I beg to move, "That the Clause be read a Second time."

It is necessary that I should explain to the House why this new Clause has been put upon the Paper. It is essential to remember that the present Bill is a Bill to amend the Act which was passed by Parliament in 1919, and that it is to be read in connection with that Act. As hon. Members will recall, the Bill as it left this House in 1919, and went to Another place, was twofold in character. It had a voluntary aspect, but beyond that there was a compulsory aspect, under which it was possible for the authorities that were to be set up to purchase an undertaking without the consent of the undertaker. Therefore, there were provisions in that Bill which were appropriate to that set of circumstances, but which required reconsideration in view of the fact that the Act, as it took final form, had had eliminated from it the compulsory element, so that there was left only the element of voluntary sale or purchase of the station and mains. In the Act of 1919 there was a Section, Section 12, which is amended by Clause 15 of the present Bill, to which it will be necessary for me to invite the House to give some consideration.

By Section 12 the powers of the joint electricity authority were defined. They were authorised to supply electricity within their district subject to the exceptions mentioned in the Section, and one of the exceptions was that they were not to supply in the area of supply of a power company. An exception was, however, grafted upon that exception, whereby they might so supply, in the area of the power company, to the owner of a station which had been purchased. That was absolutely essential in dealing with compulsory purchase. It was quite impossible that there should have been, in the Act of 1919, a right to buy a station against the consent of the owner, and then to say that the joint electricity authority which had purchased that station might not supply to the owner of that station—that, in other words, the station so purchased should be put out of action altogether. That was the state of things when the Bill of 1919 left this House. It was quite different when it received the Royal Assent. When the present Bill was introduced in another place by my Noble Friend Lord Peel, the power companies thought it necessary to put upon the Order Paper a very large number of Amendments to protect their statutory rights. May I just remind the House in a few sentences what those rights were?

The power companies had come into existence, after a Report of the Committee presided over by Lord Cross, for the purpose of very substantially enlarging what. I may call the wholesale supply of electricity, as contradistinguished from the more limited right which had been given under the earlier Lighting Act; and those power companies, not very numerous, have invested in them at the present time, I think, something like £20,000,000. Of course, Parliament is bound to give proper consideration to the rights of these power companies who had come into being as statutory companies with certain rights, upon the strength 3f which they had invested their shareholders' money. The power companies in another place, therefore, put down a large number of Amendments, and I have little doubt that they would have succeeded in very seriously hampering, if not defeating, the Bill in another place. It was because of that that my Noble Friend Lord Peel, who was then Minister of Transport., consented to the introduction in the present Bill of Clause 15. That Clause is an Amendment of Section 12 of the principal Act, to which I have already referred, and the one point of amendment there to which I need specifically call the attention of the House is that it repealed that part of Section 12 which enabled a joint electricity authority to supply electricity to the owner of a power station which had been sold and transferred to the joint electricity authority.

Clause 15, therefore, is a Clause by which the Government must stand. It is quite impossible for the Government to meet its opponents in one House, dispose of Opposition in that House, and then, in the second House, when other opposition develops, to seek to abandon the provision by which it obtains support in another place. In Committee on this Bill Amendments waste put down, and they re-appear on the Paper to-day, to strike Clause 15 out of the present. Bill, but, for the reasons which I have explained, they could not be entertained by the Government. It was said on behalf of local authorities, mainly on behalf of municipal corporations, "See what yon are doing. When the station has been sold to the joint electricity authority, the joint electricity authority that, has bought. it may no longer use that station for the purpose of supplying the corporation from whom they have bought. it." My reply to that, on behalf of the Government, was that that was not the intention of the Clause, nor was it a result which the Commissioners feared, because the Commissioners had, under Section 14 of the Act of 1919, certain powers of adjusting districts which would prevent that from happening: and, speaking with the full authority of the Electricity Commissioners, who had carefully studied the matter, I said that in practice it was not believed these difficulties Mould arise. Notwithstanding that, and I make no complaint, I was very strongly pressed that the Clause as it stood was sensible of an interpretation which might make the transfer of these stations to the joint electricity authority impossible. I pointed out that they could only be transferred by consent, and that no one would consent to transfer a station if the result was that that station was to be put out of action for the purpose of supplying the district in respect of which it had been built. I promised the Committee, however, that I would approach the Power Companies' Association, and would ask them to meet me in a reasonable spirit and to consider whether it was not possible to find words which might be agreeable, in the form of a new Clause, which would remove the fear of the local authorities.

I invited the Power Companies' Association to see me. They met me in exactly the spirit in which I thought and hoped they would, and they did consent to a modification of the position, which is embodied in the Clause, the Second Reading of which I now move. Following upon that, I had the advantage of several discussions with representatives of the Association of Municipal Corporations, and the Clause as it now stands on the Paper has been agreed by the Government with the Power Companies' Association and with the Association of Municipal Corporations as being a reasonable way in which to meet the difficulties which had been foreshadowed. I ought to say that I think I am in perfect agreement about the wording with both associations, but that, since the Clause was first put on the Paper, the Parliamentary draftsman has suggested some very slight verbal alterations, not altering the sense, but conforming better to his views as to drafting; and I think I am entitled, therefore, to say that this Clause is one which meets with the approval of the parties who were in antagonism before the Committee.

The Clause provides that the Electricity Commissioners may, when they are establishing a joint electricity authority, or after the establishment of a joint electricity authority, by an order made on the application of that authority, exclude from the area of supply of any power company, subject to such terms, conditions and reservations as they may think fit, three separate matters. The first is any part of that area in which the right of the power company to supply electricity is subject to the absolute veto of some other authorised undertaker, where the station is being transferred; that is to say, where a municipality has erected its own station, and by its statute has a right to say to the power company, "You shall not sell in our district except with our consent," and that right is absolute, then the Electricity Commissioners may exclude that municipal area from the area of the power company, making such terms and conditions as they think fit. Subsection (1, b) is really part of the old Section 14 of the Act of 1919. It says that the Commissioners may exclude from the area of the power company any part of that area which at the time of the local inquiry, or at some later time, is not being supplied by the power company, and which it appears to the Commissioners could be better served by the joint electricity authority themselves or by that authority acting through any authorised undertakers. I hope that that is clear. The Commissioners, considering the matter, say: "Here is an area which is within the limits of the power company, but which in point of fact can be much better served by some other station belonging to the joint electricity authority. Therefore, we will exclude that from the area of the power company."

The Commissioners may also exclude, with the consent of the power company, any other part of the area of supply of the power company; but at the same time they may enlarge the powers of the power company by giving it the right to be a distributor for all purposes of electrical energy in its area; that is to say, they may map out separate districts and say, "This district will be best served from the station of the joint electricity authority; that district will be better served by the power company." Then there are certain provisos with which I need not trouble the House for more than a moment. The exclusion of an area from that of a supply company is not to prevent them from laying their through mains for the purpose of connecting up their districts, and it is not. to prevent them from selling their electricity for purposes of haulage or traction on any railway, tramway or canal, and for the purpose of lighting vehicles and vessels used on such railway, tramway or canal. The last part of the new Clause repeals, because it has been enacted in better words, Section 14 of the Act of 1919. In moving the Second Reading of the Clause, I desire to acknowledge my indebtedness both to the power companies and to the municipal corporations for the way in which they have endeavoured to meet the Government and to find something which would be satisfactory to all parties.