HL Deb 20 May 1957 vol 203 cc896-994

2.42 p.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Mills.)

On Question, Motion agreed to.

House in Committee accordingly.

[THE EARL OF DROGHEDA in the Chair]

Clause 1 agreed to.

Clause 2:

Establishment, constitution and functions of Central Electricity Generating Board

(2) The Generating Board shall consist of a chairman appointed by the Minister and such number of other members so appointed, not being less than seven or more than nine, as the Minister may from time to time determine.

(5) Without prejudice to any other functions assigned or transferred to them as mentioned in subsection (1) of this section, it shall as from the vesting date be the duty of the Generating Board to develop and maintain an efficient, co-ordinated and economical system of supply of electricity in bulk for all parts of England and Wales, and for that purpose—

  1. (a) to generate or acquire supplies of electricity; and
  2. (b) to provide bulk supplies of electricity for the Area Boards for distribution by those Boards.

(7) The Generating Board shall have power— (a) to manufacture anything required by the Generating Board or by any Area Board for purposes of research or development or for the repair or maintenance of their equipment;

LORD LUCAS OF CHILWORTH moved to add to subsection (2): of whom not less than five shall he full-time members.

The noble Lord said: Before moving the first Amendment on the Marshalled List, may I preface my remarks by saying how glad I personally am—and I am sure the pleasure is shared by all your Lordships—that we have here the Minister who is head of the Department sponsoring this Bill and not, as is usual in your Lordships' House, a stand-in. So the Minister will not now, in reply to our pleadings for the acceptance of any of our Amend-mews, be able to say that he will have to consult his right honourable friend, which has been said before with monotonous regularity in this Chamber.

Having said that, may I point out that neither the Minister nor the Bill has said at any time how many of the members of the Generating Board—and it is the Generating Board we are dealing with under Clause 2—are to be part-time members, and how many full-time members. I have put down this Amendment to see whether I can persuade the noble Lord that the time has arrived when we have seriously to consider whether we should or should not carry on with the principle which we have laid down in the formation of nationalised boards or boards of nationalised industries of having any substantial number of members of the board as part-time. For myself, I should prefer them all to be full-time members, but I recognise that others may have different opinions, based on sound reasons. The other advantage we possess—at least I have—in having the Minister here is that he and I must speak the same language. We were both brought up in industry, and I do not suppose, having reached our age, we have a great deal to learn of its machinery. I am convinced that the formation of industry in the future, with the huge concerns, must have what I always call "executive directors." I said on Second Reading that in my view the age of guinea pigs and place-men is past.

The noble Lord knows that you will never get real first-class energetic brains unless they are on the young side. You cannot get young members for Boards of this description, with this terrific weight of responsibility, on a part-time basis. Young men cannot afford to be part-time members, and I suggest to the noble Lord that the day has gone when we can afford to run the Board of a great nationalised industry—and an industry that by the noble Lord's own figures is going to spend, by 1965, up to £3,250 million of the taxpayers' money—on a charitable basis. By that, I mean that the-salaries are paid by industry, who allow some of their men to sit upon these nationalised boards for a remuneration that is a positive disgrace. The noble Lord knows that as well as I do. If you want young, virile brains, and if you want to see that the youngsters in a great industry like this have the incentive to work themselves right up to the top, the course to the top must be open to them.

I suggest that one of the ways—I have another way later on—of ensuring this is to have a number of those serving on these boards full-time members, whose life's job it is; who have no distractions of having to serve shareholders in another company, and who do not have to live in fear that, if their principal remuneration payer, private industry, ceases to pay them, they would have to resign. Because what is the part-time salary of the majority of members of these boards?—£500 a year. The noble Lord does not want to fill these posts with pensioners. What he really wants is the finest men he can get in this industry, because the best is only just good enough for the gigantic proposal which the Minister has brought before your Lordships' House and so lucidly explained. There never was development in this country to marry or to match up with the nuclear atomic energy expansion of power stations in this country. I suggest to the noble Lord that he will do himself less than justice unless he sets himself out to do the same thing as if he were in private industry and, instead of the Minister of Power, were the chairman of this great industry of private enterprise. He could not go to his shareholders and argue that anything less than the very best was good enough.

Subsection (2) says that there shall be a chairman and not less than seven or more than nine other members. I suggest in my Amendment the addition of the words "of whom not less than five shall he full-time members", because I am assuming, perhaps erroneously, that the chairmanship of the Generating Board must be a full-time appointment. I want five of the other members, or not less than five, to be full-time members. If the Minister has a better figure I am not wedded to five. But the Bill does not say anything. They can be all full-time members. If the noble Lord tells me in reply that his intention is to appoint all full-time members, I shall be happy. But at least I want the bulk of them to be full-time members, so that their whole time is given to it, and so that they are not taken away with other objectives and other interests. That way, I think, is the only way to constitute this Board.

Amendment No. 2 is really upon the same lines, but I will content myself for the present with what I have already said. I shall return to it once or twice throughout this Committee stage, and I hope the noble Lord, if he docs not accept my numbers, will accept the principle that it should be clearly stated so that the country knows how many are full-time members of these Boards and how many are part-time. I give way on part-time if the noble Lord wants some elbow room. There may be good causes why he might want one or two members part-time—I hope not for the most important posts. I think the noble Lord will agree with me that the sound principle is that the bulk of those should be full-time members. I beg to move.

Amendment moved— Page 2, line 4, at end insert the said words.—(Lord Lucas of Chilworth.)

2.51 p.m.

THE MINISTER OF POWER (LORD MILLS)

I, too, am glad that I am able to attend your Lordships' House to reply in person to the noble Lord. Accepting what he seeks to do, his statement might have been my own reply, although it was much more eloquent than mine could be. I, too, believe that we need the very best men we can get to run these great industries. Our success in getting good men will determine the future success of these industries. On the other hand, we need a certain amount of flexibility, especially in these comparatively early days of these industries. We must still look outside and get men for their qualities, their knowledge and their experience. It would be my hope that the industry will more and more train the men to become thoroughly versed in their industries and thoroughly competent to manage.

It would be very inconvenient and difficult for me in my job of choosing the right men for these industries if the noble Lord wished to insert here that there should be a definite number of full-time members and a definite number of part-time members, or that they should be all full-time members. I think we should keep the matter flexible. I will see to it that there is a proper balance in these matters, having only one object in mind; that of securing the best men, in the long term as well as in the short term, for the management of these industries. I hope that my noble friend will withdraw his Amendment.

LORD LUCAS OF CHILWORTH

The noble Lord has accepted the principle. As he says, he has given your Lordships an assurance that there will be a proper balance between full-time and part-time members. I was always taught in my years in your Lordships' House—now getting on for more than ten—that ministerial intentions are one thing, and their hopes and promises are another. "Put it in the Bill," we were told. That was always impressed upon me by a colleague of the noble Lord, Lord Mills—the noble Earl, Lord Swinton. That was his prayer and his one song: "If you are going to do it, put it in the Bill." Will the noble Lord give me an undertaking that between now and the next stage of the Bill he will try to find a form of words that will give expression in the Bill to the principle he has just undertaken to follow?

I am quite happy to leave it to him. I want to give him all the elbow room I can, but under the Bill as drafted he could have all part-time men. That was never the intention, I feel certain, and I do not like these vague expressions in Bills of this sort. So, if the noble Lord can go just a little further and say that between now and the next stage of the Bill he will try to give expression to that principle, I shall be quite happy to withdraw my Amendment. Perhaps he would give me that undertaking.

LORD SALTOUN

I cannot help feeling that it would be a mistake to fetter the discretion of the Minister when the thing is just beginning. It may be very useful to have a principle later on, but just at the moment, on this particular kind of thing, I think that is a mistake.

EARL ATTLEE

I do not think it really ought to be left as wide open as this. We may have great confidence in the present Minister, but Ministers come and go, sometimes with bewildering rapidity, in this country. We do not know who will be next. It seems an extraordinary thing to have no regulation to the effect that there shall be any full-time members. I cannot recall that being done in legislation. With the old Electricity Boards there was always a due proportion of full-time men. There should be a minimum. It should not be entirely left in the hands of part-time men.

LORD MILLS

In reply to the noble Lord and the noble Earl, I may say there is, of course, precedent for this. The Bill follows most of the nationalisation Acts—the Gas Act, the Iron and Steel Act, 1949, the Air Corporations Act, the Atomic Energy Authority Act and the Electricity Act, 1947. I am much more concerned with what is practical and right. I should hesitate to agree to fix any number of full-time members until I had the opportunity of consulting with the Chairman and Deputy Chairmen when they are apointed to these Boards. After all, they must have a view, and it is proper that they should have a view, I should want to consult with them as to who their colleagues should be, and whether it is desirable or not, in certain circumstances, to appoint part-time members and who they should be. I am sorry, but I do not think it would help me and I do not think it would be right to agree to a fixed number of whole-time men in this Bill.

LORD LUCAS OF CHILWORTH

The noble Lord talks about precedent. I can quote precedent the other way. There is the Transport Act. As a matter of fact there is the Electricity Act, 1947, which even lays down the salaries. I am not trying to fetter the Minister. I want to give him all the elbow-room he likes. I will withdraw this Amendment, but I will put down another Amendment on Report stage. If the noble Lord will look at the top of page 2, he will see the words The Generating Board shall consist of a chairman appointed by the Minister and such number of other members so appointed and so on. I want to get the principle in there. I do not want to fetter the Minister, but surely we have had experience. The noble Lord, Lord Saltoun, seems to think that this is a new venture. The Generating Board is only a reformed Central Electricity Authority, which had a full-time Chairman and a full-time Deputy Chairman. The Area Boards have full-time chairmen and full-time deputy chairmen, so I am not establishing a precedent. All I want is the principle to be written into the Bill. The noble Lord talks about letting the Minister have a free hand while the new set up gets going. Experience has taught us something. That is what the Herbert Report was for. I will not argue the case any more now. I will withdraw this Amendment, but I shall put down something on Report stage which will embody the principle without tying the Minister's hands to a specific number. With those words, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD LUCAS OF CHILWORTH

In this Amendment. I have assumed—the Minister has acknowledged that my assumption is correct—that the Minister intends that the Chairman of the Generating Board shall be full-time. My second Amendment seeks to insert the words "full-time". so that Clause 2 (4) would read: The Minister shall appoint one or more full-time members of the Generating Board to be deputy chairman or deputy chairmen of the Board. I do not think it is too much to ask that the deputy chairman or chairmen should again be full-time members. There may be one; there may be two. After all, they will have to deputise for the chairman at any time, and I should think their duties will be onerous. Will the noble Lord accept this Amendment? I need not argue the case. I have already argued it on the first Amendment. I beg to move.

Amendment moved— Page 2, line 11 after (" more ") insert (" full-time ")—(Lord Lucas of Chilworth.)

LORD MILLS

In this case I am impressed with the arguments of the noble Lord, and I will certainly look at the point again, provided that, if it is ultimately accepted, it is not taken as a precedent for other Boards. I think that with this particular Board there are special circumstances which would justify the noble Lord's contention.

LORD LUCAS OF CHILWORTH

I am grateful to the noble Lord. On that assurance, I will leave it to him to put down the necessary Amendment, and I beg leave to withdrawn my Amendment.

Amendment, by leave, withdrawn.

3.3 p.m.

LORD GRIDLEY moved, in subsection (5) after "Generating Board" to insert: "through the agency of the Area Boards". The noble Lord said: I feel in some difficulty in dealing with my Amendments in their listed order because some of them are paving Amendments to facilitate the major Amendment which follows. I therefore suggest, if it meets with the approval of the Committee, that it might be most helpful if I dealt with the main purpose of the Amendments, after which the Minister would be able to tell us whether or not he is prepared to accept my Amendments, or the principle of them. It may shorten discussion later on. May I take it that I have the assent of noble Lords to proceed in the way I have suggested?

The point of my main Amendment is a simple but nevertheless a fundamental one; I referred to it briefly on Second Reading. Noble Lords who have read the Bill will realise that under it, as it is now drafted, a new Generating Board is to be established with powers to plan and construct power stations, both nuclear and conventional, and to operate them, and to provide Area Boards with supplies in bulk for them to distribute. The change that I am proposing is that the management, operation and maintenance of The power stations should be transferred from the Generating Board to the respective Area Boards. The Area Boards would, in effect, be the lessees of the Generating Board as lessor. This change has long been desired and would, I know, be welcomed by many of the Area Boards. Many of those who desire the change are electrical engineers and managers of long experience in company and municipal undertakings prior to nationalisation, and this is their view. Moreover, one of the objectives of the Herbert Report was to secure greater autonomy of the Area Boards. The transfer of power to station operation would be a necessary step towards more true autonomy.

Your Lordships will remember that when the noble and learned Viscount the Lord Chancellor wound up the Second Reading debate on this Bill, he asked me most courteously to consider certain points which he submitted, and of course I have felt it my duty to put myself in the position to reply to those points, I hope as courteously as the Lord Chancellor treated me. The first point which he raised was that the question of the operation of the stations had been considered at great length, and he said that the Herbert Committee were firmly of opinion that generation and distribution should be kept separate. May I refer your Lordships to paragraphs 224, 225 and 226 of the Herbert Report, because the observations there have a most important bearing on the point I am developing?

The Report says, in paragraph 224: Under the 1947 Act, the ownership, control and running of all power stations, whether selected stations or not, passed to the Central Authority and through them to the appropriate Generation Division. The distribution undertakings of the authorised undertakers passed to the appropriate Area Boards. This was a major operation involving the division "— mark this, if you will— and to some extent the duplication of staffs, and engineering, administrative and accountancy procedures. It was naturally looked upon with suspicion, or actually resented, by many officers of former authorised undertakings who became members or officers of the Area Boards. They observed with dismay the setting up of two separate organisations to do what had hitherto been done by one. They also showed a natural and human disinclination to part with the generating side of the businesses they had been operating, the side which from the engineering point of view is perhaps more interesting and absorbing than the distribution side which was left to them, a side in which commercial considerations loom more largely than engineering considerations.

Then in paragraph 225 the Report says: It is prima facie uneconomical to have two separate organisations operating in any given area, one dealing with generation and the other with distribution. Moreover, there is great force in the argument that the power stations exist merely to supply the Area Boards with the electricity they need to discharge their obligations to consumers, and that if the persons responsible for the commercial side were also responsible for the construction and operation of the power stations, there would at least be a incentive towards economy.

Then in the next paragraph, paragraph 226, they say: It is not surprising therefore, that certain Area Board Chairmen, supported by their Boards, have strongly urged upon us the desirability of amalgamating the Divisions and the Area Boards and giving the Area Boards responsibility under the general supervision under the Central Authority for constructing, or at any rate running, the power stations.

There we have the evidence supported by experienced men who have served the industry virtually all their working lives. Noble Lords will no doubt have noticed that in my Amendment I leave the ownership of stations where it is now, with the proposed new Generating Authority; but I give to the Generating Authority some measure of direction which they may give to the Area Boards—a direction which, I hope, it will seldom be necessary to exercise.

The next point of the noble and learned Viscount was that the operation of power stations by Area Boards would be subject to a considerable measure of control by the Generating Board who would retain responsibility for siting power stations in the National Grid, and that this would run counter to the main purpose of the Bill which is to advance the autonomy of the Area Boards, and that it might also impair the autonomy of the Generating Board because some of the most important functions of that Board would be carried out by Area Boards, as agents; so how could the Generating Board be held responsible for making the business pay? I should have thought that transferring responsibility for operations to Area Boards would be to make them more autonomous, which is one of the main objectives of the Herbert Report. No doubt there will have to be simple agreements entered into between Area Boards and the Generating Board, whereby the Area Board will be responsible to the Generating Board for interest and depreciation and other charges on the power stations, whether they are new or old.

The noble Viscount's next point was that it was unlikely that the boundaries of the Generating Division would remain co-terminous with those of the Area Board. He also interposed the observation that the Herbert Committee have pointed out that distribution is primarily a commercial matter while operation is an engineering matter. On the noble and learned Viscount's first observation, I should have thought that new stations could only be sited in the area of one Area Board or another, as the country is, I believe, already completely covered by the twelve existing Area Boards.

The noble and learned Viscount then said he feared that there might be an excess of power station capacity and that one Authority should be responsible for the nuclear programme if it is to be carried through at the required tempo; and also that less efficiency would be achieved if Area Boards operated power stations. Speaking from long experience, I do not think anyone need fear that there will be an excess of power station capacity, for in all the years I have been engaged in the industry, I have never known of that. If anything, we have generally been short of capacity—in some years, seriously short, as we can remember from the power cuts. One must also remember that there exists in many power stations still in operation a good deal of plant which has been there for many years and is not nearly as efficient as new plant, which could replace it, would be. I am also convinced, from experience, that Area Boards could operate power stations just as efficiently as they are being run at present, if not more so, and that some economies in staff could be achieved if the two responsibilities were combined.

The next and last point which the noble and learned Viscount submitted to your Lordships was that the transfer of power stations to Area Boards would adversely affect generating staffs and that, therefore, the Generating Board would be likely to keep their best engineers and to let the Area Boards have the others. If your Lordships will look at page 71 of the Herbert Report, you will see how emphasis is put upon the excessive number of people at present employed in the existing Generating Authority, and that it was thought that economies could be made there. I believe that there are enough men engaged in controlling power stations to enable men to be taken for responsible positions for operating the power stations and that we need have no doubt whatever on that.

I think that deals with the points which the noble and learned Viscount has asked us to consider. I should like to put into the minds of your Lordships the advantages which I see if operation of power stations is transferred to Area Boards. First, the new Generating Board would be free to concentrate on the planning and construction of the heavily increased programme of nuclear power stations and larger conventional units. We all know of the tremendously increased power station programme which has been announced by the noble Lord the Minister; and since we last considered this measure I have noted in the Press that plans are now contemplated, if they have not already been decided upon (for evidently they have already gone very far), for the construction of a new coal-fired station to cost £40 million, which is to have in it the largest single unit ever yet constructed in the world. That is to go to the Don Valley. If we put that and other power stations on top of the nuclear programme, surely the Generating Board will have quite enough to tackle, if not more than they can manage.

If, as the noble and learned Viscount fears, the construction work could not be carried out in accordance with the time plan, that, in itself, is a reason for relieving them of responsibility for seeing how power stations are operated. The next advantage is that Area Boards would know at any time exactly what their generating costs were. At present 70 per cent. of their costs are to be paid to the Generating Board for the bulk supply, and if the past procedure is adhered to Area Boards will not know until the end of the year, when the final account for bulk supply is submitted, what their costs per unit have been. As I understand it (the Minister will correct me if I am wrong), Area Boards have never been able to bargain upon the bulk supply accounts rendered to them; they have had to pay them, whatever the figure. Then, again, Area Boards, knowing their costs to the third decimal place, will be in a much better position for negotiating for the business of the high load consumer which every Area Board is anxious to obtain. They will be able to quote close prices, such as are required by firms operating electro-chemical processes, flour mills, cement works and the like.

If I may interpose a personal note here, I may say that it was my experience when I was managing power companies that the only way I could get business of this kind—say from one of the electro chemical works, which was a peak load job, running from January 1 to December, day and night—was to quote them a very low flat rate, with a coal clause included. To get the business of the cement works and flour mills I quoted so many pence per sack covering their electric power. I got that business, which would not have been obtained in any other way. Therefore if Area Boards are to be in that position they must know from day to day what their power costs are.

There is no doubt that economies are possible by combining the staffs of the two undertakings as I suggest. At the moment—as anyone who knows how the operations of power stations and the business of selling energy is conducted will be aware—there is a certain amount of overlapping which it is most desirable to avoid.

Moreover—and this is a point to which I attach outstanding importance—posts in the Area Boards would undoubtedly become more attractive if engineering, selling and combined management experience were acquirable by those already in the industry or those wishing to make it their career. As I mentioned on Second Reading, we in this country claim that, so far as nuclear power station construction is concerned, we are well ahead of any other country in the world. Let us hope that we may retain that position. But if we are to do so, we must give men in the industry not only commercial experience in selling the energy but also generating experience. After all—and this, too, I said on Second Reading—we hope that our manufacturing firms will get nuclear power station contracts in other parts of the world because of the advanced position we shall occupy. And when men are required to conduct the engineering and commercial sides of these new undertakings overseas men from this country who have had all-round experience will be called for. But they will not be forthcoming unless we combine engineering experience with the commercial side.

Those, I think, are some, but not all, of the important advantages that would accrue from the adoption of the Amendments in my name. May I say, finally, that there is no question of Party policy involved. The principle of nationalisation under my proposals remains quite unimpaired. Ownership of power stations would not be interfered with; it would remain where it is. I beg your Lordships to accept my submission that my purpose in trying to get the operation of the power stations transferred to the Area Boards is fully supported by the arguments which I have submitted. They are the result not only of my own long experience in the electrical industry but of the experience of many of those distinguished engineers who have served for many years in pre-and post-nationalisation days. I have therefore felt it my clear duty to use what influence I may have to convince your Lordships that my Amendment should have your support, and I trust the Minister will accept it. I hope that it will not be necessary for us to ask the House to divide. I beg to move the first Amendment.

Amendment moved— Page 2, line 17, after (" Board ") insert (" through the agency of the Area Boards ").—(Lord Gridley.)

3.27 p.m.

THE PARLIAMENTARY SECRETARY, MINISTRY OF DEFENCE (LORD MANCROFT)

My noble friend Lord Gridley has suggested that this Amendment marches with his Amendments Nos. 4 to 7 and Amendments Nos. 14 and 17. They all relate to the same principle, and I think the noble Lord was right in asking your Lordships to discuss them altogether. We have given the fullest consideration to the arguments which the noble Lord advanced on these matters when he was speaking in the Second Reading debate, and which he has repeated to-day. Coming from one of his experience, and one as conscientious and as level-headed as Lord Gridley, these arguments naturally command great respect. I only wish, for old friendship's sake, that they could command as much agreement.

The principle with which Lord Gridley deals is the fundamental principle of the Bill. It would be discourteous and impertinent for me to describe the principle behind these Amendments as a "wrecking" principle, but I must be allowed to go so far as to say that it is an extremely unsettling, if not a wrecking, principle. Let us look for a moment at what Lord Gridley wants to do. The effect of these Amendments would be to make the Area Boards responsible for generating as well as for distributing electricity and to leave the Generating Board in charge of the construction of generating stations and of inter-area supplies through the national grid. The Generating Board's operating expenses, as well as provision for depreciation and interest on borrowed capital, would be apportioned among the Area Boards. Parts of the 1947 Act dealing with the bulk supply tariff would be repealed.

In his very interesting Second Reading speech, Lord Gridley gave his reasons, in broad, for making these proposals. What he is arguing, if I have followed him correctly—and I have listened to him with careful attention—is that since the Herbert Committee reported, a new situation has been created by the Government's latest nuclear programme, and that the Generating Board, which will have a great deal of work on its hands, should be relieved of the routine duty of operating stations once they have been run in. He argues that by putting Area Boards in charge of generation as well as of distribution. Area Board staff would gain wider experience, and that service under an Area Board would consequently attract better men, which is something we all want to do. As my noble friend Lord Gridley hinted, proposals similar to those which he has just been advancing, with much eloquence and in great detail, were made to the Herbert Committee by some Area Board chairmen. They were considered with great care, but the Committee came to the conclusion that the existing separation of generation and distribution is sound, and I think that your Lordships should bear in mind the reasons which led them to this conclusion.

First, the Committee felt that the full benefits of large-scale organisation would be achieved only if supplies were planned on a country-wide basis. If the siting of generating stations, their design and size, the pattern of transmission and the operation of the whole system were under the control of one Central Authority, the Committee thought that electricity would be cheaper than if the task of generation were parcelled out among the Area Boards. To hand over to the Area Boards either the construction or the operation of the main generating stations would, in the Committee's view, be a retrograde step. I must confess that I think that the Committee were right.

They then considered the next point. It is unlikely that the boundaries of the generating divisions will remain coterminous with those of the Area Distribution Boards. This is what the Committee actually said: The advent of larger coal and oil-fired stations, the siting of these stations in relation to fuel and water resources, and their construction, the development of the supergrid and still more the advent of nuclear stations will more and more, as the years go by, result in a national generating and main transmission system bearing little or no relation to the present size and shape of the distribution undertakings of the Area Boards ". I think that that is a powerful point. Even those Area Board chairmen who favoured the amalgamation of generation and distribution conceded that the siting and operation of power stations must be a national matter, and that if Area Boards were in charge of generation—which is where my noble friend's argument must inevitably lead—they would have to conform to the Central Authority's directions not only about siting and planning but also about load control. The Committee thought that this would lead to an even greater degree of central control than exists to-day.

The distribution of electricity, for which the Area Boards are responsible, is primarily a commercial matter, while the construction and operation of power stations is primarily an engineering matter. In the Committee's view, the Area Boards should be free to concentrate on the commercial distribution of electricity and the Generating Authority on economical generation and supply in bulk. The amalgamation of generating divisions with Area Boards would not result (and I listened carefully to my noble friend's argument) in such economies in manpower as would the amalgamation of generating divisions with one another.

It is clear that the Herbert Committee were against transferring to the Area Boards the operation of main power stations, either with or without the responsibility for construction. The reasons which they gave—and they argued them carefully—have not been invalidated by anything that has happened since, by the increase in the nuclear programme; indeed I would submit to my noble friend that they have been strengthened. If Area Boards were in charge of generating, they would have to put up with a degree of central control which they would certainly find unwelcome, and which would nullify the Bill's object of putting the Boards on their mettle by giving them commercial autonomy. If, on the other hand, the Area Boards succeeded in gaining a large say in the siting of power stations, it is likely that the stations would not always be sited to the best national advantage—a situation which arose in the days of the Electricity Commissioners and the Central Electricity Board, as my noble friend will remember. As my noble and learned friend the Lord Chancellor pointed out during the Second Reading debate, if the country's electricity needs are to be met with the utmost economy, and without the installation of more capacity than is necessary, and if the nuclear programme is to proceed at the requisite speed, there must be one body responsible for providing an efficient coordinated and economic system of bulk supply for England and Wales, as laid down in the clause we are discussing. Under my noble friend's proposals, responsibility would be divided, and divided responsibility would make for inefficiency.

As to staff, it may be that engineers transferred to the service of Area Boards would be adversely affected in different degrees, according to whether the area contained many power stations or few. This is problematical, but I think that if they were adversely affected, resentment would undoubtedly result. I believe that it would be quite wrong to split up the engineering staff of the Generating Board. Another point which occurred to me, as I listened to my noble friend, is that, human nature being what it is, the Generating Board would probably retain the best engineers, and let the Area Boards have the others. We have all experienced this attitude in other walks of life. If that happened, the operating efficiency of the industry would suffer and the spread of nuclear experience among generating engineers would be retarded.

I have gone into this matter in some detail, and I apologise to your Lordships for so doing; but it seems to me to be a fundamental point. We discussed it on Second Reading, and my noble friend has now expanded his proposals in a most persuasive speech. Of course there is something in what he says, because anything put forward by the noble Lord, with his experience, must have powerful arguments behind it; but I have drawn up the balance sheet, and I think that what my noble friend proposes would, in the end, be wrong and not at all in the interests which we all have at heart. I hope that he will consider carefully the arguments which I put forward, and about which my noble friend the Minister of Power, after giving the matter careful consideration, feels strongly, and that he will consider that although his arguments contain much which, on the surface, is attractive, the Amendment which he has so persuasively argued would not be fundamentally to the interest of the industry and of the country.

LORD SALTOUN

There is one difficulty which the noble Lord, Lord Mancroft, does not seem to me to face. I may have misapprehended him, and if so he will be able to correct me. The Area Boards are charged with selling, and it seems to me that they cannot sell unless they can quote; and they cannot quote unless they know their costs at every stage of the manufacture. It seems to me that the point of my noble friend Lord Gridley was that divorcing the commercial side of the Area Boards from the generating side, puts a handicap on the salesmanship of the Boards. I do not know whether the noble Lord is prepared to answer that point now. It is one that will have to be considered.

LORD MILLS

In reply to the noble Lord, may I say that I think the machinery which is now provided is quite adequate to deal with that problem. It is envisaged that the Area Boards will be in consultation with the Electricity Council, and so will the Generating Board, so that any proposal to amend the bulk supplies will be immediately known to the Area Boards before it is settled. I do not think that this matter presents any difficulty.

LORD LUCAS OF CHILWORTH

Is not the answer to the noble Lord, Lord Saltoun (the noble Lord will correct me if I am wrong), that the Area Boards will buy in bulk from the Generating Board, so that the Area Boards will know their buying cost. Then they will have to base their selling price upon their buying cost. In other words, they are the intermediary. It is quite simple.

LORD SALTOUN

I am grateful for the intervention of the noble Lord, because it enables me to make my point quite clear. Salesmanship to-day, as I understand it, is based on an intimate knowledge of manufacturing costs. A salesman who knows his job and who is trusted by his firm has a certain degree of responsibility; he can cut prices to certain customers and can often create a market which he would not otherwise have. The fact that this is all to be done in a cast-iron way, supplies being secured at cast-iron prices from headquarters, seems to me to militate against the enthusiasm and responsibility of the members of the Area Boards, because they will become merely negotiators and will cease to be salesmen, or what I call salesmen.

LORD MILLS

I think the noble Lord will find that in most great businesses which expand and become household words the system of allowing great bargaining latitude has long since died. It is the custom of those firms to have fixed prices, upon which the public may rely, until they announce a general change in price.

LORD GRIDLEY

May I deal with the point raised by the noble Lord, Lord Lucas of Chilworth, by referring him to page 59 of the Herbert Report? The Report there says: Under the present system, Area Boards have to take what the Central Authority give them at the price which the Authority fix. That price, covering a year's supply in bulk, is not known until the end of the financial year. In those circumstances, how can those responsible for selling—they may have to quote a very cut price, and perhaps take a little risk on it in order to get, say, a 10, 000 h. p. customer—take the risk of quoting a price, when they do not know the ultimate cost they will have to pay for current? In response to the observations made by my noble friend Lord Mancroft, I was sorry to hear him refer to my Amendment as being in the nature of a "wrecking" Amendment. I feel rather resentful about that, because no one who was in favour of private enterprise and had to accept the nationalisation of this industry has been a stronger supporter of all those who have tried to make a good job of it under nationalisation than I have. I would not make any suggestion that might in any way impair that good understanding.

LORD MANCROFT

I hope my noble friend will forgive me. I went out of my way to say that it was not a wrecking Amendment. I described it—and I have the words here—as "an extremely unsettling Amendment". And that, whether he intended it or not, in my opinion it is.

LORD GRIDLEY

Then I misunderstood the noble Lord and I apologise for not having heard him correctly. This major Amendment of mine, to which the noble Lord has replied, is fundamental only in that it transfers the operation of power stations back to where it was for many years. Under the Central Electricity Authority, the power stations were operated in the areas, and the system all worked fairly smoothly. In fact, the system proposed in this Bill has created unrest in the Area Board organisations which, I warn noble Lords, will be accentuated if the Bill goes through without this alteration. The supply of power outside the areas by one Area Board to another still remains under the control where it now is, and, therefore, that argument goes by the board. I shall be most disappointed if fresh thought is not given to this Amendment. There is such a poor attendance to-day—many noble Lords who would like to know something about this industry are unable to be here—that there is not much encouragement for me to ask the Committee to divide on the Amendment. However, I would solemnly utter this warning: that, unless this change is made, there will remain a great deal of disquiet amongst members of the Area Boards and their principal officers. That will not be good for the future of the industry. It was for that reason, among others, that I was most anxious to have this change made.

On Question, Amendment negatived.

3.48 p.m.

LORD LUCAS OF CHILWORTH moved, in subsection (7) (a), to leave out all words from and including "purposes" and to substitute, "use by the Boards. ". The noble Lord said: This is about the only Amendment on the Marshalled List which, by any stretch of imagination, any noble Lord could say was politically controversial; and although it proved to be so in another place I have put down the Amendment to invite your Lordships to consider it from another angle. I do not intend to stamp over ground so well trodden already, but I cannot understand some of the arguments put up in support of the change of heart of the Government right in the middle of this Bill, to take out the power to manufacture given in the original Bill to the Generating Board and the Area Boards.

I propose to quote the noble and learned Viscount, the Lord Chancellor, and I am sure he will not mind my doing so in his absence; I thought he would be here, but even Lord Chancellors may have a holiday sometimes, I suppose. I cannot understand why a Conservative Government should depart from what I have always thought was one of the main planks of Conservative policy; that is to say, competition. I always thought that they wanted a competitive world in which it was "every man for himself and the devil take the hindmost"; at least, that is what they have always said. Of course, the noble Lord, Lord Mills, and I know that that is precisely what they do not want; at least, they act in a completely different way. As one big industrialist said to me many years ago when I inquired why they all "ganged up" in price rings: "My dear fellow, why should we sharpen our swords upon each other when there is the good old British public to sharpen them upon?"

That has been one of the troubles with British industry which the noble and learned Viscount the Lord Chancellor is now hoping—and I am sure we all share his hope—is going to be a thing of the past with the coming into force of the Restrictive Trade Practices Act. I would not pour cold water on that Act for one moment, because I am an ardent supporter of it. It was once said, "Wait and see"; and I will wait and see what will be the effect. I am also waiting to see what will be the effect of this clause. The noble and learned Viscount who sits on the Woolsack put forward some of the reasons why the right to manufacture had been removed from the Bill. I think noble Lords should get clear in their minds that the right to manufacture and the right to sell are two totally different things. The Central Electricity Authority never had the power to sell. They had the power to manufacture for themselves, which is a totally different thing. If the Generating Board and the Area Boards were going out to manufacture and then sell in competition with private industry I could understand the argument—I might not happen to believe in it because I happen to be a believer in competition, but I would understand it. But the power in this Bill originally—and my Amendment seeks to put it back—was to give them power to manufacture only for, their own requirements.

The noble and learned Viscount the Lord Chancellor said [OFFICIAL REPORT, Vol. 203 (No. 61), col. 231]: If you give these wide ancillary powers in my view you are going to distract attention from the main activity and in that way lessen its efficiency.

Would the noble Lord say that that has happened in the case of the Central Electricity Authority, who for ten years have had the power to manufacture? They have never exercised it, but it was always there as an insurance, as my noble friend Lord Attlee said on the Second Reading. The noble and learned Viscount went on: Competition, should it arise between the nationalised industry and the plant manufacturers, might well be unfair competition, because the nationalised industry can obtain its capital on easier terms.

I suppose the inference there is that it has a Treasury guarantee. But the logical conclusion to this Bill will be that in time the Area Boards will be completely autonomous and raising capital without a Treasury guarantee.

What is going to happen then? I do not suppose the noble Lord himself envisages this, tout there is nothing to stop it. In his Second Reading speech he said that they were to have complete financial autonomy. Two people can use that word and mean completely different things. The noble and learned Viscount the Lord Chancellor read some extracts from speeches made in another place to controvert my argument of the danger of ultimate financial autonomy. The noble and learned Viscount's words were [Col. 233]: I do not want to push the argument too far, but I thought that, in view of what the noble Lord, Lord Lucas of Chilworth, said on this question … he would like me to remind him of that so that he could consider it.

But not one of the quotations the noble and learned Viscount gave, I would dare swear, came from anybody who thought that this Bill could eventually lead to the complete break-up of a nationalised industry. If you are going to allow all the Area Boards complete financial autonomy, and eventually to go to the market and raise their own capital on the best terms they can get in the market, you are going to have twelve industries and not one, because eventually it means the break-up of the Electricity Council and the present conception of a nationalised industry.

I should have thought that you would give these Area Boards and the Generating Board the power, if they want it, to manufacture but not to sell. My Amendment reads, "use by the Boards." I suppose the truth is that you are tightening up the closed shop for the electrical manufacturing industry, so that the largest buyer from that industry will be the Generating Board and the Area Boards. Therefore, the hands of these Boards are tied behind their back, and we are relying upon the Restrictive Trade Practices Act to see that they are not overcharged. The noble and learned Viscount the Lord Chancellor in the same debate said [Col. 231]: Fourthly, the manufacturing industry, if it is to succeed in export markets often with small profit margins, must have a secure basis of home demand.

So I suppose really you are ensuring the home demand for the electrical manufacturing industry by prohibiting the Generating Board and the Area Boards from having a self-defensive weapon of manufacture themselves.

I cannot quite understand why that is wanted, because if that is going to be the principle, perhaps in the future we shall have another Bill to reform the British Transport Commission, whereby the British Transport Commission will not be allowed to manufacture its locomotives, wagons or passenger coaches. There is as much logic in that argument as there is in this—that you must preserve the home market for the electrical manufacturing industry by fettering their chief purchaser. I do not think that is good business; I think it is thoroughly bad business. I am not arguing on any political grounds at the present moment. I think it would be a stimulus to have some competition, because, after all, I suppose the whole of the British electrical manufacturing industry, with its cross- capitalisation, is in very few hands.

Other noble Lords may raise other arguments, but that is my argument. In the last analysis, if what the noble Lord said on Second Reading ever comes true, you will have the complete autonomy of the Area Boards. That is a subject I shall discuss a little more fully later on when we come to another Amendment. I think this is a retrograde step. I will not blame the Minister, because I believe the seeds of fright were sown in the Department before he ever arrived there, so I will absolve him from all responsibility for this, but I think that this was purely a political decision. It was not arrived at on any of the grounds that have been stated. It was purely that the Department and the then Minister were frightened by the pressure put on them. I think that on good, sound, commercial grounds your Lordships should accept the Amendment. I beg to move.

Amendment moved— Page 2, line 36, leave out from (" for ") to the end of line 38 and insert (" use by the Boards.")—(Lord Lucas of Chilworth.)

4.1 p.m.

EARL ATTLEE

I should like to support the Amendment moved by my noble friend Lord Lucas of Chilworth. This is really a very practical matter. Everybody knows that the electricity industry is highly integrated. I can recall that many years ago, when I was largely responsible for an undertaking, we were constantly met by rings of manufacturers. Cables were always squeezed. As soon as one asked for tenders, by some miracle one got some eleven tenders, all precisely the same. We were sometimes driven to go abroad for machinery, because of this pressure. I should have thought that, if we wanted a cheap and abundant supply of electricity, in the interests not only of consumers but of business, we would see that the generating part of the industry was not made a milch cow of private interests—because that is all it amounts to.

It is said: "But you have the monopoly of the business." That is all right but that is closing the door after the horse has been stolen. The essence of this provision is preventive; you have a weapon kept in reserve. I am amazed at the suggestion that we must allow home consumers, whether industrial or domestic, to be exploited in order to gain markets overseas. That argument can be carried a very long way. You can put up the prices at home, but that will not help you with competition overseas. The fact of the matter is that in the Committee stage in another place perfectly sound arguments were put up by Ministers against this provision in the Bill, and then we had an abject surrender at the next stage. I wish that they could still have had the first Lord Hailsham, whom I can remember having to withstand these vested interests, instead of the present Ministers, who have caved in, as so often happens in this Parliament, to vested interests.

LORD MILLS

I am grateful to the noble Lord for his offer to absolve me from any responsibility for this decision but I am not really in need of his absolution nor do I deserve it, because I took the decision. He mentioned the case of the railways. I have had bitter experience of the way in which this power to manufacture operated when certain of our industries were seriously affected by its wrong use. Coming to the supply industry, I think it is quite impossible to envisage the supply industry, which is definitely a technical job of a different kind, going in for the manufacture of electrical plant, and so on.

In fact, the noble Lord goes further in his proposal. The Electricity Act, 1947, gives power to manufacture electrical plant and electrical fittings. The noble Lord now proposes that they should have power to manufacture anything required by the Generating Board or the Area Boards, which is even wider. The noble Lord has acknowledged that this was a power which was never used. I do not think that there was ever any need to use it, because to use a power of this kind meant an enormous undertaking, and there were other means to their hand. In fact, the Central Electricity Authority put other people into the business in order properly to protect their interests. And now this Government has added the Restrictive Trade Practices Act, under which price agreements between manufacturers may be reviewed by the Restrictive Practices Court and annulled so far as they are found to be against the public interest. I suggest that that provides adequate protection for the nationalised industry.

The noble Lord has mentioned other reasons why it would be unfortunate if a nationalised industry ever went in for this manufacture. The home industry needs the orders of the electrical supply industry here, and it should have them. It is our duty to see that the business is on fair and proper terms. I did not find that this power meant anything at all. I felt it was unnecessary, and, therefore, it is proposed to withdraw it. I hope the noble Lord will not insist upon his Amendment.

LORD LUCAS OF CHILWORTH

Would the noble Lord mind enlightening the Committee? I think he used the words (hat one of the weapons which the Central Electricity Authority had was that they "put other people into the business ". Would he mind enlarging on that and saying how that worked?

LORD MILLS

I think the noble Lord would find that they came to the conclusion that in the boiler field, for example, there was not enough competition for capacity, and they introduced fresh boiler-makers, or they got people to take up boiler-making, so that they had another source of supply.

LORD LUCAS OF CHILWORTH

The noble Lord has really made our case, as I thought he would when I asked him the question, but at this stage of the proceedings I do not think it is worth while dividing the Committee upon this matter. We have stated our case frankly and I think it should be stated that what the Central Electricity Authority has done, the Generating Board may do in the future. There is nothing in this Bill to prevent that; and we trust, with the noble Lord, that that power, allied to the Restrictive Practices Act, will bear out his good wishes and hopes. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3:

Establishment, constitution and functions of Electricity Council

(2) The Electricity Council shall be constituted as follows:—

  1. (a) the Minister shall appoint a person to be the chairman of the Council, and shall appoint two other persons to be deputy chairmen of the Council, and may (in addition to the members so appointed) appoint as members of the Council such number of other persons, not exceeding three, as he may from time to time determine;
  2. (b) three other members shall be the person for the time being holding office as chairman of the Generating Board, and such other members of that Board as may be designated by that Board: and

(4) Without prejudice to any other functions assigned or transferred to the Electricity Council as mentioned in subsection (1) of this section, it shall as from the vesting date be the duty of that Council—

  1. (a) to advise the Minister on questions affecting the electricity supply industry and matters relating thereto; and
  2. (b) to promote and assist the maintenance and development by Electricity Boards in England and Wales of an efficient, coordinated and economical system of electricity supply.

4.10 p.m.

LORD LUCAS OF CHILWORTH moved, in subsection (2), to add to paragraph (a): one of whom shall be a person having had experience of, and having shown capacity in, the organisation of workers; ".

The noble Lord said: Here is an Amendment which I hope sincerely the noble Lord will accept. If your Lordships will look at Clause 11, you will see that one of the strange things is that it deals with " Machinery for settling terms and conditions of employment ". The duty of setting up the joint consultation machinery is vested in the Electricity Council. The Electricity Council is the only electricity body which need not have included in its number a person having had experience of, and having shown capacity in, the organisation of workers. I cannot understand why that is, because it has the responsibility of doing that very thing where first-class advice is required. The Generating Board must have one of its number so qualified—it is so specified. I think I am right in saying that under the 1947 Act the Area Boards must have one of their members in this category. Yet the Electricity Council, which has the main job of national wage negotiations and the setting up of a conciliatory machinery need not. That is my simple argument. My case for providing that one of the number should have the qualifications referred to in my Amendment is, I think, a strong one, and I hope the noble Lord will accept the Amendment, I beg to move.

Amendment moved— Page 3, line 26, at end insert the said words.—(Lord Lucas of Chilworth.)

4.11 p.m.

LORD MILLS

In reply to the noble Lord, although I do not accept his proposal, I should not like him to think that I am at all out of accord with the spirit behind it. I think that, in connection with appointments to this Council we should always consider the representatives of organised workers and those who have shown capacity in the organisation of workers. Under the 1947 Act, members of the Central Authority and the Area Boards have to be appointed from persons with experience in such fields as electrical matters, industry, commerce, finance or the organisation of workers. But I think it would be a mistake to try to specify that there must be a particular number with particular qualifications, because I do not know where that would lead. Other branches of equal competence would claim that they also had a right to representation on these Boards. I would much rather rely upon the general statement that the members should be chosen from certain categories of people, rather than that a particular appointment must be from a particular category. I hope that the noble Lord will be satisfied with that reply.

LORD LUCAS OF CHILWORTH

If the argument of the noble Lord is valid, why does he not apply it to subsection (3), which says: All the members of the Generating Board shall be appointed by the Minister from amongst persons appearing to him to be qualified as having had experience of, and having shown capacity in, the generation or supply of electricity, industrial, commercial or financial matters, applied science, administration, or the organisation of workers. Why put those words there, when the Generating Board is relieved by the Electricity Council of all those overall responsibilities for wage negotiation, and the Electricity Council is not to have the same advantage as the Generating Board? If the Minister says, "Well, I do not want to specify the qualifications of all the members of the Electricity Council," he may have right upon his side. But one of the Council's main tasks is the national negotiation of wages and conditions of employment. That is not a task of the Generating Board. The Generating Board has an expressly specified individual in the organisation of workers, and the Electricity Council has not. Surely there cannot be logic in this argument. Will the noble Lord think again about it?

LORD MILLS

This is rather a complicated subject. It does not always follow that a particular category is the right category to adopt in dealing with a specific subject. As I said earlier, in answer to another question by the noble Lord, so much depends upon what people the chairman himself thinks he needs to deal with a particular problem. I should be quite willing, however, to think further upon the matter.

LORD LUCAS OF CHILWORTH

I am most grateful. I hope the noble Lord will. There are no Party politics in this matter. If the Generating Board, which has not to deal with labour problems, must include a member specified as having experience of the organisation of workers, when the Electricity Council is to be denied it, I am afraid that the logic of it escapes me. However, as the noble Lord is to look at it again, I will, for the time being, withdraw the Amendment.

Amendment, by leave, withdrawn.

4.16 p.m.

LORD LUCAS OF CHILWORTH moved, in subsection (2) after paragraph (a) to insert: (b) the chairman, deputy chairmen and at least one of the other persons shall be full-time members;

The noble Lord said: Once again we have a point about the Electricity Council and its composition. The Council, amongst other things, has the responsibility of arranging for the raising of all finance. According to this clause, it is to consist of twenty-one members. It is to have a chairman, two deputy chairmen, and three other members appointed by the Minister. Sitting on it, there is to be the chairman of the Generating Board. There are to be two other members from the Generating Board designated by the Board—which is significant—and it is to include also the twelve chairmen of the Area Boards. That makes a total of twenty-one people. In my Amendment I suggest that the chairman and the deputy chairmen, and at least one of the other members shall be full-time members.

I do not want to go over all the arguments again that I raised when we discussed the virtues of full-time membership. Might I ask the noble Lord this question: does he intend, without putting it in the Bill, that the chairman of the Electricity Council shall be a full-time member?

LORD MILLS

Yes.

LORD LUCAS OF CHILWORTH

Then I leave that out: I agree with that. Will he also give consideration to saying that the deputy chairmen also shall be full-time members? I think they should be; and we should say so in this Bill. In my view, we should certainly specify in the Bill that there should be a proportion of full-time members. I am quite willing to leave to the noble Lord what is the proportion. I have another Amendment down to stipulate that the Area Board chairmen shall be full-time members. If we go on in the way that this Bill is worded at present, they will all be part-time amateurs. I do not want to see this great industry with all its chief Boards—the Generating Board, the Electricity Council or Area Boards—run by part-time amateurs; because they must of necessity be very old to be able to afford to be part-time.

When the recent appointments of the lay members of the Restrictive Trade Practices Courts were announced, amazement was publicly expressed that the noble and learned Viscount the Lord Chancellor could find only one under sixty-five. What a sad commentary! Although to the noble Lord and myself, sixty-five is not very old, many people think it is. It may be that to sit in a semi-judicial post on a Restrictive Trade Practices Court one must have reached a very mature age, so as to have acquired knowledge of all the vices of industry; but that does not hold in regard to the active and virile men we want on these Boards. I should like them to contain a majority of men under fifty, with the 100 per cent. virility of youth—men who have not yet got to their peak, and who do not look upon jobs like this as a nice pastime in the declining years of their life, to save them the trouble of making the newspapers last till lunchtime. Dynamic energy is what is needed in all these posts. I suppose the noble Lord and I would agree that one of the tragedies of life is that it is not until one has reached an age when energy flags that one acquires the wisdom and experience necessary to do a job properly. But that is a slight digression. I want to see in this. Bill, and in this particular clause, a provision that the chairman and deputy chairmen shall be full-time members. I am willing to withdraw this Amendment if the noble Lord will think about it as he is going to think about the others; but I hope he will concede the point that both deputy chairmen should be full-time members.

4.26 p.m.

LORD HURCOMB

My Lords, before the noble Lord replies, may I raise a point upon this clause? In the past, for his final advice on electricity matters, the Minister has looked to bodies which have been either independent or expert, or, in most cases, both. Now he is going to rely upon an Electricity Council to supervise the industry generally, and the composition of that Council is left extraordinarily vague. I quite agree with the noble Lord the Minister that, on the whole, one gets the best result by not fettering a Minister's discretion too far, and by assuming that when he comes to make appointments he will be under the criticism of Parliament and will make proper appointments because he will get into far too much trouble otherwise. The Electricity Council, however, is composed in a somewhat puzzling way, and, so far as voting is concerned, can be dominated by the chairmen of the Area Boards. The function of the Council ought to be to take a quite independent and also, I should have thought, an expert view on the way the Boards were discharging their functions. From that point of view, the Council does not seem to me altogether ideally composed. Perhaps that lends point to the argument that the chairman and deputy chairmen, who will not be members of either the Generating Board or the Area Boards, should at any rate be people of great standing, and whole-time, so that they may exert that degree of supervision which the Council is supposed to exercise. Perhaps the Minister would bear in mind those considerations, among other points, before finally deciding what he does.

LORD MILLS

I should like to tell the noble Lord, Lord Lucas of Chilworth, something of my plans, in order that he may appreciate my difficulty. He generalised (that is always rather dangerous) in saying that if we have part-time men we shall get only old men who are finished and who want a part-time occupation. That is not always so. In this particular case. I wanted as deputy chairman a young and virile part-time man who, would eventually, I hoped, qualify for the position of chairman.

He could not come at the moment as a deputy chairman, because the pay would not be as much as he is getting now. That illustrates some of the problems with which one is faced, and how inoperative one would be rendered if one were fettered in the way proposed by the noble Lord. I will certainly think about this proposal, as I will think about all these problems, but I dislike it because I do not like its rigidity. I have gone to the trouble of giving a precise case to illustrate the difficulty.

LORD LUCAS OF CHILWORTH

I am very grateful to the noble Lord, and thank him for taking the Committee into his confidence. The only fear I have is that by the time this promising "star" qualifies to receive a salary commensurate with what he is now getting, he will be so old that he will have lost all his virility. But I shall enlarge on that in a later Amendment. I am delighted with the noble Lord's suggestion. I do not want to tie his hands, but I believe that the fears of many of us have been well voiced by the noble Lord, Lord Hurcomb. We do want men who are going to give the whole of their time to this most important industry. If the noble Lord can fit his desire—which is also mine—that he shall have elbow room with my desire that some provision shall go into this Bill stipulating that these shall be full-time appointments, I shall be happy, on the noble Lord's kind undertaking to reconsider the matter, to withdraw my Amendment.

Amendment, by leave, withdrawn.

4.29 p.m.

LORD LUCAS OF CHILWORTH moved, in subsection (4), to add to paragraph (b): including the extension of suppliers to rural areas.

The noble Lord: I have put this Amendment down because I want to tempt the noble Lord, if I can, to inform us on the future policy of the supply of electricity to rural areas. I voiced my fears on Second Reading and I am not going to make another Second Reading speech. The reserve funds which were originated to equalise tariffs have been used to help the electrification of farms. I believe I am right in saying that the electrification of farms qualifies for a 30 per cent. or 35 per cent. grant from the Ministry of Agriculture. But I must confess that I am not thinking altogether of farms and farmers; I am thinking of others who live in the rural areas. I tell the noble Lord quite frankly that in my opinion the charges made by the Central Electricity Authority for the electrification of houses in the rural districts have been scandalously high. If we are going to make it so expensive to enjoy the amenities of civilisation in rural areas, what we shall do will be to drive people to herd in towns. I could quote a number of cases which have been given to me as the result of inquiries which I have made as to the cost of running a supply of electrical energy to private houses and to small holdings. In these cases, the cost, in my opinion, has been perfectly scandalous.

I think we should have equalisation in this matter. I want to know what is the attitude of the noble Lord. Does he express agreement with me? Does he, too, feel that the cost of the electrification of the countryside should be spread over all concerned, and not be put practically 100 per cent. upon the individual who has the supply? I have previously cited the case of the Post Office. I can also cite the case of the telephone. If a telephone subscriber had to pay the whole of the cost of running the telephone wire a mile and then had to give a guarantee that he would pay so much a year in charges for telephone calls, the Post Office would not install very many telephones. One of our great troubles to-day arises from the cost of transport in the rural areas. That is why the British Transport Commission has—to use the old Scots phrase—to "make the fat fry the lean". In other words, a lot of the fares in rural areas are subsidised from the fares paid in the big towns. If one had to pay to British Railways the real cost of being transported on a branch line it would sometimes be as much as 3s. or 4s. a mile.

If the noble Lord does not agree with the principle of sharing the load nationally, perhaps he will tell us. I think that it should be shared nationally here. But we have gone away from that principle, and now we have areas. I shall be happy to hear something from the noble Lord as to what is his policy in this connection at the present time. In my view, the cost of electrifying the dwelling of the individual who does not happen to be a farmer and who lives in a rural district is terrific and out of all proportion to what it should be. If this sort of thing is continued we shall not get these amenities provided in the countryside, and I take it that one of the principal policies of Her Majesty's Government is that the amenities of the rural areas should be increased so as to discourage people from flocking into the towns where they get the cheapest prices because of mass distribution. Those are the reasons for which I have put down this Amendment. My noble friend Lord Wise may like to say something upon it purely from the point of view of the farmer. I have put it down in the interests of the ordinary rural dweller. I hope that the noble Lord will be able to tell us what his policy in this relation is to be in the future. I beg to move.

Amendment moved— Page 4, line 26, at end insert the said words.—(Lord Lucas of Chilworth.)

4.34 p.m.

LORD WISE

I should like to occupy a few moments in supporting this Amendment which has been moved by my noble friend Lord Lucas of Chilworth. I may do it from another point of view altogether. My chief anxiety is that in this Bill there should be some definite reference to the electrification of the rural areas. So far as I can see, the Bill makes little reference to rural England. In one clause there is mention of the exploration of land for the purpose of putting up either generating stations or electricity supply lines. There is also a reference to agriculture in regard to the Consultative Committee representation. So far as I can see, those two are the only references to the question of supply to rural areas. Therefore, although the rural areas may be covered by the expression "England and Wales" in this clause, if it is intended that recommending some quicker method of bringing electricity to the country villages should be one of the main purposes of the Consultative Committee, I hope that it will definitely be put into the Bill that such is the case.

My noble friend Lord Lucas of Chilworth has referred to various difficulties and to charges. He has mentioned the telephone. I can refer to a case which I think is really worse than the one he cited on Second Reading. Some years ago I had occasion to ask for my telephone to be moved from my office in town to my residence in the country. The Post Office charged me 25s. for that transfer. I asked the electricity supply people at that time to bring me a supply of electricity from the village to my house—about two miles distant. The estimated charge for that was £1,200. This was ridiculous, and I have put in my own supply.

During last year—and this has a bearing on my reference to the quickening of the provision of supplies to rural Britain—I had occasion to ask the Electricity Board (I need not mention the area) to supply me with electricity. Very kindly, the official concerned said: "You do not want any extra facilities or prior facilities as compared with anyone else?" I replied that I did not. I was then told that it would be five years before I could hope for a supply of electricity in my residence. The outcome was that the electricity supply eventually came from my own land. There was a transformer at another house which I owned about half a mile away. So, in order to bring electricity to my own residence, I undertook the work myself. I cut poles in my own woods because I could not get any from the Electricity Board or the Post Office. I put in my own poles and I put in my own supply of electricity—I mean, of course, that I did it by contract. I saved myself, I should say, quite £200 in that job of bringing a supply of electricity half a mile across the countryside.

As recently as Saturday last I attended a conference of agricultural workers, and there was a proposal concerning this matter on the agenda for consideration by the workers (I was not present myself when the matter came up). The paragraph on the agenda expressed the workers' desire that the provision of electricity to the various villages around them would be speeded up and that the process should be extended throughout the country. I know that the Electricity Board has brought electricity to many thousands of farms and I pay tribute to it for so doing. There are other people in the countryside, in addition to the farmers, and I hope that there will be a directive to the authority concerned that particular attention should be paid to the rural districts. I hope that the noble Lord will agree to the Amendment and see that some reference is inserted in the Bill to help those who live in rural England.

EARL BATHURST

I hope that the noble Lord who is to reply will be able to accept the Amendment put forward by the noble Lord, Lord Lucas of Chilworth. I assure the noble Lord that the cases which the noble Lord, Lord Wise, has mentioned, are widespread all over the country, and I believe that if this innocuous but important Amendment can be accepted, it will be a directive to the somewhat nebulous Council, which has been set up to direct the electricity industry, to make sure that the Council consider the rural users of electric light. I think that if the Amendment could be accepted, it would also be an example of Parliament moving in some measure to control the destinies of, and to give a policy lead to, a nationalised industry. Speaking on behalf not only of farmers but also of those who have small country houses, and of those who hope to set up their homes in the country, I hope that the Council will consider it their duty to supply electricity at a cheap cost to rural users. Therefore, I beg to support the noble Lord's Amendment.

LORD MILLS

I am sure that we are all in sympathy with what this proposal is trying to achieve. Under the Bill, the Electricity Council have a duty to promote and assist the maintenance and development by Electricity Boards in England and Wales of an efficient, co-ordinated and economical system of electricity supply ". There is nothing in Clause 3 to prevent the Electricity Council from promoting rural electrification, which clearly must be an element in an efficient, co-ordinated and economical system of electricity supply. The rural load, as your Lordships know, has different characteristics from the urban and industrial loads. It thus promotes a more economical use of generating capacity and so tends to reduce the maximum demand charge which the Area Boards pay for electricity in bulk. Moreover, the Boards are required under the 1947 Act to secure as far as practicable the extension of rural electrification.

Their programme, with its target of 85 per cent. of farms to be connected by 1963 (by 1968 in the South Wales, South Western and Merseyside and North Wales Areas) is ahead of schedule, as I have already informed your Lordships. The remaining 15 per cent. of farms after the target has been reached will represent a problem to be solved when it arises, but there is no reason to expect any slowing-down of the programme when the Boards become financially autonomous. Rural electrification is a problem to which the Electricity Council will give their attention from time to time. Among other things, they will have to make recommendations to the Minister, under paragraph 7 of the Second Schedule to the Bill, for distributing the central reserve fund among the Generating Board and the Area Boards, and the Minister has agreed that they should be asked to give consideration to any Board who can make out a case for special treatment because it is faced with special problems, including rural electrification.

The noble Lord, Lord Lucas of Chilworth, asked me if I was in agreement with the idea of a universal charge. I have already assured the noble Lord on a previous occasion that I agree in principle that this is an end to which the Boards should work, and that it is a desirable end which should be attained as soon as possible. If I accepted this Amendment, I am afraid that it would be interpreted, or could be interpreted, as requiring the Electricity Council to attach more importance to rural electrification than to other equally pressing problems, such as system reinforcement. For that reason, I consider that the Amendment is not a suitable one. I hope, too, that the noble Lord, Lord Wise, and the noble Earl, Lord Bathurst, will be content with what I have said in regard to rural electrification, and that noble Lords will not press this Amendment.

LORD LUCAS OF CHILWORTH

I wish I could say that the noble Lord has given a satisfactory answer. It may be satisfactory to his advisers, but I cannot say that it is satisfactory when I take into consideration that there is no more pressing problem in this country than the supply of electrical energy to rural areas. When the noble Lord says that if he accepts this Amendment, that might give colour to the suspicion that the Boards would have to give preference to rural electrification over any other question, my reply is that that is what I want. What is the object of putting an atomic power station in Somerset—to send electricity to the industrial north? After thinking of one or two reasons, the Government now say that they want to put these stations in places that are short of coal. To give electricity to the rural areas?—surely that is one of the reasons.

What I want the noble Lord to do is to impress on the Electricity Council that it is no good generating electricity and then, as my noble friend Lord Wise instanced, charging £1,200 to run an electricity supply to some point. My noble friend may be a wealthy man, but I could not afford to pay £1,000. My Area Board thought that I was going to pay £100 to run a supply line 100 yards, but they had two or three different opinions about that later on. We want to help the un-subsidised individual, the man who is not a farmer and getting 30 per cent. or 35 per cent. back. Perhaps for the first time in history, if my memory serves me aright, the noble Lord has the chance of putting in a nationalisation Bill specific directions to the Area Boards about how they shall spend their reserve funds, to build up which they have a statutory duty. Would the noble Lord care to give me an undertaking that one of the first directions he will give to the Area Boards is that the, cases mentioned by my noble friend Lord Wise and by the noble Earl, Lord Bathurst, and thousands of others, will be absorbed in the all-over price structure, with the principle of which the noble Lord has just said he agrees? I can assure him that he will be hunted on this question for quite a long time, because this is one of the crying disgraces of the electrical supply of this country. To get a cheap and efficient electrical supply you have to live in the very centre of an urban district; and out into the countryside the shortage of electricity is almost as bad as the shortage of water in some of our villages and hamlets.

I was hoping that the noble Lord would accept this Amendment as an indication to the Electricity Council that their duty shall be to promote and assist the maintenance and development by Electricity Boards in England and Wales of an efficient, co-ordinated "— that is the important word— and economical system of electricity supply including the extension of supplies to rural areas. I think the noble Lord would earn a lot of kudos (and he has a lot of leeway to make up in kudos over the electrical supply of the country) in the rural areas by accepting this Amendment. May I ask him if he would like to think about it again between now and the next stage of the Bill?

LORD MILLS

In reply to the noble Lord, I should not like to think about it; again. I think anyone reading what I had to say about it would appreciate how much the proper extension to rural areas is in the minds of all concerned with the electrical supply industry. Nor would I accept that they have not done a good job in that direction. They have made continual progress. I am sure that if the noble Lord had been advocating anything else, such as system reinforcement or maintenance, he would have been just as vehement that that was the thing that really mattered. I accept the importance of rural electrification, but I cannot include it as an item without specifying everything else of importance, which is quite impossible, I hope the noble Lord will forgive me if I refuse to consider the question further.

4.53 p.m.

EARL BATHURST

If what the noble Lord, Lord Gridley, said when he moved his Amendment which was rejected by the noble Lord, Lord Mills, is right, it would seem that this Bill may mean that the new Authority will lose all support from the highest grades of men working in the Electricity Authority. By rejecting, or agreeing only to consider further, the Amendment which the noble Lord, Lord Lucas of Chilworth, has moved with regard to the organisation of labour, possibly this measure will be completely unpopular with the lower grades. And if, further, the noble Lord, Lord Mills, rejects this Amendment of the noble Lord, Lord Lucas of Chilworth, it would appear that all support for this measure will be lost from the people who are going to use electricity. If the situation continues—and there is no reason why it should not—whereby electricity cannot be laid on to rural areas, apart from farms (the percentage of farms laid on has nothing to do with it; it is the mile or two beyond the farm buildings in which the noble Lord, Lord Wise, and many noble Lords who are not here and, I think, subjects of Her Majesty all over the country are interested), then I think people will go for small generating plants of their own and will not use the new developments in electricity that would appear to be forthcoming round the corner. I would ask the noble Lord, Lord Mills, to consider this Amendment further, in order that some part of this Bill may be popular with some people in the country. I should still support the noble Lord, Lord Lucas of Chilworth, in any measure he cares to take in regard to his Amendment.

LORD LUCAS OF CHILWORTH

The noble Lord, Lord Mills, can have it his way if he likes, but we shall return to this point on many occasions. I would not for one moment detract from the praise, if praise is necessary, of the Central Electricity Authority for electrifying thousands and thousands of farms; but what I would impress on the noble Lord is that every one of those schemes was subsidised, and the Government paid over one-third of the cost. If every one of those thousands of farms electrified under a subsidised scheme had had to be paid for at the full price, I wonder how many would have been electrified. When the noble Lord talks about setting up a privileged class, I suppose that in your Lordships' House I should be very unpopular if I hinted that a 35 per cen