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Clause 1—(Increase Of Limit Of Borrowing Powers Of North Of Scotland Hydro-Electric Board)

Volume 497: debated on Wednesday 19 March 1952

The text on this page has been created from Hansard archive content, it may contain typographical errors.

9.34 p.m.

I beg to move, in page 1, line 13, to leave out "two hundred," and to insert "one hundred and fifty."

When the Joint Under-Secretary of State was making his second speech on the Committee Stage of the Bill he made considerable play of the fact that the board is not a matter which concerns the taxpayer. He rebuked my hon. Friend the Member for Kidderminster (Mr. Nabarro) and said that this was a board financed by Scottish investors.

I did not say anything of the kind. I should never dream of saying that the board did not concern the Scottish taxpayers. What I said was that the board had not yet, on account of its operations, had to call upon the Treasury for the implementation of its guarantee, and, therefore, its operations had not yet cost the taxpayers a halfpenny.

It looks as if I must refresh my hon. Friend's memory. What he said was this:

"They get permission to issue stock. The stock for the most part, I am informed, is invested by Scotsmen."
Not very good English, but we all know what is meant. Scotsmen are the people who are supplying the money.
"It may be that an odd wise, far-seeing Englishman—perhaps my hon. Friend the Member for Kidderminster—has invested a little money; nothing could be wiser, more shrewd or far-seeing.—[OFFICIAL REPORT. Scottish Standing Committee, 26th Febuary, 1952, c. 63.]
There is a good deal more of it, but I will not take up the time of the House by going into further details.

The fact is that the stock issues, four in number, total £42 million, carrying rates of interest from 2½ to 3½ per cent. and redeemable at different dates from 1989 to 1992. Of those stocks £37 million were issued to the National Debt Commissioners. That is a Government office. Those are Exchequer funds, which we in this House are expected to control.

That is £37 million of the £42 million, and of the remaining £5 million a public issue was made at 2½ per cent. in July, 1947. Of that amount £3½ million was taken over by the Scottish banks, and the remaining £1½ million was absorbed by the National Debt Commissioners. It would, therefore, appear that over 90 per cent. of the capital stock of this nationalised monopoly is being provided by the Exchequer. It is not financed from Scottish sources as stated by my hon. Friend. I am making that point, because it had a great bearing on the speech which he made, the whole tenor of which was that this was a self-contained profit-making enterprise, financed by Scottish capital and run by Scotsmen in Scotland. It is not true so far as the capital is concerned.

The money put up by the stocks is subject to the control of this House. The public control of finance is a primary duty of the House of Commons. I sometimes think that since that Sunday in 1939, when so many Bills and Regulations were passed on the nod, we have got out of the way of caring for the public purse. [HON. MEMBERS: "Oh."] I am not so sure about that, but I will have something to say about it a little later on.

The Joint Under-Secretary emphasised that the charges incurred by this nationalised board had been met out of current revenue. That is not so. I do not think that the Joint Under-Secretary has read any of the reports issued by the board. If he had done so, the facts which I have given about the National Debt Commissioners would have been known to him, for they are all printed there for anyone to see.

The fact is that interest has not been charged on unremunerative capital expenditure running to a vast sum. Instead of charging it against the revenue of the board, it has been capitalised and added to the assets. This board would not be self-supporting if these charges had been met. I do not make a big point of that, but I am only showing that in two very important respects the information given to the House by the Joint Under-Secretary was not correct, nor was a very important admission which he made. He said that borrowing was guaranteed by the Treasury, but he did not say that the capital stock, as to capital and interest, was also guaranteed by the Treasury. If ever there was a board which is the concern of this House it is this board.

9.45 p.m.

Fortuitously, because of this little Bill, which came up some weeks ago, and which I believe it was hoped would go through on the nod, or with a pious speech from the Government Bench and an equally pious one from the opposite bench—[Horn. MEMBERS: "Oh!"]—some of us, who represent Highland constituencies and who are concerned about the operation of this board, aided by our Sassenach friend the hon. Member for Kidderminster, decided that we should need to know a little more about it.

I would remind the House that the Bill has provided the first occasion for nine years, since the creation of this board, for the board to be debated by Members of the House of Commons. The sum of £100 million of public money for which we are responsible had already been subscribed. A Bill was brought forward for another £100 million. I am old enough to regard £100 million of public money as a vast sum. Because of this Bill, the House—I say this with becoming modesty—is indebted to the hon. Member for Kidderminster and to myself for providing a vehicle for discussion. The House has been very remiss. The principal blame attaches to the late Government—[HON. MEMBERS: "Oh!"]—yes, for allowing this concern to continue without bringing its accounts before the House of Commons. Her Majesty's Opposition share some of the blame.

I admit that we Scottish Unionist Members have only rights to two days on the Floor of the House and to six days in Scottish Grand Committee. Other debates have prior place, and I do not quarrel with that. It is the fact that this is the first occasion, since this little Bill came before the House, that we have had an opportunity of ventilating our views on it and of fulfilling our Parliamentary duty as Members of the House of Commons to examine expenditure.

There are fundamental weaknesses in the board, and they are born out of lack of Parliamentary control. The first is that every one of the schemes which has been brought forward to this House for approval has been exceeded by 200 per cent. or 300 per cent. in expenditure, without the board's coming back to the House of Commons and telling us about it. A £5 million scheme involves a cost of £10 million before it is finished.

The hon. Member seems to be making a Second Reading speech. His Amendment is merely to substitute £150 million for £200 million. I hope he will manage to confine his remarks to the substance of his Amendment.

I would respectfully draw your attention, Sir, to the fact that what I am saying is cogent. I want the £50 million reduction so that this board will be compelled to come back to the House of Commons in half of the time that they would have to if they got £100 million, and I am giving as my reason that they have been incurring tremendous expenses, because a cost approved by Parliament has been grossly exceeded. I hope that I am making my case.

The hon. Member will have to show that the substitution of "one hundred and fifty" for "two hundred" will advance the argument that he is putting before me. In other words, he cannot raise the question of Parliamentary control because apparently he agrees to £150 million and it is the difference of £50 million to which he must confine himself.

May I put it this way, Sir? I do not think the Government would dispute the fact that if the House gives the board £100 million it will be 10 or maybe more years before they come back to the House to give an account of their stewardship. In view of the huge excess of spending authorised by this House, am I not in order in supporting my plea for the figure to be £50 million, which would bring the board back to the House in half the time?

I do not want to be too hard on the hon. Member. It is relevant to the argument to say that the board will have to return to Parliament earlier, but the hon. Member must concentrate upon the difference between £150 million and £200 million.

Very well, Sir, I am much obliged to you and I will leave that point. I hope, however, that it has sunk in on both sides of the House. [Laughter.] It is not a laughing matter. It concerns the control of public funds, and it is a serious thing, in my view, when expenditure is carried to such an extent. I believe that one of the major causes of inflation in Scotland is the cost-plus that we were driven into during the dangerous days of the war. A contractor can make a contract for £3,900,000 and can snap his fingers because he knows very well that he can get more if costs of materials and wages rise. However, I feel that the House is bound to support the plea for closer Parliamentary control, particularly as for nine years there has been no control whatsoever.

There is another aspect of control, namely, whether it is desirable that the constitution of the board should remain as it is at present. This was the first of the nationalised boards set up at the critical stage of the middle of the war when we had not the experience we now have in 1952. This is a part-time board, composed of men engaged in other more or less full time occupations, who can spare time to come to the meetings occasionally, to sit round the table and he told what has happened. All the subsequent boards such as B.E.A. and the area boards had at least some full-time members—

I do not see how the hon. Member can raise the constitution of the board on the difference between £150 million and £200 million as the maximum sum the board may borrow. It seems to be quite beyond the scope of his Amendment.

Knowing your generosity, Mr. Speaker, to people who are trying to do their best, I am reluctant even to question the point you have made, but I should have thought that the qualification of men to spend £100 million of public money would have been conditioned largely by the time they were able to spend on the job. I know of no business of this size, with £200 million capital where the control is vested in people none of whom are qualified by experience of the industry and are simply part-timers. I think it is bad for the board. If I were a member of the board—

I think the hon. Member is quite out of order. His Amendment assumes that the board can borrow £150 million. I do not see how his argument can be hinged on to the difference between £150 million and £200 million.

I should like to put this point to the hon. Member. He has doubted the ability of the board to spend properly £200 million. How then can he justify his own Amendment?

I know that you will not allow me to answer the hon. Member's question, Mr. Speaker.

One of my main pre-occupations about this matter concerns the taking of Highland resources and using them, not for the benefit of the people they should serve and for the purpose for which this expenditure of money was intended but for the benefit of consumers outwith the area. I should have no complaint to make but for the fact that the price at which the consumer outside the area purchases his electric power is very much less than that which my constituents pay—only a third or a quarter, in fact, of what my constituents pay for domestic supplies.

The truth is that the money that was provided by the 1943 Act, and which will be provided by the Bill, has been spent for serving the cream of the applicants. People living in populous urban or suburban areas are connected. The old problem which you, Mr. Speaker, remember so well, is rife again.

Again, I must point out that it seems to me that the situation would be unchanged whether the board was allowed to have outstanding at any one time £150 or £200 million. I do not see that the hon. Member's argument is relevant to his Amendment.

One of the points that might be submitted is that if the board was not supplying B.E.A. for approximately ½d. per unit and my constituents for 5d. a unit, it would have much more in earnings in the kitty and would not need to come to the House for £100 million; £50 million would be adequate. That is a perfectly legitimate point.

This is a matter of very great anxiety. The board was created, and a primary duty was imposed upon it of supplying the ordinary people in the Highland area. While I should be the first to agree that the board is doing well, my criticism is meant to strengthen and improve the board and the services it is providing. But the area outwith the Highland area—and that is the area with which the Act is concerned—is served at a very low price per unit, while crofters, farmers and other essential people in the rural areas are unconnected nine years after the passing of the Act, the object of which was to arrest depopulation, which is the greatest affliction of the Highland counties.

In the recent census, of the two counties which I have the honour to represent, one is first in the depopulation list and the other is second. The amenities—

The hon. Member cannot raise the question of the depopulation of the Highlands on a matter of the difference between £150 and £200 million. It is not in order.

I do not know whether you realise it, Mr. Speaker, but you are making things very difficult for me. Of course, you are bound by the Rules of Order, and I should be the last to object to their enforcement, although I deplore them. It seems that I need to leave it to my hon. Friends to carry on the debate.

Unless the board stops taking the cream of the trade and gets down to dealing with the hard core, and uses some of the money which is being provided, whether it is £50 or £100 million, in supplying a fixed percentage of the rural areas, as was provided in the Act—it is a primary duty for the board to take current to the rural areas; that was almost the sole justification for the Act—and unless the House insists on this being done, we shall be failing in our duty. I feel confident, however, that that will not be the case.

I beg to second the Amendment.

The Amendment, so ably and eloquently moved by my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson), involves the curtailment of capital investment and, as I intend to devote practically the whole of my remarks upon it to the issue of capital investment, I trust that I shall not stray from the Rules of Order. On the Second Reading of the Bill I said that I would support it for this reason—and perhaps I may quote from the peroration of my speech on Second Reading:
"I have said today that the excessively high cost of capital development of the hydroelectric 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."—[OFFICIAL REPORT, 29th January, 1952; Vol. 495, c. 100.]
That is a very legitimate reason, but it does not detract in any way from the necessity for this House to scrutinise carefully the measure of capital investment granted under the Bill and the span of years in which the capital investment so granted shall be expended. It is fortunate that the Report stage of the Bill is being taken after the Budget, whereas the Second Reading and the Committee stage were taken before the Chancellor's Budget statement.

I want to quote from a speech made only the day before yesterday by my right hon. Friend the Member for Alder-shot (Mr. Lyttelton)—a speech upon this very important question of capital investment. I suggest, with great respect to hon. Members who represent Scottish constituencies, that we are not considering a parochial Scottish issue. This is an issue involving "below the line" expenditure in the national investment schedule, and it is a matter which is just as important to English Members as it is to Scottish Members.

Would my hon. Friend explain what he means by parochial Scottish matters?

My hon. Friend the Member for Croydon, East (Sir H. Williams), reminds me that there are no parishes in Scotland, so that this cannot be parochial. My use of the word parochial was metaphorical; perhaps we may say "local interest in Scotland." I was trying to emphasise that this is a matter of general interest throughout the United Kingdom.

It is clear that at the moment our economic affairs are in a difficult condition and that there is a paucity of money available for capital investment. It is, therefore, the duty of Her Majesty's Government, in my view, to scrutinise very closely every pound of capital investment to ensure that there is the maximum yield to the national economy. In the case of the Hydro-Electric Bill, that maximum yield means one or both of two things: it means either a maximum saving in coal and/or a maximum yield in electric power.

On 17th March, as reported in c. 1966 of the OFFICIAL REPORT, my right hon. Friend the Member for Aldershot, confirming the views that I have just expressed, said:
"All we are now saying, and nobody can possibly gainsay the necessity, is that in our present economic position we cannot afford to continue at the same rate of capital investment as that at which we have been engaged during 1950 and 1951."
He went on, as reported in the succeeding column, to say:
"I acknowledge that this process will certainly involve some painful readjustments."—[OFFICIAL REPORT, 17th March, 1952; Vol. 497, c. 1966–8.]
I want, at this stage, to ask the Secretary of State for Scotland to tell the House, when he replies, whether this painful process of readjustment is to be applied to the Scottish Hydro-Electric Board, or whether it is to be permitted to continue its 1951 scale of capital investment. Is the Scottish Hydro-Electric Board to be sacrosanct, or is it to fall in line with the general readjustment of capital investment forced upon us by economic circumstances?

There was a long discussion on the Committee stage on the merits—

10.0 p.m.

The hon. Member is quite wrong; it was 52 minutes. In fact, the affairs of the Scottish Standing Committee were so re-vitalised by that speech that the hon. Member for South Ayrshire (Mr. Emrys Hughes) referred to it as the insertion of a Voronoff-gland; and that was sufficient testimony in itself.

I do not wish to be contentious at this stage of the Bill, but rather to find the highest common factor of agreement with Her Majesty's Government in the matter of the figures put forward by the Hydro-Electric Board. It is a fact that in the hydro-electric scheme in Scotland the present cost per kilowatt installed is £200, whereas in a thermal station, an ordinary power station, the capital cost per kilowat installed is £60. From those simple figures, and without waxing at all technical it will become evident that the capital cost of providing equipment per kilowatt of power is three times as great for a hydro-electric scheme in Scotland as it is for a thermal power station.

When we are short of money for capital investment I submit that a three times greater capital investment per kilowatt is a major consideration for this House. The second issue, which is a parallel consideration—

Would my hon. Friend permit a question? Although the cost is as he says, does not the hydro-electric scheme use more cement, and more workers of various kinds, but less skill? Is not that perhaps a point?

If my hon. Friend will allow me to continue my argument I will, in time, pass to responding to his point.

The second point of major relevance is the fact that a hydro-electric scheme is often considered to last in perpetuity, or for all time. [An HON. MEMBER: "Yes."] An hon. Member opposite says, "Yes." That is not strictly correct. The length of time which a hydro-electric scheme is estimated to last is 75 years. That is the period on which most of the hydro-electric schemes in this country are based. A new thermal station is generally estimated to last 25 years. Therefore, a hydro-electric scheme lasts three times as long as a thermal station.

The period of amortisation of plant and equipment for a hydro-electric scheme is three times as long as for a thermal power station. But, as the capital cost of a hydro-electric scheme is three times greater than for a thermal power station, the two considerations cancel each other out in terms of the sum of money which must be amortised for every unit of electricity generated in each year.

Is not it the case that the Hydro-Electric Board must sell their current at a price comparable with the cheapest steam stations? Is not it a fact that they have done that for the last five years and this year, in spite of a rise in costs, are not they still making a profit and bringing electricity to areas where no private enterprise concern would go?

The hon. Member is partly right and I will cover his point in due course. I was just clearing up the point that the greater length of life of a hydro-electric station almost exactly offsets the cost of installation, in terms of annual depreciation or amortisation of plant and equipment.

The point made by the right hon. Gentleman is that the cost of a unit of electricity is the same. Indeed, that is absolutely correct. If he will look up the broadsheet issued by the North of Scotland Hydro-Electric Board to hon. Members of this House he will see that in the final paragraph, it is stated that, including transmission charges, the cost of a unit of electricity is exactly the same whether generated by steam station or hydro. Therefore, the capital costs as between the two types cancel themselves out and the cost of a unit of electricity is equal in each case, we are driven to only two remaining economic issues.

One is the amount of coal that can be saved by this capital investment, which this Amendment seeks to reduce, and the other is the issue of satisfying the local needs of electricity in the North of Scotland. May I speak first on the coal saving, because it directly affects the question of capital investment? I take the figure given by the right hon. Gentleman the Member for East Stirling (Mr. Woodburn), who, on Second Reading, said that for the capital investment to date, which is £47,500,000, the saving of coal is 500,000 tons a year. Those are the figures which the right hon. Gentleman gave. I think they are on the high side, but I will take them as being correct.

In days of extreme stringency of money for capital investment, it is imperative that every pound we invest should give us the greatest possible yield, either in electric power or in coal economy. That £47,500,000 invested in any one of half a dozen different projects would give us a yield in coal economy three or four times as great.

May I give one example to prove my point? Last Friday week, the hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann) was pleading very eloquently on the need for installing modern appliances in the homes of Scotland in order to conserve fuel. If we had put this £47 million that has already been spent in the hydro-electric scheme into new grates in Scottish homes, it would provide, at £10 a time, 4,750,000 such grates, and each one would save half a ton of coal a year. I am glad to have the support of the hon. Member for Ayrshire, South, who represents a mining constituency, because one of his purposes is to stop men going down the pits unnecessarily. The hon. Gentleman will, therefore, support me when I say that 4,750,000 grates, at an average cost of £10 a time, would provide—

This seems to be an argument directed not only against the Bill as a whole, but against the parent Act. We are really considering the Amendment, and I hope the hon. Gentleman will come back to it.

I was endeavouring to demonstrate a comparison of capital investment yields in support of my plea that the amount that we propose to invest under this Bill is too large in present circumstances. However, if I may, I will complete that argument by saying that, if we spent that £47 million in new modern appliance grates, it would yield approximately four times as much coal economy as the 500,000 tons of coal that is saved each year by the investment in hydroelectric schemes.

But how many tons of coal would be required to make the 4,750,000 grates? [Laughter.]

Hon. Gentlemen opposite should wait a minute; they have got it coming to them. My hon. Friend inquires how much cast iron will be required for the grates. [HON. MEMBERS: "No, coal."] All right; how much coal would be required to make the cast iron that would be put into the grates in the houses. Not half as much coal as was required to make the steel which has already been consumed in the hydroelectric scheme—not half as much.

Let me come to the final point, that of providing electricity to the local residents in the north of Scotland. On the Second Reading of this Bill I was interrupted on many occasions because hon. Members said that I was seeking to criticise the legitimate requirements for electricity in the north of Scotland. I corrected them and said that was not the case because the existing capacity of hydro-electric schemes in Scotland is more than enough to meet the needs of the 400,000 odd persons in the seven crofter counties. This further investment which we are now discussing, and which I suggest is too great, is solely designed to provide electricity for the Scottish Lowland grid and for the north of England grid.

When the Joint-Under Secretary of State replied to me on the Committee stage he said it was going to take 20 years to spend this £100 million. Therefore, what we are being asked to do tonight is to legislate for expenditure in a nationalised industry some of which expenditure will not take place until 1972. What rubbish! We should not be legislating for 1972; we should be legislating for the next three years. I am not prepared to look any more than three years ahead in the matter of capital investment in view of the extreme stringency of funds available at this moment.

If, by this Amendment, the additional borrowing powers of the board are reduced from £100 million to £50 million, then it means, according to the reply of the Under-Secretary of State, that we shall legislate for 10 years' expenditure ahead by the Hydro-Electric Board. I submit that 10 years' cover ahead is more than adequate. It should not be necessary to try to look further than 1962, and no civil contractor and no local board in Scotland can deny that they only plan their hydro schemes up to five years ahead. I believe that on that score alone the Under-Secretary of State stands condemned.

I want to pass to another point. I have been very severely criticised in the Scottish newspapers—I enjoy criticism—for daring to suggest that Parliament, by scrutinising capital expenditure grants to the Hydro-Electricity Board, should exercise a greater degree of control over this particular nationalised industry. One Glasgow paper, the "Bulletin and Scots Pictorial," asked, in its leading article—why a Sassenach Member should single out the North of Scotland Hydro- electricity Board for criticism and why should not Parliament have the same degree of control over all nationalised industry?

Those who are constant attenders in this Chamber will know that I have been standing up every Thursday afternoon for weeks asking the Leader of the House why all the nationalised industries that have their Reports and accounts in arrear are not being brought to the Floor of the House for regular debate, and why we have never debated the accounts of the Gas Council; why the accounts of the Electricity Authority are already two years in arrear? As was confirmed so eloquently by my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson), we have not since 1945 even discussed the annual Report and accounts of the North of Scotland Hydro-Electric Board.

I hope that by reducing the amount of the additional borrowing powers to £50 million and thereby giving dispensatory discretion to this nationalised Board for only 10 years ahead instead of for 20 years, we in this House will be doing our proper job and exercising due control and jurisdiction over the expenditure of a nationalised Corporation.

10.15 p.m.

Before the hon. Member sits down, may I ask him whether he has ever been in a crofter county in the North of Scotland before he allied himself with a man who has no real knowledge of his county and has been disowned by his own local authority in this matter of hydro-electric power? I should like to hear whether the hon. Member has ever been there and knows anything about the position in that area? I resent the fact that the hon. Member should be trying to practise his obvious opposition to the Snowdonia scheme by unfairly criticising the work of the Scottish Hydro-Electric Board.

I am a regular visitor to the North of Scotland, but this is a national issue and not only a Scottish issue, as I said at the beginning of my speech.

Furthermore, in case the hon. Member is not sufficiently well acquainted with the facts on hydro-electric power and has not studied the annual report and accounts with the same interest and care with which I have studied them, he should go back to the point in my speech where I said, as I said in Committee, that the existing hydro-electric capacity is much more than enough to provide for all the needs of the seven crofter counties and for any prospective industrial development and that this extra money is only required for the generation of electricity to the Lowland grid and to the North of England.

I am very pleased to have caught your eye, Mr. Speaker, because we have had three meetings of the Scottish Grand Committee to deal with this subject and I failed to be called to speak at any of them. The hon. Member for Caithness and Sutherland (Sir D. Robertson) delivered three speeches during that period and I think that amply illustrates that at least he has had much more time to state his case than those of us who believe that the full amount stated in this Bill should be voted have had in replying to him.

There is a certain Siamese twins complex about the mover and seconder of this Amendment. They have certain odd characteristics in common in stating their case. I can remember before I became a Member of this House how I used to be rather intrigued by the antics of one Gander Dower who used to represent Caithness and Sutherland. But I think we have had a new low level of absurdity now for a Highland Member in connection with Highland development. I think this new low level of political burlesque should cease after tonight in connection with Scottish development at any rate. Some of us feel very keenly about what has happened since hydro-electricity in Scotland was initiated by the late Government.

We should remember the part played by Mr. Tom Johnston. We in Scotland, quite apart from a mere Londoner who has a passing knowledge through a visit to Scotland in August, recognise that this development in Scotland has completely changed living conditions in a very material way in large areas of our country.

I hope the hon. and gallant Member will catch Mr. Speaker's eye. I have a fair amount to say.

I repudiate completely the intention of this Amendment to reduce the sum of £200 million by the amount indicated. We know that there are still many areas without electricity, and it seemed peculiar that the hon. Member for Caithness and Sutherland, in moving the Amendment, should have indicated that there are parts of his constituency still without it, while the seconder tried to make a case against these areas getting it.

No, the hon. Gentleman took up enough time during the Committee stage. There are still many areas without electricity, and I want the supply of electricity to be extended to these areas and to other areas which have some electricity supplied from private sources.

From my knowledge of the Highlands, which is very close, I am aware that, very often at considerable inconvenience, certain Highland landlords have been instrumental to a limited extent in providing electricity in their own areas. I am thinking of one scheme in particular where, I think, the Hydro-Electricity Board ought to spend some of the £200 million in getting rid of an out-dated private installation—

On a point of order, Mr. Speaker. Is it in order to discuss the whole range of who made provision before somebody else did it?

I was listening to the hon. Member. So far he is in order, but may I make an appeal to the House? Of course, I have no knowledge of what took place in Committee, but I have heard from hon. Members on both sides of the House that this matter was discussed on a somewhat different Amendment in Committee. I would ask hon. Members not to go over the whole range of the Bill again. A great deal of work has been done upon it both in the House and in Committee, and it is against the Rules of Order to go back over the same ground again and again. If hon. Members will confine themselves to the Amendment, I am sure we shall get on better.

I appreciate your advice, Mr. Speaker, but I hope you will appreciate that I tried for three mornings in the Scottish Grand Committee to catch the Chairman's eye.

With respect to these installations, I believe that the Hydro-Electricity Board could, with a great deal of added convenience to the inhabitants of certain Highland areas, do away with these small private uneconomic installations and extend its own activities to those areas. I am certain the hon. Member for Caithness and Sutherland knows that the service in these areas is given at an higher price than the Hydro-Electricity Board's charges. Very often the crofters and others in the area are subjected to electricity breakdowns which do not occur in Hydro-Electricity Board's areas with the same frequency.

The board is doing a good job, and, while I understand that Mr. Speaker's Ruling is that we cannot go into this matter now, I would say that this criticism of part-time members comes very ill from the hon. Member for Caithness and Sutherland while he himself, in association with many companies, is only a part-time member or, if he is a full-time member of them, he is very much a part-time Member of this House.

I wish to answer the criticism of the hon. Member for Caithness and Sutherland with respect to increased costs and his reference to the cost-plus system. I want to put the point to him that ever since the war ended industry as a whole has had to meet this position. Cost-plus has been a feature of all contracts. As I understand it, most contracts contain a clause to meet the contingency of either increased wages or increased prices of materials, such as the recent increase of £4 per ton for steel. Obviously, many contracts, when they were fixed, anticipated that sort of thing, and therefore a clause in the contract does meet that contingency. If it does not, and if there is opposition to the operation of such a clause, the price will assuredly be increased under the various schedule heads so as to give adequate cover; so the hon. Member's argument does not hold water.

I should like to deal with the argument of the hon. Member for Kidderminster (Mr. Nabarro). He made an enormous impact on the Scottish Grand Committee. By his method of addressing us in such loud tones in the confined space of the Scottish Grand Committee Room, he did for once have a rather enlivening effect, which I enjoyed. He is regarded as a very good mathematician but it did appear to me, in listening to his case, that our difficulty in dealing with him is that he establishes his own rules—and only he knows them. He will even change his rules in an attempt to win his case. His total figure of £94 million in the beginning, in relation to the £200 million asked, he changed to £33 million to suit his argument. He does not bother about rates of interest or repayment periods. Amortisation is merely a passing phase with him.

In local authority circles, in connection with local authority finance, he would be completely laughed out of court by the rules he lays down in financial matters in this House. If we applied his rules on this occasion to the provision of a municipal house, after the estimate and firm offer and the final contract price had been fixed, which we would borrow over 80 years, he would recover the loan charges in rent, if his argument is correct, over one year. That is his diagnosis of electricity and the price charged. I suggest that we do not accept his method in so far as finance for hydro-electricity is concerned.

Further, I disagree with his case for coal-fed stations as against hydro-electric installations. I do not think we should accept it because if we did it would mean that the Highlands of Scotland would have no electricity. Frankly, those of us with an interest in the Highlands are not going to accept his case. After construction of the dams, tunnels—

10.30 p.m.

Well, they had the Tummel running into a tunnel in one of the schemes. After construction of the dams, tunnels and power stations, the yearly on-cost is much cheaper. Hydroelectricity is saving huge coal tonnage, and also transport.

Yes, huge. I am talking about the necessary coal that would have to be transported by the railways if we generated electricity by coal-fed stations. A huge quantity would have to be taken into the Highlands, and the transport costs would cause a huge loss.

I have twice said this evening what I said in Committee. There is more than enough electricity already generated by the hydro-electric schemes to look after all the needs of the seven crofter counties plus all industrial development in the foreseeable future. That is all we are arguing about on this Bill, which is solely for grid supplies.

On a point of order. I have always understood that the main purpose of the Report stage was to bring forward Amendments so that the Government could consider particular points, which have perhaps already been considered at rather greater length in Committee, but which the Government have been asked to reconsider. Surely in the last half hour we have been considering the general principle of the Bill.

I have made repeated efforts to call the House to order in this matter. There has been a disposition to treat this Amendment, which involves only £50 million, as involving the whole principle of the Bill and the whole question of electrical generation throughout the country, by both water power and coal. I cannot any further tolerate this wideness of discussion. The House is now in possession of my mind on the subject and further speeches, if any, should be directed strictly to the Amendment.

I thank you, Mr. Speaker, and also the hon. Member for Hands-worth (Sir E. Boyle), with his knowledge of procedure, for getting me back to the point—if I ever went off it. I thought I was dealing with the point made by hon. Gentlemen opposite.

I hope that the board will have the authority, and that the Government will resist as strenously as possible this division, this split in their own ranks. I hope they will not give way to this writhing and twisting dissension, actively led by the hon. Member for Caithness and Sutherland, who has even fallen out with his own county council, Tory-led though it is. I hope the board will have the authority to borrow the £200 million for the necessary period, and that it will continue its experiments in connection with peat and gas turbines and the utilisation of wind power. I congratulate the board, and I feel that all right-thinking people are behind it in the necessary efforts which it is making on behalf of the Highlands of Scotland.

I do not intend to detain the House for more than a couple of minutes, and I certainly shall not attempt to follow the hon. Member for Central Ayrshire (Mr. Manuel) in his very varied speech. In any case, I should be out of order if I did, and therefore I will not try it. I should, however, like to deal with one thing he said, and that is the suggestion that the late Government initiated hydro-electric development in Scotland, because that is too fantastic to allow to pass. He has forgotten the 1943 Act; he has forgotten the Grampian Electricity Supply Company, which was long before that.

I wish to come to the Amendment, and to a point which I raised in Committee, namely, that whether it be £200 million or £150 million, I hope we shall realise that all public authorities or public companies which have extra facilities given to them for borrowing will be sorely tempted to exercise those powers unreasonably. Therefore, it is of the greatest importance that this House should keep a close eye on the expenditure of this money.

Merely saying that power is given to someone to borrow does not necessarily mean that they shall do so, and as quickly as possible. It is of the greatest importance that careful examination be given to this important matter, whatever may be the figure.

I do not think the hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan) need have great fear. Only this afternoon it was proved that the Treasury were examining very carefully any proposition to spend more money. Incidentally, it has been explained again and again that all we are talking about is that the board may have power to come and ask whether they can borrow. They are not being given £200 million or £150 million.

I want to correct the impression that may have been given by the seconder of this Amendment that anyone who wants electricity in the Highlands has only to press a button and it flows there and then because there is plenty of it. I am sure he did not want to give that impression. If we want to retain the population we have in the Highlands, we must give people reasonable amenities according to modern standards.

This is not a question of water-power or the saving of coal. It will require capital expenditure, but we should scrutinise that capital expenditure to see if it is justified. Let us have all the scrutiny that hon. Members desire, but do not let it go out from this House that we shall hold back from that very desirable capital expenditure in the Highlands by which we may retain the population of those areas and give them real hope for the future.

That is the danger if we cut this figure from £200 million to £150 million. It does not mean that less will be spent this year or next, but that the people in those areas, such as Hoy in my constituency, and in the Western Isles, will feel that once again the promises that were made to them years ago will fall by the wayside and de-population will thereby be allowed to continue without any notice being taken by the people in the South.

I am surprised at the hon. Member for Orkney and Shetland (Mr. Grimond) demolishing his own point, because he started by saying that we would not take anything away by reducing this amount of borrowing power. All we are seeking to do is to retain proper Parliamentary control at the only point where Parliamentary control can be maintained. It is all very well for the hon. Member to say, "Oh, yes, but you get borrowing powers and then you have to get Treasury permission to borrow the money or to start the scheme"—

I am coming to that. It is all very well to say that, but it is not Parliamentary control. It does not help us to get Parliamentary control—

I tried to confine myself very nearly to the Amendment. I do not see how the question of £200 million or £150 million will give any better Parliamentary control. I say, have it by all means but I do not see how, by reducing the amount, there will be more or less control.

May I put this to the hon. Gentleman? Is he not forgetting that even after this happens, no scheme can proceed without the board coming to the House for approval of the scheme on which the money is to be spent?

I am fully aware of that, but we have to consider the following points. First, are powers to this extent necessary now? Second, have powers to this extent generally been given to other bodies? Is that the normal constitutional practice? Third, are these powers really desirable now? This Amendment is merely to reduce the borrowing authority of the Board from £200 million to £150 million. If the full powers are not necessary now, then I submit that it is not right for Parliament to agree to them.

At no time has it been argued that the whole of the amount is necessary now, and that is what we ask the Joint Under-Secretary to explain when he comes to reply. Let us consider the present position. We are asked to give borrowing powers of £200 million, but as has been pointed out, the amount borrowed so far, or authorised to be borrowed, is only £56 million. The amount spent on capital development in 1950 was given in the last report as £12,250,000, and it was revealed that labour had been reduced by half. We have the restrictions on capital development as another factor.

Will my hon. Friend tell us, when he replies, what is likely to be the annual rate of borrowing? If it is around £12,250,000, it is clear that it will be a considerable time before this money is spent. It has just been stated that £94 million borrowing had been authorised so far, and the Joint Under-Secretary of State told us that schemes before the Department amounted to £30 million; so that everything which has been authorised, or is at present being considered, totals £124 million.

That is surely well within the limit of £150 million. How long is it before other schemes, not yet submitted, are likely to be started? In any case, why should Parliament give borrowing powers so far in advance of actual borrowing? This is relinquishing the one control which Parliament seems to have over these nationalised industries. It will be more than seven years before the amount in this Amendment is exceeded at the present annual rate of expenditure.

I suggest that we ought to have some detailed explanation from the Joint Under-Secretary as to why the full amount of £200 million is actually required before we give this authority. It may be said, and I know that it is argued in some quarters, that my hon. Friend the Member for Kidderminster (Mr. Nabarro) is interfering in Scottish affairs.

It might well be deduced from what has been said tonight that that is so, and it is widely suggested in some places in Scotland. But I was going to say that it is interesting to note the reaction of the board itself, which has indicated that it does not want shackles put on it. In what way are we putting shackles on it by exercising proper Parliamentary control over borrowing? I do not come here to denigrate the board or to snipe at it, but we should have much better information as to the way in which this money is likely to be spent before we part with these considerable powers.

10.45 p.m.

After all, I think we ought to compare what has been done by other boards. For example, the Colonial Development and Welfare Act, 1949, increased borrowing powers from £17,500,000 to £20 million. The Airways Corporations Act increased the power from £50 million to £60 million, and there was another increase in the Colonial development powers—those I quoted just now were annual powers—to £25 million, and to raise the total from £120 million to £140 million. In this case the increase is from £100 million to £200 million, and that ought to be pointed out.

It is no answer for my hon. Friend the Joint Under-Secretary to enumerate safeguards, as he did at an earlier stage—from the board to the British Electricity Authority, to the Secretary of State, to Parliament. These are a poor substitute for control by Parliament of this sort of expenditure. It looks as if this is another case of thinking of a number and doubling it.

There is one other point to which I should like to draw attention. The conception behind the Act of 1943, as has already been pointed out, was that the cost of electricity supply to remote parts would be made up from the profits on electricity sold outside the board's area at guaranteed prices and based on the most efficient scheme in Scotland. The Joint Under-Secretary has admitted that the cost of current hydro-electric schemes in Scotland is £200 a kilowatt. That was one weak point in a first-rate speech.

If the board cannot sell its surplus output to the British Electricity Authority at a profit, then the whole economic basis of the scheme for development of hydroelectricity in Scotland is undermined. If that occurred, we should not be justified in granting even an extra £50 million. It is on that point I hope my hon. Friend will again concentrate, because the position is not as rosy as my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson) indicated.

The board are selling to the British Electricity Authority electricity at little over 7d. a unit whereas the average cost of generation spread over the whole year was 481d. a unit. Why has there been no division of generating cost figures, and why has Parliament not been given that division? How can we make up our minds whether it is possible to give powers when we do not know what is the cost of new electricity plants and what it is running at now? The total cost of a unit sold is 1.28d. a unit whereas it is selling at 7d. a unit. I know that in that figure I have added in all the transmission costs and the rest of it, but it is a point to watch carefully.

There is not nearly enough information. Had we not given to the board something not given to any of the other nationalised industries, there would not have been the need for this long debate. We could have judged this matter for ourselves. Throughout the debate we have not had answers to these questions, and it is time we had them. I submit with the utmost respect to the House that borrowing powers for an additional £50 million are sufficient in the existing economic situation. We are not trying to take away from the Highlands or the Board any kind of development powers. What we are trying to do is to assert proper Parliamentary control.

Perhaps it would be for the convenience of the House if I were now to answer some of the points which have been raised.

On a point of order. Will the hon. Gentleman be answering the other questions which hon. Members wish to ask him?

This is an all-important point. There may be other questions, and I am asking whether the hon. Gentleman will also answer the other questions which have not yet been asked.

This is a Report stage, and we are dealing with an Amendment. There is another stage to come. If the hon. Gentleman speaks now, he will have exhausted his right to speak on this stage.

We have tonight bad a repetition of the debate which we had for three days during the Committee stage. All who were on the Committee are familiar with the general case which has been advanced. But whereas during the Committee stage my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson) moved that "two hundred" should be replaced by "one hundred and ten," he is now prepared to substitute "one hundred and fifty," so we are apparently £40 million more creditable than we were at the time of the Committee stage. That is all to the good. I observed with great pleasure tonight, too, that my hon. Friend said most emphatically that the board is doing well. That is very encouraging. I did not gather that that was his view during the Committee stage.

I believe that we can deal with the matter fairly briefly I raise no objection—nobody could raise any objection— to a case being put, as it has been put by my hon. Friends the Members for Kidderminster (Mr. Nabarro) and Caithness and Sutherland, which says in effect "This is a considerable financial transaction. Be careful what you are doing."

That is a perfectly proper thing to say, and it is also proper to criticise what the board is doing. I am not here to provide a white sheet of impeccability for the board. The Chairman and the general manager of the board are the first to admit that they have made mistakes. They told me that the other day, and they expect to make mistakes again.

Where these occur, it is the duty of hon. Members on all sides of the House to make representations to the board and to the Government—if they see any faults, failings, inefficiency or extravagance. This is not somebody's private board; it is a Scottish board. It is part of the Scottish heritage now. I urge hon. Members to look at it as a piece of Scotland's heritage which we must certainly maintain and try to improve. The Bill is necessary for the maintenance of that Scottish heritage, and I shall shortly ask the House to reject the Amendment. I do that for a number of very good reasons which should appeal to hon. Members in all parts of the House.

My hon. Friend the Member for Caithness and Sutherland was concerned about finance and thought he saw some error in certain of my remarks during the Committee stage. He said that at one time the board was financed by the National Debt Commissioners. That is true, and it still is. The National Debt Commissioners chose to invest in the Hydro-Electric Board. That was not a subsidy. The National Debt Commissioners might have invested in any other enterprise in the country, but it chose to do it that way.

I contend that that does not in any way alter the statement I made that up to this date the operations of the Board have not cost the British taxpayer a penny.

In view of the hon. Gentleman's statement that this is a Scottish heritage, why did not he ask the people of Scotland to subscribe the money?

I thought that my hon. Friend would have realised by now that the great part of the wealth of the British Empire is produced by Scotsmen anyway. On that point my hon. Friend the Member for Caithness and Sutherland need not be unduly anxious, and I do not think that it in any way contradicts what I said.

He thought also that he saw a mistake in my statement on interest charges. I said that the board met interest charges out of revenue. That is true. It is obvious that while a scheme is being built up—the dams, and the power stations, and so forth—and before there is any return from the project, one cannot charge interest to revenue because there is no revenue. As soon as the scheme is completed and the revenue begins to flow, the full interest charges are met out of revenue. There is nothing unusual about that. I am sure that my hon. Friend knows better than I do that that is common to all large projects of this kind.

On another point my hon. Friend suggested that I may have been guilty of a slip of the tongue. He suggested that I said in Committee that the guarantee of the Treasury in this matter was not for the capital and the interest, but only for one of them. If I said that I had no intention of doing so. I can assure him that the guarantee of the Treasury is for the capital and the interest. There has never been any doubt about that.

The point is that in the Committee stage the Joint Under-Secretary said the Treasury guaranteed the borrowing as to capital and interest. The fact is, of course, that it also guaranteed the stock as to capital repayment and interest, and the stock only stands at £75 today for the £100 which it cost.

That does not alter in any sense the statement which I made to the Committee. That is exactly what I have said.

Let us look at the question of Parliamentary control. The hon. Member for Caithness and Sutherland is right in asking for the proper Parliamentary control in this matter, but if Parliament does not choose, if the Opposition does not choose, to raise this issue; if private Members do not use their many opportunities to raise this matter, the Hydro-Electric Board cannot be blamed for that. There are many opportunities in this House for the matter to be raised. Members in all parties have failed to take advantage of those opportunities. I am sure that if any Member, in any part of the House, chooses to raise the matter in the annual debates we shall be most ready to listen to him and to do all we can to help him.

I am not allowed to touch upon the constitution of the Board. The hon. Member for Caithness and Sutherland talked about misuse of Highland resources, and suggested that the price charged to his constituents was far in excess of the price charged to the grid. The figures of fivepence and fivepence-halfpenny which he gave are true. But he bad not been looking accurately at the schedule, because the fivepence is the highest rate that is in the schedule. I will read the schedule. It states:
"Primary units per quarter are allowed to every habitable room and each primary unit consumed is charged at 5½d. Nine times the number of primary units consumed are charged at 2d.…"
And so it goes on. I think the hon. Gentleman was a little unfair in his figures. He should have given the average figure offered to the consumers in the Highlands, which in fact does not differ substantially from that charged to consumers in other parts of the country. I do not think there is a great deal in that point.

11.0 p.m.

Now I turn to the hon. Member for Kidderminster—[HON. MEMBERS: "Where is he?"] Perhaps he is not here. He suggested that the capital cost per kilowatt of hydro schemes is three times that of coal projects, but that the subsequent cost of actual generating is three times cheaper in the former case than in the latter: so that in the end we are just about balanced. Actually we are a little better than balanced because the cost of generating electricity by hydro is so much less than that of generating it by steam stations that we gain in the end. I will be very pleased to let him have the figures.

The hon. Member for Kidderminster was concerned with capital investment, and here I am really surprised at an hon. Member who is undoubtedly learned in these matters. If the purpose of this Bill was to enable the Hydro-Electric Board or encourage them to spend £100 million within the next year or something like that, there would indeed have been something in his argument. But that is not what it is for at all.

The purpose of this Bill 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 increase is required because the board has now been given borrowing consent amounting to £96 million. This amount has not yet been borrowed—the total borrowed is about £57 million—but the amount is earmarked for existing schemes approved and under construction and other work.

I invite hon. Members who are in doubt about this matter to listen to what I am about to say. The Bill itself does not give the board power to borrow any money. Before it can do so, it has to get the consent of the Secretary of State. I have said it before, but I have to say it again. Before it can make a stock issue or borrow on overdraft with a Treasury guarantee, it has to obtain the sanction of the Treasury. The board cannot carry out any generating projects or erect any transmission lines without the authority of a Construction Scheme, which has to be approved by the British Electricity Authority, confirmed by the Secretary of State and submitted to Parliament and approved by both Houses.

Negative. There is still a further safeguard against the board incurring more capital expenditure than the position of the country justifies, even if it already had borrowing consent to cover it. All new capital schemes of any size must be authorised by my right hon. Friend before they can be commenced.

The total value of the work done in a year is regulated in accordance with the decisions of the Government on investment policies. Therefore, there will not be one halfpenny advanced in this matter unless it fits in with the investment policy of the Government. There is no question whatever, once this Bill is passed, of the board running through £100 million just like lightning. I do, therefore, ask the House most seriously to believe that in the machinery we have now established, there are all the necessary controls.

I have to tell the House of a slight development which has taken place in this direction since we last met in Committee. I recognise the anxiety that was in the minds of hon. Members on account of the rising costs of materials and so on. I was worried as to whether the Government, through the Secretary of State for Scotland, was kept closely enough in contact with those rising costs and whether the contact was continuous enough. We have been in touch with the Hydro-Electric Board, and some improvement is likely to be brought about.

It is suggested that the Board, in addition to the present procedure which I have just described, should keep the Scottish Home Department informed, from time to time, of increases in wages and materials. So much depends on the future course of inflation, that it is not easy to make further suggestions for control at this stage, but it seems that that is some advance. We should now know from month to month what is happening, and when the Board comes with a new proposition we shall not be taken by surprise.

I am sorry to have to say this again, but my hon. Friend, the Member for Kidderminster, still has not got the essence of this Scottish hydro scheme. The essence of the scheme is that unless we export a large proportion of the electricity created to the south, there cannot be any electricity for the Highlands. When the hon. Gentleman says there is enough power there to satisfy the needs of all the Highlands, as if to suggest we should stop at once meeting the demands of the grid, then he shows a complete ignorance of the whole project. I must ask him, with the greatest respect, to go back and study the original debates. If he will do so, he will problably sleep much more happily tonight because I am sure he is genuinely concerned about this matter.

The hon. Gentleman says the object is not to provide electricity for the Hydro-Electric Board, but to export power to the south. What will the load factor be?

Mr. Speaker, there is a complete, crushing, reply, but, if you rule it out of order, I shall have to keep my answer for another day.

May I conclude these remarks? I have looked at this problem with the greatest of care and I am sure that the fears of hon. Members are not justified. I believe the machinery we have now got of control, management and superintendence is adequate.

I have had the figures given me of the growing needs of Scotland for electricity in the next five years. If I were to give these figures, the House would experience the same concern as I do. At the present rate of growth of the use of electricity and the present rate at which coal power stations are reaching obsolescence, the position in five years' time will be that, unless we get the maximum output from the Scottish hydro-electric scheme, Scotland's position will be in danger. It is going to be a very tight thing to balance supply with needs, and unless hydro power is given the opportunity to make its fullest contribution we are all going to suffer. [HON. MEMBERS: "Nonsense."] It is no use hon. Members saying "Nonsense"—I can provide the figures.

For those reasons I feel that an Amendment of this kind would be disastrous and I therefore must ask the House to reject it.

rose in his place, and claimed to move, "That the Question be now put."

Question, "That the Question be now put," put, and agreed to.

Question, "That 'two hundred' stand part of the Bill," put accordingly, and agreed to.

Motion made, and Question proposed. "That the Bill be now read the Third time."

11.11 p.m.

Before we part with this Bill, which does propose a very large increase in the borrowing powers of the hydro-electric authority in Scotland, I think we might briefly consider whether this expansion is desirable. We can only discuss what is in the Bill and in the Bill is £200 million. Technically, I am not as good on this subject as I was some years ago, because my connection with electricity supply has terminated; but I know a little about it. There is a delusion that hydroelectric power is cheaper than steam power. That is only true in certain circumstances, where there is a more or less constant load.

Would a steam coal station in the north of Scotland—in Caithness, for instance—be less or more economical than a hydro-electric one?

I have been to the town of Tongue, from which a lot of Scotsmen derive their habits. It is in Sutherland, I believe. I am dealing with the general idea that some hon. Members have that hydro-electric generation is cheaper than steam generation. It entirely depends for what you are using it. The idea behind hydro-electric generation is to have continuous processes, with a constant load, 24 hours a day, seven days a week. Then hydro-electric power is much cheaper than steam power.

But if one has an ordinary mixed load, which one gets in a town—in London or anywhere else—my contention is that Battersea Power Station would beat the hydro-electric power station. There is an assumption that there is something miraculous and mysterious about hydroelectric power. Once the hydro-electric station is built the charges are small and there is a rather small staff; but the trouble is that in Scotland—

If that argument is correct it would apply more strongly to a peak load station, yet a peak load station, built in Scotland, can produce electricity far cheaper than would be possible even if Battersea Power Station were built today for that purpose.

I quite understand that with the station which runs constantly day and night, more or less at full power, one gets very economical generation, and when the peak load comes on other stations are taken in; but taking the general average of supply from steam stations.

On a point of order. As I understand it, on Third Reading one discusses what is in the Bill. As this is The Hydro-Electric Development (Scotland) Bill, I should have thought that what was not in the Bill was steam generation of electricity.

I agree it is only to extend the borrowing powers of the board. The hon. Gentleman began by saying he could only speak about what was in the Bill, and I hope he will keep to his own rule.

I think I can say I am in order because what is the purpose for which the borrowing powers are to be extended? It is all based on the assumption that it is desirable to increase largely the generation of electricity by the hydro-electric method. That is the purpose. If that proposition is not true then the justification for the increase from £100 million to £200 million no longer exists.

It seems to me that the case for the Bill is destroyed if the case for a hydroelectric system and its indefinite extension is not made out. That is why I was using this argument, and that is why I think I was in order. We all know that in places where the mountains are high the hydro-electric system is very successful. If you drop a gallon of water one foot you get one result; if you drop it 100 feet you get another result. You cannot generate electricity economically unless you have a high fall, and to a large extent in Norway, Italy, and France where they have high falls of water—

The whole basis of the increase in the borrowing powers is that it is desirable indefinitely to extend hydro-electric generation in Scotland. [HON. MEMBERS: "No."] Certainly, I am not talking about hydro-electric power in the Orkneys.

It does not seem to me proper that the Hydro-Electric Board should run diesel engines.

Here we are being asked to extend the sum by £100 million. Before we entrust anyone with the ultimate responsibility for this sum we ought to know a little more about it. We ought to be satisfied that their projects are likely to be wise. They have spent only £56 million. They have authorisations up to £98 million. They will not have any need for this expansion for several years, and why should Parliament lose its control?

It is true the Treasury and the Secretary of State come in, and later an Order is made against which we may pray, but the primary control of Parliament is done away with if we grant this increase, which is a deliberate incitement to the board to go forward on the assumption that ultimately they will be able to spend £200 million. That sum in relation to the electrical supply of the country is a very large sum indeed.

If hon. Gentlemen look at the "Statistical Digest" and see what has been already spent, they will see it is out of relation to the establishment of the most efficient electrical supply system in this country. It is not as if the Hydro-Electric Board were at the beginning of hydro-electric supply in Scotland. It is 20 years since I went to Tummel Bridge. There is also the great enterprise at Kinlochleven.

The hon. Gentleman will note, too, that Kinlochleven was launched by a private company and not a nationalised industry.

At Kinlochleven there is a continuous metallurgic process for the production of aluminium. We had a discussion, I think in 1942, about the Glen Affric scheme, promoted by Mr. Steven Hardie, for the production of calcium carbide. Hon Gentlemen opposite were opposed to it because they did not realise what a great friend Mr. Hardie, as he then was, was going to be to them. I supported that Bill.

I agree, Sir Charles. I was led astray a little by the hon. Gentleman opposite.

We are now deciding that the hydroelectric schemes of Scotland are ultimately to involve a capital expenditure of at least £200 million. I do not think that the efficiency of the water supply in Scotland justifies a £200 million project, and for that reason I do not like this Bill.

11.21 p.m.

We view the scene tonight with just a little sadness and some sympathy for the Government, who are faced with the peculiar situation sometimes described in the Press as "the tail trying to wag the dog." Let me re-assure the Government at once that, if those who oppose this Bill carry their opposition to a Division, I shall advise my hon. and right hon. Friends to support the Government and see that they are not defeated.

I regret this attack on the Government and on the Hydro-Electric Board, which has been misjudged and unfair, and has done a great disservice to the development of a great enterprise in Scotland. I regret especially the attitude of Highland Members, with perhaps the exception of my hon. Friend the Member for the Western Isles (Mr. M. MacMillan) whose constituency is so far not benefiting very much from the Bill. Members for other Highland constituencies have actually joined forces with the hon. Member for Kidderminster (Mr. Nabarro), and under his leadership have done their best, during the several days on which we have discussed this Bill, to destroy it and the whole purpose of it.

The right hon. Gentleman is not quite correct. He will find that the majority of Highland Members are behind this board.

I am glad to have that assurance, because it has not been apparent from the debates we have had on this Bill. Listening to Highland Members, and remembering that the country is spending £200 million of its money in development of the Highlands, I have felt that the kind of reception given to this Bill by some of them is a great discouragement to other hon. Members ever to try to help the Highlands in any direction.

Surely the right hon. Gentleman will agree that every Highland Member on this side of the House has spoken in favour of the current produced now being used in the Highlands.

That interjection in itself shows a complete misunderstanding of the whole scheme. The hon. Gentleman was the only one who mentioned any benefit that came to the Highlands, because he explained that in his house he had got electricity. That is the only house in the Highlands that has got any electricity, judging by the speeches of Highland Members. I think that their behaviour on this Bill has been absolutely shocking and a great discouragement to the rest of the House to try to get anything for the Highlands. It is just as well that this scheme is not only for the benefit of the Highlands and that some of the electricity will go to parts of Scotland which appreciate it.

This winter we have been able to avoid electricity cuts, largely because of electricity coming from this scheme into the southern part of Scotland. The hon. Member for Kidderminster (Mr. Nabarro), who has led the attack on the whole scheme, has never studied the matter. The whole of his speeches are riddled with misunderstandings, misconceptions and misjudgments. He continually talks about our sending electricity from the hydro-electric scheme into England. Not one kilowatt of that electricity comes into England.

Not at all. Why should they transmit electricity from the Highlands to England when they can do it from a hydro-electric scheme much nearer at hand?

Not at all. The purpose of the scheme is to send electricity from the Highlands into the grid which supplies the southern part of Scotland, and with the income that is derived from the sale of that electricity, to enable the Hydro-Electric Board to give benefits to the Highlands and to provide electricity for an area which economically could not otherwise sustain an electricity undertaking.

The right hon. Gentleman must not misrepresent what I have said. I have said on a dozen different occasions that the electricity would be put into the Lowlands grid, and when the investment contemplated under this Bill is completed, it will lead to the feeding of electricity into the north of England.

No, the hon. Gentleman went on talking about this electricity going to England. He is now again modifying his speech, as he has done with every other speech he has made, in order to correct it when he has been corrected. He manipulates it. As my hon. Friend says, he has rules of mathematics peculiar to himself. This scheme is not only for the benefit of the Highlands and not only for the benefit of the South of Scotland, but for the whole of this country, for two reasons. First, it makes a contribution to the availability of electricity to the country; second, it economises in what is the most valuable product of this country, both in its international aspect and for home productivity, namely coal.

If a scheme of this kind will save four million tons of coal a year in the course of time—and that can be done by no other method, even by the method of the hon. Gentleman who wants to push all his patent gas grids and other things of that kind—

Only the right hon. Gentleman has brought to this House the allegation that four million tons of coal a year will be saved by this scheme. He knows that cannot be true. There is nothing on record to support his statement. It is a fancy, a figment of his imagination.

Not at all. The schemes that are already under contemplation will save two million tons of coal a year.

Just a moment. The schemes which are in survey and under construction will save two million tons of coal. Those that are expected to be developed in the next 10 years under this Bill will save up to four million tons of coal a year. Those are the estimates.

Nearly all the arguments that have been used against the Bill have been mis- conceived and are unsound. The hon. Member for Caithness and Sutherland (Sir D. Robertson) has, I understand, some personal dispute with the board over some coal in Arbroath, which he seems to be bringing into this Bill, and it apparently accounts for the bitterness he has introduced into this discussion.

May I ask the right hon. Gentleman to withdraw that, because it is wholly untrue. I have no dispute whatsoever with the board. All I have asked it to do is to consider generating electricity in Sutherland, where there is a coal pit, rather than to send the coal from Sutherland to Rotterdam to generate electricity there. It seems to me a farcical situation but there is no dispute about it.

The hon. Gentleman is very mild about it tonight, but I think everyone will agree that in earlier speeches he has delivered violent tirades and spent a great deal of time on the question of coal. That is a matter for himself, but he has no right to introduce into a public discussion as to the merits of a great scheme of this kind some matter about which he has a dispute of his own. It is quite outside this Bill.

The other point of the hon. Member for Caithness and Sutherland was that there were no electrical experts on this board. But I would like hon. Gentlemen to notice that his reason for wanting people on the board is to control finances. I am not sure whether electrical experts are necessarily experts in finance, and I think that a good canny Scotsman in charge of this board who has experience of finance would probably be a better man for controlling finance than an electrical expert who may not know the first thing about it.

The right hon. Gentleman is putting words into my mouth that I have never used at any time. I simply said in the earlier stages of this debate that, under the Acts passed by the Government of which the right hon. Gentleman was a member, they insisted that on every electricity board there should be not less than four and not more than six members qualified by experience in the generation of electricity. Hon. Members opposite supported it, and I think that we did, too.

The hon. Gentleman cannot go back to discuss other Acts of Parliament.

The opposition to this borrowing is based on quite fallacious arguments. The hon. Gentleman should remember the old saying that "the experts should be on tap, but not on top." Parliament calls in the experts, but it does not have a committee of experts running Parliament, and that applies to the board.

I would also say that I was surprised at the attack made on part-time directors of concerns, for at least, I think that that was unfair to some of his colleagues who sit on twenty different boards, and must give little time to each.

I think that the right hon. Gentleman is being led astray. We must confine ourselves to the Bill.

The other point which has been made is the difference between coal and hydro-electric stations; and here, the hon. Member for Kidderminster introduced some mathematics about a peculiar costing system which, so far as I know, do not apply anywhere in the world. He appears to think that he has some knowledge of this, but it was not obvious to us, and what he said is not the belief of those with any experience of business. The idea that the cost of electricity for one year is going to have charged against it the whole cost of the establishment of hydro-electric schemes, lasting perhaps for a hundred years, is something quite farcical. I just do not understand what the hon. Gentleman is thinking about. As regards the hon. Member for Croydon, East (Sir H. Williams), who does not seem now to be with us—

Well, what he said about the "mixed" station may be all right in theory, but it does not work out; it does not apply in practice as between the coal station and the hydro-electric station.

Because when one turns off the water one does not use the supply, but when one turns off electricity, one does not stop consuming coal. The economy in water power is that it gives electricity at a time of the year when it is most needed, and not at that period of the year when electricity is needed least. It is the one way in which electricity can be stored; and here it is stored in the hills of Scotland, and that, in itself, is a great safeguard so far as industry is concerned.

Has not the right hon. Gentleman found plenty of water in Perth in the month of August?

There is water in Perth; Perth has many forms of refreshment, and I have no doubt that the hon. Member has patronised them all.

The only argument that the hon. Member for Kidderminster was able safely to make was that about capital investment—is it wise to put it into hydroelectric schemes, rather than into grates?

That example, and I do not want to describe it rudely, is quite impracticable, because, as a matter of fact, no more money can be spent on grates than is being spent uow. If the hon. Gentleman is paying attention to what is going on in the House he will find there is a great campaign to reduce the use of pig iron for grates, so that there will be fewer grates produced.

It is not for the Hydro-Electric Board to decide what degree of capital investment will be made in hydro-electric schemes. That is done by the Government. What money goes to what investment, and what is the best thing to be done in the present circumstances for the safety of the country is controlled by the Chancellor of the Exchequer and the Treasury, and I should have thought it was much safer to leave it in the hands of his advisers rather than that he should take the amateur advice he is getting from the dissentients in the House. We can safely leave it to the Chancellor's advisers to deal with the matter.

This scheme is the greatest single contribution ever made to Highland development. There has never been anything like this amount of money put into the Highlands. True, some of the benefits are going to the country as a whole, which is supplying the funds. It is not philanthropy to the Highlands, it is a national investment. Incidentally it is making an addition to the electricity resources of the country, and making a saving which will increase the saving of coal. There is no investment better or wiser because the price of coal may increase—and the hon. Gentleman the Joint Under-Secretary gave us a shock tonight when he talked about the process of inflation: if that is his prophecy, and inflation is to proceed, it means the cost of coal will go up. If the price is doubled that makes not the slightest difference to hydro-electricity because water comes down from heaven at the same price that it comes down today—absolutely free of charge.

Is the right hon. Gentleman really trying to convince the House that hydro-electric schemes can be made without steel and cement, both of which are major consumers of coal in their manufacture?

With great respect to the hon. Gentleman, if there is a scheme like the Loch Sloy station and a steam station, and the price of coal is doubled the costs of the latter station will go up tremendously, while the cost of the Loch Sloy scheme remains the same. One regret was that these schemes were not built before the war, for with things as they were the cost of electricity today at pre-war construction rates would be an asset to industry and the country. There is no investment better or wiser for the country, and I would advise my hon. Friends to support the Government, and reject this unfair and unwise attack made not only on the scheme but also on the Government. It may not be often in this Parliament that we shall have the pleasure of supporting the Government but it will he our duty and pleasure tonight.

11.40 p.m.

My right hon. Friend need hardly have appealed to his hon. Friends nor have made an appeal to most hon. Gentlemen opposite. It is not our business to enter into the family squabbles of the Tory Party or to settle differences between the National Liberals and their own Front Bench. That is a domestic trouble for them to patch up. The purpose of the Bill is to extend borrowing powers to £200 million. The purpose of the Amendment was to prevent that happening. If the Amendment were—

I will leave that, Mr. Deputy-Speaker. Do I understand that the hon. Member for Caithness and Sutherland (Sir D. Robertson) will be consistent and oppose the Third Reading of the Bill? I do not know whether he wants to answer that question or not, but it is rather important. Is it his intention as a Member of Parliament for a Highland constituency to oppose the Third Reading or not?

I am sorry that the hon. Gentleman heard what I was saying but had not the courtesy to answer, although I am glad that he is not opposing the Third Reading.

It is not answer time either. The right hon. Gentleman should be careful what he says about Question time, because he does not always answer the questions which are put to him.

The mass of Highlanders are dismayed by the opposition to the Bill throughout its passage here. The hon. Member for Caithness and Sutherland should not pretend that he speaks for Caithness and Sutherland in opposing the Bill. He is not speaking for his county council. He is not speaking for the people of the main burgh of his constituency. He is not speaking for the mass of the Highland people. He is speaking alone among Highland Members of Parliament in opposing the Bill at any stage.

The noble Lord the Member for Inverness (Lord Malcolm Douglas- Hamilton), for different motives, has associated himself with some of the arguments of the hon. Member for Caithness and Sutherland, but I do not think his intention is to destroy the Bill and prevent the board having the wherewithal to continue the schemes, which all of us know are greatly benefiting, and will continue to benefit, the Highlands and Islands of Scotland.

The hon. Member deserves more than one interruption because he is entirely misrepresenting the motives which actuated me. I should have thought every hon. Member would have shown some gratitude for the ventilation of the board's operations, which have not been discussed in the House since the creation of the board.

I do not intend to, Mr. Deputy-Speaker, but the hon. Member has imputed to me motives which are incorrect. He has said that I am not representing the people. The fight that I have waged on the Bill has been almost exclusively for the people I represent—[HON. MEMBERS: "No."]—because the rural areas are not getting electricity; it is going outside the area to the south.

I am sorry if I have interrupted the hon. Gentleman's speech. The effect of his opposition to the Bill and of the Bill being destroyed on Third Reading would be to deprive his constituents of great benefits. It is all very well for the hon. Member for Kidderminster (Mr. Nabarro) to fly into the Scottish Grand Committee and back here on his magic carpet and tell us that enough power is being generated in the Highlands. He does not know what he is talking about when he comes into the Highlands and Islands.

The bon. Gentleman has had more than his ration even in Tory days. The destruction of the Bill would deprive the Highlands of a basic service which is essential to any industrial development of the Highland area. The hon. Member for Dumfries (Mr. N. Macpherson) ought not to shake his head unless there is something inside it to shake. I know that his uncle was Secretary of State for Scotland. I am only sorry that this scheme was not developed on that occasion.

That is a direct misstatement of the fact. My uncle was never Secretary of State.

The fact remains that the Highlands are overwhelmingly in favour of this development, and they would condemn the hon. Member for Caithness and Sutherland if he went into the Lobby against it tonight. But I know that he will not do that. I know the private opinion of many of his constituents. I know what a disaster they would think it if the Loch Sloy scheme did not go ahead, or if the money and materials were not forthcoming. I know, too, what his county council would think.

May I ask, Mr. Deputy-Speaker, whether this Highland ramble is to go on interminably?

On a previous occasion I advised the hon. Member for Edinburgh, South (Sir W. Darling) to conserve his wind for some other purpose than blethering in this House, but he has not taken my advice. I am sorry. I will refresh his memory in regard to the occasion, if he wishes. Before the hon. Member for Caithness and Sutherland became interested in the Highlands, or fitted himself for that purpose, he was the hon. Member for Streatham, which is quite a ramble from the Highlands. In this House the hon. Member has shown no interest in examining these schemes or the general finances of the board. He has had all the opportunities we have had. When we did not approve of something we made it clear that we did not approve. I do not know what is happening to the hon. Member for Kidderminster at the moment. I will give way to him if he wishes.

The hon. Member is attacking the hon. Member for Caithness and Sutherland for not previously drawing attention to matters regarding the board. The hon. Gentleman has been here since 1945—and before—and on no single occasion has he referred in a debate to the accounts of the Hydro-Electric Board. The hon. Member is making a thoroughly dishonest statement there.

The hon. Member is talking through his hat on this occasion. My name was among those put to the annulment of the Loch Sloy Order, for a particular purpose.

I must ask the hon. Member, if he does not confine his remarks to the Bill, to resume his seat.

I am sorry that I was misled by the hon. Member for Kidderminster. The fact is that we have 37 opportunities through the year when the hon. Member for Caithness and Sutherland could have raised these points, occasions when he could have put the board under examination—

I must ask the hon. Member to resume his seat for not obeying my Ruling.

On a point of order, Mr. Deputy-Speaker. I was going to speak on the Amendment but I saw Mr. Speaker and asked whether I might have wider scope on the Third Reading. I was assured I could. I therefore withdrew my name from the list of speakers—

I am only here to carry out the Rules of Order; I do not make them. The hon. Member has not obeyed my Ruling, and I must ask the hon. Gentleman to resume his seat.

11.51 p.m.

We have reached the Third Reading stage of the Bill, which has been examined with very critical eye, particularly by one individual who, if his knowledge of the Highlands is equal to his knowledge of Kinlochleven, is not a fit and proper person to conduct such an examination. I would suggest to him that he should try to learn a little more about the story of the building of this great dam there and then he will feel ashamed indeed of the system which he supports.

The Bill has been so vigorously and, by some, so viciously criticised that I think we ought not to allow it to go from this House to another place without, by our unanimous approval, showing the board our approval of the work it has done and our confidence in the work which it intends to do. I think this is very essential because it is necessary that the board, as an instrument of policy designed by this House, should know it has the confidence of the House. We can do that tonight by giving Third Reading our unanimous approval. I say that because, during proceedings on the Bill, the personnel of the board have been attacked, its methods, and control of expenditure have been attacked, and in every single case, they have been wrongly attacked. There is not one single bit of information which has been put at our disposal by the mover or the seconder of this Amendment—

I am very sorry—the Amendments moved on Report and in Committee—in no single case have any of the arguments advanced been arguments that were not fully met. In addition there was an open invitation, which I am certain will be extended to any hon. Member of this House, to meet the Chairman of the board at any convenient time if they have any personal doubts on any matter discussed during these debates.

So far as the transactions of the board are concerned they are not a sealed book, and there is no top secrecy in any of their work, as the hon. Member for Kidderminster (Mr. Nabarro) sought to convey during the series of debates we have had on the Bill. I suggest it is incumbent upon us now to say that the board has our full confidence, and we can show that by following the suggestion I have made and giving our unanimous approval to the Third Reading as we speed the Bill on its way to another place.

11.55 p.m.

I do not wish to take up much time because I feel we have had prolonged debates on this Bill in its various stages. These debates have strayed over a very wide field. I do not want to get out of order, for obvious reasons, and I do not want to be accused of undue repetition. But I do think that I ought to say, in view of certain criticisms which have been made, that I associate myself with what the right hon. Gentleman the Member for East Stirling (Mr. A. Woodburn), and the hon. Gentleman the Member for Tradeston (Mr. Rankin), said about the North of Scotland Hydro-Electric Board, which was that in past years it has done very valuable work in the North.

To anybody who lives in the North, which is a farming community and residential with all sorts of people, it is of vital importance it should have electric power and current provided. The board has done a lot of work and that good work should be continued. I hope it will be continued. The board deserves the thanks of the House for its work and 1 hope that we shall give the Bill an unopposed Third Reading.

The only thing I would say about the Bill is that I really begin to think the House must have a good idea of what its intentions are by now. I would, therefore, confine myself to saying that the purpose of the Bill—I feel these remarks will not surprise the House because it is nothing novel—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 money is earmarked for existing schemes either approved or under construction.

The total value of the work done in a year is regulated in accordance with the decisions of the Government on investment policy. That, I think, gives a very careful safeguard. Therefore, there is no question of the board, once the Bill is passed, running through this additional £100 million in any uncontrolled fashion. It is clearly desirable there should be no interuption of the work of the board.

11.59 p.m.

I shall occupy the attention of the House for only a minute. A great deal of time could have been saved in Committee and on the Report stage of this Bill if one sentence out of the last speech of the right hon. Gentleman the Secretary of State for Scotland had been brought forward a few hours earlier, namely, that Her Majesty's Government will exercise strict control over the capital investment of this board. That has not previously been said. The final point I make is this.

I shall be foremost in pressing, during the next 12 months or more, that this nationalised industry, together with other nationalised industries, has Parliamentary time allotted to it.

The hon. Gentleman did not disobey any Ruling, and I give a warning first.

In view of your Ruling, Sir, I conclude by saying that I am completely satisfied with the Minister's final sentence. Had that sentence been brought forward a lot earlier, a good deal of Parliamentary time could have been saved.

Question put, and agreed to.

Bill accordingly read the Third time, and passed.