Question again proposed:
That this House takes note of the First Annual Reports and Statements of Account of the British Electricity Authority and of the Area Elctricity Boards; of the Report of the Minister of Fuel and Power for the period 1947–49; and of the Annual Report of the North of Scotland Hydro-Electric Board for 1949.
A study of the first Report of the British Electricity Authority makes it plain that nationalisation has done no good to the industry, to the public or to the consumer. At best, it has not done any very considerable amount of harm. The Authority has carried on with the old methods. Where it has departed from tradition, it has added to its costs, and that has been reflected in price increases charged to both industrial and domestic consumers. In support of that, I should like to point out that during the previous 10 years the average increase in price was only 0.8 per cent., whereas in the first year of nationalisation the increase was no less than 4.7 per cent. That increase was caused by higher maintenance and administrative costs. As a study of the Report reveals, administrative costs went up by no less than 14 per cent. as soon as the Authority took over.
Before continuing with some of my more critical remarks, I should like to put in a good word for the technicians. They have had a very difficult task in coping with not only the new generating programme, but also the difficulties of load shedding at a time of expanding demand. They have also had to cope as best they could with delays in the supply of new equipment and the replacement of old. But, of course, the technicians have had another great difficulty, and that has been the frustration caused by excessive administrative bureaucracy which has been built up. That fact is apparent from almost every page of the Report. All the emphasis of the new Authority has been upon administration. It has been "Self before Hacking."
I cannot understand why there should have been this great emphasis upon administration, because electricity supply is essentially a technical business. A great administrative task is not involved. This is a technical matter, and electricity supply should be arranged by technicians and by managers with technical experience, rather than by administrators with technicians in a subordinate role.
The relative importance of the two types of individual is shown by two advertisements which I have taken from an issue of the "Electrical Review." One electricity board advertises for assistant administrative officers who are required to have no particular qualifications. It states that a legal qualification and experience of electricity supply would be an advantage, though not essential. An assistant administrative officer, with no particular qualifications, is to receive a salary of £800 to £1,000 a year. In an adjacent column, there is an advertisement for the appointment to another board of a district engineer who is required to be a corporate member of the Institution of Electrical Engineers, to have had a sound technical training, and to be experienced in the construction, operation and maintenance of overhead and underground mains and substations, up to and including 33 k.v. For a man with all that experience and knowledge, the Authority and its boards are prepared to pay only £665 per annum.
Who will run that part of the electricity undertaking—the assistant administrative officer with a legal training and a salary of £1,000 a year, or the district engineer with his corporate membership of a professional body and a salary of £665 a year? It is obvious who will run the undertaking, and it is obvious why so many of the staff feel a sense of frustration at the importation of all these administrators with very few qualifications, who will set out to over-administer this industry. Unfortunately, we see the growth and development of a vast bureaucracy, which is slowing down progress and development.
We believe that a great deal of time is taken up with meetings at board level and divisional level. Then the chairmen of the boards come to London to attend further meetings and, as a result, they are not in their own areas to give on-the-spot decisions. Paper work is churned out in London, elaborate minutes are kept and passed back to the areas, and a vast paper work system is developed. Those who have to supply the Authority and the boards know just what this involves, because they experience continual delays before decisions are taken and forms of contract are completed. Also, as is common whenever a bureaucracy is set up, there is considerable delay before bills and accounts are paid. I think the Report itself also serves to show, if one reads it carefully, how heavy is the bureaucracy which has been set up. While I am full of praise for the technicians, I hope the Minister, in the coming year, as he looks at the work of the Authority, will see that the administrative side is kept in its proper place and is not allowed to swamp and inundate the whole undertaking.
I now want to turn to the capital cuts which have been referred to, and to draw attention to the fact that most of the cuts ordered by the Government are to take place on the distribution side and not on the generating side. I suggest that that is a faulty balance, because the distribution side is heavily overloaded. It does not get very much publicity; in fact, electricity supplies rarely attract the headlines, except when there is a disaster at a power station. I should like to give this warning to the Minister—that there is every possibility of a number of disasters at heavily overloaded sub-stations throughout the country, and every possibility of a number of "blow-outs" in heavily overloaded cables which urgently require replacement and extension. Their renewal has had to be deferred by reason of this arbitrary decision to cut development in distribution, but not to change the generating programme.
I appreciate that there is an urgent need for new power stations, as well as for new distribution equipment, but there is no point in building the power stations if the distribution network is worn out and in urgent need of replacement. I am not making any attempt here to deal with the desirability of extending the distribution network into the rural areas; other speakers will doubtless be dealing with that point.
It might well be asked—what do we really want? To cut the generating station programme, when it is well-known that its capacity is insufficient for the increase in demands made for electricity? Of course, we do not want to do that; it is not necessary, as I think we could get more output for the same expenditure of capital. Some of these new generating stations are being constructed in a most lavish way, and many economies could be made by cheaper constructional methods. It seems to be forgotten today that power stations, in the light of modern developments, will probably last for only 40 or 50 years. These new stations are being built as if they were to last for 400 or 500 years.
Is it necessary to go in for extravagant architectural features, instead of exercising proper economy? Is it not really going too far in constructing new generating stations to insist on special types of facing brick for ornamental purposes? Is there any need for lavish and exotic internal fittings? Probably as much as 10 per cent. could be saved on the cost of each new generating station if the Authority only had the mind to see to it. The fact is that the Authority, and the Socialist Government supporting it, are intoxicated with the conception of building these temples of power all over the country, instead of getting down to the work of providing serviceable generating stations as economically as possible.
As further proof of that, one has only to look at the hoardings throughout the country and see the lavish programme of advertising which has been going on, seeking to demonstrate that there never was a power station in the country until the British Electricity Authority was set up. I am not suggesting that they need be ugly, but there is no need to raise them to a supreme position among the architectural features of the country at a time when economy is essential. That is the important point.
In 1948–49, nearly £500,000 was spent on prestige advertising, and, if that was what the Authority was spending then, goodness only knows what it is spending now on advertising of an unnecessary character and, in many cases, well above the heads of ordinary men. Some of the pictures of power station construction can have no possible value to the man in the street, nor are they particularly informative. They are examples of an extravagant outlook which is a by-product of the intoxication of the British Electricity Authority, with its large capital resources and apparently unlimited power to expand administratively.
There is a very big facade being put up. A Research Council has been established, with technical developments of one sort and another, but there is not a single reference in the Report to any new technical idea. In the first Report, there is very little reference to research going on, because if there was we should have heard more from the Authority about it. When the new Kingston power station was opened, the P.R.O. handed out a Press statement stating that it was the first of the 25 power stations to be built by the British Electricity Authority, which, in fact, had been in existence only six months, but which was already trying to take credit for the power stations planned by the previous authorities. We can be quite sure that, if there were any results in technical and research work going on, we should be hearing a great deal about them.
I suggest that, in this country, we are lagging very seriously behind in our transmission technique, and that the British Electricity Authority, by having control over all the generation and distribution of current in this country, is losing a great opportunity of building up vigorous new research into new methods of transmission. I would like to see some attention given to high voltage direct current transmission. But this is at the bottom of the Authority's list of priorities, and instead, we are getting the mixture as before. It was announced recently that there was a proposal for a new super tension transmission line of, I think, 225 k.v.a. In Sweden they are already building an A.C. line to work at 400 k.v.a. We are lagging behind in this country and making very little real progress, and the reason is because the technicians are being bogged down in the administration merry-go-round, with the result that the men at the top are unable to get on with the job. Reference has been made to "Self before Hacking"; it is time it was "Hacking before Self."
I think that my right hon. Friend, who opened the Debate on this Report, did so in a most moderate fashion, even though he described the Report as being labyrinthine. I think it is preferable that we should have a Report with all these facts and figures rather than one with insufficient information. It is better to have plenty of information than none.
On the whole, I think right hon. and hon. Gentlemen must admit that the first Report of the British Electricity Authority is very complimentary indeed, and I do not agree with the hon. Gentleman who represents Altrincham and Sale (Mr. Erroll) when he says that nationalisation of the industry has done no good whatever. I cannot speak for England and Wales, but I can, for instance, draw the attention of the House to the first Report of the South-East Scotland Electricity Board. There, the hon. Gentleman will find plenty of evidence of the fact that nationalisation has been of great benefit to the people.
The hon. Gentleman was referring to the South-Eastern district, and to the benefits we have received. I interrupted to say that the rates have been raised in that area. What has he to say about that?
If the hon. Gentleman would not be so precipitate he would find that in the course of my remarks I intend to deal with that point. He comes from a city where rates are low. and everything else is low.
If we turn to paragraphs 47 and 48 on page 8 of the Report, we find that the South-Eastern area was the last to make any improvement. Why? Simply because private enterprise, which distributed electricity before the vesting date, mismanaged the industry. For instance, it bought a supply of electricity from Edinburgh Town Council at a fraction of a penny a unit but distributed it to the people in the South-Eastern area for 8d. a unit.
We are told by the hon. Gentleman the Member for Altrincham and Sale that costs for the 10 years before the vesting date were very low compared with what costs have been since. The hon. Gentleman has failed to take into consideration the general increase in the costs of every sort of commodity and also in the cost of living.
The cost of coal was rising throughout the previous decade, and it rose no more in the first year of the B.E.A. than it had done each year in the previous nine or 10 years.
I refer the hon. Gentleman to previous Debates on coal. He will get an education in this connection if he reads them.
The company which distributed electricity in South Scotland before the vesting date allowed its machinery to deteriorate, and that today is causing a great increase in maintenance by the Electricity Board. Now let us see just exactly where private enterprise took us in South-East Scotland. Three supply companies, the Clyde Valley, the Lothians Electric Power, and the Southern Electric Companies, each led the supply out to the verge of the urban areas and left a great triangle of the richest agricultural land in Scotland devoid of any supplies. There was no legislation to compel any of those supplying companies to give to the people in the rural areas a supply of electricity. Today, the South-Eastern Board has promised a supply—[HON. MEMBERS: "Ah."] Yes, they are doing it, and no one knows it better than the hon. Gentleman who represents Edinburgh, South (Sir W. Darling) and stays on the banks of the Tweed, because the supply crosses his estate.
The rich agricultural land in the upper Tweed valley has never had a supply of electricity, and in the churches and schools they have been working with paraffin lamps right up till now. It has been left to the nationalised unit to see that the large number of people there are going to get the ordinary privileges that the rest of us in the urban areas get. How then can it be said that we are not better off than we were under private enterprise? Time and time again, I endeavoured to get private enterprise to supply those people with electricity. We find in this Report that out of 350 villages in South-East Scotland only 240 have a supply of electricity, and we find it stated in the Report that rural development would be uneconomic to carry out.
There, in South-East Scotland, is one of the richest industrial areas, which is bounded by the agricultural area, in the Newtongrange, Easthouses, Gore-bridge district. Thousands and thousands of people can be accommodated in the hundreds of houses that have been built there with the greatest speed—the greatest building speed in Scotland. Yet today the great village of Newtongrange, with over 8,000 people, has such a supply of gas that a man has to get on a chair on top of a table, if he wants to read his evening paper.
That is no exaggeration. That is a statement of fact. I ask the Minister to draw the attention of the South-East Electricity Board to the fact that the development of those areas cannot be uneconomic, and that they are bound to be, in the nature of our national economy, of the greatest importance. There must be priority in the supply of power. We know perfectly well that private enterprise has left us with so much leeway to make up, that there has to be a system of priority, and I suggest that mining and agriculture should be the first two priorities, and that the mining and agricultural areas should have priority in receiving supplies of power. I believe I can leave the Minister to see that what I have said is conveyed to the Board, so that we in South-Eastern Scotland will now get the current which we have sought so patiently for many years and awaited in vain from private enterprise.
I wish to refer to something which has worried me ever since I have tried to obtain mastery of the Report of the British Electricity Authority, and that is its confused nature. If the Minister does nothing else for us tonight, I ask that he will tell the Authority that when it produces its next Report it should be better set out, with an index, so that we can pick out the facts quickly and easily.
We have heard about many of the details and also about some of the essential things concerning the electricity industry of this country, and I want to turn to what seem to me to be essential things about which we ought to have an answer from the Minister when he replies to the Debate—matters concerning the future policy of the industry.
I was very surprised that the Minister in his opening speech, seemed to be astounded at the way the consumption of electricity has increased in this country. If he looks at the statistics of consumption during the last nearly 30 years, based upon the annual sales as a measurement of consumption—which is a very accurate one—he will find it has been increasing at the astonishing rate of 9.5 per cent. compound interest per annum. Anyone looking at that curve knows that we shall inevitably be in great trouble unless we develop our generating and transmitting capacity quickly enough to meet this increasing demand. Partly as a result of war conditions for six years, when although that rate of increase was still continuing, we were not able to build up our capacity, we are now running very near the generating and transmitting capacity falling far short of this astonishing demand, which, as I say, has been going on for about 30 years.
How has the demand come about on this scale? The Minister said that there it was, that it was going ahead; but he did not attempt to analyse it. When it is analysed in the Report, it is apparent that, certainly since the war, a very large proportion of that enormous increase has come about from domestic consumption. Appendix 3 shows that in 1946 domestic consumption was over 13 per cent. more than in the previous year, in 1947 nearly 11 per cent. more, and in 1948 7.7 per cent. more. Yet at the same time for industrial and commercial consumption, in 1946 the figure was 2 per cent. more than for 1945, in 1947 there was no rise, and in 1948, the last year for which figures are published in the Report, consumption was 11 per cent. more than 1947, and much the largest part of that 11 per cent. was for commercial rather than industrial consumption.
Far from trying to strike a balance between the growth in the rates of domestic and industrial consumption, for a period the Government actually encouraged the growth of domestic consumption by removing the Purchase Tax in the Autumn Budget of 1945, re-imposing it only in the spring of 1947. Furthermore, during all this period, quite apart from any encouragement the Government may have given, we have been short of coal in all our homes, and so have been driven to choose whatever means we could to keep ourselves warm, not only in the very cold winters but also in the warmer ones we have had more recently.
The problem of the balance between domestic and industrial demand is a very real one. One figure which brings it out dramatically is that the switching on of a one kilowatt ordinary radiator bar at the time of peak load means that one man loses his production during that time because it causes load-shedding, which shuts down the machinery. One important reason for this rise in the domestic consumption of electricity has been the pricing policy of the British Electricity Authority. As my right hon. Friend the Member for King's Norton (Mr. Geoffrey Lloyd) pointed out, the price of domestic electricity is 9 per cent. less than it was before the war, whereas the average price of electricity for industrial purposes has increased by 50 per cent. If figures mean anything at all, that means that at present industry is subsidising the domestic consumer. Paragraph 340 of the Report gives the background to the reason for this subsidising of the price of domestic electricity, but the result is very striking, and is disturbing to the future prosperity of the country.
I have some figures comparing the situation here and in the United States. In this country we consume domestically 200 kilowatts per head per year, whereas in the United States they consume 300—one-third more. Industrially, however, we find the ordinary differential in productivity between the two countries: we consume about 400 kilowatts per head per year, and in the United States the figure is 1,000. Unless this fundamental problem of getting enough electricity for our industrial purposes and encouraging our industries to use more electricity is faced, our productivity will not rise as it ought to and must rise if we are to recover economically, and if we are to fulfil those hopes of increased productivity which have been held out by visitors from our businesses to the United States, and what we have read in the reports of the Anglo-American Productivity Committee about the need for further electrification in our factories.
What is more, unless the Government face this problem and propose a policy— and it is the Government alone who can make a policy about pricing for the British Electricity Authority—not only will we not get the improved productivity we ought to be getting, but those who are most responsible for bringing on peak loads will not be paying for the additional capacity which has to be created in order to meet them. I therefore hope to hear from the Parliamentary Secretary some statement of policy about the pricing of electricity.
On the generating side, there are many questions which we should like to have answered, for we cannot find the answers in this out-dated Report. These questions affect the whole future expansion programme of both the generating and the distribution side of the industry. Is the Minister satisfied that we shall not be getting ourselves into trouble by standardising the large units being put in on the 900 lb. pressure and 900 degrees Fahrenheit boilers and generating sets? Appendix 19 shows that there are very few such sets—I think only one—at present operating in England. The 900 degrees Fahrenheit is standard, but are the higher pressure and temperatures mentioned in the Report experimental, in which case they are fully justified? Or are we going to place considerable reliance for the increase in power output upon stations equipped at these higher pressures? We have also heard about the present capital cost per kilowatt. How does that compare with those before the war? Is it equal to the fall in the value of money, or is it considerably more?
It takes four years or more to erect a station. How much more is that than before the war? How much more is it than in industries with comparable capital expenditures in comparable conditions of foundation, and so on? If the figures are a great deal higher than in comparable industries, what are the reasons, and what action is the British Electricity Authority taking to bring into the electricity industry conditions more in line with those in other industries?
My hon. Friend the Member for Altrincham and Sale (Mr. Erroll) referred to the cuts in capital expenditure imposed last autumn by the Chancellor of the Exchequer at the time of the economic crisis—£25 million on the right hon. Gentleman's Ministry mostly on capital expenditure for electricity. Can he give us some idea of how this is to be spread and, in particular, whether it is true that it is to fall mostly on distribution? There can be few other industries—perhaps I need hardly say this to him—where a capital cut of this size will have a more detrimental effect on the general productivity of this country than in an industry which is as basic as coal or transport.
It will be interesting to see whether the hon. Member for Midlothian and Peebles (Mr. Pryde) is more successful than some of us in East Lancashire have been in bringing electricity to some of our more remote farms. I ask the Minister to have a look at some of these farming projects which have been knocking around for 10 years or more, although I know that six of these were war years. I have one farming area in my constituency where for over 10 years, a scheme has been delayed, to bring electricity to 30 farms in the remote and high ground above Burnley and the total cost involved is only £5,900. This delay for want of a very small sum of money is in the northwestern area which has the best record of any area in England for installing electricity on the farms. Even in the north-western area which includes most of Lancashire we still have 10,000 farms not connected up with electricity, and every other farm is still to be connected. For all the lead in rural electrification given by the old private enterprise undertakings before nationalisation there is still a great deal of work to be done in bringing electricity to the farms which are as much productive units as the factories to which it is being brought.
I should be in trouble with you, Mr. Deputy-Speaker, if I embarked on an economic argument. I think that the cuts could have come in other Departments rather than on the essential capital equipment of this country. May I summarise what I and other hon. Members on this side want to hear from the Parliamentary Secretary? We want to hear a statement from the Government about their pricing policy, which is one of the most essential features of the whole of the electricity supply and its future in this country. We want to be sure that the money now being spent on capital equipment is being spent to the best possible advantage. We want to have an answer to some of the points that the hon. Member for Altrincham and Sale and I have raised about extravagance on peak load stations. Lastly, will the Parliamentary Secretary give us some details about the effect which the cuts will have on the present and on the future of the electricity industry?
It is not my intention to follow the hon. Member for Clitheroe (Mr. Fort) in what he said about the more technical side of the electricity industry. I want, for the few moments during which I shall detain the House, to speak more upon what I would call the human relationships of the British Electricity Authority. Unhappily, for the most of the afternoon I have been detained with important business upstairs, which has meant that I have only heard the first two speeches in this Debate and the last two, so if I make points which have already been covered in the Debate I hope that the House will bear with me.
I am particularly concerned about the way in which the consultative councils are working, and I should like to hear a lot more about the work being done by these councils. It seems to me, from my observations of the council which covers the area in which my constituency is situated, that they are far too remote from the consumers to be able to do the work they ought to be doing. I notice that, according to the Report, it is intended to set up local contacts, local persons or local committees, to assist the consultative councils in their work, but there seems to be very little information available as to the extent to which these local contacts have been established, and little publicity given—as to where they have been established—to the ordinary citizen as to how the domestic consumer can get into touch with these local representatives of the council.
This has meant, in my experience, and probably in the experience of other Mem- bers, too, that one of three things happen when a domestic consumer has a complaint to make or wants advice on a point. In many cases such people go to their local councillors for help, and they may get in touch with the consultative councils as a result. A good many bring their complaints and difficulties to their Members of Parliament. Those Members who, like myself, have regular occasions when constituents can come and see them about their complaints and difficulties have also probably advised these people of the existence of the consultative council.
The fact that these things occur, that people come to their Members of Parliament and go to their local councillors, is proof, I think, that the consultative councils are not at present working in the way in which we hoped they would work when the Measure was before the House.
I also find that a third thing happens, I have discovered this on occasions when I have been canvassing in my constituency. In some ways it is the more serious aspect of the matter. I find that many people who have a complaint just do not know where to go, who to see, or what to do about it. They simply do not know where to seek advice, with the result that it remains a kind of festering sore, which creates hostility to nationalisation and to the policy which has been followed by this and the preceding Government. Therefore. I ask the Minister whether it is not possible to do something to bring about a more direct contact between the consultative councils and domestic users. I hope he will take steps to see what can be done in this matter.
Turning to another matter concerning human relationships upon which I want to comment, I would draw the attention of the House to the considerable waste which is going on at the present time of what would otherwise be excellent administrative ability, not only in relation to this nationalised undertaking but others as well. Owing to the superannuation scheme, men and women in middle life are often debarred from recruitment into the undertaking. [HON. MEMBERS: "Hear, hear."] I have had cases of that kind come to my notice, and from the assent of hon. Members on the other side of the House it is quite obvious that other Members, too, have had similar cases brought to their attention.
I want to ask the Minister whether it is not possible for the Authority to find some way of overcoming that difficulty. We all recognise the importance of superannuation schemes, but we do not want those superannuation schemes to act as a deterrent and, indeed, as a barrier to recruitment of the right sort of personnel for industries and undertakings of this kind. This is not the moment when one can put forward suggestions as to how that difficulty can be overcome.
All I ask today is that the Minister should pay some attention to that matter, and see if, by more steeply graded contributions to superannuation schemes or some such method, it is not possible to allow a larger number of people in their middle years to give of their best in the service of these undertakings. Many of the men and women concerned have served this country very gallantly and very efficiently in the war years and I am quite sure that we should like to see their ability being used particularly in this direction.
The third point I want to make has to do with education and training. I am sure that every Member of the House who has read that section of the Report dealing with education and training will welcome what is being done by the British Electricity Authority in providing for further education and training. I only want to ask my right hon. Friend one question on this subject—whether, in the electricity industry, there is any parallel scheme of promotion within the industry other than by certification, under which a man with great technical experience and ability, but who has not been able to qualify for public certificates, can get promotion within the industry and rise to the higher grades.
I understand that in some undertakings there are such parallel schemes of promotion for the older men in the industry, who have not acquired public certificates, alongside schemes for the younger men who are coming on, and who are being trained in the way in which we want to see them trained. I shall be grateful to the Parliamentary Secretary if he can deal with that subject when he comes to reply.
The other matter I wish to mention is rather off the points I have already raised. It is the Severn barrage scheme. As one who was born and lived all the earlier part of her life within a few miles of the banks of the River Severn and who was taken when very young to see the phenomenon of the Severn Bore and was thrilled by the marvellous tidal power of that estuary, I have always been interested in the scheme, which has now been talked about for so long for the utilisation of the power of the tidal bore in the production of electric current. My right hon. Friend, towards the close of his speech spoke of the tidal bore, and referred to the Severn scheme as though it were actually in operation.
Of course, that is far from the case, and on the several occasions on which I have referred to this matter in the House by Questions on the Order Paper I have not had very encouraging replies. I should like to know what has happened to the model which I was told was being prepared. Has that model revealed that this is a practical proposition, and if it is so considered when can we expect to see a start made on the construction of the Severn barrage, and when is it hoped that a contribution will be made to the production of electrical power by that means?
There are other similar proposals. There is one for the harnessing of the tidal race of the Menai Straits. I do not know whether the noble Lady the Member for Anglesey (Lady Lloyd George) dealt with it in her speech, but it concerns her constituency rather than the West Country. I would like to know whether models have been constructed in order to ascertain whether that is a workable proposition. Those of us who have been interested in this subject of tidal power would like more information on it than the Minister was able to give us during his opening speech.
I hope that the hon. Lady the Member for Sutton Division of Plymouth (Mrs. Middleton) will forgive me if I do not follow the line of argument which she developed in her very interesting speech, or if I do not attempt to adjudicate between her and the Minister on the correct procedure to be followed by her aggrieved constituents. It is a temptation to anybody who, like myself, was on the Committee which dealt with the Electricity Bill, to say in many directions "I told you so." I resist that temptation, and I will deal with only one aspect of the report.
Paragraph 262 of the report says that the cost of coal for the British Electricity Authority was at the rate of 183 per cent. above the pre-war price. A great deal was made during the recent Debate on coal costs of the fact that the level of coal prices had remained rather lower than that of many other commodities. Now we see that a level above that figure has been carried in great measure by this nationalised body, which took a great proportion of our small coal output. Therefore, in some measure this industry was subsidising the general price level and producing a result out of line with reality.
The question of ash content has been referred to. It has gone up by something like 4 per cent. Now we see some of the Minister's chickens coming home to roost. No one can suggest that the ash content in either dry slacks, which in great measure are only screened and are not dealt with by any mechanical means, or the ash content in fines and washed smalls, a greater amount of which went through the washeries before the war than during the period under review, can be put down to what was described as "antiquated and outmoded conditions" in the pits. The fact is that this nationalised industry has had, during the period under review, to carry the burden of inefficient production in another nationalised industry.
This is not a matter to which the Minister can refer in detail, but hon. Gentlemen opposite may well pause and consider these two matters of relationship between two nationalised industries. In one direction one nationalised industry is subsidising another, and in another direction a nationalised industry is imposing upon another a burden out of relationship to what is either reasonable or efficient.
Broadly, the Report has made a not unfavourable impression on me. It is a comprehensive record and it tells of not too bad a performance during very difficult times. I think that the performance is due more to the work of the technicians than to that of the planners, but it is not a bad record.
That is as it should be. The nationalised industry took over one of the best examples of private and municipal enterprise. It was a fine, going concern. It is still operated by the same men and the same team, and they are too good to be quickly demoralised even by some of the conditions under which they are working now. I hope that they will continue to resist any further demoralisation. I hope that their old traditions and loyalties will be reorientated in the new Authority because I believe that it is only by doing that and by carefully nurturing and developing that spirit, the sort of spirit that one gets in a good regiment or corps, that the nationalised industries will really be made to work.
But I find the Report much too cumbersome. It is too big for many people properly to study. There is a lot of meat in it, but there is also a tremendous amount of suet in which one has to find the meat. Also, much verbiage is spent in describing difficulties and too little is said about how they are to be overcome. I should like to see about three months after the end of the Authority's year a short statement, rather like a company sends out, of about four sheets, with the accounts and the chairman's statement, something which hon. Members could read in five or ten minutes and then put on one side; and have a bigger Report later. That would be much more helpful to the House and to the country generally, and, what is more, it could be produced more quickly and with less labour by the clerical staff of the Authority.
I agree that the accounts make an impressive array, but there are quite a lot of estimates and uncertainties among them, and it looks as if the preparatory work was hurried, to say the least of it. That is most clearly displayed in the notes on the accounts. On page 162 under the heading "Notes on the consolidated
accounts I was a little shaken to find the words:
It is thought that it will only be in respect of minor matters that the allocations in the accounts now presented are in any way defective.
That is a little disturbing. It says that, it is thought that they may only be defective in respect of minor matters, but that there may also be major faults. I do not want to judge the accounts on one instance only, and, therefore, I refer the Minister to pages 167 to 172 where in four different sections appear the words, "Has not yet been determined," showing that some decision has been arrived at on insufficient premises.
I want now to refer to what appears to be an under-valuation of assets. The balance sheets suggest that the compensation paid, plus the liabilities taken over, amounts to £60 million more than the value of the assets received. That sounds as if the compensation was generous. I want to take the opportunity of saying, as was said time after time when the Bill was going through the House, that the Government should have had a proper valuation of assets. But I do not think that the Authority has suffered in this case since I believe that there are a number of hidden assets which have probably been greatly undervalued in the accounts. There need have been none of this doubt if the Government had taken the advice of the Opposition and had a proper valuation of assets when the industry was taken over. I do not know what direction was given by the Minister when it came to valuing the assets. Appendix 40, which deals with it, is silent on the point, but I should imagine that the Authority were told informally to take them over at book value and that is the reason for this figure.
A number of people have talked about the excellent relationship existing between the officials and the staff. One thing which I do not think is so good is the pensions scheme. In the old days under company and municipal ownership 70 per cent. of the manual workers had a pension scheme. Today, I do not believe that any have. In paragraph 106 it states:
The policy of extension of superannuation to manual workers generally was one upon which the Authority and the boards awaited Government guidance.
Then, in a footnote, it states that much later, on 8th August, superannuation schemes have been approved for non-manual workers. From that I read that there had been no provision for manual workers, for the 70 per cent. who had them and who have now lost them.
That is fair enough, so far as it goes, but my point is right, that in future new manual workers will not share in these schemes in which, in the past, they did share up to an amount of 70 per cent. I do not think that that is an improvement in labour relations.
Now I wish to refer to one or two good points about the Report. The diagram setting out the position of coal efficiency and the rise in coal prices is excellent. Appendix 34, giving particulars of electrical contracting and retailing is good and a model of its kind. The provision of a glossary in a book of this sort is useful, but an index would have been even more useful. The first four appendices, recording the development of the industry in the last 18 years of its un-nationalised life, is a not ungraceful tribute to the municipalities and power companies.
After this brief interlude of praise I must, I fear, return to criticism. I am profoundly disappointed at the progress being made with distribution of electricity in rural areas. In my part of the world I do not think there is much change between the rate now and the rate under private enterprise but we are in favourable circumstances in having a number of towns which help carry the load. Nevertheless, people expected that the situation would be much better. That is the one thing which they hoped from nationalisation—that rural supplies would improve. In many rural areas they have slowed down. I have always been very suspicious as to whether the Government's heart was in any drive for the extension of electricity in rural areas. I remember what the present Minister of Defence said on Second Reading: that new boards would be able to undertake rural development on a national systematic plan and that unless that was proceeded with quickly he was satisfied that there was no hope of checking the decline of the rural population. In the Bill introduced
there was no mention of rural development at all, but it is in the Act. The Opposition saw to that on the Committee stage; they took very good care of that. Section I (6, b) reads:
Area Boards shall secure, so far as practicable, the development, extension to rural areas and cheapening of supplies of electricity.
I think they were hedging a little there with the "so far as practicable."
The position today, two years since the Bill became an Act, can be seen from paragraphs 391 to 415 of the Report. Of those five pages which are devoted to the question of rural electrification, four are devoted to the telling of what was done before nationalisation. On the remaining page, two paragraphs set out the task of the authority and their approach to it, and one paragraph is devoted to saying what has been done. It is said that during the period under review, 8,727 farms were added to the 78,963 already supplied with electricity. I would remind the Minister, however, that another 200,000 farms are not yet supplied and that at the present rate of progress it will be 25 years before their needs are met. I hope that something very much quicker than this will be achieved.
The Report goes on, with a rather pious hope, to say:
Since vesting day, the Central Authority and the Area Boards have had under consideration the best and most equitable methods of implementing this duty, and these will be the subject of discussion … with agricultural interests.
That was the position when the Report was drawn up, presumably about 16th December of last year, but somewhat earlier than that, on 6th April, 1949, the Parliamentary Secretary, on an Adjournment Debate, gave us rather more information and said that the matter had been remitted to a special Departmental committee about a year before. When pressed to say whether they had done anything in that year, however, the hon. Gentleman said that he was not able to say when the committee would work out their final policy. I suggested at the time that that committee was only set up to meet the pressure for something to be done. The Parliamentary Secretary was rather indignant when I did so and denied that the Government were "passing the buck." If they were not, in fact, "passing the buck," I hope he will tell us tonight what progress they have
made, because in the two years since the committee was set up we have heard nothing.
Another alarming feature of the prospects for the extension of rural electrification is contained in the Appendix on Capital Investment to the Economic Survey for 1950. I see that in 1939 £40 million was spent on the distribution of electricity. In the coming year the figure, I believe, is £32 million. A "drastic slowing down" is referred to, and I should like to know whether the rural development will share this reduction pari passu with all other development, or whether its prospects are unprejudiced. An ugly rumour is going round that whereas in 1949 £5½ million out of £40 million was spent on rural electricity, in 1950 only £2½ million out of £32 million which is devoted to the distribution of electricity will be applied to rural electrification. I cannot believe that rumour, and it is only fair to give the Minister the chance of denying tonight the unpleasant suggestion of any halving of the amount to be applied to rural supplies.
I understand that on South Wales Area Board they have no agricultural representation. That to which the hon. Member refers may be representation on a consultative council, but not an area board. His part of the Principality has been prejudiced by not being represented and it would be very wise for those in that area to press for representation.
A number of hon. lady Members on the opposite benches have spoken about consumer councils. I fully agree with all that has been said. I do not believe that these councils have had as much publicity as they should have had, and I feel that their work would have been more publicised if, as we have always said from this side, meetings had been held "in the open" and with the Press present.
The hon. Member for Midlothian and Peebles (Mr. Pryde) has spoken of some of the electricity difficulties in Scotland. I would like to ask the House to turn its attention for a moment to another Celtic country with which I am more familiar and to consider the hydro-electric schemes the British Electricity Authority propose for North Wales.
There is no one in this House who does not recognise the need for providing electricity in the towns and villages of North Wales for agriculture and industry. The only question in dispute is whether the proposals made by the Authority are the most practical, the most economical, or whether more effective proposals could be made which would be far less destructive of the amenities of the area. Last year this House passed a Bill, the National Parks Bill, to preserve forever the natural beauty of certain areas of this country. Amongst the areas so designated was the National Park of North Wales with Snowdon as its central point. That was a year ago and now the British Electricity Authority comes forward with proposals to put 10 power stations in the National Park of North Wales.
But we are not asked to consider the proposals of the North Wales Power Company. The proposals were taken over, accepted, and not altered by the British Electricity Authority and these are the proposals we have to consider now. These proposals are that there should be 10 power stations in the National Park of North Wales, four of them on Snowden itself. These buildings will be some 100 ft. long and 70 ft. high and one cannot hide a power station on a hill. There will be miles of leats, 13 miles of tunnel and, I am told, the leats will be protected by wire netting with here and there gates by which people can cross them. That is the new interpretation of free access to mountains which the British Electricity Authority are putting before us.
These schemes cannot be carried out without roads capable of carrying contractors' plant and heavy generating machinery which will have to be driven up the mountainside. These will hardly improve the amenities or the natural beauty of Snowdon. These plans have been drawn up by engineers, of course, but it also seems that they have been drawn up by people with an unerring and piratical eye for beauty because it seems that they have hardly missed one of the really famous beauty spots of this part of the world.
This is a matter of concern to people who live in North Wales and also to the tourists who come to North Wales, to the great benefit of the people of North Wales in the coastal towns and rural areas and to the farmers, for whom they provide an extremely lucrative market. And we must remember that tourists do not come to see engineering works, however admirably designed to look as if they were not there. They come to enjoy the peace and beauty of the hills. This is a matter which affects, and may affect very seriously, national parks in other parts of the country because, once we have created this precedent that we can waive all the principles which animated the National Parks Act in rural areas in this way in North Wales there is no reason why we should not do it in Cumberland and Scotland.
There are other objections of a different kind, into which I cannot go in the limited time at my disposal. There is the difficulty of water supplies in North Wales. Water is becoming a scarce and precious commodity. We have provided water supplies for a great many English cities, including the city which the right hon. Gentleman the Member for King's Norton (Mr. Geoffrey Lloyd) represents. These British Electricity Authority proposals would not only cut across some of the existing water schemes; they take no account of any future needs of the area. Of course, there is the effect upon agriculture and upon the hill farmer also to be considered.
The Minister of Fuel and Power spoke this afternoon of alternative methods of providing electricity. I think it was the hon. Lady the Member for Plymouth, Sutton (Mrs. Middleton), who spoke about the possibility of harnessing tides to generate electricity. As she pointed out, there is already a proposal of that kind to provide electricity for Wales, and I have no doubt also for great parts of England, by means of the Severn Barrage. I do not know whether any scheme of that kind has been considered for North Wales. Perhaps we might have the information.
There is the alternative of coal burning stations. I understand that it is not denied by the British Electricity Authority that one thermal power station can produce as much electricity as could all these hydroelectric schemes put together. There is, as we know, to be a coal-burning station installed at Connah's Quay, which is to provide electricity for a certain part of North Wales and is also to relieve the peak load in a part of England in the area around Chester. Why should we not have the service of that power station to ourselves in Wales? Mr. Cooper, the Mersey-side controller, was asked whether Connah's Quay could supply the needs of North Wales. The answer was, "It could." If that is not practicable there is always the possibility of supplementing that station by another in the vicinity of the North Wales coalfield.
The Government have a duty in this matter. These are the schemes which are produced by the British Electricity Authority, and at some time or other the Government will have to inquire into them and pronounce an opinion upon them. They cannot wash their hands of this responsibility. Apart from the Minister of Fuel and Power, the Minister of Town and Country Planning and the Minister of Agriculture have a direct responsibility in this matter. I do not know, nor do I think any of us know, what stage these consultations have reached, or how far the inter-Departmental conversations have gone, but I hope that the Government will take into account the very great objections which are taken to the schemes of the British Electricity Authority.
I hope that the Government will consider these schemes, not in the sort of emotional coma which the hon. Lady the Member for Flint, East (Mrs. White), seems to think exists in the minds of some people on this matter. That is not necessary. All they have to do is to consider these proposals in the cold light of reason, with a proper sense of values and a real sense of proportion. If they do that they will reject them as uneconomic, extravagant and as destructive of one of the most glorious parts of this country.
We are now coming to the end of the Debate on the electricity supply industry, and I do not think that any of us can say that it has been a very electric Debate. There has been nothing in the way of sparks flying; there have been no short circuits so far as I know, and everyone has behaved himself so quietly and so well that there has been no need to send for any copper conductors to see any one safely away.
Before I comment on the Report, may I make reference briefly to some of the speeches we have heard today. Most hon. Members who have spoken, no matter from what bench, have had some grievance apparently against the British Electricity Authority or one or other of the area boards. The hon. Member for Hammersmith, North (Mr. Tomney) complained about the over-weighted staff. The Liberal Member for Merioneth (Mr. Emrys Roberts) confessed at the opening of his speech that he was a great believer in the nationalisation of electricity and had voted for the Bill. He went on to criticise heaven knows how many things that were happening under it, and is evidently disappointed at the way it is working out. He said everyone was looking forward to one universal price throughout the country. If the hon. Member has studied the Report from cover to cover, he will have seen how little his hopes in that matter are likely to be realised.
Then we had three speeches from Lady Members opposite. The hon. Member for Blackburn, East (Mrs. Castle) complained about the way in which consultative committees were working or not working. The hon. Member for Flint, East (Mrs. White) recommended that at some future date there should be joint Debates on the nationalised industries—coal, gas and electricity—so that the way in which these consultative committees are operating or not operating in all those industries should be considered together. That is a very good ideal Then we had the hon. Member for Plymouth, Sutton (Mrs. Middleton) also complaining about the way in which these consultative committees are not working. So, on the whole, I think the Government can claim little support today from those who have spoken from their benches.
In spite of what has been said in some quarters I should like to utter a word of praise to those responsible for compiling this Report. One can see that a good many hands have been employed in drafting various parts of it, which have all eventually been collated, edited and compressed within 131 pages. I venture to doubt whether many hon. Members, either on that side of the House or on this, could put their hands on their hearts and say they have studied it from page I to page 131, have read every word, and have examined all the schedules, graphs and tables that are therein provided for our consumption. It is really a very informative and explanatory Report, giving us a great deal more information upon which we can rely than we have received in certain reports in the past, such as the enormous expenditure on groundnuts and other capital schemes of that kind.
In my view, the Report confirms many of the fears that were expressed and the prophecies that were made from this side of the House during the discussion which took place when the Electricity Act, 1947, was going through its various stages. We then asserted—this has been referred to today, but was denied by one hon. Member who is not in his place now—that the production "Let us Face the Future" issued in 1945, said that public ownership of gas and electricity undertakings would lower charges. It was denied from the benches opposite today that that was said during the 1945 election campaign. Then, the then Minister of Fuel and Power in 1947 was, very rightly, concerned about the position of rural consumers. He said:
If there is any body of consumers who are likely to benefit at all by this Bill, it is bound to be those in the rural areas.
Again, he added:
… in spite of the increased costs of electric equipment and plant, we can assist in cheapening the supply of electricity throughout the field."—[OFFICIAL REPORT. 30th June, 1947; Vol. 439, c. 1072–6.]
I do not know what he meant by the words "throughout the field." No doubt he meant throughout the country. In spite of all that the present Minister has
told us today, the former Minister said:
We can assist in cheapening the supply of electricity.
My criticism is not of the Report, because that is frank and informative, but of those who prophesied that we should have cheaper electricity as a result of that Bill. We now see that nothing of the kind is happening, nor is it likely to happen.
I do not blame the area boards or the Authority for raising prices. The capital cost of power station equipment has gone up to £50 and more per kilowatt—four times what it was in my early days in the industry, and more than twice what it was before the war, as the Minister reminded us. Capital expenditure on these undertakings only produces a 20 per cent. revenue. One has to spend £1 million capital to earn £200,000 of revenue or turnover. No other business I know of can compare with that high ratio of capital to income. When one compares what an enormous figure the capital represents in cost, it is extremely difficult to cut down prices when one has to face such high figures. On top of that, as we have been told more than once, the cost of coal is 183 per cent. higher than it was before the war.
In those circumstances, how can we blame any authority—private enterprise, public corporation or nationalised industry—if it has to raise prices? I agree that we cannot, but I would point out that those in productive industry are constantly being exhorted by the Chancellor of the Exchequer and the President of the Board of Trade to reduce costs and to improve quality. The nationalised industries do not decrease their costs.
What really is wrong with the national set-up under the Act is that there are far too many people at the top. There are widespread complaints. It is no use shutting our eyes to them. We hear from all over the country that chairmen of the area boards, four of whom serve on the Authority, spend more than half their time in London engaged in conferences on one subject or another. The result is that they are not available in their areas when decisions have to be taken. Committee after committee has been set up and meetings are held, and the result of all this is that the tempo of development throughout the country has been definitely slowed down. If any hon. Member doubts the truth of what I have said, I beg him to look at paragraphs 74 and 75 of the Report. He will then appreciate the force of what I have said.
What do these consultations really involve? This is what the Report says in paragraph 169:
The consultations referred to above, and the publicity which has to be given to the Authority's major proposals, inevitably take a considerable time; and this period may be protracted, particularly when conflicting interests necessitate the holding of a public inquiry by the Minister. Moreover, a substantial amount of highly specialised work is involved in preparing the data required by the various authorities and interests who have to be consulted.
When one Government Department, or a nationalised board under a Government Department, wants to get on with its job, it very soon finds that it has to consult other Government Departments, which are all tangled up together, and no progress can be made until the requirements of five or six other Departments have been satisfied.
I am suggesting that far too many take place, and that the great fault is that there is too great a tendency at the headquarters of the British Electricity Authority to refuse authority to men who are quite capable of running the area boards, but who have to refer so many matters to London before they can get on with the job. That applies also in the area boards themselves, be cause they are so split up into sub-areas and sub-districts that a great many men, most of them quite capable of carrying responsibility, now find themselves treated not as persons but as mere units in the machine, with the result that no one takes responsibility, and when a matter has to be settled it is referred from one side to another until it eventually goes to the top. That is the Socialist method; no individual will take responsibility. It is all settled by Committees—
This is a question of the siting of stations, a matter of immense importance to the areas, and on which consultations must take place. Nobody makes more fuss about consultations than hon. Members opposite.
The Minister shuts his eyes to it, but it is so widely known that it is talked about all over the country and in every area, and it really is the fault of the system. It is one of the inevitable consequences when we socialise an industry and make it responsible to a Minister.
I must say a word or two about the seriousness of the cut which the Government have imposed on the area boards and the consequences that will follow, having regard to the fact that we are so very short of power station capacity at the present time. I do not know whether the House is aware of it or not, but it is a fact that, in various parts of the country, our mains today are very heavily overloaded at certain times of the day. There are transformer stations running so hot that the men engaged in their operation are almost hourly afraid of an explosion, and, as a matter of fact, I believe that certain explosions have taken place in one or two sub-stations. We are told in the Report that nearly 30 per cent. of the plant operated in power stations today is 25 years old, and the risk of breakdown will remain in all these cases an extremely serious one.
The Report of Sir Henry Self has been referred to, and in the chapter which he wrote dealing with this particular point, this shortage of power station capacity, and the cut which the Government have made are referred to in a chapter which he very appropriately calls "Cabin'd, Cribb'd, Confin'd"; he says:
If the figures in the survey are to be taken as a guide to the future, the outlook is not at all promising. If the generating plant programme were itself to be subject to further applications of the axe, an indefinite continuance—if not an actual extension—of load-shedding may be foreshadowed.
I referred to this next point in a speech I made a week or two ago. I shall repeat it now, because I have a copy of what was said. He said:
It is, I think, relevant here to call attention to the serious consequences which could flow from a series of breakdowns in electricity supply which might result from these capital 'cuts.' With national production running at the rate of about £6,000 million per annum, say £120 million per week, it is not difficult to appreciate that a fairly widespread stoppage for only one day might more than offset the attempted reductions in capital expenditure which these estimates imply.
I leave Sir Henry Self's words to speak for themselves. No doubt that man, with his massive brain, will command by words of his far more attention than I could
possibly command with mine. I do not wonder that he headed the chapter in which he included those sentences with an indication that the British Electricity Authority is "cabin'd, cribb'd, confin'd."
I say to the Minister and the Parliamentary Secretary: Is it not their duty to make plain to the Chancellor of the Exchequer—and also to the Prime Minister—the grave danger that the country is being asked to face by not pressing for a review of the limitations of capital expenditure on a matter which is so vital to the national interest, especially with the state of the world as it is today?
My time is coming to an end, and I must omit certain things with which I wish to deal; and I will come now to one or two questions of which I have given the Parliamentary Secretary notice, and with which I must bring my contribution to an end. The first is: What was the planned annual outlay on power stations, transformer stations and mains, and by what percentage has that been cut by the Government? There is a footnote on page 80 of the Report which was added only at the last minute, saying:
The recently-announced reductions imposed by the Government in the investment programmes of the fuel and power industries, a substantial share of which falls upon electricity development, has necessitated the severest pruning of construction programmes, including those of rural electrification.
That is why I put that first question to the Parliamentary Secretary. By what percentage has the cut been made?
Secondly, are the present restrictions on the use of electricity referred to on pages 256 and 257 of the Report to be reviewed this summer as is indicated? We have heard nothing about this in the House so far. Is this review in hand? Has it been commenced? If so, when are we likely to hear the result of it?
Then, are the consultative committees established in every area, with the officers and staffs with which they were to be provided under the Act? And what do they annually cost? If we cannot get that information now, I am going to ask that in future accounts published by the Authority a separate item should be shown, showing exactly what the cost of these consultative committees in the various areas is amounting to each year. We can then see whether they are really of very much value for the money spent upon them, or not.
Then, do the area boards supply current in bulk to one another, and, if so, on what terms? The Report is quite silent about a matter of that kind, and the figures are of importance to the consumers inside those areas.
What is the new coal structure? Apparently, as the Report admits, the British Electricity Authority and the area boards have no freedom of choice; they cannot negotiate for their coal supplies; they must take what they are told is available for their use. It is not like the old days, when we could go and negotiate with three or four merchants or alternative colliery companies and buy our own coal for power stations. Now the power stations must take what coal may be provided for them. They have no voice either as to grade or as to price, and we see that there is now a new coal structure to be discussed. We should very much like to know what that coal structure is.
Finally, I would say this. Until there is less control from the British Electricity Authority at the centre, until greater responsibility is placed on the area boards, unless there is a considerable reduction in the number of committees sitting in London and in the mass of paper work, and unless the present over-straining for stadardisation of plant and equipment is sensibly restrained, the position of consumers of electricity, both domestic and industrial, will be worsened and not bettered.
A cheap and abundant supply of electricity—a phrase which was bandied about all over the place not so very long ago—is a vital national and industrial necessity. Today we have neither, and the claimed benefits of nationalisation are not being achieved as promised in the Socialist manifesto. I end with the words that I ventured to use three years ago on the Third Reading of the Electricity Act. I do not wish to see this great industry, which has been of such immense value to Britain, failing to repeat the great services it has rendered in the past. I wish it well, and I hope that in the days that remain to me I shall not see it fail.
The hon. Member for Stockport, South (Sir A. Gridley) has had a very long and distinguished career in the electricity industry. His words, therefore, carry great weight with us in the House, and I am perfectly certain that those who have an interest in the industry and those who are running the industry will read what he has had to say with great interest. He asked me a number of questions, and I hope to be able to give him a reply to them. He first asked: What is the percentage of cut imposed on the programme for the electricity industry? The rate of expenditure proposed for 1950 was £113 million, which was cut to £102 million—about a 10 per cent. cut. None of that cut is falling upon the generating side, so that there is a 20 per cent. cut on the remainder—the distribution and other side of the industry.
What amazed me was the way in which the hon. Gentleman followed one or two or his colleagues in relation to the cuts in capital investment. Of course, this is not the time or the place to deal with the whole question of the capital investment programme, but it did come strangely from him, or any of his colleagues, even to talk about not cutting this programme, when, only a few months ago, we had from the Leader of the Opposition the suggestion that we should cut the capital investment programme by something like £500 million. No one was concerned about reducing expenditure on defence, although we cannot at this stage go into a long debate about that. When capital investment has to be cut hon. Gentlemen opposite scream in great rage at the Government because they have not cut the capital investment programme sufficiently. When, however, the programme is cut by 10 per cent. they come along to the House and expect to be taken seriously when they say that this cut should never have been made.
My recollection is that it was on the capital investment programme. The hon. Gentleman referred to the restrictions which are printed in the letter on pages 256–7 of the Report and asked whether effect had been given to the statement which says
The whole position will be reviewed again in the summer.
That referred to the summer of 1948, and the position was reviewed. The fact is that generating plant continues to be so deficient that a list of priorities similar to that has still to be maintained.
It must rest with the area boards themselves to determine in what way they can get the most for the money available.
The hon. Gentleman the Member for Stockport, South, asked about consultative committees and their cost. We have not had a full year of the consultative committees because they were set up some time after the boards were formed. They will not be a great expense. The costs will presumably be the hire of rooms, travelling expenses for members of the committees and the secretaries' salaries. The travelling expenses for the committees are those laid down by the Treasury for members of Departmental committees, which are less than those paid by local authorities to members of local authorities. I think the hon. Gentleman will find that the costs are not unreasonably high for the consumers' councils.
He also asked whether the area boards sell current in bulk to one another. The answer is, "Yes." The Report clearly indicates the nature of these transactions, and if he will look at the statement A5 on page 175 of the Report he will see the details of the transactions between the area boards, showing the number of units and the prices that have been paid.
In regard to the coal price structure, hon. Members in all parts of the House are quite familiar, by reason of the previous Debates which we have had on subjects allied to this, with the fact that there was necessity to have an adjustment of coal prices brought about by the flat rate increase which took place during the war, which made inferior coal higher in price than it ought to have been and the better coal lower in price than it ought to have been. That first adjustment has been made, but it is only an interim adjustment, and some reference is made to that in the Report. The final structure is being worked out, but is not yet complete.
I think that the questions which the hon. Gentleman asked me and of which he was kind enough to give me notice I have been able to deal with. If I am not able to deal with all the other questions that have been asked, it is only because time is so short. I was rather surprised that the hon. Member for Altrincham and Sale (Mr. Erroll) had nothing very good to say about the British Electricity Authority. Apparently he was well briefed for the engineering side as against the administrative side. I do not think that it is as quarrelsome as all that inside the industry, although there may be differences between technicians and administrators. I do not understand how he can have the argument both ways.
He claimed that credit was being taken by His Majesty's Government for the new power stations going up, and he quoted a Press report—the Press hand-out from the British Electricity Authority when the Kingston power station was being built, saying that it was one of the first of 25. He then delivered a crushing blow by saying it was not their power station at all and that it was planned before nationalisation, yet in the next breath, he complained that the Government allowed this power station to be built and described it as a temple of power and ornamentation gone mad.
The fact is that they were designed in the pre-nationalisation period. I quite agree with the hon. Member in what he said. I will tell him something more, that new and simpler designs, for which the British Electricity Authority is responsible, are being worked out with possibly cheaper methods of construction. They are being examined and tried. Therefore, what the hon. Member complains about is something for which the Authority cannot be held responsible; what he wants to see achieved is being done.
The hon. and gallant Member for East Grinstead (Colonel Clarke) wanted to know why the value of the assets is not shown in the balance sheet in the way that he himself wanted. He asks what instruction the Minister has given in this regard. This is not a matter on which the Minister gives directions, nor, in fact, has he done so. The Authority decided to adopt the net book value based on the book value of the former undertakings, and it will be seen that, according to paragraphs 499 to 502 of the Report, that is the only practical basis on which they say they can work.
The right hon. Member for King's Norton (Mr. Geoffrey Lloyd) seemed to indicate throughout his speech that all that is being done in the industry is due entirely to what the Conservative Government did in the field of legislation, and also to what private enterprise has done. He seemed to overlook completely the fact that two-thirds of the industry was in the hands of municipal undertakings.
One of my hon. Friends has referred to this industry as being a socialised industry in a local sense. I do not think it is a great debating point to suggest that it is always the best of private enterprise we inherit and that we have spoilt what private enterprise has done. Many of the municipal enterprises were extremely progressive, and many of the private companies were progressive, but it is equally true that some municipal enterprises and some private companies were not progressive. The right hon. Gentleman quoted the former Minister, who is now Minister of Defence. What did he say? He said:
This Bill makes an indispensable service a national concern, available, as soon as physical difficulties are overcome, for industrial and domestic use at a price strictly related to costs."—[OFFICIAL REPORT, 3rd February, 1947; Vol. 432, c. 1421.]
Later, a good deal of play was made in Committee by Members opposite of the fact that Government spokesmen had not, in fact, promised cheap electricity. What we have said is that electricity under integration in this public way, will be cheaper, and "cheaper" is a relative term. I do not think that anyone will deny that.
Relative to the prices operating at the time when one is considering an article which is being sold. It is relatively cheaper, although the price might be more. [Laughter.] I can understand Members opposite laughing. Whenever things are explained to them in a simple way, they just do not get down to it. Prices have risen, and they would have risen a good deal more if it had not been for nationalisation. Members have failed to notice that, at the take-over, 150 undertakings were making losses totalling £7 million a year. Would these undertakings not have put up their prices? Of course they would; otherwise, they would have gone out of business. The price increase of electricity is 12.6 per cent. on 1938–39 figures, but only 4 per cent. on 1947–48 figures. The nationalised industry cannot be blamed, therefore, for the whole of the increase since the war. I would go further and say that, quite apart from these undertakings losing that amount of money, prices would have been higher if there had not been substantial economies effected by reason of nationalisation.
My hon. Friend the Member for Blackburn, East (Mrs. Castle) gave an instance out of the North West Board's Report of a saving of something like £270,000, because the industry was integrated, and if hon. Gentlemen would care to look through the Authority's Report they will find another interesting one—the £1,400,000 that was saved as a result of integration in transmission and distribution equipment. In the Merseyside and North Wales Report a saving is shown there—these are isolated instances of savings—of £143,000. All these figures would have been added to the price of electricity if the industry had not been nationalised.
The right hon. Member for King's Norton referred to the inferior quality of coal. He talked about the difficulty and cost of getting rid of the ashes. It is perfectly true *hat the power stations are getting an inferior coal and that inferior coals are cheaper than the better coals. I know that the British Electricity Authority would prefer to have better coals unless the price of the inferior coal comes down, as probably will be the case when the structure is finalised. Is it not a sensible thing that in this country we should find a useful outlet for inferior coals? We shall always mine inferior coal, because that is inevitable in mining operations.
Therefore, if a useful outlet can be found for inferior coal, and if the power stations, by reason of the development of a better boiler technique, can use inferior coal with greater efficiency, it is a sound and sensible thing, which we should encourage, in order that inferior coal which is inevitably mined should be used for the country's benefit.
Is it not the case that the power stations have always been inclined to use the inferior and cheaper coals and we quite agree with that, but is it not also the fact that now they are getting very bad inferior types of inferior coal?
If the coal is mined—and thank goodness His Majesty's Government cannot be blamed for what is inherent in a seam of coal—is it not a good thing that there should be an outlet for that type of fuel?
What we have really got to do is to get this inferior coal burned, and the suggestion that there should be development of the boiler technique in order to burn the inferior coal and get good value from it is something which should be encouraged. If we take the units of electricity generated in each ton of coal used in the power station some interesting figures are to be seen. In January, 1947, there were 1,550 units for every ton of coal used; in January, 1948, it was 1,518. Vesting date was 1st April, 1948, and in 1949 units of electricity generated for each ton of coal rose to 1,602, and in January, 1950, to 1,631. There is a development for the better use of inferior coal, and if we look at the thermal efficiency of the station, we find that pre-war it was 20.7, the year before nationalisation it was 20.86, and in the first year of nationalisation it had risen to 21.15. I understand that that improvement is continuing so that there is steady improvement in both the thermal efficiency and the units being obtained per ton of coal, which I think point to rather satisfactory progress.
The right hon. Gentleman also said that the B.B.C. had been badly treated. My hon. Friends the Member for Blackburn, East, and the Member for Plymouth, Sutton (Mrs. Middleton) raised the question of the consumer councils. I wonder why the B.B.C. were being so badly treated that they did not take advantage of the consumer councils and let the consumer councils do the job. I promise the right hon. Gentleman that we shall certainly find out all about this B.B.C. complaint, the charges in which he was not prepared to substantiate. I will let him know more about the matter.
The consumers councils have not a very easy job but a difficult job. They have to make themselves known to the public. I agree with my hon. Friend the Member for Sutton that it is important that that should be done. We have taken the line that where there is a consumer's complaint we might at least give the local management a chance of putting it right. I do not regard consumer councils as recipients for every single complaint that arises. At least give the local management a chance, and if there is no satisfaction then use the consumer council. There is much that one could say about consumer councils, but I will have to leave it in order to reply to some of the other points.
The hon. Member for Carlton (Mr. Pickthorn) asked about loans to employees for the purchase of houses or official cars. The Authority and the boards are merely continuing the practice of the former undertakers in advancing loans to employees to assist them to buy houses or official cars. No such loans were made to members of the Authority or of the boards but only to their employees. He asked whether the profit was a true profit. The answer is that the surplus of more than £4 million was made after deducting all the proper revenue charges. The amount set aside for depreciation by the Authority, £31 million, was greater than that provided by the former undertakings. Even so, I accept what he said; the normal depreciation provision will not in itself be enough to replace the assets at present-day prices. The Authority recognises this fact in paragraph 549, emphasising the necessity for building up a reserve for that purpose.
Some discussion took place on the standardisation of charges. It is not intended at this stage that there should be a standard charge throughout the length and breadth of the country. It is desired, and every effort is to be made, that within the areas we shall get down to some standard of charges, probably one, two or three tariffs, according to the particular business and the circumstances. It is intended that the various tariffs that were in existence at the time the British Electricity Authority took over shall be put on one side and that we shall get down to two or three tariffs for the areas. I would not go so far as to say that it will be possible, at this stage at any rate, to say that from Land's End to John o' Groats we can have a universal charge for electricity.
I would like to say something about the North Wales hydro scheme which the noble Lady the Member for Anglesey (Lady Megan Lloyd George) raised. When the scheme is prepared it will have to be submitted to the Minister and he will have to give it his approval. In any case a Bill will have to come before the House, so that there will be plenty of opportunity to deal with all these matters that she raised. I obviously cannot reply to them at this stage, but I assure her that there is a great deal of sympathy with maintaining the good and beautiful conditions that abound in Snowdonia.
That this House takes note of the First Annual Reports and Statements of Accounts of the British Electricity Authority and of the Area Electricity Boards; of the Report of the Minister of Fuel and Power for the period 1947–49; and of the Annual Report of the North of Scotland Hydro-Electric Board for 1949.