1213 STANDING COMMITTEE C Monday 12th July, 1926.

[Sir ROBERT SANDERS in the Chair.]

ELECTRICTY (SUPPLY) BILL.
[OFFICIAL REPORT.] CLAUSE 35
—(Terms of purchase of a company taking a bulk supply.)

Where a company, being authorised undertakers, have ceased to generate electricity themselves, and in lieu thereof are taking a supply of electricity in bulk directly or indirectly from the Board, or, with the approval of the Electricity Commissioners, from any other source, and the undertaking of the company is purchased by a local authority under Section two of the Electric Lighting Act, 1888, the following provisions shall have effect notwithstanding anything contained in that Act:

  • In addition to the sum payable to the company by the local authority in respect of plant and other assets under the said Act or under the said Act as varied by any Order, there shall be paid a sum representing the capital properly expended upon plant and other assets rendered unsuitable for use by reason of the taking of such bulk supply as aforesaid, after deducting such amount as the company, in the opinion of the Electricity Commissioners, ought properly to have written off in respect of such assets:
  • Any question arising under this provision shall be determined by the Electricity Commissioners, whose decision shall be final.
  • Mr. GROTRIAN: I beg to move, to leave out the words, "with the approval of the Electricity Commissioners," and to insert instead thereof the word "lawfully". The object of this Amendment is to make it clear that the right shall exist to have capital repaid on compulsory purchase in all cases where supply in bulk is being taken lawfully by the authorised undertakers, and not merely with the approval of the Electricity Commissioners.

    1214

    Lieut.-Colonel Sir FREDERICK HALL: On a point of Order. If I may draw attention to the fact, there is a very important discussion about to take place downstairs, and many of us are very desirous of hearing it. I was wondering, therefore, whether you could agree to an adjournment of the Committee?

    The CHAIRMAN: That is not a point of Order.

    The MINISTER of TRANSPORT (Colonel Ashley): May I, before I deal with the Amendment, say that, with your approval, and with the concurrence of the Committee, I would be willing to suggest that if the Committee could see their way, without undue discussion, but, of course, with proper discussion, to get to Clause 38, that is to say four small Clauses, with hardly any contentious matters in them, then I would be prepared, with your concurrence, to move the Adjournment, so that we could attend the Debate to which my hon. and gallant Friend has referred. On the Amendment itself, this Clause was put down in order to do a measure of justice to distributing companies. It does not affect municipal undertakings, and it does not affect joint electricity authorities, but it does private companies, and I am afraid I shall be unable to accept the Amendment, as the Clause provides a concession, and it is as far as we can legitimately go. If this Clause had not been included, the Bill would have two bad effects, in that it would have penalised private companies, because when they came to be purchased by local authorities, they would not have been able to put in their power stations and other assets as part of the purchase money,, because they would ex hypothesi have been receiving a supply of electricity from the Board and, therefore, those assets would have been put out of account. That, I think, would have been unfair, and would have penalised them. It would also have had a further effect, in that it would have discouraged undertakers taking supplies from the Board, because they would have said, "If we take supplies from the Board, we shall lose a considerable sum of money when our undertakings are taken over by the local authority". I think the Clause is as far as we can go; it says that when an authorised 1215 undertaker is taking electricity, directly or indirectly, from the Board, or with the consent of the Electricity Commissioners, this provision will apply. My hon. Friend seeks to enlarge that, and to say that practically wherever they are "lawfully" taking a supply of electricity—and I am sure they can only be taking it lawfully—that shall also apply. That would, therefore, bring in waste heat and other matters, and the whole object of this Bill is to reserve, as much as possible, all these extra powers to the Central Board for distribution. I think my hon. Friend will agree that we have met the case of these companies very fairly and very well, and that this Amendment would go further than we should be justified in going.

    Amendment negatived.

    Sir JOSEPH NALL: I beg to move, to leave out the words "Section two of the Electric Lighting Act, 1888," and to insert instead thereof the words "any provisions of the Electricity (Supply) Acts, 1882 to 1922, or of any order made thereunder". I understand that the words in the Bill are not sufficiently comprehensive to cover cases which may arise. The proposed words would make the thing quite clear.

    Colonel ASHLEY: I think my hon. Friend is not, perhaps, quite seized with the meaning of this Clause. It goes rather further than, possibly, he thinks. What, I understand, we intend is that this Clause should apply to an ordinary case in which there is a purchase by a local authority on the ordinary legal terms. The Amendment would extend that, not only to the ordinary terms, but when special terms have been arranged between the purchasing authority and the purchasee, and, my technical advisers tell me, that on the ground of common sense, you should not extend that to cases where there have been special terms, but only where the ordinary terms apply.

    Amendment, by leave, withdrawn.

    Mr. GROTRIAN: I beg to move, after "1888," to insert the words "or under any local Act or Order on terms similar to those contained in the said Section two".

    Colonel ASHLEY: I accept the Amendment.

    Mr. ATTLEE: I would like to ask exactly what meaning is attached to the 1216 word "similar" I do not want to give unnecessary work to the lawyers, but there might be private Acts in which the term was used, and the question might arise as to how closely similar, which might raise quite a good legal argument for the House of Lords.

    Colonel ASHLEY: I quite appreciate my hon. Friend's point. I am advised that "similar" means that the terms are practically the same. If the hon. Member has any scruples about it, I will have the word "similar" examined before the Report stage, and if there be anything in his fears, I will have it looked into. The only idea is, that you should not exclude terms which are almost exactly the same as are in the Clause.

    Amendment agreed to.

    Further Amendments made:

    In Sub-section (1), after the word "Act" ["assets under the said Act".], insert "of 1888".

    After the word "Order" ["varied by any Order"] insert the words "or under any such local Act or Order as aforesaid"—[Mr. Grotrian.]

    Sir J. NALL: I beg to move, to leave out the words "such amount as the company, in the-opinion of the Electricity Commissioners, ought properly to have written off in respect of such assets:" and to insert instead thereof the words "an amount calculated on a scale of rates of depreciation to be prescribed as provided by this Act".

    Colonel ASHLEY: I am afraid I cannot accept this Amendment. In my opinion—and I hope the Committee will agree—this is eminently a matter for ad hoc decisions, especially by the Electricity Commissioners. If the Committee will read Sub-section (1), it will be seen that it must be a matter for decision by the Electricity Commissioners "a sum representing the capital properly expended upon plant and other assets rendered unsuitable for use by reason of the taking of such bulk supply". That, I submit, is really a technical matter for the Electricity Commissioners, and each case ought to be decided on its merits.

    Mr. G. BALFOUR: I quite appreciate what my right hon. and gallant Friend 1217 has said. I want to place on record, for the right hon. Gentleman's advisers, that I called attention to the fact that in fixing a scale it should not be on a level basis. Many companies and other undertakings, when not even meeting expenses, may be debited for the first year with a rate of depreciation when, obviously, there can be no question of either profits or depreciation. I simply want it recorded that that should be taken into account, and a scale should begin to accrue as from the date when the company is making a suitable, reasonable trade balance.

    Mr. ATTLEE: What we have to realise is that we are here asking a local authority to pay for working plant, and where the provision has been made by the company, what you have to consider is whether there has been depreciation. The effect of any such financial position cannot add anything to depreciation. It does not alter the fact that the things have depreciated.

    Mr. BALFOUR: I do not think there is any real difference in calculating the scale at points where it would be reached. In nearly all cases, you would have arrived at a stage where you would have annihilated the non-profit-earning basis. The point I want to make clear is that it should not be a minus quantity at all in years when they are making no profit, and then a rising scale rather than a flat scale.

    Amendment negatived.

    Mr. GROTRIAN: I beg to move, in Sub-section (2), to leave out the words "whose decision shall be final," and to insert instead thereof the words "Provided that if the company or the local authority are dissatisfied with any such determination by the Commissioners the question shall be referred to the arbitration of a barrister (or in Scotland an advocate) appointed by the Minister of Transport from the appropriate panel set up under Section four of this Act, and the arbitrator may, if he thinks it expedient to do so, call in the aid of one or more qualified assessors and 'hear the case wholly or partially with the assistance of such assessors". This Amendment is intended to secure the right of appeal to the barrister referred to in Clause 4 against any decision of the Commissioners relating to the rights conferred on a company by this Clause.

    1218

    Colonel ASHLEY: I really think that this is not a matter that need go to the barrister. It is eminently a technical matter for the Commissioners, and we ought to keep the barrister for what I call more important subjects, and nontechnical subjects. I think my hon. Friends ought to be grateful for what the Government have done for them in this Clause, not to look a gift horse in the mouth, and be satisfied that they are getting something very substantial.

    Sir F. HALL: Although my name is associated with this Amendment, I quite agree with my right hon. Friend. I think that after the discussions we have had, it was agreed with the Attorney-General that only what we call the practical matters should be left to the Commissioners.

    Sir J. NALL: I quite appreciate what my right hon. Friend has said. This is a matter dealing with finance, and, therefore, some appropriate words like these should be added.

    Amendment, by leave, withdrawn.

    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 36
    —(Methods of charge.)

  • The charge made by authorised undertakers to any ordinary consumer, may, if duly authorised, and notwithstanding anything in any Act or Order to the contrary, consist of a periodical fixed or service charge and in addition a charge for the actual quantity of energy supplied to the consumer or for the electrical quantity contained in the supply.
  • When the undertakers have power to provide meters, electric lines, fittings, apparatus and appliances, the periodical fixed or service charge may include a rent, charge or remuneration in respect of any meter and any electric lines, fittings, apparatus and appliances provided by the undertakers in or upon the premises of the consumer whether let on hire or hire purchase terms to the consumer or otherwise.
  • A method of charge as aforesaid may be authorised by Special Order or by an approval under the provisions of Section thirty-one of the Schedule to the Electric Lighting (Clauses) Act, 1899, or corresponding provision contained in any Act or Order, and such Special Order or approval may provide, where expedient, for an option to ordinary consumers to be charged by an authorised alternative method.
  • Sir F. HALL: I beg to move, in Subsection (1), after the word "undertakers" ["made by authorised undertakers"], to insert the words "for electricity supplied". 1219 I think that will make the Clause plainer.

    The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Lieut.-Colonel Moore-Brabazon): I must resist this Amendment. This is all of a rather technical nature, but in Section 31 of the Electric Lighting (Clauses) Act, 1899, it is laid down that undertakers may charge for energy supplied, and, because of those words, it is impossible to introduce this quarterly charge in addition to the rate for energy supplied. If the words that my hon. and gallant Friend desires to put into this Clause are inserted, it nullifies the whole possibility of making this service charge plus a rate for uniform supply. It would nullify the whole effort of the Clause, which, I think, these private companies and undertakers wish to introduce better way.

    Sir J. NALL: Before this Amendment is withdrawn, may I say that these words might imply that the local authority can do many other things which, at the present time, it cannot do. The particular draft now suggested may be inappropriate, hut it appears necessary to put in some words here, or we may extend the scope of certain undertakings whose present business is limited to the supply of electricity.

    Sir F. HALL: I only wanted to make it clear, and define what the Clause meant. Perhaps my right hon. and gallant Friend will consider whether such words as "electricity or energy supplied" could be put in? I want to limit it, as I have stated, and if my right hon. and gallant Friend will look into the matter between now and the Report stage, I will not stress the point now.

    Mr. HARDIE: If the Board or the schemes brought under the Board are to supply nothing but electricity—

    Mr. BALFOUR: I think I see the point. My hon. and gallant Friend's anxiety is that the supply of electricity shall be chargeable quarterly. You might supply no electricity in one quarter, and, in these circumstances, during the quarter when no electricity was supplied, you would still charge the company's annual charge, but that charge would disappear if it were only for electricity supplied. The point could be covered by a different form of words.

    1220

    Mr. HARDIE: It is covered already.

    Amendment, by leave, withdrawn.

    Sir F. HALL: I beg to move, in Subsection (1), after the word "undertakers" ["When the undertakers"], to insert the words "are a local authority and". The object of this Amendment is to limit local authorities so that their powers shall not be further increased. It is no good beating round the bush. That is, really, what is at the back of my mind. I do not want to see their powers increased. They have certain powers now, and my own opinion is that they have been granted quite enough. I do not want to go into the question of municipal trading and private enterprise—

    Mr. HARDIE: You cannot keep off it on this Amendment.

    Sir F. HALL: It is perfectly plain with regard to my own ideas, and it is for that purpose, and, knowing that no further powers will be conferred on these municipal undertakers, I prefer to move this form of words.

    Colonel ASHLEY: With the greatest respect to my hon. and gallant Friend, I do not think he understands the effect of his Amendment, which is to confine the operation of this Clause to local authorities. It would exclude from its operations joint electricity authorities and private companies. That is the effect of the Amendment. I am sure my hon. and gallant Friend would not like private companies to be left out. If you let the Clause stand as it is, all these various bodies can come in and take advantage of the Clause, of which I am sure the Committee must be in favour, as it enables these two alternative means of charging to be put in force, which is greatly demanded by industry at the present moment.

    Sir J. NALL: I do not want to go into the question of what municipalities and supply companies are charged, for it arises on a Clause later in the Bill; but there is a weakness as the Clause is drawn, for the quarterly charge may apply to the installation of fittings.

    Lieut.-Colonel MOORE-BRABAZON: Will not the new Clause cover that?

    1221

    Sir J. NALL: This Clause, as drawn, might possibly apply a quarterly charge to an installation of fittings on which the authority will spend capital, and never see its capital paid off. Where they already have the power to instal fittings, it is quite a different point from the one made by the Government now. A quarterly charge in relation to the supply of energy, though the energy may not be delivered, is an established thing in these Committees, but to extend this Clause to enable the quarterly rent to be levied, irrespective of fittings and wiring installed in house property, is another matter, which this Clause is not designed to cover, as I understand it, and I think that these particular words are the most appropriate. Some further Amendment ought to be made to this Clause to make it clear that we are dealing with the supply of energy, and not with an extension of the facilities for varying charges and spread-over charges in regard to the installation of fittings.

    Colonel ASHLEY: I am advised that the present law is not changed in any way in that respect.

    Sir F. HALL: I am sorry to press my right hon. and gallant Friend, but I have my own doubts about this, and, notwithstanding all he has stated, I cannot help thinking that, under this Clause, additional powers are being conferred on local authorities for providing such things as meters and fittings, and all that sort of thing. I do not want to see this power extended. The next Amendment is intended to limit the terms of the Clause to apparatus of the undertakers, let on hire or purchase, on a hire or hire purchase system, to consumers. That is, really, what this means. I am sure my right hon. Friend is not desirous that any of these powers shall be given to these local undertakers, and we do not want any Clauses to slip through. There may be a difference of opinion, and I am very sorry that I cannot see eye to eye with my right hon. Friend, notwithstanding the advice he has tendered. No doubt, his advice is founded on good fact, but let us be sure; and if there be a possibility of an increase in the authority's powers, surely it is advisable that words be inserted to make it clear. If my right hon. Friend will be kind enough to say that he is prepared to look into this point, and 1222 see if there is anything in the fears I have expressed, then my mind will be more or less at rest. Will he look into it between now and the Report stage?

    Mr. ATTLEE: I should like to make a slight protest against the extraordinary delusion of the hon. Member opposite, who is living some way back in the dark ages. I do not think this Clause gives any power to municipalities, but why this dog-in-the-manger attitude which is always taken up by hon. Members opposite? As a matter of fact, it could not give any increase to us in London, where the hon. Member's interests lie, because we already have these powers. What he is really doing is to object to the powers that he already has for his own companies being given to municipalities, because it especially benefits the poorer class of consumer, to whom we specially want to give facilities, with a rental for wiring, and so on. If the hon. Member will study the proceedings of the Special Committee of the House of Lords on this subject, he will find he really is a very long way back. The House of Lords can hardly be described as very revolutionary, and they thought the local authorities should have these powers extended, and so did the Weir Report. In this Bill we are not really considering the question of municipalities versus companies, but the extension of electricity as far as possible to everybody. The Weir Report is strongly in favour, the House of Lords Committee has reported strongly in favour, and we shall deal with that later on, but in this case, as far as I can read it, there is no extension. If there were, I should welcome it.

    Mr. BALFOUR: There is just one observation which does arise on this Amendment. I think my right hon. Friend should insert words to explain that this does apply only to the supply of services, and does not refer to meters and wires, if it be the intention that the wires and fittings are to be dealt with in a s eparate Clause.

    Mr. KELLY: The hon. and gallant Member for Dulwich (Sir F. Hall) made a reference to Clauses slipping through without being noticed, or Clauses slipping through with which he did not agree. A good many Clauses have slipped through with which some of us entirely disagree.

    Sir F. HALL: Hear, hear!

    1223

    Mr. KELLY: But I can assure the hon. and gallant Gentleman this case shows the need for a Bill of this kind, when we find the endeavour being made to place restrictions upon those who are engaged in the supply of electricity. One can quite understand how badly we have been dealt with by these various companies when they endeavour now to apply, as the hon. Member for Limehouse (Mr. Attlee) said, the dog-in-the-manger policy by keeping back from municipalities the supply of things which are needed.

    Sir J. NALL: I want to make it quite clear that all I sought to do just now, apart from what my hon. and gallant Friend had to say, was that we should not now become involved in this Clause in what might turn out to be a decision upon what arises on later Clauses. With regard to the points raised by the hon. Member opposite, I would remind the Committee that I myself presided over a private Bill Committee dealing with this subject.

    Mr. ATTLEE: I was referring to the other hon. and gallant Member.

    Amendment negatived.

    Sir F. HALL: I beg to move, in Subsection (1), to leave out the words "or otherwise". What is the meaning of the words "let on hire or hire purchase terms to the consumer or otherwise"? I do not know how far they go, and where they lead us. Perhaps my right hon. Friend will give a definition of these two words, saying exactly how far they go. I prefer to leave them out. If my right hon. Friend would do this4 I should be grateful, but there may be something more than meets the eye, and, if so, and he will inform us, we shall know where we are being led. I do not want to see words that take me such a distance that I cannot see the other end.

    Lieut.-Colonel MOORE-BRABAZON: I think I can reassure my hon. and gallant Friend, it is not to give any more powers to people; it is dealing with authorities who are established, and who already possess these powers. The words "or otherwise" refer to the system of deferred payments rather than hire purchase—two separate types of payment for apparatus, one deferred payment, and the other hire purchase. It is to include 1224 that that the word "otherwise" is put in. If my hon. and gallant Friend's Amendment were carried, it would prejudice the debate which must at a later date take place on the whole question of municipal trading in apparatus. My hon. Friend has said he would rather not have that debate now, and if we exclude the words it will prejudice the full consideration of the question later. I am sure he will agree it would be best that we should leave it as it is now, and take it up at a later time when the new Clause is moved.

    Mr. BALFOUR: I understand in this Clause the proposal to "let" or "otherwise," only relates to the letting on hire or hire purchase terms of those things which comprise the service lines, meters and fuses, which it is quite competent for the consumer to own. I want to mention that, so that it will be quite clear, when we come to discuss the new Clause, that we are confined in this to a charge for the supply of electricity.

    Amendment negatived.

    Clause ordered to stand part of the Bill.

    Clause 37 (Amendment of Schedule to62 & 63 Vict., c. 19) ordered to stand part of the Bill.

    Clause 38.
    —(Minor Amendments.)

    The Amendment specified in the second column of the Sixth Schedule to this Act (which relate to minor details) shall be made in the provisions of the Electricity (Supply) Acts, 1882 to 1922, specified in the first column of that Schedule.

    Sir DOUGLAS NEWTON: I beg to move, at the beginning of the Clause, to insert the words "With a view to the consolidation of the enactments relating to the supply of electricity". The essential point I want to raise in this Amendment is the necessity of consolidating the various Electricity Acts at the earliest possible opportunity. When this Bill gets on the Statute Book, there will be no less than seven different Acts of Parliament dealing with electricity, and three of them have been passed since the War. The draftsmen in these different Acts have adopted the usual, but highly inconvenient practice of providing that the whole seven are to be one Act. The effect of this is to apply some of the definitions given in the earlier Acts to the later 1225 Acts, and also, conversely, some of the definitions given in the later Acts to the earlier Acts. Really, I do not believe any ordinary person can possibly read these Acts and understand what they mean when they have to refer backwards and forwards from one Act to the other. I do not want to weary the Committee now, as we all want to be in the House, with the arguments in support of that contention, but they are many, and they are wide. I would like very much to get some expression from the Minister that he will either take steps in this Bill, which would be much the preferable course, to consolidate these Acts, or, at any rate, if he cannot see his way to do that, that he will take the earliest possible opportunity of consolidating these seven unfortunate Acts of Parliament.

    Colonel ASHLEY: My hon. Friend seems to look forward to some more pleasant afternoons up here. I am sure, considering the profitable time we have spent here during the last few months, we shall all look forward to meeting again next year for his Consolidation Bill, and I hope the same hon. Members will make the same excellent speeches. I am afraid I cannot say any more as to the Government's intention of passing a Consolidating Act, except, as I say, the inducement 1226 to listen to the speeches that we have heard. I would ask my hon. Friend not to press his Amendment, because I do not think, really, it would convey the proper perspective of this Act. This is not a consolidating Act. This is an Act which deals with the supply of electricity; and these Amendments to an existing Act are necessitated by the Bill which we are now considering. Therefore, it is not a question of consolidation, but of Amendment, and I think if the words he suggests were put in, they would give a false view of the Bill.

    Sir J. NALL: May I suggest to my right hon. Friend that when he does take steps to bring in a Consolidation Bill, it would facilitate many points involved if he would introduce it early in the Session?

    Amendment negatived.

    Clause ordered to stand part of the Bill.

    Colonel ASHLEY: I beg to move, "That the Committee do now adjourn".

    Question put, and agreed to.

    The Committee adjourned accordingly at Twenty Minutes before Five o'Clock until To-morrow (Tuesday) at Eleven o'Clock.

    THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

    Sanders, Sir Robert (Chairman)

    Alexander, Mr. Ernest

    Alexander, Sir William

    Apsley, Lord

    Ashley, Colonel

    Attlee, Mr.

    Balfour, Mr.

    Barclay-Harvey, Mr.

    Clarry, Mr.

    Clayton, Mr.

    Dawson, Sir Philip

    Ellis, Mr.

    Grant, Sir James

    Grotrian, Mr.

    Hall, Lieut.-Colonel Sir Frederick

    Hannon, Mr.

    Hardie, Mr.

    Holt, Captain

    Hudson, Mr. Robert

    Hume, Sir George

    Kelly, Mr.

    Looker, Mr.

    Maclntyre, Mr.

    Manningham-Buller, Sir Mervyn

    Moore-Brabazon, Lieut.-Colonel

    Nail, Sir Joseph

    Newton, Sir Douglas

    Rentoul, Mr.

    Sandeman, Mr.

    Townend, Mr.

    Ward, Lieut.-Colonel Lambert

    Warner, Brigadier-General