Before we proceed with the proposed New Clause, which may lead to very prolonged discussion, I should like to know whether the Minister proposes to go beyond the formal moving of it or whether he proposes to finish it and the Amendments to-night, which may easily mean going far beyond the under- standing. Perhaps the right hon. Gentleman will enlighten the Committee.
All the new Amendments stand in my name and the names of certain other hon. Members, and I propose, when the time comes, to ask leave of the Chair to treat them all as one. They all give rise to the same broad issue. A great number of them are drafting or consequential, and they therefore only represent one Amendment of real substance.
The new Clause, as has been common with other Bills, has been the subject of a number of Amendments proposed by the hon. Member for South Croydon (Mr. H. Williams). As we told him, the subject matter of the Clause was being discussed between my right hon. Friend and the public utilities undertakings and I gave him to understand, although we could give no undertaking, that we hoped the result of the discussions, when it came before the House, would be accepted as reasonable. The subject matter of the Clause is damage done to apparatus, pipes, installations, and so on, of water, electricity or gas companies, as a result of the special powers conferred on local authorities for the widening or the diverting of streets, in furtherance of the objects under the Act of 1930and under the Bill. The Clause is formidable in length but is simple in structure. Perhaps I might mention the Sub-sections shortly, and point out what they deal with. Sub-section (1) empowers local authorities to move, alter and substitute any pipes or wires, in the making of new thoroughfares. Sub-section (2) provides that if any dispute arises, the housing authority saying that a job ought to be done and the undertakers saying "No," it shall go to arbitration. Sub-section (3) provides that the local authority shall make reasonable compensation for damage sustained by undertakers by reason of the execution by the housing authority of works under Sub-section (1). Sub-section (4)enables the undertakers to call on the authority to remove pipes, wires, etc., and substitute others where it is necessary to remove pipes or wires and lay down some new ones. Subsection (5) is machinery and Sub-section (6) is an arbitration Clause. Subsection (7) deals with the position of statutory undertakers who may be similarly affected and gives them similar rights.
Before I sit down I may say that the principle of this Clause is that full compensation may be given either by way of money payment or by way of local authorities substituting new pipes. The general principle is that there should be no compensation for loss of profits, and that in so far as a local authority do no more than a private individual could do, namely, pull down houses which belong to them, they ought to be in no worse position than the individual. It follows from this that the obligation to carry outworks of alteration should be limited to cases where the authority are exercising powers, not open to an individual, of stopping up or altering streets. The argument was that a local authority ought not to be under a greater obligation than private persons. Then it would seem to us that if, as a result of the special powers devolving on local authorities damage was done to those undertakings, compensation should be awarded. Those are the lines on which the Clause is framed.
I think that this is an entirely new type of legislation. There is no precedent for it in regard to this subject matter. I would ask the learned Solicitor-General whether I am right, first of all, in the assumption that there is no precedent, and whether the analogy he has just given with regard to private land is at all pertinent to the consideration of this matter? These works which have been placed in streets, and so on—electric-light cables, gas pipes and water pipes—have, I presume, been laid by virtue of Acts of Parliament, and make no charge or call upon the undertaker for any easement, as there would be a charge if the undertaker took his pipes over private land. Therefore, he is already in a privileged position as an undertaker running his works through what is substantially public land. He is not in the same position as someone who has purchased a right to be there. He is there as a matter of convenience to the public. If the public wishes, as a matter of public convenience, to alter the line of the roadway, that is not a matter for which he should get compensation. He is not in the position of someone who has purchased a right to be where he is, who owns the soil and who is disturbed against his will. He is a person who is given a power as a matter of public convenience to have his pipes laid along a public roadway and over public land, and surely if the public wishes as a matter of public convenience to move the line of pipes that should be regarded as one of the privileges of the position. The conception that you are here dealing with him as a man who has purchased the right to be where he is, that you are disturbing him in his right and that he is therefore to be compensated, is something absolutely unknown to our law, where you are dealing with pipes put into a public road which are subsequently moved for public convenience. I may be wrong, but I do not know of any other case where, in a matter of public convenience like this in dealing with slum areas, such a provision has been made for undereakers who have their pipes in a public road or a public place.
I wish in the first place to thank the Minister for having brought in this new Clause. When it has been read a Second time and we come to the Amendment stage I shall want to indicate in what direction I do not think it quite satisfactory. In the Committee I tabled a Clause and explained that I did that on behalf of the Conjoint Conference of Public Utility Associations, of which I happen to be a member. That Conjoint Conference represents, I think, every municipal and company gas, electricity and water undertaking, as well as certain other public utilities. Therefore it is not in any kind of narrow selfishness that this view was put forward. The hon. and learned Member for Bristol says that because these people have got these great privileges and are allowed to put pipes and cables in the street, they have not much of a grievance if somebody destroys the street. Surely he must be aware that the public utility concerns are statutory companies and that although they are granted certain privileges they have imposed upon them, in consequence, a great number of liabilities and obligations. In the case of the gas industry they have that interesting system of the sliding-scale; and this applies also to a great number of electricity undertakings. There are many obligations upon these concerns. In some cases they are under a statutory obligation to supply in circumstances which are obviously unprofitable. It should be remembered, therefore, that as against this facility of having free land for their distribution systems they have heavy obligations imposed upon them. I hope that the hon. and gallant Gentleman will pay attention to what I am saying. What I am saying may not be as interesting as what he is saying but I am at least replying to his speech.
I always thought there was something strange about the hon. and learned Gentleman. He says he can talk and listen at the same time, which is a strange thing; for the only organ of the human body which is incapable of doing two things at the same time is the ear. I know perfectly well, because I talk too much myself. The difference between me and the hon. and learned Gentleman is that I know it and he does not. Do not let us introduce questions of prejudice in this matter. In the London County Council area you have a county council functioning and performing certain duties as a housing authority and in the same area municipal bodies are providing gas, water and electricity. I am inclined to think that if the Stepney electricity undertaking, for instance, found a great many of their mains being destroyed through a housing scheme carried out by the London County Council they would naturally and properly expect the London County Council to compensate them for the damage done. We have in the London area about 15 municipal electricity undertakings and it seems to me only perfectly right and proper—
If the hon. and learned Gentleman in addition to being a barrister was also an engineer he would know perfectly well that if you put cables and pipes into a street and you afterwards pull them up what you pull up is nothing but a great deal of broken cast iron. Does the hon. and learned Gentleman know what happens when you take up electric cables or water pipes? Perhaps that has not entered into his experience, but in all probability 90 per cent. of the economic value of what has been sunk in the streets is destroyed. You have the whole cost of excavation; you sink the cables, water pipes and so on in the street; you fill in the ground; you have to restore the surface; and it may well be that three-quarters of the expense is not the cost of what you put under the soil, but the cost of putting it there, and when it is taken up all that value is destroyed.
I am grateful to the Minister for having gone part of the way, but I would point out that there are three kinds of value involved. First there is the value of the mains, cables, waterpipes and so on that are buried in the streets, and which have to be pulled up when, as a result of these schemes, building lines and so on are altered. Next there is something of considerable importance, both to companies and municipalities. In recent years very strong pressure has been applied by Government Departments, the Electricity Commissioners, and otherwise, to assist people to have the advantages, for example, of the installation of electric light through assisted wiring schemes, either by some form of hire-purchase or by the payment of a little more for the current because the authority has provided the wiring. The houses are pulled down, and all this capital which has been sunk in them is destroyed. No one is going to place upon the gas company, the electricity undertaking, or the Metropolitan Water Board the responsibility for the bad houses; they have come to try to improve the houses; but, having sunk a great deal of capital in them, if the houses are destroyed, for reasons which have nothing to do with them, all that capital is destroyed, without, as far as I can see, any compensation.
Further, there is the loss of effective business. If you have a lot of customers and their premises are destroyed, the business is lost. That may be one of the chances that you have to take in this world, and broadly speaking the public undertakings concerned maybe in a position in some cases to stand it; but I am told that in Great Yarmouth 20 per cent. of the customers of the gas undertaking are going to have their houses pulled down and they are going to be re-housed in an area outside the limits within which the gas undertaking is permitted to supply. Personally I have no connection with the gas industry, except that when I was Parliamentary Secretary to the Board of Trade I had something to do with the supervision of that industry, but it seems to me to be a tragedy to say to a public undertaking: "We are going to deprive you of a fifth of your customers, destroy their premises and re-house them elsewhere, outside the boundaries within which you are permitted to supply." That position is in no way met in this Clause, and, while I am grateful to the Minister for having met in part what I tabled in Committee, I hope there will still be some further opportunity for him to consider the arguments I have put forward, not on behalf of any narrow selfish interest, but on behalf of the whole of the municipal and company gas, water and electricity undertakings in this country. The Ministry of Health has been in active negotiation with the organisation to which I have referred. Matters of great public interest are raised in the hope that there will be a rather fuller consideration of these problems than has already been given to them.
I will deal with one or two of the points at this stage. The hon. and learned Gentleman opposite asked whether there was any precedent. I am told, though he may not regard it as a precedent, that in local legislation there are many precedents providing for compensation for disturbance of this kind for specific work. He said that a public utility undertaking, when it receives permission to lay pipes in the street, does not have to pay for the right of passing over private property, and that, therefore, if the public utility company want to put their pipes somewhere else why should they receive compensation. I do not think that that is quite the right way to put it. The public utility undertakings perform functions that we desire, and many of them have expressed obligations put upon them to provide a particular service. They also have a monopoly. I do not want to put them too much on one side or the other, but they are entitled to decent treatment. A local authority may say to the public utility company, "Here is a place for you to lay your pipes at your expense for the supply of water, gas or electricity." The next year, or even five years later, the authority concerned may change their policy and say, "We do not want your pipes here but somewhere else; it is quite true that we told you to lay your pipes here, and that other concerns in other parts of the country are not being put to this particular expense and inconvenience, but we think that these pipes should go somewhere else." We think that where a change of policy under the powers conferred by this Bill results in that particular form of damage to the undertaking affected by diversion of this kind, reasonable compensation should be paid in respect of this special instance of damage falling upon a particular undertaking as a result of something which is desired to be done. What the hon. and learned Gentleman said about it not being a case of right of way, or something of that sort, really did not seem to be relevant to the consideration which made us put this Clause forward.
My hon. Friend the Member for South Croydon (Mr. H. Williams) has raised in his speech the points contained in his Amendments, and it may be for his convenience and that of the Committee, if I deal with them now, and we can, subject to what you may say, Sir, divide on them without discussing them separately. He really raised two points. He said that these undertakers, particularly electricity and gas undertakers, in order to bring electricity and gas into the houses of the working-classes, have in fact themselves paid for the wiring and piping and have charged a higher sum for the use and consumption of gas and elec- tricity than is charged to people who pay for the wiring and piping themselves. When a house like that is pulled down, there is some sabotage; the pipes are there, and there is loss. My right hon. Friend gave the matter very serious consideration, and on the whole we thought that that item ought not to be included. They take the risk that the house may be pulled down either under such a scheme as this or by the owner.
In the ordinary way there is some contract or arrangement, but this is a case where there is statutory interference. Somebody comes along and says to the owner: "You must pull it down." If he had pulled it down of his own volition compensation would have followed automatically.
I doubt that. I stand to be corrected, but I have taken pains to inform myself, and I doubt if there is any provision for compensation being paid to an owner who for reasons of his own convenience pulls his property down. In introducing a new principle we went as far as we thought it would be right to go, and we are giving compensation where damage results in the way set out in the Bill.
My hon. Friend the Member for South Croydon referred to the effect brought about by the change in population as a result of clearance schemes, and mentioned one particular case, which I cannot but think is an abnormal one, where 20 per cent. of the customers of a gas undertaking were, as the result of a slum clearance scheme, to be taken out of their area. Of course, no change can be adopted without causing some dislocation and no dislocation can take place without producing some hardships. Let me illustrate my argument by way of analogy. Take the policy which for many reasons has been pursued by successive Governments—many people think that it would be a good thing if it could be extended—namely, that of transferring people from the depressed areas to other parts of the country. Any move of population of that kind, whether due to economic causes or to practical policy initiated in this House, involves some hardship, say, to the retailers and possibly the producers in the area from which the population moves. It is clearly a case of hardship to an undertaking if 20 per cent. of its customers are removed from its area, but we do not think that it would be possible to deal with this matter except in the way laid down in the Bill. We have done our best to meet the situation, but we have not been able to extend in the way that my hon. Friend would like. We are grateful to him for his congratulations on what we have done, and in the circumstances I hope that he will not press his Amendment.
I agree with the view expressed by the Solicitor-General, but the language of the Clause is not absolutely clear on a very important point. I refer particularly to subsection (3), the first sentence, which provides that:
A local authority shall make to statutory undertakers reasonable compensation for any damage which is sustained by them by reason of the execution by the authority of any works under Sub-section (1) of this section and which is not made good by the provision of substituted apparatus.
I have no doubt as to the intention of the Solicitor-General and the Government. There should no possible doubt in the mind of local authorities or anybody else. I have consulted one or two authorities, and their view of the matter is that the wording is open to doubt. When houses are cleared a local authority may decide to instal electricity for lighting purposes in place of gas, and it may be that they would have to make a payment to the statutory undertaking for "any damage" they may have suffered as a result of the action of the local authority. I maintain that the words "any damage" might be interpreted to cover loss of profit which a statutory undertaking might sustain in that way. I have an amendment to cover the point, but I do not want to move it provided the Government will alter the wording themselves or make a statement as to the real meaning of the Clause and that there is no doubt at all on the matter.
I support what has been said with regard to the measure of compensation which the Government have seen fit to give to these public utility companies. So strong is their case that as regards the actual physical damage to their property in the streets the Government have completely met it. Indeed, their case is unanswerable. Not only can they go nowhere but down the street, but they have a legal liability to supply. I submit that there is a real case for reconsideration with regard to what is called the gas carcasing and the electrical wiring. I would press upon the Government the argument that it is strongly in the public interest that these undertakings should be encouraged to make these services available for these poor neighbourhoods. In many cases it has been the provision of gas and electricity which alone has made these old houses habitable at all. Anything which makes a company or a municipality chary of sinking large sums of capital in these services in the poorer class of houses is to be deplored. The standard of housing is rising, and houses which no one would now suggest would come within the provisions of a Bill like this may easily come within its provisions in five or 10 years time. The proportion of capital in the case of the gas industry and the electricity industry which goes in distribution is much higher than possibly many persons may suppose. Therefore, it is a very serious matter for the companies if they find themselves with a large mass of capital thrown away and they receive no compensation for it. No moral question arises. I cannot think that any one imagines that the companies or undertakings are in any way responsible. They are all limited as to the profits they can make. No question of landlordism or anything of that kind arises. It is merely a matter of business assessment of the damage that is done to the public utility undertakings.
I ask the Minister whether he cannot offer some compromise on that point. We all appreciate the force of the case made in the particular instance of Yarmouth. I do not know whether the figures given can be substantiated, but there is a grievance in the case quoted. A good many of us feel that these movements of population, though they may be accentuated by Bills of this sort, are more or less a business risk, but I believe that in the case of shops even the Government's own legislation does admit the possibility of compensation where, as a result of their scheme, a very large reduction of population takes place. But suppose we say that it is very nearly an ordinary commercial risk. I do submit that the other damage is one which should be considered on a par with actual physical damage to mains in the streets:—the value of pipes torn out of houses cannot seriously be considered. I saw an un-legal twinkle in the eye of the Solicitor-General when he was referring to that matter. It cannot be that there is any valuable portion of a company's capital that has been sunk in those services and that remains in a case of demolition.
But I think it will be agreed that as a result of any large-scale clearance public utility undertakings do suffer considerable damage, and as I read the Clause that damage will not be met by the Bill. No compensation will be given to the people, who have no responsibility for the evils that are being dealt with, who have done something to improve them, and whose good will in all future housing in poor districts it is essential to retain. In those circumstances I hope that the Minister, who has shown such a fair-minded consideration of cases on their merits, will consider this case also. The Committee will remember that in many of these cases there will not only be an effect on the dividend. If a heavy cost is put upon the company or undertaking in this way the result in many cases will simply be an increase in the price of the commodity.
I beg to move, in line 33, after "any," to insert "loss or."
I have already stated, in substance, the case for this Amendment and I would only reply to one point made by the Solicitor-General. He said that in these cases there would be a good deal of salvage. I assure him that if wires and pipes which have been buried in the plaster of walls are torn out and pendants which have been fixed into ceilings are removed, the salvage will not be worth much. The refusal of this Amendment means refusing to these people compensation for the loss of installations which they have put into other people's houses for the purpose of providing facilities, not otherwise available. Broadly speaking, what will be left in these cases will be what engineers call "junk" and it will only have a "junk" value. Therefore if the Solicitor-General refuses the Amendment, it means saying, in effect, to people who have put their property in the form of wires and pipes, into other people's houses "You are going to be robbed by Act of Parliament of the value of that property."
I beg to move, in line 89, at the end, to insert:
(8) No compensation shall be payable under this section in respect of any loss of income occasioned by the removal or alteration of any apparatus.
We think that the Clause as it stands is all right in this respect. Our intention, which I explained in reply to the arguments of the hon. Member for South Croydon (Mr. H. Williams) is quite obvious. The hon. Member will notice that Sub-section (3) of the proposed new Clause provides for compensation for damage which is sustained by reason of the "execution of any works" and not the exercise of any power by the authority. A point has been raised as to the relation of this provision to any consequential loss which might result and we shall certainly look into the matter but at present we think that the Clause in this form achieves our intention.