I beg to move, "That the Bill be now read a Second time."
This is a short Bill. Its purpose is to increase from £100 million to £200 million the statutory limit on the amount of borrowed money which the North of Scotland Hydro-Electric Board may have outstanding at any time. The Board has already been authorised to borrow up to nearly £94 million of the permissible total of £100 million. That £94 million has not yet actually been borrowed by the Board. The total borrowed to date is only £56 million, but the balance between that figure and £94 million is earmarked for works already approved.
Further schemes both for the generation and transmission of electricity have been submitted by the Board for confirmation. Other schemes are in preparation and, as hon. Members know, the work of the distribution of electricity is going on continuously. Consequently, further provision for borrowing is essential.
As the House knows, the Secretary of State has to consider in a judicial way schemes submitted to him for confirmation, but in the normal course it would appear that borrowing consents for the additional £100 million, for which it is now proposed to make provision, will have to be issued to the Board during the next three years or so. Of course, the money will only be taken up by degrees in accordance with the Board's approved investment programme, but when a scheme is approved provision for borrowing to meet the cost must be made.
The existing power of the Treasury to guarantee the Board's loans will extend to the increased total mentioned in this Measure. I need hardly stress the useful contribution which the new hydro-electric works of the Board are making towards bridging the deficiency of electricity supplies without the use of coal or iron. The installed capacity of the new hydroelectric schemes now in operation is 282,900 kilowatts, and it is estimated that the annual output, when they are fully operated, will be of the order of 767 million units.
Other large schemes are in course of construction and, as I have indicated, still more schemes are planned. Even more important, as I think hon. Members will agree, is the contribution made by the Board to the amenities of life in the Highlands and also to the urgent national task of countering depopulation as well as of possible development in these regions. In the four years 1948–51, over 76,000 new consumers were connected up to the Board's system, and, out of that total, more than 54,000 were in rural areas.
Clause 1 (1) raises the limit of loans which the Board may have outstanding at any time to £200 million. The present limit is imposed by the proviso to Section 47 (2) of the Electricity Act, 1947, at £100 million, and subsection (2) provides that any additional sums required by the Treasury for fulfilling any guarantees of the payments of interest or principal of any of the Board's loans, brought about by the increase in the Board's borrowing powers, shall be charged upon the Consolidated Fund. Clause 2 sets out the short title of the Bill.
I hope that, with that short explanation, the House may see its way to facilitate the passage of this Measure, which I commend to the House.
I am quite sure that the House has listened to the very brief and rather formal presentation of this Bill with some interest, but it may be thought that, after the rather gloomy and tragic picture which has been placed before us in the last hour, this comes as a different type of subject, and not one which should interest the House very greatly.
I would submit, however, that there is something cheering in turning from a policy of restriction, forced upon us by circumstances beyond our control, to a picture of further development which is going to make a very big contribution to the solution of the very problems that we have been discussing. It is not very often that hydro-electric pioneering projects in Scotland are subject to examination by the House, and I think that it is well worth while to devote a little time to seeing what this body is actually doing and what purposes have been effected.
I myself have had a rather intimate connection with it since the very beginning. I was Parliamentary Private Secretary to the right hon. Tom Johnston when he took the Bill through both Houses of Parliament. It went through in the period of the Coalition Government, and not one Amendment was either made or moved against it. It was carried through by agreement, and, therefore, it is not a matter of party controversy. From the point of view of Scotland, it is certainly one of which we can be justly proud.
If we look at what has happened in other countries in connection with hydroelectric schemes, such as the Dniepiestroy dam and the Tennessee Valley Authority project, and we remember the wide publicity which they received, it is appropriate that we should expect to hear what developments are taking place in our own country. It may be said, and, indeed, it is quite obvious, that the House has often found itself in the position of not knowing what is going on in our own country.
These operations, both physically and metaphorically, bring us light and hope, and this scheme is one the benefits of which, both from the human and material point of view, are not fully appreciated by many people, who take a rather distant interest in them. The population of this country has been increasing quite considerably, but, in contrast to that fact, the population of the area which will be covered by the activities of this Board has decreased by 25 per cent. in our own lifetime. This is a loss of a population which is extremely valuable. It is not without some basis of truth that it is claimed that this population, in proportion to its numbers, has made a greater contribution to the well-being of the world than any other population in the world.
Mr. Speaker himself is a witness to the distinguished places to which Highlanders have been called, and, in every part of the world, we find people with Highland names playing important parts in administration and in government. One can recall many who acted as advisers to Shahs and other potentates and who bore Highland names. In the Army also, we frequently find that people who have been playing a distinguished part in the Army have also borne Highland names, because many people from these parts of our country have made a career of serving in the Army.
In the 200 years during which committees have been sitting and putting forward schemes for the benefit of the Highlands, it is true to say that no committee can compete with that presided over by Lord Cooper in the extent to which realisation has followed the promises it made, because, not only have the promises they made been fulfilled, but, already, they have been more than doubled.
The granting of this additional power to the Board to borrow up to an extra £100 million is not a philanthropic gesture on the part of this House, but it is one of the most profitable of investments which the State has ever made. It is not a speculation. The Board has already been able to meet all demands in the way of charges on its loans without requiring a subsidy from the State, and, in that direction, it is quite distinct from many other projects which have been carried out in recent times.
The main purpose of the Board is to produce electricity, and that electricity is being produced, but, in addition to that main purpose, the incidental benefits are not less important. Indeed, they are of really great importance, from both the human and the material points of view. In the solution of the problems which have just been outlined to us by the Chancellor, everyone will agree that the fundamental problem facing us is the expansion of our supplies of fuel and power. The solution of all our problems is, in reality, the raising of greater exports through greater production of power for our industries.
That is our main problem, and the easiest, cheapest and most efficient way of meeting that problem quickly is by the speedy construction of hydro-electric plant for the production of electricity. I think it can be described literally as power from heaven. Hydro-electricity can not only save coal in the production of electricity, but greatly reduce the amount of coal burned in the transport of coal for the production of electricity.
Already, I understand, the hydroelectric scheme is saving over 500,000 tons of coal a year in this country, and, with the further schemes which have now been approved, I am informed that we shall be able to save up to 2 million tons a year, and that, within 10 years, this figure may be increased to 4 million tons a year. When that is achieved, there will be no problem, and it will appear that electricity is coming to us from the sky itself.
I am very interested in the right hon. Gentleman's figure of the potential saving of 4 million tons of coal in a decade. Would he give us an indication of what exactly the capital cost for hydro-electric schemes would have to be to effect that saving?
That would have to be worked out in relation to the charges. I am talking of charges which, after allowing for the payment of interest charges, make this still the cheapest electricity which can be produced in this country today, and which can bear comparison with any steam producing unit.
Would the right hon. Gentleman confirm that point and tell us, for instance, what is the capital investment cost per kilowatt of power generated by a hydro-electric scheme, as compared with that of a steam generating station?
I do not think that is the point, because with a steam generating station the capital expenditure has to be liquidated over a very limited period of time. With a hydro-electric scheme, on the other hand, much of the capital expenditure is liquidated over a considerable period. Therefore, what one has to deal with is not the initial capital expenditure, but the annual charges which arise from it. Steam generating stations, which may go out of date, cannot be compared with hydroelectric schemes where the water power is perpetual. Atomic energy may come and dispense with steam generating stations, but it will not dispense with hydroelectric stations because, once the stations are built, water power is even cheaper than the production of atomic energy.
When it comes to cuts in capital expenditure—and I hope the Government will pay special attention to this in regard to hydro-electric schemes—the question of such cuts in the Highlands is quite a different proposition from that of cuts in other parts of the country because the construction labour in the Highlands cannot be transferred to other activities in the same way as can be done in a populous area where industries exist. It would mean depopulating the Highlands—the removal of large sections of the population—and from that point of view, so far as construction is concerned, hydroelectric schemes do not interfere or compete with defence activities as do steam generating stations.
I realise, of course, that the manufacture of the necessary plant is not all done in the Highlands; it is done in areas which compete with defence expenditure. Some of it is done in England, some in Scotland, and some even abroad. But the manufacture of such plant certainly competes less with defence expenditure than does the equipment for steam generating stations. I would point out to the Government that the production of electricity by hydro-electric schemes is quicker, cheaper and of much more advantage to the country. These advantages alone should be sufficient reason for supporting this Bill, but the incidental advantages are no less important.
This is the one part of Britain which is capable of great expansion in regard to the production of meat, a matter which I know is very dear to the heart of the hon. Gentleman who introduced this Bill. Nobody who knows anything about meat production would pretend that such an expansion would be either easy or quick. We must establish the foundations for such an expansion in the Highlands. The necessary foundations are a population on the land and capital improvement of the land.
The basis of population in the Highlands is, of course, the home, and the woman is the centre of the home. My experience during my time at the Scottish Office, both during and since the war, was that the women in the Highlands are not going to live in outlying places unless they are supplied with water, roads and some of the other amenities available in the towns. The State has already gone a considerable way towards meeting these requirements: Parliament has approved grants up to £20 million for water supplies, and the hydro-electric scheme has made a very big contribution towards opening up the Highlands by the provision of roads.
It is already producing electricity for farms. I believe that something like three-quarters of the farms are already receiving a supply. The bringing of electricity to the farms gives the farmer machinery for his work and his wife machinery for her home. It gives her heat in the home and the opportunity of using a washing machine, an electric cooker, a vacuum cleaner, wireless and even television.
I know that there is a great deal of sneering at television today. I do not know whether that is justified or not, but I have had some experience of the Highlands Film Guild. That Guild brings films into the Highlands in order to give the people there some of the amenities available to people living in the towns. Whether we like it or not, one of the attractions of the towns for young people is the cinema, and I take it that that fact guided the Chancellor very considerably today in his attitude towards the films. The Highland Film Guild gives at considerable expense a very devoted service to the people of the Highlands.
Those who operate these film units have to travel the roads in all sorts of weather, but even when they reach a village, the people wishing to see the films have to travel many miles on foot, sometimes through the snow, to see the show. The hon. Member for Caithness and Sutherland (Sir D. Robertson) knows that in his constituency that is frequently the case in bad weather. One thing the women of those parts demand is that there should be transport to carry them to and from the villages. My hon. Friend the Member for the Western Isles (Mr. M. MacMillan) reminds me that many of these women have to carry their provisions on their backs for many miles and sometimes even their sick before reaching a road on which there is wheeled transport. The only service which has been able to overcome that difficult is the Highland aeroplane service which transports sick people to hospital.
The other incidental contribution which the hydro-electricity scheme can make is the possibility of bringing new industries to the Highlands. This has been a very difficult question. The last Parliament, or the one before it, made a regulation extending the development benefits to an area in the Highlands. Everyone has been disappointed that private enterprise has not been attracted by these benefits to establish to any great extent industries in that development area. During the last Parliament I suggested that it was desirable, if private enterprise was not prepared to take the risk, that the Government should take the responsibility for developing some industry in that part of the Highlands.
Cheap electricity is available there and the necessary sites are also available. A very useful social purpose could be served by industries going there. The only industry which it has been proposed to set up there was one which would consume practically all the electricity produced by the scheme and which provided practically no employment for the people there. It also wanted a big subsidy. That would be the wrong kind of industry to be set up there. The industries which go there must clearly be suitable for the area and must conform to the normal habits of the life of the Highlands.
This scheme has had effects outside its own area. It has brought new industries into Scotland. For example, hydro-electric engineering was not highly developed in many parts of our country, but there are now a number of firms, which formerly had no experience of the work, who are now able to offer their services to other countries, and this will provide an additional possible export. The Hydro-Electricity Board has developed in conjunction with the firm of John Brown and Company of Clydebank, the makers, gas turbines for the production of electricity. That, again, is an industry which might be capable of expanding our exports in the future.
Beyond that, in the Orkneys, where gales caused such destruction recently, it is hoped to harness the wind to make electric power. If the scheme for wind power is successful it will be the first of its kind in the world to succeed. The American one was destroyed by the wind. If we can develop the "know-how" in the production of electricity by wind power we shall have accorded ourselves another opportunity for utilising Nature for the production of power in this country.
When I was Secretary of State I set up a committee under Sir Edward Appleton to investigate the possibility of winning peat. So far as we can see at the moment, the closed-cycle gas turbine will utilise peat. If that is possible we shall have another opportunity to save coal for other purposes. The Industrial Revolution in our country started very humbly with the water-wheel. Alongside our rivers, both in Scotland and in England, we still see very many relics and traces of the industries resting upon the power of those water-wheels.
I think the two biggest stopped running five years ago in Ayrshire. They were 50 ft. wheels providing 250 h.p. Just as they have given up duty we now have water coming into service again with the hydro-electric scheme. I understand eventually something like 10,000 million kilowatt hours can be obtained from water that formerly used to rush down to the sea and be lost to us.
I should like to pay tribute to Lord Cooper and his Committee. Few people who have presided over such committees have had the satisfaction of seeing their recommendations come to fruition. Speaking from memory, I think the Committee estimated about 400,000 kW. capacity might be produced from water power. We are already exceeding 900,000 kW. and I believe that with the present installations that output can be increased.
I think, also, that my late chief, Tom Johnston, the former Secretary of State for Scotland, who was the guiding spirit of this scheme from the very beginning, and is still controlling its destiny, deserves tribute from everybody in Parliament and from the whole of Scotland for the devoted service he has rendered.
Another name which ought to be mentioned, that of a man whom we have lost very recently and who was not so well-known to the public, is that of Sir Edward McColl. I never met anyone who knew the Highlands so intimately, and not only from the point of view of electrical development. He knew the spirit of the Highlands. The devotion and energy he applied to recovering this power from the Highlands were something which inspired everybody who came in contact with him. We all regret his passing. I should also like to pay tribute to the staff. There are many inducements for them to leave Scotland and go to other concerns but, so far, they have kept to their jobs.
At the time, great fear was felt that the beauties of Scotland would be destroyed by the coming of the hydro-electric schemes. But nobody who has seen the new loch in the constituency of the hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan) can doubt that instead of lessening the beauty of the countryside it has further increased it.
But we must not make the mistake now that was made before the war. Everybody must regret that this work was not carried out before the war when it could have been done at a third of the cost. We know all the reasons for the objections to it. The coal interests thought they could not sell their coal and, therefore, they did not want to deprive themselves of this outlet for coal. There were interests who opposed the work on public grounds for other reasons, but if the work had been done then we would now be enjoying electricity at a price cheaper than that at which it will ever be produced in the future, as far as we can see.
The production of electricity and coal governs the question whether the population can live in this land. I was very interested in a speech made by the hon. Member for Kidderminster (Mr. Nabarro) some time ago on the utilisation of fuel and his calculations that would keep the production of electricity and coal in harmony. I think he will agree that this scheme meets his objection and that when these works are established they will not need the coal he thought would not be available for steam-producing stations. The "fuel" for this purpose comes in the right quantity at the right time of year for us in Scotland.
As far as we are concerned this project is not a matter of controversy between parties and hon. Members. We can support this Bill with the feeling that no money was ever better or more wisely spent and no money was spent from which one could know with such certainty that there would be such ample and good returns.
In following the right hon. Gentleman the Member for East Stirling (Mr. Woodburn), with whose remarks I find myself entirely in sympathy on all important matters, I still feel that a word of caution is necessary in passing this Bill, which I am going to support. The point which should be borne in mind is that we all want hydroelectric development in Scotland. There has been a lot of misrepresentation about my hon. Friend the Joint Under-Secretary of State and myself and our attitude to the Tummel-Garry scheme. We were supposed to be opposed to hydro-electric development, whereas we were supporting it and merely wanted certain things changed.
Nobody in the Highlands of Scotland with any sense in his head wishes to oppose the development of hydro-electric power; but it is a matter of fact that thinking opinion in Scotland is becoming perturbed at the enormous increase in the actual cost of these works over the estimated figure put before Parliament.
As an example, I quote the case of the undertakings at Loch Sloy, Loch Morar and Lochalsh. It will be seen from HANSARD of 2nd July last year that I asked the Secretary of State for Scotland what was the original estimated cost of these projects, and he told me that in 1944 the estimated cost was £4,600,000 for the three schemes. He then gave the expenditure on these schemes up to the end of May, 1951. It had risen to £9,043,000 and that was after two parts of the Morar and Lochalsh scheme had been withdrawn. He also told us that the estimated cost of completion, less these two comparatively small parts which were postponed, would not be less than £9,235,000. That is but one example of the enormous excess of the actual cost of carrying out these schemes over the estimates that we approved.
While we do not wish to hold up the development of hydro-electric schemes in any way—far from it—we must not overlook the question of cost in these desperately serious times. Giving the option of increasing the limit of borrowing powers—topping it up by £100 million—may perhaps have the effect of making people think: "There is plenty of money available, let us go ahead and spend it." That is a grave danger. I do not think people will do it intentionally, but it is an attitude of mind which might prevail where there is a great deal of money which can be borrowed, and particularly where it is double the amount one could borrow before. I hope very much that far greater care will be exercised by the Secretary of State for Scotland and his Office in the examination of the actual cost to see whether it cannot be kept closer and more nearly related to the estimates.
The example which I have given is only one of many. I do not think I am wrong in saying that if one asked the Secretary of State for Scotland for similar figures for the other schemes, we should find a similar increase. Of course, nobody will pretend that the cost of things today is likely to be the same as it was in 1944, because the cost of everything has gone up; but that does not absolve us from our duty of looking much more closely all along the line into the actual cost of these schemes, in which I am sure reasonable economies could be effected without doing away with the efficiency of the schemes, which we all heartily support.
I want to make only one or two short points on this Bill which, like everyone else present, I support. The development of the Hydro-Electric Board has been one of the most notable things which have happened in the north of Scotland. It has stimulated in many districts a feeling that some of the pleasanter things available in the towns and the South would come their way and that attention would be paid to them by the Government, and that Scotland itself was doing something to help these great unpopulated areas from the Tay up to the north in my own constituency. I hope that the Board will continue to expand their work as fast as they can.
I think that the provision of some of these pleasanter things is a very important step in arresting de-population. Also, as has been said, the provision of electricity relieves the housewife of a good many unpleasant jobs and does a great deal to help the farmer and the crofter. Therefore, whatever happens to this Board is a matter of great and personal importance to many people in an area which is facing rather difficult problems and at the moment is suffering by reason of the fact that it does not derive any benefit from the re-armament programme but is at the same time suffering to some extent from the high prices and the general economic difficulties of the country as a whole.
In my own constituency the Hydro-Electric Board is somewhat inappropriately named because it generates none of its electricity by water. It generates the major part of it by oil and a small amount by wind. The time may come when electricity will be generated by the movement of the tides, and when that times comes the hon. Member for Caithness and Sutherland (Sir D. Robertson) and I may be able to meet on a great barrier running from South Ronaldshay to Caithness. Those days, however, are to come.
I should like to make one point on the subject of oil. I cannot understand why the oil companies cannot move oil cheaper in bulk by sea up to Scotland and thereby reduce the freight charges on oil. I do not see how it can be impossible to move oil comparatively more cheaply in a tanker taking it up to, say, Lerwick or Kirkwall or Wick, or wherever it may be, than by moving it by rail or by road. Yet I think we pay extra for all grades of oil, and the increasing cost of oil is one of the things which forces the Hydro-Electric Board to come to the House and ask for new borrowing powers.
In the early days the promises of electricity were rosy and many crofters got their houses wired. The cost of wiring a house is no small matter to a crofter. Then, because of the scarcity of materials, the rise in prices and so on, it became necessary to curtail the free provision of electricity, and in some cases guarantees were asked from the crofters that they would use so much electricity a year. I can understand the reason for that and I can understand the difficulties of the Board.
The Board are supplying a great many scattered crofts, and the cost of erecting poles and carrying cables to those crofts is considerable. We have heard of an old lady in the constituency of the hon. Member for Ross and Cromarty (Mr. John MacLeod) who only uses the electric light in order to light her oil lamps. She switches on the current, and when she has lit the oil lamps she switches it off again. On the other hand, there are areas in the Highlands where electricity is being used on a large scale and we must surely expect that as it becomes a more normal thing, more and more electricity will be used in the crofts for agricultural and ordinary household purposes.
There is no doubt that there is a feeling of unfairness between crofter and crofter because one man who has had the misfortune to come into the scheme late is asked to give a guarantee that he will use so much electricity, while another man who came in earlier has not been asked to give a guarantee. That has happened in many cases in my constituency. I do not say it is the Board's fault but, as I said at the beginning, this is an important matter for the Highlands, and if we can assist in overcoming the feeling of unfairness, we should do so.
I understand also that people are now being asked to contribute the initial cost of carrying electricity to their houses. That, I think, is something new. If we could get a statement on what the future is likely to hold in this respect, it would be a great help to the people. Some have spent large sums of money on wiring their houses, and now they do not know whether they will be required to give a pretty substantial guarantee or else make a fairly substantial contribution towards the cost of carrying electricity to their crofts; in the end they may be unable to do it and their expenditure may be wasted; while others eagerly await electricity which has not materialised.
Those are some small points which I wanted to raise on this Bill. I join the many other hon. Members who have said that it is very important that this great development in the Highlands should continue. It should be given every possible facility by this House bearing in mind the condition of the country as a whole.
I have been greatly interested to hear the all too brief statement of the Under-Secretary of State for Scotland followed by the more expansive speech of my right hon. Friend the Member for East Stirling (Mr. Woodburn). I find myself in agreement with the suggestion that we should not in any way frustrate the ambitions, schemes and general programme of the North of Scotland Hydro- Electric Board. I do not think anybody in the House wants to do that.
Members on both sides of the House have criticised aspects of particular schemes at different times. I have done so myself, just as the hon. Member for West Perth (Mr. Snadden) has done on other occasions. However, we should not castigate other hon. Members too severely, because we all feel strongly at times about certain aspects of different schemes. I suspect, however, that in one or two cases other private and commercial interests may occasionally have obtruded themselves—I am not referring here to the hon. Member for West Perth—but I will leave that for the time being.
I do not share the view which has been expressed that the schemes for the distribution of electricity will mean the maintenance of a large labour force permanently in the Highlands. As the various schemes are completed, there will be a skeleton maintenance force, which will not amount to anything like the forces required for ordinary steam generating stations. On the other hand, there is the compensating point that we shall not have these continuing costs that we have in connection with a steam generating station. Once the water power schemes are completed and fully under way and are eventually linked up with what I may call the general hydro-grid system, the costs do not recur. The costs are relatively stable once the water is doing its job. I admit that the cost of oil for the diesel engines will be a consideration at all times in the smaller schemes.
In the meantime, I do not want to over-stress the importance of these projects from the permanent employment point of view. There will be a number of clerical workers, technicians, maintenance crews and so on, but do not let us be misled by some of the too glib statistics about de-population which have been related to the activities of the Hydro-Electric Board, because to some extent the number of people imported to these jobs has helped to put a temporary check on the figures for emigration and depopulation. They do not really reflect a real trend.
On the other hand, one has to be grateful to the Hydro-Electric Board for their activities in the Highlands and Islands in creating employment for these few years while setting up their generating stations. One has to pay tribute to the late Sir Edward MacColl, to Mr. Tom Johnston and to all those who had the vision, the capacity and the continuing interest and energy to push these schemes ahead in face of considerable criticism both in this House and certainly outside it.
I can well remember the amount of opposition there was to hydro-electric development from coal area interests in various parts of the House. I remember that we were finally given a completely free vote and could get no guidance from the Government or the Ministers on the Caledonian Power Scheme and other schemes. Looking back on these things, it all seems rather shameful now. The criticisms we had and the opposition were rather those of vested interest than of people who took a different national point of view. Today, however, everybody in the House pays tribute to the development of hydro-electric power under the Board and to its distribution not only in the Highlands but also in the service of Scottish industry.
Having paid that tribute to Tom Johnston and the Board's workers and staff—and having paid it without any reservations—I will nevertheless say that I cannot fully agree with my right hon. Friend the Member for East Stirling in one respect. What he said may be generally true of the larger schemes; but not of the smaller schemes. The Board have not lived up to some of the early promises they gave and the expectations they raised in respect of smaller, so-called "uneconomic schemes." They were pledged to bring service to areas which could never by themselves make it economic, and which were to be carried by the whole scheme.
Consider the case of some of the islands in the west. I well remember Sir Edward MacColl, buttressed by all the authorities at the time, saying in 1945 that by 1949 some 90 per cent. of the population of the islands would be served by electricity for lighting and power. But that has not happened, and it is no use pretending that it has. When my right hon. Friend the Member for East Stirling said the Board had brought light "both physically and metaphorically," I was inclined to substitute the word "hypothetically" for a large number of the smaller islands. The hon. Member for Orkney and Shetland (Mr. Grimond) spoke about the old lady in Ross and Cromarty, looking for the electric light switch in order that she might see to light her lamp, but I saw the picture the other way round—a picture of the old lady going round with her lamp looking for the Hydro-Electric Board and the electric switch. I know of islands with populations of a few thousand who were led to believe that by 1949 they would be part of the 90 per cent. of the population who would be switching on electric lights and using electric cookers.
Another point arises from the Chancellor's statement today. If we are to economise in the use of steel and to direct the allocation of steel supplies to our export industries and to re-armament, will this Bill mean what it says?
I heard the Chancellor's statement excluding the fuel and power industries from the cuts, but how far will it be possible to carry out his presumably good intentions? One is surely permitted to question how far it will be possible to carry out the programme and whether the Hydro-Electric Board will be able to continue to make their heavy priority demands on steel, cement and several other materials which are so essential to our industrial export drive and to the re-armament drive. One is entitled to question whether they will be able to continue at the pace shown over the last few years. I hope they will be able to do so and, with priority given to the fuel and power industries, that they will receive the necessary allocations.
Reverting to the consumers, I am very anxious indeed to know what is to happen to those people who want to install electric cookers or to buy electric irons and generally to make use of electricity. It is no use installing electricity without providing the gadgets for using it—and the Chancellor of the Exchequer did not say anything which would exclude those gadgets from these very severe cuts. Indeed, he said the opposite. It is bad enough that Scotland should face an ever-increasing Purchase Tax on all the pleasant amenities enjoyed in the south, like television, just at the moment when these amenities are coming northward within her grasp. It appears to me that millions will have to wait for years for the enjoyment of those new amenities. As soon as television is to be transmitted from Kirk o'Shotts, we find that we are not to have television sets. Can we have any reassurance regarding new consumers?
The hon. Member for Orkney and Shetland made the point that the Hydro-Electric Board now demand that crofters and others who want electricity installed shall pay a considerable fee—often equal to several years' rent—or guarantee to use a cooker and so many units of electricity per quarter. That happens in my part of the country, in the Western Isles. In some cases the charge is very heavy, partly depending on the amount of distribution work involved, the distance from the main lines and so on. It is a new charge which has not been imposed hitherto, and those who had the good luck to have electricity installed years ago did not have to pay it. Anybody who wants electricity now, after having waited all these years and perhaps having wired his house, has to pay that charge unless he guarantees to use quite a large number of units per quarter.
I do not know what is the solution to this problem. I agree that the Board have to meet ever-increasing costs, far higher than was envisaged in 1944 or 1945 and higher than anyone could have foreseen at that time, but should they all be borne by the new consumer, now being supplied with electricity? It is hard on the crofter or the fisherman on a small income—so small that he is often outside Class 1 National Insurance benefits altogether—if he has to pay the full cost of his installation and heavy consumption. What can we do to ease the misfortune of these people? These costs that have been piling up against the Board are apparently to be passed entirely to the new consumer.
I fully recognise the benefits brought by electric light and power to the crofts and farms throughout the Highlands. There is only one thing we should welcome more than light, and that is water. The two things are, certainly, separate matters; and I ought not now to pursue the matter further. But, in passing, I hope that water supplies are not to suffer as part of the cuts announced by the Chancellor, especially when we are considering the needs of these areas.
My right hon. Friend the Member for East Stirling painted a very pretty picture of the benefits of electricity and told us about the films provided, and about Mickey Mouse. We would much rather have a good water supply. But Mickey Mouse is quite a consolation. Such things place a temptation in the way of young people of the Highlands and Islands who see all the nice things which the people of the towns are enjoying. They want those things, so the spread of electricity perhaps tends to hasten the desire for the city and for city lights. To that extent, therefore, it may be a service and yet at the same time may carry some of the germs of emigration.
With electricity, I should like to see these much-mentioned industries being brought to my constituency. I have not yet seen one. The right hon. Gentleman the Member for East Stirling says the industrial revolution started with water. I can only regret that it ended with Purchase Tax as far as my constituency's Harris Tweed industry is concerned. I do not blame him entirely for that, although he has his share of the blame on the basis of collective responsibility of Governments.
I can only hope that hon. Gentlemen opposite, now they are in power, are still doing their best to push these new industries they agitated for in recent years into the Highlands and Islands. They have far more influence with private industry than have members of the Labour Party. I want to see industries go into the Highlands and Islands and I am sure the appeals of the Highlands Panel, local authorities and Lord Bilsland's Scottish Council will receive the support of everybody on this side of the House if the new Government go on to develop new industry. Let them drive on with the projects for which they have always asked—those based on electricity included—which now apparently are to be cut instead to the bone. Let us see if they can solve the problem. We will give every encouragement and aid.
None of us will oppose this Bill. We shall all support it, even with the caution uttered by the hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan) in mind. We recognise the advantages that could accrue to agriculture; and also to new industries—if we can get them—in the Highlands. The hon. Member for Caithness and Sutherland (Sir D. Robertson) has gone on boldly but alone with this sort of enterprise. He has shown courage compared with other industrialists who have said that they wish to see new enterprises in that area but take no personal risks. Anyhow, that is a good start.
As I say, we all welcome this Bill, but, unfortunately, one of the things because of which so much of our support in this House was given to the hydro-electric scheme in 1945 and since, that it would bring all these incidental benefits—that it would assist in the development of industries, serve every small community, and so on—has not come about so far. Therefore, I conclude by making a plea to the Board—a plea which, I hope, other hon. Members will reinforce—to look after the smaller places, as the large places tend to be much more able to look after themselves.
The hon. Member for the Western Isles (Mr. M. MacMillan) and the hon. Member for Orkney and Shetland (Mr. Grimond) have raise points upon which I also feel a word should be said. I refer particularly to the Board's installations in crofts and smallholdings in fairly recent times. Some of those crofters and smallholders have been faced with the difficulty either of the cost of wiring or of a guarantee demanded from them, or some charge of one sort or another. I do not know whether other hon. Members have had this experience, but I certainly have had many complaints about that sort of thing. I wrote to the General Manager of the Board. I found him most helpful. I pointed out particularly the hardships that these charges imposed in some cases, and some compromise was usually reached, or the claim by the Board was even waived, and the crofter was satisfied: and I hope that the Board were, too.
The hon. Member for the Western Isles raised a point which has been filling me with anxiety ever since the Chancellor of the Exchequer was speaking and my hon. Friend introduced this Bill. We listened for over an hour to a very grim story from the Chancellor of the Exchequer, and I, like the hon. Member for the Western Isles, cannot quite see how, immediately after the Chancellor's statement, the Government can introduce a Bill for extending the loans which the Board can obtain by another £100 million. Will it work out? [An HON. MEMBER: "They will not spend it."] No one could be a greater supporter than I of these schemes—
But the point is this. Naturally, the Chancellor of the Exchequer wants to take steps to improve and increase our exports. That depends on coal. Anything which saves coal is a contribution to the solution of the problem.
I thank the right hon. Gentleman for that intervention, but in his speech just now he mentioned that, in addition to other benefits of the development of hydro-electricity schemes, there would be benefit to beef and mutton production in the Highlands. I know that in various parts of the Highlands the Chancellor's edict about the restriction of credit has come as a very serious blow to hill farmers raising cattle and sheep—a very serious blow. In fact, I know of several going out of business because of this restriction. How does that tally with the purposes of this Bill? How can we afford to give the Board powers to borrow another £100 million when we cut down on the very thing that is more essential even than electricity—that is, food supplies? That is what fills me with wonder.
I am sure that the Bill will be passed, and I hope that the Board will get the iron and cement and steel and all the other things which they want for their developments. We have just had an announcement about a big scheme being developed at Loch Awe, but I wonder whether the Chancellor's restrictions will not limit the supplies of materials required for these schemes.
Again—and also as the hon. Member for the Western Isles said—what about the cookers and radiators and the electric irons and those sorts of things? Are we going to get them? I sincerely hope we shall, but that very question occurred to me as I listened to the Chancellor of the Exchequer making his statement and then to my hon. Friend immediately afterward moving the Second Reading of this Bill. As I listened to the Government in almost the same breath talking about restrictions and about extending the borrowing powers of this Board, it seemed to me to be queer.
My hon. Friend the Member for Kidderminster (Mr. Nabarro) raised the question of the thermal stations and capital expenditure on hydro-electricity. I have had it on the best authority—unfortunately, he has passed to another world, and so I cannot question him on it now—that, no matter what thermal scheme we introduce, electricity can be produced by the Board 17 per cent. cheaper—at any time, whether in 1945 or 1950 or 1960. My hon. Friend is an expert on these matters, and he will, perhaps, pull to pieces what I say; but that is what I have been told on the best technical advice.
I fully agree with the hon. Member for the Western Isles about the question of the population. What is disturbing me is this. For instance, where is the labour to come from for the Loch Awe scheme? Will it be attracted away from sheep and cattle raising? Will the agricultural workers required by the hill farmers be attracted away from the farms to such a scheme? Shepherds and cattle men could get much better wages temporarily working on those schemes than the farmers are able to pay them.
Will those schemes draw that labour away from the farms and leave the hill farmers without sufficient workers? This affects the vital question of beef and mutton production. I feel that this is not a question of increasing the population but of taking away the men who are required essentially for the hill-farming industry. I am sure that the Board have had this matter brought to their notice, and I hope that they will try to get foreign labour—Poles and Irishmen, and so on—to deal with these schemes.
I am quite certain that as the years go by the disturbance by these schemes of the countryside will be cleared up, and, so far as the beauty of the countryside and amenities of that sort are concerned, I do not think there is any danger. There is nothing like the danger there that there is of taking away the population already in the Highlands.
Another point about which we are very anxious is one about which the hon. Member for Orkney and Shetland asked a Question today, and that is the matter of the freight charges in the Highlands. Surely, the development of hydro-electricity is one way of solving that difficulty. If we could do away with the importation of coal into the Highlands, and depend only on electric power and peat power, that would be of enormous benefit to the Highlands and to their population. There would be not only a saving on thermal stations and coal transported to them, but on coal for the ordinary domestic consumers. The problem of freight charges is one of the most serious that we have to contend with in the Highlands.
I hope, and I feel quite sure, that this Bill will receive unanimous support in the House today, but I should like to call the attention of my hon. Friend the Joint Under-Secretary of State to this question: How comes it that we can give the Board power to borrow another £100 million and at the same time cut our credits which were being given to the hill farmers to produce mutton and beef?
It is quite clear from some of the speeches that there is a good deal of confusion in the minds of hon. Members about the impact which the Chancellor's speech will have on the implementation of this scheme, and the question which presents itself to some of our minds is, I think, a quite legitimate one: In the long run will this money be spent? We know that we shall get more steel from America; but we also know that that steel will cost us £26 per ton more than it can be sold at in this country.
That is bound to result in an increase in costs, which will send up, not merely the cost of new stations and production but also, ultimately, the cost of distribution. It will certainly affect the amount of electricity which will be consumed—the amount of necessary electricity which ought to be consumed in the Highlands if we are to achieve that development which we all want to see.
It was also argued, again, quite reasonably, that these schemes would cut coal consumption, and that we might therefore export that coal. The difficulty about that argument is that these schemes are long-term schemes; they will not solve our problems tomorrow. We need the extra coal for export, not next year but this week. Therefore, while I agree that these schemes will, in the long run, save coal for export and, therefore, help in our general economic position, that is not an argument which seems to be applicable to the immediate circumstances facing us today.
However, I rose, not to tread on the tails of other coats, but merely to make a point which has so far not been touched upon. In support of my hon. Friend the Member for the Western Isles (Mr. M. MacMillan), I should like to point out to the hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan), who deplored the way in which the costs of many of these schemes had risen, instancing Loch Sloy and the Glen Affric scheme, that when one sees the conditions under which these works have been carried out one realises that the job has been so enormous that it is astonishing that the costs have not exceeded estimation even more greatly.
The Hydro-Electric Board have had to meet great opposition from local vested interests, and the town of Pitlochry affords a shining example of the type of vested interest which has helped to contribute to those additional costs to which the hon. and gallant Member objects.
Would the hon. Gentleman not agree that, when dealing with enormous sums like this estimates should be very much closer to reality, and that the conditions about which he now talks should have been foreseen?
The Chancellor, this afternoon, referred to the difficulties as they presented themselves to him, which are appreciated by many of us. He was faced with that very problem, that of rising costs; and he gave instances of how it had affected estimates in spite of all they had done to try to control these things. The Hydro-Electric Board is no more exempt from that pressure than any other spending body.
The point to which I wish to direct attention, very shortly, is the need for preserving the identity of the North of Scotland Hydro-Electric Board. I make that point because there has arisen a feeling that other plans are in view for this authority, and I feel that the Government ought to take this opportunity to make it perfectly clear to the people of the Highlands and to the Board that there is no intention of attempting to interfere with its functions. The only guidance we have so far is the word we got some weeks ago from the right hon. and gallant Member for Kelvingrove (Lieut.-Col. Elliot), but, however highly we estimate what he says, I am sure he will agree that the authoritative word lies with the Government Front Bench, and I think we ought to be told that there is no intention of interfering with the identity of the North of Scotland Hydro-Electric Board.
Many of us believe that that Board has to perform the type of job which can only be performed by an ad hoc authority. It is different from the other two electricity authorities in Scotland, who are concerned solely with the distribution of electricity. The North of Scotland Hydro-Electric Board is concerned with producing electricity and also with distributing electricity. In addition, it has done great work in the development of amenities in the Highlands; it has created roads, and it is laying the foundations of forestry schemes.
In other words, because of its peculiar nature it was specially constituted for the development of the Highlands of Scotland, and that should remain its function. Because of that, it is not concerned solely with the physical work of creating more electricity for power. It has also concerned itself with other developments; not only of bringing industries to the Highlands, which is important, but of fostering the indigenous industries which will flourish in the Highlands—one of the most important aspects of the whole problem of Highland development.
The Hydro-Electric Board has been doing that type of work, and it would be disastrous for the Highlands if its work were merged in any other functional body. I hope that tonight we shall have from the Government an assurance that such is not their intention.
So far as I am led to believe by the Chairman of the Board, one of their great jobs has been creating those roads in the Highlands which are essential to afforestation schemes. The hon. Gentleman may disagree with that, but I had the privilege, on one short visit, I admit, of seeing quite a number of the schemes, and I did see some evidence of road development there.
I should be astonished to know that it was easy to develop re-afforestation of the Highlands without road development preceding it. Then again so far as I am aware from my talks with the Chairman of the Board, they have done something towards encouraging the development of agriculture within the Highlands. The hon. Gentleman will not disagree, I hope, with the general proposition that we ought to be trying to encourage the development of these industries which might be termed indigenous to the Highlands of Scotland.
I hope that we may have tonight some assurance from the Government that there will be no attempt to interfere with the North of Scotland Hydro-Electric Board and with its functions or powers. Like other Members I welcome this Bill, and although I wonder whether money will be spent, nevertheless, the money is being set aside for a purpose which will find no note of dissent in the whole House, and I take this opportunity of commending the Bill.
I have some criticism to make about the operations of the North of Scotland Hydro-Electric Board, but I want to be a kindly critic, although an absolutely truthful one.
I fully appreciate the tributes that have been paid to the Board, to its Chairman, and particularly to Sir Edward McColl, a very great electrical engineer, and a Highlander, whose imagination and drive did so much to bring this Board to the position that it is in today; but I should not like the House to overlook the real pioneers in Highland electricity—the late George Balfour, who was so long an honoured Member of this House and who was Chairman of Balfour, Beatty and Co., and his four Scottish partners—William Shearer, William McGill, Ian Murray and Sir Andrew McTaggart.
Those were the men who created and brought electricity into the Highlands. Those were the men who waited for 11 years before they paid a dividend at all. They walked the streets of London trying to get capital for the venture. I would not like them to be forgotten when we are paying just tribute to their successors. These men made the most remarkable contribution ever made in the Highlands of Scotland by the introduction of electric power.
The hon. Member for Tradeston (Mr. Rankin) talked about the industries which the Hydro-Electric Board has fostered. I say that it has fostered none. There is a compulsion on it under the Act to do that, but that has been one of its failures. This story about building roads to foster industry will not do. Roads are built for the Board and for no other purpose, and when the construction work is finished and the roads are no longer required they may be of some help to us in the Highlands, but do not let any of us imagine that they to get into that frame of mind.
There is under the parent Act a compulsion on the Board to encourage and foster industries in its area. I challenge the Minister who is to wind up today to tell us of one or of any which it has fostered. In my area, which is a considerable part of the North of Scotland, there are none at all. If the hon. Member for Tradeston wants me to give way I will.
I am glad that the hon. Gentleman has given way. I did not really mean to interrupt him, but I take advantage of his generosity. I think that he is only stating the problem that the Government are up against. What I did say was that the Hydro-Electric Board had fostered industries by creating the basis on which the industries must thrive, for instance, road and afforestation schemes, and so on. At the same time, if these things are to develop we have to attract the individual to the Highlands, and that brings in other aspects of our difficulties and has created the whole problem which, I think, the North of Scotland Hydro-Electric Board has been facing up to very well.
I have stated my case very clearly.
I have asked the Minister who is to wind up to name any industry that has come into my area or any other Highland area, because I do not know of any. It is the duty of the Board to do that, but the Board has failed in that respect. It is compelled under the parent Act to give priority of power and light to consumers in the North of Scotland area; they have not done that. The great bulk of units of electricity produced are going to the South. Connections that have been made in the area have been mainly made in the populous areas, and do not let us overlook the fact that there are many important cities in that area. In my own constituency, the eastern coastal belt has had some connections, but where are the connections in the remote areas?
I have had the greatest possible difficulty in getting connections made a mile or two outside the county town of Dornoch, just off the Great North Road, and even when the connections are made, although the parent Act stipulates that the communications will all be made free, the little crofters who earn an income of about £50 to £150 a year are called upon to pay a guarantee of £3 a year for a croft. I think that it is one pound a room. [HON. MEMBERS: "Much more."] That is more than the rent of the croft in most places, and it is fundamentally wrong and in my opinion a breach of the Act.
The farmers who are making such a magnificent contribution to the nation's food, and whose work has been interrupted very much by the tragic hurricane which swept through the North of Scotland a fortnight ago, are being asked to pay capital charges—the little farmer with 40 acres, £18 per year for 10 years, a capital charge of £180. That was never visualised in this House when the Act was passed. We were told that communications were to be free. That is a legitimate criticism, and I hope that the Minister who is to wind-up will tell us that he intends to deal with it. My charge is that the populous areas are getting electricity in the same way as they get telephones, when the men in greater need of both in the remote areas do not get them.
Is the hon. Gentleman aware that farmers in my constituency have to pay a contribution when they are a certain distance from the road before they can have electricity? That applies all over Scotland. It does not apply only to the Highlands but to people in any isolated area.
The right hon. Gentleman's interruption is totally irrelevant. His area does not come under the 1943 Act.
I should like very much tonight to get the figures for the units exported to the south in the last three years and the units sold in the northern area, and I should like the latter to be sub-divided into the units sold in the rural portions and the other portions of the area. It may be that it is too much to expect the Minister who is winding up to supply them tonight, and if that is so I will wait a fortnight or a little longer and then I should put down a Question, which he can answer.
I take no parochial attitude over this matter. Nothing would give me greater satisfaction than to see Glasgow, Edinburgh and the south getting surplus electricity. The Under-Secretary of State, who opened the debate, said that electricity had arrested depopulation. That is not so. One of my counties, Sutherland, is the most depopulated in Scotland, and depopulation is still going on. Caithness is the second most depopulated county in the country. I say that the Board has lamentably failed in giving us the electricity that we require. Its transmission lines in course of erection remain unmanned or under-manned. It does not seem to want to take on extra men to do this work, yet we have unemployment in the area running at a rate four times more than the average for all Scotland. It is a thoroughly unsatisfactory position.
The right hon. Gentleman the Member for East Stirling (Mr. Woodburn) spoke about industries, and lamented that the development area which he himself created between Inverness and Cromarty was not populated by a single industry. He will recollect the plea I made at that time—that development areas ought to be created in the towns and large villages in the Highland areas, where people have lived for centuries and where they want to go on living. They do not want to go into a barren wilderness out in the fields of Cromarty. It was a failure, and I said it would be a failure. I am sorry that my words came true, but the opportunity still exists. In Wick, the largest town north of Inverness, there is abundant opportunity for industry, with buildings available. In Thurso and Darnoch, two of the oldest towns in the United Kingdom, there is not a single industry.
Let me remind my hon. Friends on the Front Bench that no country or large area of any country can hold its population on an agricultural economy without industry. The whole history of the world indicates that agriculture and industry are twins, and if we are to hold our populations they must go on together. For a century Governments of various colours have been talking about the depopulation of the Highlands. This Government will have an opportunity of doing something, which very few of the others ever did, and I know that in spite of the crippling inheritance which they have taken on from their predecessors they will seize the opportunity.
I know a number of other hon. Members want to speak and I must conclude now. I have some other points here which I wish to make, but they can wait for another occasion. This much, however, I do say, that while I know that much has been done by the North of Scotland Hydro-Electric Board, nevertheless it is a fact that in some fundamental priorities it has failed to carry out the duties imposed upon it by the Act for the Highland area.
The House will probably come to the conclusion that the speech of the hon. Member for Caithness and Sutherland (Sir D. Robertson) was of a rather carping character about a good Bill, which I can commend in view of the fact that it is well designed for the purpose for which it is intended. I support this Bill, and I think that the £200 million is not disproportionate to the very good work which is being done by the Hydro-Electric Board.
The purpose of the hydro-electric scheme is to bring light, heat and power to the North of Scotland, and the House will agree that it has done a good deal to improve the lives of the people there. One thing which is not being done I should like to suggest to the House, though I do not do it in any carping way. The success of this Board is largely due, notwithstanding what has been said by the hon. Member for Caithness and Sutherland, to the devoted skill of men, who have spent their lives in its work, and notably Mr. Thomas Johnston. It is idle for the hon. Member to deny the success of this Hydro-Electric Board in the sphere in which it has operated.
The suggestion that I have to make is that hydro-electric power should be used for transport, which is a crying need in the North of Scotland. One of the great needs there is quick, cheap and effective transport. It seems to me that the electricity provided by the hydro-electric scheme might fairly be applied to the transport system of the North of Scotland. To put it shortly—I think the railways of the North of Scotland should be electrified. The North of Scotland suffers greatly through its geographical position; it suffers greatly because of the freight costs; and it suffers greatly because the products of that area have to be brought at great expense to the South, there to compete at high freight charges with the products of the South. The fish of Aberdeen, for instance, has to compete with the fish of Grimsby and Hull, which are very much nearer to the large consuming centres.
If the railways of the North of Scotland were electrified by the power from the hydro-electric scheme, that would do a great deal to assist trade and industry in the North of Scotland, and would be an appropriate use to which to put that electricity. I support this Bill, and I would support a Bill which would much more generously put funds at the disposal of the Board for the aim I have just ventured to adumbrate.
It may be said that this is not the time to electrify the railways. When is the time? I say this is the time to save coal; to provide transport facilities for our fish and agricultural products in the North of Scotland; to develop Scottish markets, and to populate or re-populate the Highlands. If this is not the time for that when is the time? Will that time ever come? It is revelant for me to make the suggestion to the Board through this House that some of the added funds which will be acquired under this Bill, and possibly under another Bill at a later date, should be applied to this desirable end.
If my hon. Friend the Member for Edinburgh, South (Sir W. Darling), will wait a few moments, I shall demonstrate to him that this is a matter which is of very great interest to parts of the United Kingdom other than Scotland.
At the outset, I should like to temper with a little realism the idealism of the right hon. Gentleman the Member for East Stirling (Mr. Woodburn). In his useful contribution to this debate, he inferred that the capital development cost of schemes of this description is not a matter of over-riding or even major importance. I consider he is wrong in pushing to one side the capital cost element in a hydro-electric scheme. Nobody in this debate so far has attempted to draw a comparison between the capital cost of generating one kilowatt of power from a hydro-electric scheme in Scotland and the cost of generating one kilowatt of power from a power station in England, Scotland or elsewhere.
It is pertinent, as we are voting a very large sum of money, an extra £100 million of borrowing powers for capital development of Scottish hydro-electric schemes, that a direct comparison between these costs should be made.
Perhaps my hon. Friend will allow me to pursue my argument, and will return to the relatively minor point which he has made in a moment. I said it was essential to have a comparison made between the capital cost of hydroelectric development for power purposes and the cost of the power produced in a power station in England, or elsewhere. These are calculations which I have taken out since the commencement of this debate, without the aid of a slide rule. I am sure that when read in HANSARD tomorrow, they will be found approximately correct.
Hydro-electric schemes in Scotland have cost about £94 million, and for that sum a total of 282,900 kilowatts of electric power is being provided which, on the basis of 1,000 kilowatts to one megawatt, equals 283 megawatts of electric power to date. That means that the installed capital cost of one kilowatt of power from hydro-electric schemes of Scotland is no less than ₣332.—[Interruption.] That is the capital cost, not the cost for a year of production, as my hon. Friend the Member for Edinburgh South suggests.
The Third Annual Report of the British Electricity Authority gives a corresponding figure of capital cost, taken as an average of the installation cost, for power stations in the whole of the area controlled by the British Electricity Authority. That area excludes the North of Scotland and the hydro-electric schemes. That cost is £50 per kilowatt installed. In other words, the cost is approximately one-sixth to one-seventh of the corresponding installed capital cost under the hydro-electric schemes.
The hon. Member is using words to convey a wrong meaning. What is the cost of electricity? In all capitalist industry it is the annual charge that liquidates the capital cost plus the cost of running. It may be, as the hon. Member has said, that the capital resources used for the establishment of a hydro-electric scheme at a given date require more cement and steel than in the case of a steam generating station, but the cost of electricity is calculated as an annual charge. The second point, on which the hon. Gentleman is either misleading himself or is confusing the House, is that he is taking hydro-electric schemes produced this year, with the present labour conditions and cost of production, and is comparing them with the average over the whole area of the British Electricity Authority, whose stations were built long before the war when labour and materials cost perhaps a quarter or an eighth of what they do today.
The right hon. Gentleman is seeking to misrepresent me. I can prove my point in a number of different ways. The fact remains that the capital cost of installation for one kilowatt of power in the North of Scotland is of the order of six to seven times the corresponding capital cost in a standard power station elsewhere in the United Kingdom.
My hon. Friend the Member for Ross and Cromarty (Mr. John MacLeod) has asked how the residents in this part of the Highlands of Scotland are otherwise to get their power. I have no desire to deprive them of electric power, but the purpose of hydro-electric schemes in the North of Scotland is, as he well knows, not only to provide local residents with power and to attract industries to the area, but to export power to the Lowlands of Scotland and, what is equally important, to the North of England.
If the capital cost of developing power under a hydro-electric scheme is six to seven times greater than it is in a power station in England, then capital costs are of very great importance. That is quite aside from the question of providing local residents with power in the Highlands, which is, of course, of local interest.
I should like to clear up this point about the cost of the scheme. The production of hydro-electricity today, compared with electricity produced at a station built for steam, would be 30 per cent. cheaper, calculated on an annual cost basis. In a steam station, electricity would cost 50 per cent. more to produce than in a station like that at Loch Sloy, on a peak load basis. It may be that the cost of cement and steel at Loch Sloy would be more than for a steam station built today, but I do not think the hon. Member should try to alter the whole basis of capital cost in order to support his argument.
The right hon. Gentleman forces me to occupy the attention of the House for longer than I had intended. If he is not prepared to take the figure on the basis which I argued, perhaps he will allow me to put it in another and much simpler way. The Hydro-Electric Board have spent £94 million to date.
The borrowing powers were £100 million, and are now to be advanced to £200 million. Therefore, it is not unreasonable to say that the whole of the original sum voted for borrowing powers is in sight of being expended. The Joint Under-Secretary of State readily agrees with me.
The point I want to make to the right hon. Gentleman is that last year the British Electricity Authority used £85 million for capital development on power stations. For that sum they generated approximately an extra 1,100 megawatts of power. In Scotland, we have a capital commitment, over a period of five years, of approximately £94 million, of which perhaps only £56 million is taken up to date, yet the megawattage of power available is only approximately one quarter of that available from the British Electricity Authority for an expenditure of £85 million. That is an alternative way of stressing my point.
Quite a number of hon. Members are wondering where the hon. Gentleman's argument leads. One of his own supporters has already asked whether the hon. Gentleman was suggesting that because this scheme is so costly we ought not to have electricity in the North of Scotland. If that is not what he means and he is only arguing for argument's sake, there are two points I should like to put to him.
The hon. Gentleman has dealt with the cost of a kilowatt, taking only capital investment into account. That is quite a wrong way of examining the matter. One has to look at what electricity is going to cost in the future. The first point I want to stress is that manpower required in a hydro-electric scheme is very much smaller than in a solid-fuel station. The second point, following the hon. Gentleman's argument, is that we are having the greatest difficulty in getting coal for our own industries, for solid-fuel electricity stations and for export. If the hon. Gentleman's argument means anything, he must go on to tell us where we are to get the solid fuel if we are to wash out all kinds of expenditure on hydro-electric schemes.
The hon. Lady is suffering from an excess of impetuosity. If she will let me continue and complete my comparative figures she will find that I shall cover each of the points to which she has referred. I merely counsel, because I believe it to be correct to do so. that the capital development cost of the hydro-electric method of generating power is comparatively six times or more as great as in the case of a power station.
The other argument, an economic one, is the effect upon our coal economy, and the contribution that hydro-electricity schemes can make towards balancing our coal budget. The excessively high capital cost of hydro-electric schemes is justified, in existing circumstances, by the extremely bad coal prospects for the United Kingdom during the next few years. I am not over-emphasising when I say "extremely bad." I point to the fact that in 1951, excluding bunkers, we exported only eight million tons of coal, and we brought into this country 1,220,000 tons of American coal. It therefore follows that our net exports of coal, excluding bunkers, were approximately 6,750,000 tons, which is the lowest figure on record for any year of peace.
If these hydro-electric schemes are capable of providing electric power for just a small part of the United Kingdom—which is undoubtedly so, but it is a very small part—in addition to the needs of the local residents, then there is, on grounds of coal economy alone a case for justifying a six times higher capital expenditure to get the electric power, instead of paying American dollars to import coal. [Interruption.] I am not going back over my tracks, but I am satisfied that the capital cost of development is as high as I have said.
I am sorry to cross swords with my hon. and gallant Friend, but in my view that is not the essence of the scheme. If £100 million of the nation's capital resources has to be put into a scheme to provide electricity for something of the order of 1 per cent. of the nation's population, I should say that the whole scheme is perhaps out of balance.
I hope that when he replies the Under-Secretary will give us a comparison of the cost to a consumer, per unit of electricity derived from the hydro-electric scheme in Scotland—taking such places as Aberdeen, Edinburgh or Glasgow—and the comparable cost to a consumer in England for a unit of power generated by a standard British Electricity Authority power station.
In justifying this extremely high capital cost of hydro-electric development, I should be glad if the Under-Secretary would tell us what benefit the electricity grid south of the Border will derive from hydro-electric generation in the course of the next three or four years. When the schemes were first promoted, one of the principal facets in the arguments of the people who raised the original sums of capital, was the fact that the scheme would be capable of exporting electricity cheaply to the North of England. Only a negligible amount has yet become available.
I have said today that the excessively high cost of capital development of the hydro-electric schemes could only be justified on account of the fact that there is a direct saving in coal. It is primarily for that reason that I am supporting the Bill.
I was glad to hear that my hon. Friend the Member for Kidderminster (Mr. Nabarro) was really supporting the Bill. Its main object is to try, first of all, to supply electricity to people in the Highlands who have no electricity at all, and unless we produce it in this way I cannot think that they will get electricity in any other way. I hope that the day will come when we shall export more electricity than the people of the Highlands themselves can use.
I support the Bill, but I agree with my hon. and gallant Friend the Member for Perth and East Perthshire (Colonel Gomme-Duncan) that we must watch the ever-increasing costs. It is imperative that they should be looked into in detail, because I am sure that many savings can still be made.
An important point is the guarantee which is demanded from small crofting communities. When Mr. Tom Johnston got his Act through Parliament he gained the support of Highland hon. Members at that time by guaranteeing that the people in the Highlands would have the first call on the electricity when it was available. However, small communities are now being asked to guarantee large sums. A man told me that the guarantee for a smallholding was £60, which is an enormous amount of money for a small crofter, and that man is living beside another community which got the electricity free to the gable end, as it was guaranteed in the Act. The guarantees ought not to be so high, because the small crofting communities are potentially great consumers of electricity.
The hon. Member for Kidderminster gave the impression that the scheme was just to supply electric light to the people in the Highlands. That is not the full picture. The people in the Highlands have a tremendous amount to contribute, especially if we have small communities making component parts, to be assembled at centres, of articles which are of great value in our re-armament programme. The Hydro-Electric Board would find that the people in the Highlands would consume far more electricity if the guarantees were not so frightening to the small crofters, who are not prepared to pay them. This is an important point, and we ought never to forget that Mr. Tom Johnston got sympathy for his Act by guaranteeing that the people in the remote areas of the Highlands should have first call on the electricity.
This is a policy Bill and I do not wish to oppose it. It increases the possibility of borrowing by the North of Scotland Hydro-Electric Board by £100 million. It does not, however, allow the Board to borrow that sum. The Board can only borrow it piece by piece, according to the permission of the Secretary of State for Scotland and the Treasury.
The first point I want to make is that the Board itself should be informed sufficiently early how much it will be allowed to borrow on as long-term a programme as possible. There are two main expenditures for the Board: the production of electricity, and distribution. My constituency is concerned mainly with distribution, and the local office of the Board does not know even yet, although it is the end of January, how much it is to be allowed to spend this year on distribution.
That is very unfair to the Board. It means evasive answers to inquiries. It means that when people ask for electricity, the area manager can only say, "We will do it if we get the raw materials and if we have permission from the Secretary of State." My plea tonight is that under this new business Government there should be a proper business arrangement between the Government and the Board, so that the Board will know as far ahead as possible not only the amount of borrowing that will be allowed, not only for capital works, but also for distribution.
My second point is this. The Board is a national monopoly, and I think that the average person of independent thought in the Highlands is suspicious of monopolies. The people want to be quite certain that things are being run properly and not too expensively, as my hon. and gallant Friend the Member for Perth and East Perthshire (Colonel Gomme-Duncan) has said. They want to be assured that the scheme is a business proposition, that when they get evasive answers there is good reason for not being able to give electricity to a certain town, and that if their costs are higher than those of their neighbours there is a good reason for it.
I do not think that we have reached perfection in the relationship between monopolies and the public. Certainly, we have not done so in the nationalised monopolies like, for example, coal. But the North of Scotland Hydro-Electric Board is a special case. The hon. Member for Orkney and Shetland (Mr. Grimond) mentioned a similar point. The Government and the Board ought to work out some better scheme of public relations. I can give my experience in a sentence. In the last seven weeks, while we have been away on holiday, I have had no fewer than three local distribution schemes brought to my notice. The persons concerned have asked me to interview the area manager to ascertain what would happen to the schemes. That should not be necessary for a Member of Parliament. There should be some form of public relations between the public and the Board so that there is proper knowledge and confidence between the Board and the public.
One other aspect occurs to me. There are ample opportunities in the north of Scotland for public relations to be developed on a quite cheap, if not an almost free, basis. There are many clubs—Rotarians. Chambers of Commerce, the Housewives' League, for example—and all sorts of bodies who are only too anxious to get people to talk to them, to give lectures and so on, in the winter months all over the north of Scotland, if only the Board can provide the experts with the knowledge and ability to put over the case. I am quite certain that the relations of this national monopoly in the north of Scotland would be very much better, and Ministers would have very much less trouble in the House, if this was gone into and if the public relations aspect of the hydro-electric industry in the north of Scotland was examined.
I should like to say a word or two in favour of the Bill. I do not want to cross swords too fiercely with my hon. Friend the Member for Kidderminster (Mr. Nabarro), but I think that his way of looking at problems of the Highlands is exactly one of the reasons why we have not had greater Highland development in the past. It is not merely a question of giving electricity to the now all too few inhabitants of the Highlands. It is a very great thing that at this time of financial stringency we can look ahead to a scheme of hydro-electric development. It is a case of enabling the Highlands to play their full part to help the nation out of its difficulties, and it is no good simply comparing Highland conditions with those in the rest of the country.
The charter of the Hydro-Electric Board has two main charges, which are, at first sight, in conflict with each other. The first is to provide electricity to the remote consumers in the north. The second is that the scheme must be a commercial proposition. Quite obviously, at some stage or another, these things will come into conflict, and the greater the cost of the scheme, the less the local consumer is likely to benefit.
It is no good pretending that we are doing the good job which the Board set out to do in providing local consumers with electricity, when, in fact, we are not doing so. It is perfectly true, as Mr. Tom Johnston said, that the Board is providing 20,000 new consumers a year, and that is certainly to the credit of the Board. But where are they? I have an enormous number of constituents who continually write to me and who are not being provided, or who are being provided at costs which they are virtually unable to pay.
If the Board, under the present charter, cannot do the job that we want—that is, the development of the Highlands in the right way, so that they make their contribution to the economic benefit of the country—Parliament should consider a new charter. It may be that redistribution of industry and population will become so important that almost any expense is worth while. But I should like to see a little more done now with industry as far as these hydro-electric schemes are concerned, and I wish to leave just one further suggestion.
The Hydro-Electric Board should allot one scheme, at least, wholly to the development of new industry. I should like to see a place in the West Highlands, like for example, Cannich, become an industrial estate and encourage industry to come to the north. The hydro-electric schemes in Scotland will not produce very much power in relation to that produced all over Britain. The output will come only to about 5 to 7 per cent. of the total, and at present, of course, it is nothing like that figure.
Does my noble Friend realise that at present the whole of the hydro-electric scheme in Scotland represents 1·7 per cent. of the total electric power produced in the United Kingdom?
My hon. Friend is quite correct. When fully developed, the scheme will represent only something like 7 per cent. But I submit that all of that could be usefully used in the Highlands, and I hope that when it is developed, other development takes place which enables that to be the case.
I beg pardon, Mr. Speaker. I should have asked the leave of the House. Many of the questions addressed to me are of a technical nature and relatively unskilled people could not deal with them effectively on the spot, but I will try to deal with a number of questions which have been put because I believe they are very pertinent and should be answered, if at all possible.
In a way I feel that my hon. Friend the Member for Kidderminster (Mr. Nabarro) has misled the House in this debate. I should like to point out to him that this Bill authorises the Board to borrow. It is not voting the Board money but authorising the Board to borrow further money to carry out their schemes; and the £94 million to which he referred, I am informed, has no relation whatsoever to the kilowatts already in production. It is the estimated cost of the schemes confirmed, many of which are not even yet completed.
I was very puzzled to grasp what it was that my hon. Friend, with all his vast experience of the subject, was asking. If it had been about pigs and cows I could have understood him, but I came to the conclusion that he had been very woolly. The comparison is not between the capital cost of kilowatts but between the costs per unit of output. The cost per unit of hydro-generated power is vastly cheaper than that of steam power, and if it were not so the North of Scotland Hydro-Electric Board would vanish. It is rather dangerous to be misled on this.
I think we should all like to associate ourselves with what was said by the right hon. Member for East Stirling (Mr. Woodburn) about well-known people who have brought this scheme into operation, Lord Cooper, Mr. Tom Johnston and the late Sir Edward MacColl. On behalf of the Government, I associate myself with everything he said about them.
The main question put by the right hon. Gentleman was one which was common to the debate and was running through the speech of almost every hon. Member. It was the fear that because of our economic situation capital investment cuts will be very drastic and will therefore affect the future of hydro-electricity. I will deal with the point raised by my hon. and gallant Friend the Member for Argyll (Major McCallum), which is a slightly different one, a little later.
All I can say on the main question, apart from what the Chancellor said this afternoon—which I would recommend every hon. Member interested to read—is that my right hon. Friend certainly said that fuel and power would come in the first class of priority, but personally I should like to read his actual words before saying more. What I can say for the Secretary of State is that, in allocating investment resources which may be made available in present circumstances, the special needs of the Highlands, particularly this region, are being kept very much in mind. That is some sort of assurance on that matter.
A question was raised about roads made by the Board. I know of one region where, because the Board are working out a very big scheme, they are inevitably knocking the countryside about and affecting the farms. They have run a road right through a glen to carry out their work, but incidentally, it is of very great assistance to the farmers, who would otherwise never have got a road at all. There is much to be said for co-operation between the Hydro-Electric Board and the farming industry.
The right hon. Gentleman mentioned a figure which I do not think was quite accurate and I wish to give him the figure relating to farms connected to the Board's system. At the moment the number connected for the North of Scotland area is just over 5,000, which is one-eighth of the total. The North of Scotland area is by far the largest in the whole of Scotland. It has 41,000 farms and 5,000 are connected. That shows that there is still a great deal to be done.
My hon. and gallant Friend the Member for Perth and East Perthshire (Colonel Gomme-Duncan) spoke about the Tummel-Garry scheme and the cost of the work, suggesting that we should look very carefully at extravagance. In answer, I can only quote the safeguards against extravagance. As he probably knows, constructional schemes have all to be examined by the Secretary of State and after they are submitted to him they are subjected to very close scrutiny, including Parliamentary scrutiny, which also covers the estimated amounts of the works. My right hon. Friend has also to give a borrowing consent in respect of every scheme of which he approves. It is true that in a period of rising costs, what is estimated today may turn out to be very much more as a scheme progresses. I know that in connection with one large scheme factors such as conditions found when tunnelling or building a great dam were not foreseen by the greatest experts.
In that case it was dollars which went down a drain but in the other case it was water coming through a tunnel.
The hon. Member for Orkney and Shetland (Mr. Grimond), made a point which I have not heard before about taking oil by sea, which he said should be cheaper. I can only give the assurance that I shall have the suggestion put to the proper quarter. The answer to his question in regard to guarantees appears to be that the Board are giving supplies without a guarantee to pre-1948 consumers; that is, before the nationalisation of electricity. Since then they have had a much wider field to operate in and now, by statute, they are responsible for seeing that they do not make a loss. They must not do that, but they are subsidising uneconomic supplies to the extent of about one-third of the cost.
I would say that is so; but I should like to look into the question because it was raised by two other hon. Members and I think it an important one. I should like to look into it, and I should not like to commit myself to a more specific answer beyond what I have said.
The hon. Member for the Western Isles (Mr. M. MacMillan), raised the question of supplies to remote areas, as did some other hon. Members. Here we are up against a very complicated business. Because many people do not happen to live near the lines of construction, they have to pay very much higher charges, naturally, because the capital costs are very much greater. I refer the hon. Member to the Report of the Board which, on page 16, goes very fully into the difficulties of serving these remote areas. I can tell him that the Electricity Consultative Council for the North of Scotland district have been examining this difficult question in consultation with the farming interests and I assume they will have some proposals to bring forward. I have not seen their proposals, but I know that they are going into this difficult question of how to get an economic supply to the remote areas.
Perhaps the point has not been quite completely grasped. I am not thinking of, nor was I speaking of the individual who is a little off the main road or far from the lines of supply. I was thinking of whole areas, villages, islands, which have been completely neglected in spite of the undertaking—or was it merely what should have been a reliable forecast?—that by 1949 90 per cent. of the population in the Islands would be served. I think of North Uist or Barra, with roughly the same topography and the same distribution of population as South Uist, and where there is very much the same element of cost involved. Why should there be a delay of four or five years in the case of these whole communities?
I follow the hon. Member's point. I had taken it up rather differently.
There is the further point that where agricultural holdings are in areas where supplies are expensive, they should realise that there is provision for assistance under certain Acts of Parliament, such as the Hill Farming Act. In addition, just as coal can be charged against revenue so can electricity supplies. I do not think that that is well enough known.
The hon. Member for Tradeston (Mr. Rankin) asked about the future of electricity policy and whether I could make, any statement with regard to the future of the Hydro-Electric Board's powers. I cannot say any more than was said by
the Secretary of State in reply to a Question which the hon. Member put. He said:
I do not contemplate that any change in the present organisation of the electricity industry in Scotland would impair the special responsibilities for the Highlands and Islands placed on the North of Scotland Hydro-Electric Board by the Hydro-Electric Development (Scotland) Act, 1943."—[OFFICIAL REPORT, 4th December, 1951; Vol. 494, c. 2209.]
It is clear that their special powers will not be impaired by any change that might be made.
My hon. and gallant Friend the Member for Argyll (Major McCallum) raised a point which I found rather difficult to follow. I think that what he was trying to bring to my notice was the fact that the restriction of credit is affecting existing agricultural legislation—the Hill Farming Act and the Livestock Rearing Act—and he asked, why cut credit to people who are financing these schemes and stop them from going on when we can come forward with this Bill to take powers for the borrowing of further money? All I can say to him is that I am well aware, from the agricultural point of view, about this danger of restricting credit to such an extent that full advantage is not being taken of productive enterprises sponsored by Government legislation. This point has been brought to the notice of the Chancellor of the Exchequer by the responsible Ministers, and I hope that it will be looked at by his Department.
I have covered all the points which I have noted. If there are any others with which I have not dealt, they will appear in HANSARD, and I shall see that they are looked into and sent to the proper quarters. I hope that the House will now be able to give this Bill a Second Reading.