on the principles upon which my hon. Friend's anonymous ex-Law Officer advised him to act, I am afraid our Acts of Parliament will be 1686 a series of explanatory provisions followed by sub-explanatory provisions, and so on ad infinitum. A Bill must he allowed to speak for itself without putting in words which somebody may think a proper explanation of its various provisions. My hon. Friend has this factor in his favour, that the words of this Amendment formed a Sub-section in the Bill as it reached this House from another place last Session. That is true, but further examination has shown that the inclusion of the Sub-section would not be of advantage and might produce certain disadvantages. I think that I understand what my hon. Friend's purpose is; I cannot, however, say that I was quick enough to follow his figures or all his examples. I understand that what my hon. Friend really wants to do is to ray that if a person has obtained a special price from an undertaker for a particular supply of electricity that price shall not be taken into consideration in connection with the ascertainment of the proper price of electricity supplied to other persons in quite different circumstances.
§ The ATTORNEY-GENERAL
I am very gratified to think that I have understood my hon. Friend's purpose, but, if he will allow me to say so, I discovered that not so much from his illustration as from a perusal of Section 12 of the Act of 1926. My hon. Friend told me what was his intention, and that he believed that that was the intention of Section 12, and so I looked at Section 12, and now know what my hon. Friend's intention is. I do not think anybody would interpret Section 12 in any other way. The supply which is dealt with by that Section 12 is obviously a supply which is provided, and the special price is not to be confused with, or averaged up with, a supply of electricity furnished to different people under the terms of the appropriate tariff. My hon. Friend asks why we first put it in the Clause. At that stage, no doubt, it was thought by someone, just as my hon. Friend has thought, that it was desirable, if possible, to make the position even clearer still: but if my hon. Friend will be good enough to look at his Amendment he will find that in order to make the explanation complete he would have to include some other matters in his Subsection. For instance, he would have to 1687 include the provision that they were not to be entitled to look at special prices which had been given under the powers conferred by Clause 1 of this Bill. When my hon. Friend realises that fact, as I am sure he will, the moment it is pointed out, he will agree that it would be more liable to cause error than to furnish a clearer understanding to put in an explanation which would allow somebody to say that in the case of a special price under Clause 1 of the Bill a different principle was to be applied from that which was to be applied with regard to the special price in Clause 2.
If my hon. Friend wants to be a completely accurate commentator upon Section 12 of the Act of 1926 he must enlarge his sub-section. No doubt it was considerations of this sort which led the expert advisers of the Government on the drafting of this Bill to the conclusion that it was much better to leave Section 12 of the Act of 1926 to speak clearly for itself, instead of trying to produce a. commentary which would not be a complete commentary and would lead the traveller very much astray, having regard to the omission to include other matters all of which ought to be included if one is to be included. I do not know whether I have succeeded in making my point of view clear to the Committee. To put it as briefly and simply as I can it is better that Section 12 should be allowed to speak for itself, because if we are to attempt to write a commentary in the form of a sub-section to this Clause 3 we shall have to draft one which would be much more cumbrous and complicated in form than that which was originally devised by the draftsmen and put into the Bill in the House of Lords, that being the sub-section which my hon. Friend has now adopted. He is very anxious to impale me on the horns of a dilemma by saying that if it is so clear I ought to put it into the Bill. My answer is that I should he very glad apart from the objection to cluttering up a Bill with unnecessary Clauses, to put in anything which made that which was clear still clearer, but I do take objection to putting into a Bill an explanatory sub-section which is not accurate because it stops short of explaining the whole story. If we are to explain the whole story everything must be put in. We shall only make it worse by putting 1688 in one part of the story instead of the whole. Therefore, I hope my hon. Friend will not press his Amendment. We have given due consideration to the point, it has been examined in all its bearings, and I hope that the draftsmen and the advisers of the Government can be trusted on this small matter.
§ 8.49 p.m.
§ Mr. H. WILLIAMS
Before I ask leave to withdraw the Amendment I would like to say that I am a little surprised to learn from my hon. and learned Friend that he regards the drafting of it as unsatisfactory. If it was incomplete that was the error of those who put it in many months ago.
§ Mr. WILLIAMS
That was the error of the Government's learned advisers. I am only a poor engineer, and I do not understand what all those words mean, but I hope that what the Attorney-General has said as to the interpretation of Clause 12 of the Act of 1926 is the right one. I have read the Clause, and I am inclined to think the advice he has now given us is sound advice. My only regret is that he was not called in to advise the draftsmen of the Bill at an earlier stage, so that we could have avoided this unnecessary Debate. I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 8.50 p.m.
§ Mr. NOEL LINDSAY
I beg to move, in page 4, line 40, at the end to add:Section twelve of the Electricity (Supply) Act, 1926, shall have effect, as if the following words were added at the end of paragraph (6) of the Third Schedule to that Act or as regards capital raised after the first day of November, nineteen hundred and thiry-four, not less nor more than such rates as may be prescribed by the Electricity Commissioners, and those Commissioners may prescribe different rates for different companies'.The somewhat unusual combination of names which appears attached to this Amendment is accounted for by the fact that it is moved at the suggestion of the Association of Municipal Corporations. The Minister of Transport has already explained to the Committee that this Clause amends Section 12 of the Act of 1926. Under that Section 12 authorised undertakers who take a supply and pass 1689 that supply on are allowed to charge to the persons whom they supply the price which they pay the board, plus a figure in respect of their transmission lines. In the Third Schedule to the Act of 1926 are set out certain things which may be taken into account in arriving at the proper charge in respect of transmission lines. One of the items included in the Third Schedule is interest for capital charges, and it is laid down that that interest should vary only between a minimum of 5 per cent. and a maximum of 62 per cent. Those figures were settled as long ago as 1926, when the general level of interest was very much higher than it is to-day, and it is felt that some alteration is required to meet the changed conditions of the money market to-day, when the general level of interest on Government and other securities is much lower than in 1926. What this Amendment would do would be to enable the Electricity Commissioners to fix the levels between which interest might be charged on fresh capital. We could not alter the levels in the case of existing capital, but where fresh capital was raised, and a sum had to be included in respect of that fresh capital, it would seem obviously right that a lower minimum than 5 per cent. should be fixed. This is a very moderate and a very reasonable Amendment, and I hope the Attorney-General will see his way to accept it.
§ 8.55 p.m.
§ Sir G. ELLIS
I do not think the question is quite so simple as my hon. Friend makes out. To begin with, those rates were fixed by Act of Parliament in 1926, after due consideration, and it is now proposed to take the fixing of future rates out of the hands of Parliament and transfer it to the Electricity Commissioners. I am well aware of the competence of the Electricity Commissioners in regard to the amount and quality of electricity, but I doubt whether they are as qualified to fix rates of interest in relation to what the rates of money may be in the future. The main point is that these rates were fixed by Act of Parliament at a certain time with a view to the future and to last over a term of years. Over those years, money was raised and expenditure was incurred in the expectation that there would be no variation in the rate. Now we are asked to make a variation because there is a temporary change in money rates. If, every time there is a tem- 1690 porary change in money rates, the commissioners are to be able to make some alteration, that introduces great uncertainty into the method by which money can be raised by the companies. They work on a basis which has been given to them, and if the commissioners for the time being can make a change when they think that money rates are going to alter, it will be extremely difficult for a company to forecast the rates at which they can borrow.
I am surprised that this suggestion has come from the Association of Municipal Corporations, who say that they may suffer in making bargains with particular companies as to the nature of contracts to be made between the corporations and the companies. Anybody with practical knowledge of the contracts which are usually made knows that a great many considerations other than the fixing of rates of interest are taken into account. If at the time a bargain is made between a company and a corporation the rates of money are much lower, and the contract involves a certain amount of expenditure, the treasurer of that corporation is well seized of the facts in regard to the bargain that he may be making with the company, and is perfectly capable of getting a bargain which will suit him.
These rates have been fixed by Act of Parliament, and we are asked now to vary them, not by Act of Parliament, but through the temporary action of the commissioners. I put it to the Attorney-General that apparently this change is to be made only to the particular bargains under the Bill and that it would introduce a principle which might well be used in future so as to give the commissioners authority to deal with money rates in contracts other than those which relate to railway traction and lighting. Before we divest ourselves of the right to deal with these matters definitely fixed in the Act of 1926, we should remember that they will be taken out of the power of the House and passed into the power of commissioners for the time being.
§ 8.59 p.m.
§ Mr. H. WILLIAMS
I wish to enforce the arguments of the hon. Baronet the Member for Winchester (Sir G. Ellis). I was surprised when I saw the interesting collection of names attached to this Amendment. We are informed that the 1691 Amendment is promoted on behalf of the Association of Municipal Corporations. The association are presumably speaking on behalf of their various electricity departments. It is a little strange that the Association of Municipal Corporations should be endeavouring to change the financial relationship between the board and the companies. I am not denying their right to do so, but they are interfering with somebody else's business. I do not say that somebody else's business does not react upon them, but it is a little strange.
In 1926 money was dearer than it is to-day, and the main reason why money is cheap now is that commodity prices have fallen. It is the object of the Government of every country in the world to raise the prices of primary commodities, because of the effect that certain fixed charges have had upon industry. The low level of wholesale prices is one of the causes of world-wide unemployment. It is obvious that if the efforts of the Governments of all the countries in the world are successful—there is no Government of which this is not true, whatever its political colour —the amount of working capital which every business undertaking wants will suddenly rise, this glut of bank money will vanish, and interest rates will rise. It is a perfectly well-known fact that the immediate effect of a sudden fall of commodity prices is to bring down the bank rate and finally a gradual droop leading to very low money rates. Just because money rates are very low at the moment it is proposed to alter what was regarded as a settlement in 1926.
§ Mr. WILLIAMS
In this case we are dealing with something over a long period of time. When you make a contract you take the rough with the smooth. There have been periods since this was passed when an Amendment in the opposite direction would have been convenient to the companies, but they did not propose such a thing because when you make a bargain which is intended to be permanent there are periods when the bargain suits you and periods when it does not. In 1888, the old Government Fund was converted into what are known as the Goschen Consols. Those Consols, 1692 which carried interest at the rate of 2¾ per cent. for so many years, and are now at 2½ per cent., have gone through every kind of vicissitude. There was a time when £100 worth of 2½ per cent. Consols could have been bought for £39, but the other day they were over £90, and I think they are over £90 at this moment. At no time have the people who entered into that arrangement voluntarily in 1888 ever had a right, or have sought, to vary their bargain. It was a bargain in perpetuity.
So far as I know, the Act of 1926 represented a bargain in perpetuity. There were periods when conditions might suit the Electricity Commissioners and others when they might suit the companies, but when a bargain has been made, as the hon. Baronet the Member for Winchester stated, and all sorts of persons have invested their money on the assumption that all the terms of the bargin would be kept, it is clearly improper to vary the terms. If a trade union enters into a contract with a body of employers with regard to the rates of remuneration over a period of years, and that contract is varied during its currency, it is rightly charged against those who have committed the breach that they cannot honour a bargain that they have made.
§ Mr. WILLIAMS
We are not talking about the schoolmasters. They have not done too badly as compared with prewar days.
The TEMPORARY - CHAIRMAN (Lieut.-Colonel Charles MacAndrew)
I must ask the hon. Member for North Hammersmith (Mr. West) not to interrupt.
§ Mr. WILLIAMS
All I am saying is that the bargain should not be broken casually by an Amendment tabled at the last moment. All sorts of interests are involved. A great deal of the money in public utilities is not held by private individuals, but by people representing every kind of trust and interest, and this proposal imperils all those interests and a vast degree of security. It is entirely improper that this suggestion should be 1693 brought up at this late hour. I am amazed that the Association of Municipal Corporations have not seized the opportunity for consultation—I do not think they have—with the other interests.
§ 9.5 p.m.
§ Mr. GLOSSOP
I do not claim to have a great deal of knowledge with regard to electricity, but I have often wondered what was the necessity in the first instance for the Central Electricity Board. I imagine however, that the object of setting up that board, and the object of this Bill, is to try to encourage the use of electricity—to make it easier for more people to get supplies of electricity at cheaper rates. We have to take that as we find it, and, whether we agree with the board or not, we must assume that the whole object of setting up the board, and of this Bill, was to enable an extension of the supply of electricity throughout the country to be brought about. The present Amendment would act in an exactly opposite direction. If it were carried, its effect would be actually to retard the development and extension of electricity supplies in the country. Under the Act of 1926, Parliament, as was pointed out by my hon. Friend the Member for Winchetser (Sir G. Ellis), fixed the rate of interest, and I think it would be detrimental to take this power out of the hands of Parliament and put it into the hands of the Electricity Commissioners.
The Amendment goes on to say that the commissioners may prescribe different rates for different companies, which again would be a most retrograde step. If the commissioners had the power to decide at what rate of interest a certain company should be allowed to raise money, it might have a most detrimental effect on the development of that company. One can well imagine that the companies which would need an extension of capital might be companies in comparatively rural areas, where the revenue is small, and it is possible that a company like that, in order to get its capital, would have to pay higher rate of interest than perhaps a company on a sounder financial footing. If we allow these commissioners, however excellent they may be in their own capacity, to dabble in finance as regards the rate of interest which electrical undertakings have to pay, we shall definitely put ourselves back and retard the development and extension of those elec- 1694 trical supplies which I think the whole Committee will agree are so essential to the well-being of the country.
§ 9.9 p.m.
§ The ATTORNEY - GENERAL
Undoubtedly the rate of interest is lower at the moment than it was in 1926, and from that point of view I have a good deal of sympathy with the proposal of the Amendment that the commissioners should be allowed to reduce rates, or, indeed, to raise the rates, if they think fit. I cannot help feeling, however, the force of the observation of my hon. Friend the Member for Winchester (Sir G. Ellis) that it does not seem quite right that the Electricity Commissioners should be charged with this duty when perhaps they do not know so much about finance as they do about electricity. A great many people think that the present rates of interest are not likely to continue indefinitely, and, indeed, everybody hopes that, when new industries can be found in which to employ money profitably, the present rates will rise. I suppose the intention is that from time to time—I do not know quite how often—the Electricity Commissioners should reduce the rate of interest according as they found the market altering.
But what impresses me about this Amendment is its smallness, if I may use that expression. I am told that, if there were a reduction of 1 per cent. in the rate of interest upon all capital expended upon transmission, the effect would be only a reduction in the cost to the consumer of somewhere about 1½per cent. on the price which he at present pays, and that if, as the Amendment proposes, the reduction in the rate of interest were limited to new capital, the reduction in price to the consumer would be very much less than 1½ per cent., and would become so small as to be wholly negligible. In these circumstances it seems to me that the game would be hardly worth the candle. It would introduce a principle which on the whole is not a very good one, namely, that the Electricity Commissioners should be charged with fixing the rate of interest for new capital. I think it is better that Parliament should fix it from time to time. I admit that, if it were going to make a great difference to the consumer, the consumer ought not to be mulcted, and there ought to be some elasticity for making arrangements from time 1695 to time in accordance with the varying rates of the market; but inasmuch as it is neither here nor there, broadly speaking, I suggest that the Committee might well be content to leave the provisions of the Act of 1926 as they are.
§ 9.13 p.m.
§ Mr. N. LINDSAY
I agree with the Attorney-General that there may be something to be said against putting this in the hands of the Electricity Commissioners, and the figures which he gives would appear to point to the fact that this is a matter of rather less importance than some of us had imagined. If the Attorney-General would say that he will do what he can to encourage conversations on this point between now and the Report stage, so that the Association of Municipal Corporations may have an opportunity of considering the matter in conjunction with the power companies and anyone else who may be interested, I would ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.