HC Deb 24 July 1899 vol 75 cc122-74

Order for Consideration, as amended (by the Standing Committee), read.

Motion made, and Question proposed, "That the Bill be now considered."


I rise to move that this Bill be considered on this day three months. I hope I need make no apology to the House in taking this step in place of the hon. Member who has devoted a great deal of time to the question. We are at a considerable disadvantage in discussing a Bill of such magnitude at this late period of the session. It is obvious that when a proposal coming from the Government is accepted as advantageous by London and a great number of municipalities, a good deal of opposition to the Bill is obviated. It is quite true that those interested seem to accept this Bill as a solution of a very difficult question, but it is also the case that behind the attitude and opinion of London and the large municipalities, there exists an alternative policy. There is no doubt that if London and the municipalities are willing to accept the proposals of the Bill, they would have been equally willing to accept in some form or other a national system of telephones. But the alternative has been rigidly excluded, unfortunately, from consideration. It is quite true that the right hon. Gentleman the Secretary to the Treasury discussed that alternative, and gave reasons which were admitted by the right hon. Member for London University as conclusive against any national system, but as a whole the right hon. Gentleman has been obliged to work within limits. In my humble opinion this is very unfortunate, but I hope it will not be argued by the right hon. Gentleman that this question has been decided, and that therefore we have no business to re-open it. I do not want to import into this discussion anything extraneous, but the magnitude and importance of the issue lay upon us the responsibility of not excluding anything which, on its merits, ought to be considered in connection with this important subject. Now, in the first place, this is an entirely new Bill. The Government proposal now laid before us is not the Bill which went upstairs; it is not even the Bill which left the Committee. The changes made are so radical, and so essential, that it seems to me that the proper course the House should take is to recommit the Bill for full and careful consideration. Besides being an entirely new Bill, the present proposals are an absolutely new departure in the attitude of the Government towards telephone enterprise. The alteration of the date when the licence of the National Telephone Company was to expire, from 1911 to 1925, under certain conditions, is in direct antagonism, not only to the attitude of former Governments, but also to the attitude of the Select Committees, and in direct contradiction to the attitude of the right hon. Gentleman some time ago. I could quote the right hon. Gentleman's words to show that he has been definite and strenuous in his opinion that this question was closed, not to be reopened, and that everyone was agreed that beyond 1911 the licence of the National Telephone Company should not be prolonged. Of course, the right hon. Gentleman will say that he has got concessions from the National Telephone Company which will make the new concession to the company not, on the whole, disadvantageous; but I think the objections I have stated should be fatal to the present proposals. I do not speak as an advocate of any one interest concerned, but I do say that, under the conditions foreshadowed by the right hon. Gentleman's proposals, it will make things worse than before. The right hon. Gentleman will not deny that we shall have vigorous competition from the Post Office. In the second place, we have given fresh powers to the National Company, and vigorous competition is certain to follow from these fresh powers. I do not blame the company; they are a trading concern, and must look after the interests of their shareholders. Well, then, we shall also have the competition of the municipalities. Under certain conditions, when a municipality receives a licence, the National Company will have their licence prolonged. I say that is an infringement of the attitude hitherto entertained by all in this House, and by all the experts. Then, again, the right hon. Gentleman proposes to allow urban and sanitary authorities to give licences to fresh companies in their districts. We shall have a sacrifice of public convenience by the muddle sure to be brought on by these proposals. I think it is very unjustifiable to go entirely against all experience. The right hon. Gentleman will not deny that hitherto the outlook of all critics of our telephone system has been that in 1911 that system would become a national one. The right hon. Gentleman himself said, Why should we do this or that, when the business will fall into our lap in 1911? It is alleged against a national telephone system that it would vastly increase the number of employees, and their wages in the Post Office; but I fail to see why that should be any ground for the proposals in the present Bill. With the Government owning the telegraphs, it seems to me to be perfectly absurd to stick at theoretical considerations in regard to the State ownership of telephones. The telegraphs and the telephones are intimately connected, and must work together, and if the Government were to take the telephones over, it would not involve anything like the increase of staff or wages which would have to be made if they were taken over by any other body. Then what is to become of the rural districts under this Bill? The Post-office propose to expend £2,000,000 in extending the system in London, and the rural districts would be left out in the cold. It is only the Post-Office, only a national concern, which you can rely on to develop the poorer parts of the country as well as the richer; to apply the profits of the undertaking in the richer areas to extending the benefits to the poorer areas of the country. I have great admiration for the perseverance and tenacity which the right hon. Gentleman has shown in great difficulties; but I must hold that in making these proposals there has been a surrender of the whole position. It is impossible to ask the House to assent to the Bill in its present form at so late a period of the session, and I therefore beg to move that it be considered this day three months.

MR. BUCHANAN (Aberdeenshire, E.)

I beg to second the motion made by my hon. and gallant friend. I will only criticise, in a very few sentences, the considerations that have already been laid before the House. It is a fact that this is a new Bill compared with what it was when it was sent upstairs. And it is a new Bill in a direction of which the majority of the House and the country would not approve, if they were fully alive to the changes made in it. If any one examines the Bill, he would be able to see that, as an adequate settlement of the telephone system on a real national basis, such as the Secretary to the Treasury promised us in the earlier stages of the Debate, we are further away from it than at the beginning of the session. I am not opposed to municipal enterprise in any degree, and there is no doubt that the hon. Gentleman has been enabled to satisfy and conciliate very large and powerful communities in the country, and in the House. He has been able to shake the opposition of London itself, and to get over the opposition from large municipalities like Glasgow; but what has he done for the smaller centres of population, and the rural districts? He says that the rural districts are to be able to establish telephones. In my part of the country an urban district has been interpreted to include a police burgh, and the majority of these have a population below five thousand. Is it within practical politics to say that these are going to establish a telephone system in their district? We are merely playing with words in a clause of that sort. Instead of a great national system, we are shutting out from the benefits to be obtained from a national system all the small towns and villages. With regard to the treatment of the small municipalities where the National Telephone Company have already obtained a footing, it must be well-known to the right hon. Gentleman, from the correspondence he has had, the way in which towns like Fraserburgh have been treated by that company. I say that at this period of the session, and with a new Bill before us, it is impossible to have a settlement of this question, which is to last for the next twenty-five years, or which is likely to be satisfactory to public opinion, or to keep pace with telephone communication in other countries of Europe. The Secretary to the Treasury has taken power to extend the licence of the National Telephone Company to 1925.


Only in places where there is competition.


The right hon. Gentleman insisted in this House, when he introduced the Bill, and on the Second Reading, that in 1911 the licence of the National Company came to an end; but now it can be extended to 1925. I am not saying this in hostility to the right hon. Gentleman, because we have looked upon him as our champion, and the champion of the public interest against this monopolist company, which lurks in all the lobbies, and sits on the benches of this House. The right hon. Gentleman has stood up for national interests, but I am sorry to say that in the last round of the contest he has apparently been defeated. I am certain that if he were to postpone this Bill to next session he would obtain popular sympathy. We should next year get a much better measure than the one now before the House, and one based on national grounds. I urge that we ought not to extend the licence of the National Telephone Company, and put a large part of the country for twenty-five years under the domination of the company which has done so much to stifle telephone interest in the past. The only true and sensible solution of the problem is to nationalise the telephones and put them in the hands of the Post Office. I warmly support the motion of my hon. and gallant friend.

Amendment proposed— To leave out the word 'now,' and at the end of the Question to add the words 'upon this day three months.' "—(Captain Sinclair.)

Question proposed, "That the word now' stand part of the Question."

SIR CHARLES CAMERON (Glasgow, Bridgeton)

I trust that the House will not allow itself to be influenced by the arguments of my hon. friends. I have for many years been interested in obtaining a better system of telephones. Glasgow has led the movement, and is anxious to obtain powers to establish municipal telephones, and I am certain that this Bill has been made more acceptable to those who favour that principle. The Bill, moreover, has been enormously improved in Committee. How many municipalities would care to establish telephonic exchanges under conditions that bring them to a close in eleven years? There can be no real competition in such conditions. And I am certain you would not get six municipalities throughout the kingdom to embark in such an expensive business for such a short period. If towns like Glasgow choose to accept licences terminating in 1911, with the risk of a renewal, they can do so, and the licence of the National Telephone Company will not, in such cases, I believe, be extended. In proposing to extend the licence the right hon. Gentleman has taken the best step to ensure municipal competition. Personally, I want all the competition we can get, and if we had competition between. the municipalities and the telephone company we should have a better service for the public than if either was granted a monopoly. There is only one other point to which I wish to allude. The question of intercommunication is a most important subject, and the right hon. Gentleman has, after negotiations, arrived at what appears to me to be an equitable arrangement. Glasgow is willing to go on without any right of intercommunication, and the authorities are confident that the company will in time come to them and ask for intercommunication to be made. I heartily congratulate the hon. Gentlemen who have secured the arrangement for intercommunication, and though this Bill does not go the length which I should desire to see, it is, in my opinion, a great improvement to the Bill as originally introduced into the House. If my hon. friend goes to a Division, I can only say I shall have to vote against him.

MR. PROVAND (Glasgow, Blackfriars)

I hope that my hon. friend will withdraw the Amendment. The hon. Gentleman who supported this Bill supported it on the ground that it would not nationalise the telephones of this country. Many people do not know what nationalisation means; it does not mean that we shall get the telephones for nothing, but that they shall be handed over to the country as a matter of purchase. Nationalisation of telephones is not a feasible project. The only method by which the country can acquire the telephone service is to pay five or six millions; that is the only method of nationalisation. It has been suggested by members of various Stock Exchanges that the country should buy the telephones at a cost of £6,850,000. If that were acceded to, it would mean that the country would pay 1¼millions more than the shares of the company are worth; and what should we buy for that? Plant, the bulk of which is worthless. In Glasgow there are about 6,000 wires, and to buy the telephone system on the Stock Exchange principle would cost £56 or £57 per wire, or more than £300,000. The plant of the company in Glasgow could not be sold at any such high price. Except in a few places the plant of the company is obsolete, and the agitation to substitute modern plant must compel the company to reconstruct all the present telephone plant in the country. There are only two ways in which the plant of the company could be bought—by private agreement, or under the arbitration clause in the licence. But no Government or Chancellor of the Exchequer could permit this arbitration clause to be used. I wish to satisfy those on this side of the House who support nationalisation that it is an absolutely impossible scheme, and the right hon. Gentleman was perfectly well aware of that when he said he would rather spend the taxpayers' money in buying new plant than obsolete plant. One hon. Gentleman said he thought the telephones could be worked more cheaply by the Government than by anyone else, but had he been cognisant of the expense of the working of the Post Office telephones he would not have made that remark. In no case where they are now conducting the service have the Post Office been able to compete with the National Telephone Company. The Bill no doubt will have much greater effect in the rural parts of the country than in the towns, and I believe that under it many rural places will be able to get a telephone service for a subscription of £1 a year. I therefore hope my hon. friend will withdraw his Amendment for the rejection of the Bill; if he does not, I shall have no option but to vote against him.

* MR. FAITHFULL BEGG (Glasgow, St. Rollox)

I do not propose to follow the hon. Gentleman in the remarks which he has made on a matter which has been discussed at such length. Every business man knows that it is neither fair nor reasonable to take as the basis of purchase of a going concern, built up as the National Telephone Company has been, how much money it will take to replace it. That is not the basis on which to discuss it. My main reason for rising is that I have an Amendment, which I need not now move, and so save the time of the House. I might, however, say that the Bill has been changed in two important particulars since Second Reading—namely, the extension of licences beyond 1911, and the permission to form new companies, the first of which the Secretary to the Treasury formerly declared to be contrary to common-sense and the second to be practically impossible. The new provisions make it necessary that the Bill should be seriously considered at this stage. In my opinion the new provisions are bad, because the country is thus brought face to face with the contingency of having four different authorities carrying on telephonic business—namely, the Post Office, the existing company, the corporations, and new companies. Yet if there is one thing which they were led to understand would be vital to a, good telephonic system it was that the whole of the subscribers should be on one circuit and be able to intercommunicate with each other. I do not know whether my hon. friend intends to take a Division on this motion or not, but if I may offer him advice, I would say that I do not think it is an advisable thing to do, because I am sure that it is the general feeling of the House that this measure should go forward. For myself, the idea under which I always opposed this proposal was that nationalisation was the right thing, but now nationalisation has absolutely gone, and that having been decided, I am content to devote myself to one or two small Amendments which I shall move later on, and which I think will be improvements.

MR. CHARLES MCARTHUR (Liverpool, Exchange)

I do not agree with the hon. Member who has just sat down that nationalisation has gone. I will not deal with that point further than to say that I entirely repudiate the view put forward by the hon. Gentleman opposite. Those who advocate nationalisation do not propose for a moment that if the State took over the telephone we should pay an exorbitant price for it, and our proposal is only to pay its real value. If, as the hon. Member opposite has suggested, the system of the National Telephone Company is obsolete, then the real value can be ascertained, and all we have advocated is nationalisation at a fair valuation. Those whom I represent are not satisfied by the Amendments which have been made in the Standing Committee on Trade, which have rendered the measure more complex than it was at first. As the Bill came before the House in the first, instance, it proposed that municipal authorities containing a population of 50,000 or over should be allowed to establish systems of their own. That has now been enlarged so as to include all local authorities and local companies, and therefore the system now proposed is much more complex. My hon. friend the Member for the Blackfriars Division of Glasgow has pointed out that the Bill would create four distinct sources of telephone supply, that is, the Post Office, the local authorities, the local companies, and the National Telephone Company. I would ask the House, is it reasonable to suppose that all these various authorities will work together in angelic harmony, and is it not much more likely that there will be local difficulties and jealousies which will prevent anything like that harmony which is so essential for the success of telephonic communication? I want the House to consider what will be the result of this Bill if it passes. My own opinion is that it will not lead to municipal authorities setting up telephone systems of their own to any large extent. Take, for instance, the 114 boroughs in England, the 13 boroughs in Scotland, and the 103 urban districts in England who have concluded agreements with the National Telephone Company. Is it likely that they will depart from those agreements? The conditions which are laid down for these authorities are of such a nature that they will not depart from their present arrangement, and they are likely to increase their indisposition to enter into such an enterprise. The Post Office is to have complete control over all their proceedings; they have to see what is the character and construction of the plant, and arrange the system of charges. They have to fix the maximum rate of charges, and, in short, these municipal authorities may make a loss but not a profit. If they make a loss they are still to contribute a royalty of ten per cent, upon their gross receipts. But after all, the most serious aspect of this scheme, in my judgment, is that it sanctions the prolongation of the National Telephone Company's licence beyond 1911. We have all along gone on the assumption that 1911 was to be the end of it, and from that time there was to be a new system introduced which would satisfy all the demands of the public, and do away with the monopoly. The Commission of 1892 recommended the non-renewal of this licence, and my right hon. friend the Secretary to the Treasury was of the same opinion a very short time ago when he addressed a deputation which I had the honour of introducing to him, for he said: If the municipal system is found not to work satisfactorily it will be perfectly within our power in 1911 to terminate that service and nationalise the service everywhere. And we find only a few weeks after these words are uttered steps are taken and proposals are made, which have the effect of continuing this monopoly of the National Telephone Company for, perheps, an additional twelve or thirteen years. The hon. Member for Bridgeton pointed out that the right hon. Gentleman only proposes to increase the licence at points where there is competition. I cannot understand how that can be done in the case of the National Telephone Com- pany. It seems to me quite impracticable that you can say to the National Telephone Company: "We continue your licence here and there at perhaps a dozen different points where competition is set up, but we withdraw your licence as a whole." I would like to ask the right hon. Gentleman whether it is still impossible for him to reconsider this Bill. The measure has been opposed by the business men of the country if we take the chambers of commerce to represent them. This measure has been opposed by every chamber of commerce which has considered the subject, with the exception of the chamber of commerce at Tunbridge Wells. There were thirty-six chambers of commerce represented by the deputation which I had the honour to introduce, including many important centres, and all were strongly opposed to this measure. It has also been objected to by the Stock Exchanges, and surely they are entitled to an opinion on the subject. It has been opposed by many of the leading corporations, the Society of Arts and Manufactures, and by the Society of Electrical Engineers. Therefore, I venture to say with great respect that it would be a great mistake to insist upon forcing upon the country a system which has been so generally condemned.

MR. MOULTON (Cornwall, Launceston)

I think the best way of dealing with this Bill is by the motion which has been made that it shall be dealt with this day three months, because this is practically a new Bill. You might as well attach these new provisions on a Highways Act as to attach them to the simple Bill brought in by the Secretary to the Treasury, and which received the completest support on this side of the House, and I believe also of a very large portion on the other side. I oppose this measure because I think it is a most discreditable surrender to a rich company, which is ahead of all other companies in the art of manipulating this House. I say this with the deepest regret, because no one heard with greater delight and sympathy than I did the manly, honourable, and public-spirited statement of the Secretary to the Treasury when he first introduced this Bill. That was a Bill to enable the public to use the powers which it had reserved, and which it had a right, with out dictation from any company, to use in the best interests of the public. The Bill as it stands at present is a surrender of those powers, and a consent to tie the hands of the public in working this system. In the few remarks which I intend to offer to this House, I want to ascertain what right the National Telephone Company has to come and dictate terms to this House, when the English nation desires to use telephonic communication more largely. When the original licence was granted, it was granted with a most foolish liberality to terms. The company was allowed to carry on its business just as it pleased, and there was no provision that the company should be so regulated that the best interests of the public would be furthered. Only two things were reserved, and otherwise they were absolutely at liberty to do what they liked. Those two things were—an absolute right to introduce competion, and the termination of the licence in 1911. With those exceptions everything was granted to the company. Of course the company availed itself of its limitless powers to the full. I remember in 1895 an attempt was made to secure that a reasonable service should be provided everywhere at a reasonable price, and the Government were asked to grant municipalities a licence if the National Telephone Company failed to provide a reasonable service. That suggestion was ignored because we were told that the National Telephone Company were bound to provide a reasonable service at a reasonable price. The nation had reserved the right to allow competition, and what is proposed now is that there should be competition introduced. Somehow or other there seems to be an idea that if you are dealing with rich companies every concession that has been made to them is sacred, and must be observed to the full, but everything which you have reserved in defence of the public must only be timidly or half used. I know of no such principle. The National Telephone Company made no bad bargain when they got this licence, for the enormous profits they have made are known throughout the world. I want to know, when we are thinking of increasing telephonic communication, and when we think it will be to the interests of the public that municipalities should have a right to set up these systems, what law or equity in the interests of the National Telephone Company should stay the hands of the House of Commons when it seeks to exercise that power which was specifically reserved when the licence was granted. Supposing Glasgow wanted to have a licence, and it is given one up to 1925, what possible right can the National Telephone Company have to set up a claim that its licence, which it has enjoyed during all these profitable years when it had no competition, should also be extended? Why should we give away that portion of the property of the public? There is no reason which can be put even into moderately logical words why they should enjoy a lengthening of their licence just because we exercise that power which was specifically reserved, of granting as much competition as the nation thought proper to grant. But what is the reason which has been suggested why this ought to be done? This is a specimen of the sort of argument which, in the case of the National Telephone Company, is sufficient to sway the House of Commons. One of the concessions which the company has to make in order that its licence may be extended for all these years is that it has to treat people alike, and that it has not to make any special condition. I have known the National Telephone Company threaten to take the telephone away from a business man unless he allowed the company to put up a pole sixty feet high in his yard with 120 wires upon it. The company threatened to withdraw this man's telephone service if he did not grant them permission to put up that pole, although he was paying the same as other people for the use of the telephone. Why not bring in a Bill saying that there shall be no undue preference on the part of the company, and that there shall be no unfair treatment?


That is what we are doing now.


; Yes, this Bill mentions that, but it buys that concession at the expense of privileges which are double the value of the concession, and the effect of which I will deal with presently. I think the House has a perfect right to pass a regulating Act in this matter, for we do not ask the consent of the railway companies when we pass a railway traffic regulation Act. We pass such Acts because they are in the interests of the public, and in the true interests of the companies themselves. What is the other concession that we are to get? It is this—that the National Telephone Company is, where there is competition, to keep its charges within the limits of the prices charged by the competing company. That is a most wonderful concession, for it is a thing which it would have to do under the influence of competition. Those are the two miserable concessions we have got, one of which ought to have been granted without any return whatever, and the other of which would have come as a matter of course without any concession whatever. Those are the only miserable concessions asked for from the National Telephone Company in return for what? Why for this privilege—that wherever a town is driven to desperation by the bad management of their business by the National Telephone Company, and it resolves to take the telephonic communication into its own hands, it cannot get a period of years for its licence without also increasing the licence of the competing company. If Glasgow wants a twenty years' licence to set up a telephone exchange, this company, which has had the benefit of all those past rich years, is also to have an extension of its licence in Glasgow. I want to know what justification the Government have for that proposal, which seems to me to surrender practically for ever our right to come into possession of the telephonic communication. If there is to be any safety in Parliament dealing with a Bill of this kind, involving such great consequences, such a measure ought to have been brought in earlier in the session, and ought to have been passed through every one of its stages in the ordinary way. Practically, this Bill comes in once, and then becomes the law of the land. This is a disgraceful surrender of public rights, and it is a matter which ought not to be forced through in this way. Let me point out what the real effect of this Bill is. I am not at all sure that the licence of the National Telephone Company will not be extended by licences which may be granted after 1911. Supposing Glasgow asks for a licence up to 1925. In this case the National Telephone Company also gets its licence extended to 1925; and if the Glasgow Corporation gets a continuance of its licence to 1950, the telephone company also gets its licence extended to 1950, and therefore the company's licence, will be extended perpetually.


No, no.


I beg the right hon. Gentleman's pardon, but that is the fact as the Act now stands; and the consequence is, that at every place where a municipality is strong enough to form and keep alive a telephone exchange, there the company's licence is a perpetual one. Of course, the National Telephone Company just now are very quiet, for they know perfectly well the enormous victory they have gained. It will now be to their interest to get municipalities to start telephone companies and telephone exchanges, and to keep them as weak as possible; the only thing they must not do is to kill them outright. As long as they exist, the National Telephone Company will be far more free, as a company, than these municipalities will be as long as they choose to keep up their licence, because the telephone company will keep up its licence as well. Therefore, the municipalities, instead of being free in 1911 to provide a centralised system, and to work their telephone service like they now do their gas and water, will have committed themselves for ever to competition with a private company that has rights of that kind, and which is purchasing these rights by no substantial concessions. I may point out that a Bill like this is not treating either the English nation or this House fairly when such proposals are made on the Report stage, because when they are once passed they are irrevocable. We know what power the House has got to recall anything which it has granted to a private company, and we know that such concessions will be absolutely irrevocable. I ask whether we have have had sufficient time to consider this enormous change in the House, and whether the trading community of this country have had time to consider it. This measure is proposing to make a perpetual burden upon the people, and I most heartily support the motion that the Report stage of this measure be taken three months hence. I can assure those Gentlemen who thought there was a possibility of us not going into the Lobby upon this question that they are very much mistaken, for all hon. Members who vote against this proposal will clear themselves from having had anything to do with this most disgraceful surrender of public rights.


The hon. and learned Member who has just sat down made some remarks at the end of his speech with which I entirely agree. He laid great stress upon the extravagant privileges which previous Governments have conferred upon the National Telephone Company. With those remarks I am entirely in accord, because I have always said from the first that it was past my comprehension how such powers could have been put into the hands of an unregulated monopoly. I do not, however, think that the hon. Gentleman opposite has quite fairly stated the case when he alleges that great concessions have been made to the company and nothing substantial has been given in return. In the first place, I must utterly deny that there is anything whatever in the Bill which gives him the slightest authority for supposing that, under any circumstances, the licence of the National Telephone Company can be perpetuated. I defy him to point out a single clause or word in the Bill which even encourages such a supposition; and when he speaks of the extension of the licence, I have always myself contended that the general licence of the company should, under no circumstances, be extended beyond 1911. I think it was a monstrous thing, in the first instance, that a general licence extending over the whole country should ever have been given to the company at all. Therefore, I still maintain my opinion that, except in certain cases, for special local reasons, there is no justification whatever for extending the general licence of the company beyond 1911. Where are we proposing to extend the licence of the National Telephone Company? Only in those areas where we are introducing new competition. And why are we proposing to extend it? In the interest not of the National Telephone Company, but of the municipalities and the companies who will be in competition, Our Committee and all those who looked into the matter strongly recommended that wherever we introduced competition we should do our best to deal equally between the company and its new competitors; and therefore it is necessary that if we extend the licence to the municipalities we should also extend it to the National Telephone Company itself. No doubt the feeling throughout all the municipalities was that if this competition with the National Telephone Company, on the part of the municipalities or new companies, was to be genuine and strong, as we hope it is to be, we must grant to these municipalities and new companies a period extending beyond 1911. We are therefore bound by the Report of the Committee, and we want to deal fairly with the National Telephone Company and its new competitors, and to give the latter a chance of life. The National Telephone Company having been placed in the position it occupies by previous Governments, makes it very difficult to deal with this matter. I am sure the hon. and learned Member opposite would not wish us to confiscate any of the rights of the National Telephone Company.


Leave them alone.


I am very unwilling to leave them alone, and I do not think it would be right to leave them alone. If we are going to extend the company's licence in any single locality it is absolutely necessary that we should not leave them alone. What has been the complaint with regard to this company all through? In the first place, that it is a monopoly, and, in the second place, that the monopoly was unregulated. By this Bill it ceases to be a monopoly.


It never was a monopoly after a given date.


Under the Bill the company, which could have extended its operations over the whole of the United Kingdom, and could by that mere fact have prevented competition arising anywhere but in the larger boroughs, cannot enter any areas in which they are not now working. All the poorer and weaker boroughs have, therefore, an opportunity of starting a valid and strong system of their own. The hon. and learned Member says we have got no concessions. If we had got no concessions but that alone we should have got some thing well worth having. But we have got two more concessions of equal importance. One is that the company should come under control, and the other is that under certain conditions there should be inter-communication. I admit it is a great disadvantage that in one area we should have two competing systems, but we cannot always help it. It happens in Stockholm, where the greatest use is made of the telephone, and it exists to a great extent in Norway and Sweden and Denmark. Here, again, the difficulty has been overcome, and wherever a bona fide extension of the licence to the company takes place, and wherever there is a bona fide competition—that is to say, where a new company has 500 subscribers to the National Telephone Company's 1,000 subscribers—there must be inter-communication. Then the hon. and learned Member says there have been very great changes introduced since the Second Reading of the Bill. All those matters were dealt with before the Grand Committee. All the new clauses, with the exception of the one dealing with inter-communication, were before the Grand Committee, and it is a singular fact that the Committee were practically unanimous as to the alterations. One portion only was not dealt with by the Grand Committee, and that is the question of intercommunication, but although it was not formally dealt with by the Committee, it was thoroughly well understood that clauses such as have now been introduced would be brought up on the Report stage. The mover of the motion now under consideration spoke as if the National Telephone Company had appropriated to itself all the rich and populous portions of the United Kingdom, and the hon. Gentleman asked how we were going to serve the rural districts. The hon. Member implied that the rural districts and the smaller urban districts were by no means likely to be profitable either to the company or to the Post Office. If the company is not working already in the smaller urban districts, those districts need not fear any competition; they will be absolutely free to start a system of their own without fear of competition from the National Telephone Company. As to the smaller districts, is it the fact that they are not paying districts? The experience of Norway and Sweden shows that they are paying districts to work, and when asked before the Select Com mittee of last year where, if he had his choice, he would prefer to start an exchange, Mr. Preece said he would choose the smaller rural districts, and he instanced portions of Anglesey. Only within the last year the municipal system has been started in Guernsey, and there they are beating the record against foreign countries. In the neighbouring Island of Jersey, where the National Telephone Company has been in operation for several, years, the number of telephones to the population is about one in 300. Already in Guernsey, after one year's operation, the telephones are as one to eighty of the population, and it is expected that soon they will be as one in fifty. I hope I have shown the House that the very grave charges of undue concession to the National Telephone Company made by the hon. and learned Member for Launceston are not justified by the facts, and I hope I have also proved to the satisfaction of the House that we have got from the National Telephone Company concessions which we could not have got except by negotiation. It would have been sheer confiscation to force them down the throats of the company, and it would have been distinctly contrary to the recommendations of the Committee that we should have tried to do so. I have done my best throughout the negotiations to protect the interests both of the taxpayers and of the company. I cannot forget that the National Telephone Company, with all its faults, has done good work in starting the telephone service. It had had privileges given to it—privileges which, had I been Postmaster-General, I would never have given to it. I felt all through that the Government's hands, were tied by the enormous privileges given to the company, but I have refused to be a party to anything in the nature of confiscation. On the whole a Bill has been obtained which is fair to the company and fair to the taxpayer, and a Bill which will give the country a good service, national in the best sense of the word, and not lagging behind the telephone services on the Continent.

MR. J. A. PEASE (Northumberland, Tyneside)

I do not think there is a single hon. Member in this House who has advocated any notion of confiscation of the National Telephone Company's interests, but what a great many of us do complain about is the system which the National Telephone Company have put into operation in this country. They have treated the users of telephones with very little courtesy in regard to the terms which they have extorted, and they have made very large profits out of the trading community, and now, owing to the arrangement which the right hon. Gentleman has made with the National Telephone Company, they are to have their licence extended from 1911 to 1925. The right hon. Gentleman has alluded to the concessions, which, he thinks, he has secured to the advantage of the country from the National Telephone Company, and has placed them against the privilege which he has given them of extending their licence. I submit that the system as at present in operation is very unsatisfactory, and even if it is not to be perpetuated, as the hon. Member for Launceston indicated it would be, but is merely to be extended to 1925, we had far better allow things to remain as they are than even to have the National Telephone Company controlled and regulated in the manner in which the right hon. Gentleman proposes. On that ground, and on that ground alone, I shall go into the lobby in support of the proposal which has been made by the hon. Member for Forfar. I should like to point out one or two of the inconveniences which exist in connection with the present system, and those inconveniences seem to me to be increased under the operation of this Bill. If a wool merchant, we will say, wants to speak from his office at Bradford to his office in Leicester, it is necessary for him first of all to ring up the exchange and then ascertain whether, through the exchange to the post office, the trunk line is free, and if the trunk line is free very probably he will find that he cannot get into communication with his office in Leicester because they are already in conversation with somebody else on some other trunk line. Under the present complicated system communication between town and town is most difficult for business purposes, and over and over again I have been obliged, in carrying on business in one part of the country with another, to send long telegrams because of the inconveniences arising from the present system. We want some uniform system of communication throughout the whole country, under the control of the central Government. The existing system is doing an enormous amount of harm to the trading interests of this country, and I shall, therefore, regard it as a national disaster if the Bill passes. The right hon. Gentleman claimed that he has done away with monopoly; but there has not been altogether a monopoly, because there are some places where the Post Office has entered into keen competition with the National Telephone Company. In the City of Newcastle, which I, to a large extent represent, the Post Office system has been in operation almost from the very commencement, but the National Telephone Company has been gradually undermining the system there. And why? The main reason is that the great business houses in the City of Newcastle find it necessary to have telephonic communication with the various other industrial centres, and in these centres the Post Office system does not exist. I am told on very good authority that if the present system goes on, instead of the Post Office having a monopoly in the City of Newcastle, the National Telephone Company will have a practical monopoly. If this can happen in the City of Newcastle, I am quite sure that in many other large towns the National Telephone Company under the provisions of this Bill will prevent any serious competition from municipal bodies, though I believe that many municipalities will carry on the telephonic system in their districts effectively and economically. The right hon. Gentleman has claimed that he has not introduced a new Bill. I admit that a portion of the Bill is somewhat the same, but two pages have been added to it. I submit that it is a shame that the people who are interested in telephones in this country should be represented by Members who are prepared to vote for a Bill which those who are dependent on the telephones in the country do not thoroughly understand. Over and over again, during the last few days, I have spoken to people with regard to the proposal of the Government, and they have been simply amazed that there is a proposal that the telephone licence should be extended from 1911to 1925. I believe that if the right hon. Gentleman could see his way to drop this Bill, he would be able to satisfy the country another year with a better measure, and one which would not perpetuate the many evils which I believe will be perpetuated by extending the licence of the National Telephone Company.

MR. KIMBER (Wandsworth)

I wish to join in the appeal to the Secretary to the Treasury to postpone the further consideration of this Bill. I believe that if we pass the measure in the manner he proposes to do now—and it is not the way in which he proposed to pass it when he first brought in the Bill—we shall add another great loss to the telegraphic deficit of this country. Let us consider for a moment the position when the Bill was brought in and the position now. When the Bill was brought in we were told that it was necessary, for two reasons—first, because the National Telephone Company had claimed virtual monopoly; and, secondly, because it was necessary to start an effective competition and to terminate the licence of the National Telephone Company. The right hon. Gentleman asked for two millions of money, which he was to spend on behalf of the State in starting this effective competition. In the Report of the Committee of1898, it was distinctly stated that if the Government did not deal with the company in this way, they might be in a position in 1911 in which they might be forced to buy the plant of the National Telephone Company at an exaggerated value, because the Government could not, on the spur of the moment, lay down a new plant to start its own system. It was given in evidence, quoted by the Secretary to the Treasury in his Report, that it would take five years to lay down an alternative plant for the purpose of taking up the work in 1911 which the Telephone Company are now doing. The Committee reported as follows: Your Committee in thus recommending a Post office service, assume it will constitute a real and active competition, and that concessions to the company not required by the agreement will cease. The real reason why the Government have brought in a Bill which does not support a Post Office service is alleged to be, that many important members of the Government consider it would be increasing the Civil Service to such a large extent as to make it really impossible for the system to be taken over a Government Department, or as a separate Depart- ment of the Post Office. Therefore the Bill does not carry out the Report of the Committee. The Bill is based on the Treasury Minute, but, curiously enough, the Treasury Minute itself says that there must be effective competition, and that in any case all licences should terminate in 1911. All licences. Why? Because the system must be a national one, uniform throughout the country. When you consider that the telephone is really a "speaking telegraph," it is obvious that it must be carried on with the same universality of system as the Post Office telegraphs, that is to say, under one hand, in one possession, and by one management. There is no other way of carrying on the telephone system to the advantage of the trading interests of the country but that. The right hon. Gentleman contradicts himself on his plan. Although he says he must not increase the Civil Service, he asks you to give him £2,000,000, which is to be spent by somebody. Is he going to spend that without appointing fresh men? By what Department is that going to be done? Through the Post Office, I imagine. But £2,000,000 cannot be judiciously expended without having some trained hands to look after it. There is at once an extension of the Civil Service. I agree it is a grave objection to these things when they involve a large extension of the Civil Service, but it is inevitable. There are worse evils than that, and one of them is to put back the country by thirty years, as the plan of the Bill as now framed will do. What was the system at the time of the Report? It was worked, not by the Post Office, but by a number of companies. The Post Office had obtained, on its own application and insistence, a declaration of law that the "telephone" was a "telegraph," and that the Government had a monopoly of the telephone as well as of the telegraph, and it was on that footing they afterwards proceeded. What did they do? They brought into existence a number of companies. It is the Government that fixed the powers and the limits of the jurisdiction of the working of those companies. Inevitably, as all those licences were granted on precisely the same terms, the system and the country demanded that they should amalgamate. They did amalgamate, and without the permission of the Government at all. By amalgamating they succeeded to a certain extent in accommodating the public. What are the things of which the right hon. Gentleman accuses the company? Over and over again he said that their charges are not limited by any maxima or any minima. Why the public should be limited as regards the minima I do not know, except it be that the Post Office managed their telephonic business so badly that the company—who had to make a bigger profit than the Government—beat them at the price, the public obviously getting the benefit. Another thing the company are charged with is that it is entitled to refuse service to a customer, that it is not bound to supply telephones at all except as it chooses, and then only on its own conditions as to the facilities being given. Many of us, no doubt, have suffered from that fact. Then, again, it is urged that the company has no way-leaves, that it has no powers to lay its lines underground from customers' houses to the Exchange. But all these; faults and deficiencies are congenital in the licence, and created by the Government which granted the licence. The Government had the power to rectify these matters, but did not. It brought into existence a bantling—it ought rather to be called a monster—and, under this Bill, as introduced, the House was asked to give £2,000,000 for the purpose of harrying the company down to a lower price than the Government thought they might have to pay if they bought it now. That was an intelligible policy; I do not say anything about its fairness.


That was never suggested for a single moment.


What was not?


It was never suggested that we should beat down the shares of the company in order to buy them up—never for one moment.


I did not say anything about shares. I will read the Report of the right hon. Gentleman's own Committee:— Competition appears to be both expedient and necessary, in order, firstly, to extend and popularise the service, and, next, to avoid a danger which is by no means, remote if no alternative system is in operation, that a purchase of the company's undertaking at an inflated price may be forced upon the Government of the day. What does he mean by "inflated price"? Turn to a previous paragraph, in which he says, in relation to the amalgamation of these companies, that when they bought up one another, one—that is, of course, the last survivor, the eater up of the rest—had to pay the capital of the other company, and in the course of so doing they paid no less a sum than £1,800,000. The amalgamation value and the purchase value was £3,105,000, and the difference between the one and the other is what some people are pleased to call the "water" value, because it was given to buy up another company, and to enable the buying company to do the service of the public in the only way in which it can be done. Then the right hon. Gentleman goes on to state that it would take five years to replace the plant, and therefore, if they left the company uninterrupted until 1911, they might have to buy them at their own price, and buy up this large and inflated capital, which was a great deal more than the amount for which, with the experience obtained by the advance of time, another system could be laid down. So that it was to prevent the company asking the repayment of this capital, other than the cost price of a new plant, that it was suggested we ought to have competition.


I must deny that. Anybody who was on the Committee knows that that is not what was meant. The hon. Member himself must have seen, when he quoted that passage, that it was impossible to replace the company's plant under five years; that the danger the Committee had before them was, that as it was impossible to replace the company's plant under a period of five years, it might be possible for the company, either by giving a very bad service or by charging very high rates, to disgust the public with the service, and to make them appeal to the Government, saying, "We can no longer go on with the National Telephone Company, you must buy up this service yourselves. "As it would be impossible to replace the plant within five years, it would be quite possible for the company then to demand an exaggerated price from us, and that was the sole meaning of the Report.


I will read the exact words of the Report again:— Unless the Government had a leady an alternative plant available, supplied wholly by the Post Office or partly by municipal licensees, the purchase of the company's undertaking at an inflated price might thus be imposed upon the Government. The inducements to the company to produce such a result are obvious; and your Committee cannot too strongly recommend that no delay should occur in taking adequate precautions to prevent it. Mr. Preece informed your Committee that it would probably take five years to provide such an alternative plant for the whole country. Very well, then; the reason given for the competition is, that if no alternative system is in operation, the purchase of the company's undertaking at an inflated price may be forced upon the Government. I think I have made that proposition clear. Whatever the faults of the company were, it was quite intelligible, and, under the circumstances, I am not going to say it was unreasonable, to try and prevent the company getting the whip hand of the Government to enforce an inflated price, if it was an inflated price; and, therefore, it was important to put the public in a position of independence. What was the position as between the Government and the company? The company alleged, and the Government have not denied it, that they paid to the Government £900,000 for the Government share of the profits of the undertaking, and that at the present time they are paying £114,000 a year, a sum which is increasing. The profits of the company amount to 6 per cent. on their capital, which, by a curious coincidence, is equivalent to about £228,000. The Post Office, therefore, derive one-third of all the profits which the company get out of the public. The principle of competition is to be introduced. What is the natural effect of competition? To knock down profits. Are the Government or are they not in their system going to charge the same rate of pront as the company? Prima facie, the £114,000 of royalties will be diminished. But whether or not it was possible for the Government at that time to have unified the whole system, to have put the hand of the State upon the company, with an impress which should have made it a State Department, as recommended by the Report, it would not necessarily have made all the employees Civil servants. We have, in India, companies controlled by the Government, but the employees are not Civil servants. But it was possible for the Government to come into the business of the company and its plant by the simple process of converting the company's certificates into guarantee certificates with a limited interest of 3 per cent. That would have amply compensated the company. No question would have arisen as to the value, as the shareholders, if they did not like it, could have got their money by selling their certificates, and the Government could have come into the whole of the profits of £228,000 a year, besides the £114,000 they are now receiving. Inasmuch as they would have had to pay 3 per cent, on the certificates, one-half only of the annual profit would be net, but even then they would get half the present dividend of the company, besides the royalties of £114,000 a year, without having paid a single sovereign for it. It is true they would have given a guarantee, but the fact that there would be, no liability against the guarantee is shown by the way in which the business has been taken up, and by the fact that the Government has sufficient confidence to come and ask you to sanction another £2,000,000 being put into the business. If that course had been adopted, the Government would have had all the power in their own hands; they could have charged any rates they liked so as to be sure of a profit; whereas now they are going into what they call "real and effective" competition. Will they make a profit? Will they tell the House that on this £2,000,000 they will make a profit? Will they not reduce the £114,000 they are now getting? Financially for the State this is a most disastrous transaction; it is one by which we are almost bound to lose—at all events as compared with what the Government might have done, and what it might now do. From the point of view of the country at large, let me ask—and this is even more important than the question of the loss to the Government—where are the public in this competition? What sort of competition is that between two persons or two bodies, one of which has the power of putting a rope around the neck of the other? Where the Government will have the power to fix the rates and charges and make the company conform to those rates, I should like to know who will win? If the rates are to be cut down so as to suit the public, the company must lose profits, and the Government must lose royalties. Then look at the inconvenience. We will have one system in London, competitive, which is to terminate in 1911; another system in the provinces, competitive between this company and new companies or municipal corporations. Instead of "uniformity," "diversity" is the best term by which to describe such a system as that How are we to get that which the trade and commerce of this country demands—viz., universal communication between one part and every other part? There must be portions of the country which will not pay by themselves, and it is an advantage of having a national system that those poor places can be served, and if they do not yield a profit the other parts will

make up for them. I venture to say that this scheme is financially disastrous to the nation, and to the interests of the country as a whole as regards its trade and commerce it will also be detrimental, and will put us back by whatever is the term of the new licence which it is proposed to grant, thus hampering and hindering the trade and commerce of the nation in its competition with the rest of the commercial countries of Europe.

Question put.

The House divided:—Ayes, 174; Noes, 41. (Division List, No. 294.)

Archdale, Edward Mervyn Field, Admiral (Eastbourne) Lowe, Francis William
Arnold, Alfred Finlay, Sir Robert Bannatyne Loyd, Archie Kirkman
Arrol, Sir William Fisher, William Hayes Lucas-Shadwell, William
Atkinson, Rt. Hon. John FitzGerald, Sir R. Penrose- Macartney, W. G. Ellison
Bagot, Capt. Josceline FitzRoy Flannery, Sir Fortescue Macdona, John Cumming
Bailey, James (Walworth) Fletcher, Sir Henry Maddison, Fred.
Balcarres, Lord Flower, Ernest Melville, Beresford Valentine
Balfour, Rt. Hn. A.J.(Manch'r) Foster, Colonel (Lancaster) Middlemore, J. Throgmorton
Balfour, Rt. Hn. G. W. (Leeds Garfit, William Milton, Viscount
Barry, Rt. Hn. A. H. S-(Hunts.) Gibbs, Hon. A. G. H.(City of Lon. Monk, Charles James
Barton, Dunbar Plunket Gibbs, Hon. Vicary (St. Albans More, Robt. Jasper (Shropshire)
Bathurst, Hon. Allen Benjamin Giles, Charles Tyrell Morrell, George Herbert
Beach, Rt Hn Sir M.H.-(Bristol) Gilliat, John Saunders Morton, Arthur H. A. (Deptford
Bigwood, James Gladstone, Rt. Hon. H. John Mount, William George
Billson, Alfred Goldsworthy, Major General Murray, Rt. Hon. A. G. (Bute)
Blundell, Colonel Henry Gordon, Hon. John Edward Nicholson, William Graham
Boscawen, Arthur Griffith- Gorst, Rt. Hon. Sir John Eldon Nicol, Donald Ninian
Brodrick, Rt. Hon. St. John Goschen, Rt. Hn G. J. (S. G'rge's Nussey, Thomas Willans
Brookfield, A. Motagu Goschen, George J. (Sussex) Oldroyd, Mark
Bullard, Sir Harry Goulding, Edward Alfred Parkes, Ebenezer
Burns, John Graham, Henry Robert Pease, Herbert P.(Darlington)
Burt, Thomas Gray, Ernest (West Ham) Percy, Earl
Butcher, John George Griffith, Ellis J. Pierpoint, Robert
Caldwell, James Hamond, Sir Chas.(Newcastle) Pilkington, R.(Lanes, Newton)
Cameron, Sir Charles(Glasgow) Hanbury, Rt. Hon. R. Wm. Platt-Higgins, Frederick
Cawley, Frederick Hatch, Ernest Fred. Geo. Powell, Sir Francis Sharp
Chaloner, Captain R. G. W. Hayne, Rt. Hon. Chas. Seale- Priestley, Sir W. Overend(Edin
Chamberlain, Rt. Hon. J. (Birm Hazell, Walter Provand, Andrew Dryburgh
Chamberlain, J. A. (Wore'r) Helder, Augustus Pryce-Jones, Lt.-Col. Edward
Chaplin, Rt. Hon. Henry Henderson, Alexander Purvis, Robert
Charrington, Spencer Hermon-Hodge, Robt. Trotter Pym, C. Guy
Clare, Octavius Leigh Hoare, Samuel (Norwich) Rankin, Sir James
Coghill, Douglas Harry Holden, Sir Angus Rickett, J. Compton
Collings, Rt. Hon. Jesse Houldsworth, Sir Wm. Henry Ridley, Rt. Hon. Sir M. W.
Colston, Charles E. H. Athole Howell, William Tudor Ritchie, Rt. Hon. C. Thomson
Cornwallis, F. Stanley W. Hudson, George Bickersteth Rothschild, Hon. Lionel Walter
Cox, Irwin E. Bainbridge Jeffreys, Arthur Frederick Royds, Clement Molyneux
Cubitt, Hon. Henry Johnston, William (Belfast) Russell, Gen. F S (Chelt'nh'm)
Curzon, Viscount Kemp, George Russell, T. W. (Tyrone)
Dalrymple, Sir Charles Kennaway, Rt. Hon. Sir. J. H. Samuel, Harry S. (Limehouse)
Denny, Colonel Kenyon, James Sandys, Lieut.-Col. T. Myles
Donkin, Richard Sim Keswick, William Schwann, Charles E.
Doughty, George Lawrence, Sir E. Durning(Corn. Sharpe, William Edward T.
Douglas, Rt. Hon. A. Akers- Lawson, John Grant (Yorks.) Shaw-Stewart, M. H. (Renfrew)
Doxford, William Theodore Lea, Sir T. (Londonderry) Skewes Cox, Thomas
Duncombe, Hon. Hubert V. Leigh-Bennett, Henry Currie Smith, James Parker (Lanarks.)
Dyke, Rt. Hon. Sir W. Hart Leng, Sir John Smith, Samuel (Flint)
Elliot, Hon. A. R. Douglas Lewis, John Herbert Stanley, Lord (Lanes.)
Evans, Samuel T. (Glamorgan) Llewelyn, Sir Dillwyn-(Sw'ns'a Steadman, William Charles
Fardell, Sir T. George Loder, Gerald Walter Erskine Stirling-Maxwell, Sir John M.
Fellowes, Hon. Ailwyn Edw. Long, Rt. Hn. Walter (Liverp'l) Stone, Sir Benjamin
Fergusson, Rt. Hn. Sir J.(Manch Lopes, Henry Yarde Buller Talbot, Lord E. (Chichester)
Thornton, Percy M. Williams, J. Powell-(Birm.) Wyvill, Marmaduke D'Arcy
Trevelyan, Charles Philips Wilson, J.W. (Worcestersh, N. Young, Commander (Berks, E.)
Tritton, Charles Ernest Wodehouse, Rt. Hn. E.R.(Bath Yoxall, James Henry
Valentia, Viscount Woodhouse, Sir J T (Huddersf'd TELLERS FOR THE AYES
Wanklyn, James Leslie Wyndham, George Sir William Walrond and
Williams, Colonel R. (Dorset) Wyndham-Quin, Major W. H. Mr. Anstruther.
Abraham, Wm. (Cork, N. E.) Hedderwick, Thomas C. H. Pirie, Duncan V.
Ambrose, Robert Jameson, Major J. Eustace Price, Robert John
Begg, Ferdinand Faithfull Joicey, Sir James Spicer, Albert
Buchanan, Thomas Ryburn Lawrence, Wm. F. (Liverpool) Stevenson, Francis S.
Channing, Francis Allston Leese, Sir J. F. (Accrington) Sullivan, Donal (Westmeath)
Crilly, Daniel Lubbock, Rt. Hon. Sir John Wallace, Robert
Curran, Thomas B. (Donegal) Macaleese, Daniel Wedderburn, Sir William
Curran, Thomas (Sligo, S.) MacDonnell, Dr M A (Queen's C) Whittaker, Thomas Palmer
Dilke, Rt. Hon. Sir Charles M'Crae, George Williams, John Carvell (Notts
Donelan, Captain A. Moulton, John Fletcher Wilson, Henry J. (York, W.R.
Doogan, P. C. O'Connor, Arthur (Donegal) Woods, Samuel
Duckworth, James O'Connor, James (Wicklow, W.
Dunn, Sir William O'Connor, T. P. (Liverpool) TELLERS FOR THE NOES
Ferguson, R. C. Munro (Leith) Pease, Joseph A. (Northumb.) Captain Sinclair and Mr. Charles M'Arthur.
Flynn, James Christopher Pickersgill, Edward Hare

Main Question put, and agreed to.

Bill considered:—


I beg to move the Amendment standing in the name of the hon. Member for Wandsworth, to leave out Clause 1. When the House was in Committee the other day I pointed out that we shall add under this clause a sum of not less than two millions to the national debt. We are doing this day after day, and week after week. We added nearly two millions for the Niger Company, four millions for the naval works, and three millions for military works. Now we are adding two millions for the extension of the telephone system, or in all eleven millions added to the permanent debt of the country in one session by the present Government.


National debt !


The right hon. Gentleman is trying to correct me. It is not technically national debt, but it is to be paid off with terminable annuities of twenty or thirty years' duration. That is to safeguard this amount of debt from the temptation of future Chancellors of the Exchequer. But I am perfectly certain the Secretary to the Treasury is the last man to deny that what we are doing under this Bill is to add two millions to the national indebtedness of the country. The Government during the present session has added eleven millions to the national indebtedness; and during the four years the Government have been in office it has already added twelve to fourteen millions of money to the national indebtedness under this peculiar method of procedure, which not only complicates our national finances, but prevents us from seeing what the national indebtedness really is, and whether it is increasing or decreasing. I am sorry the hon. Member for King's Lynn is not in his place, for he and the right hon. the Secretary to the Treasury, in his days of more freedom and less responsibility, were earnest critics of this particular style of finance. The system is a bad one. It is one of comparatively modern introduction, and was only begun on a large scale in 1888 or 1889. It has grown with gigantic strides during the last few years, but in no session equal to the present. Is the taxpayer going to get value for his money under Clause 1? What is the purpose for which this two millions is asked? There is nothing stated in the clause as to the purpose for which the money is wanted. Of course, the title of the Bill says that it is to improve the telephonic communication, but there is nothing to show that this money is to be spent in improving the telephonic communication. As I read this clause, the money asked for may be spent for any of the purposes of the Telegraph Acts, and I think that even at this late period it would be wise to introduce limiting words. In order to arrive at the purpose for which the money is to be spent, we have to look to the speeches of the Secretary of the Treasury. He told us when the Bill was first introduced that he proposed to ask for two millions to develop telephonic communication on the part of the Post Office, and he went on to state that the first place where the operations were to be extended was to be London itself, and the small municipalities. I would like to ask why London, this great Metropolis, the richest city in the world, and the one best able, if you are going to introduce a municipal telephonic system, to put it in operation—why is London to have a first charge on this money? That question even seems to have suggested itself to the right hon. Gentleman; for he said that in this large area of London the Post Office is determined to compete at once with the National Telephone Company. That is to say that the first charge upon this money, contributed by the taxpayers of the whole country, is to enable the Post Office to enter into active competition in the area of London—which is much the richest community in the world, the best able to take care of itself, and the best able to institute a system of municipal telephones—with the National Telephone Company. We know that the views of the right hon. Gentleman have altered somewhat during the progress of the Bill. If London is to have the first charge on these two millions I do not think there would be much left for the rest of the community. The right hon. Gentleman stated that the balance over would be given for the development of the system in the smaller municipalities. "There are hills beyond Pentland, and lands beyond Forth," and where do the country districts and the small towns come in? Where is to be the benefit to them when the rich metropolis of the country has the first charge on the money to be borrowed from the Exchequer? The little towns in England and Scotland of two or three thousand inhabitants are to be told that they are to establish municipal telephones out of their municipal rates. I say that is a grossly unfair way in which to deal with public money. More than that, it is contrary to the statements made by the right hon. Gentleman in March, and in the beginning of June, when the one point he laid stress upon was that the object of the Government was that they wanted to establish a real national telephonic system throughout the length and breadth of the country. Now, when we come to examine the modus operandi, we find that they are going to spend the whole of the money in establishing effective competition with the National Company in the district of London. That is exceedingly unfair to the general taxpayer. Moreover, the right hon. Gentleman himself says that the two millions will not be enough for that purpose, and he looks forward to the time when he must come down to the House for further money. What will be the result of the expenditure of this money in the future? First of all, we are going to spend two millions in good hard cash on a scheme of improvement of the telephonic communication, which, at best, will be temporary. It cannot be a final settlement. Then the hon. Gentleman or his successor will find that two millions is not enough, and will have to come to the House for more money for the same purpose. What will be the effect when he or his successor has to face the question which is being shirked now—that is of buying up the National Company and the other companies which are to be licensed under this Bill? If you establish effective competition in London, that will stimulate the National Company to compete with the Post Office, and by so doing the value of the National Company's property, for buying up purposes, will naturally and necessarily be increased. You are not only wasting money in taking the whole telephone system under the control of the Post Office, but actually increasing the value of the property which we shall have eventually to buy up. On all these grounds I oppose this clause, and I beg to move that it be deleted.

Amendment proposed— In page 1, line 5, to leave out Clause 1."—(Mr. Buchanan.)

Question proposed, "That the words 'The Treasury may' stand part of the Bill."


I want from the Secretary to the Treasury a little further information as to what he is going to do with these two millions. The right hon. Gentleman is directly infringing all the canons he has previously laid down. In the first place, there is to be a municipal system, but it is not to be a municipal system for London. In the next place the system is not to add to the wages or staff of the Post Office; but the system under this clause must inevitably add to the wages and the number of the employees of the Post Office. Then, again, whatever may be the result of this proposal to set up effective competition in London, I contend that, on the face of it, it is a waste of somebody's money. My conviction is, that any private enterprise in an active competition with a Government Department will inevitably get the best of it. It has the stimulus or motive of responsibility to its shareholders, to embark in an energetic and vigorous policy, which is wanting in the Post Office. But that only emphasises what I have said before, that there will be a ruinous waste of money. Then, how is this to affect the rural districts? What proportion of this money is the right hon. Gentleman going to devote to the development of the rural districts, which have not yet been reached by the telephones? It is greatly to be deplored that the Government have adopted a policy which cannot but increase the centralising tendencies of the great towns.

SIR J. T WOODHOUSE (Huddersfield)

I protest against the attitude displayed by certain hon. Members in regard to this Bill. If there were any men who came before the Select Committee of the House of Commons last session, and pleaded for that competition which this Bill proposes to set up, it was the representatives from Glasgow and Edinburgh. The hon. Baronet who represents Bridgeton, who has taken the greatest interest in the development of the telephonic system, and who knows more about it than almost anybody else, cordially supports the Bill which the Government has introduced. I do venture to say that the obstruction towards the Bill—["No, no!"]—yes; this obstruction is not becoming towards those who are endeavouring to do their duty, and to those who came from Scotland and demanded that this competition should be set up, and themselves have promoted a private Bill to obtain the facilities which this Bill proposes to give them. I cannot understand the opposition which my hon. friends have displayed towards this Bill. I fail to see that there is any rational principle in the speech of my hon. and gallant friend who has just sat down. He says that the proposal of the right hon. Gentleman is to spend £2,000,000 primarily on the City of London. He is not strictly correct. In the first place, the telephonic area of London comprises much more than the City of London. It includes a population of six millions of people, and extends very much beyond the bounds of the City of London; and the Government are giving effect to what was practically the recommendation of the Select Committee—that the telephonic area of London should be taken up by the Government. Well, I think that it is a fair and rational demand that the Government should ask for two millions, a great part of which I have no doubt will be spent in setting up that effective competition which we all desire. That is the pivot on which the Bill turns, and it was the basis of the recommendations of the Select Committee. A proposal to reject the unanimous recommendation of the Grand Committee upstairs is trifling with the time of the House, and not yielding to the demands of the witnesses who presented themselves from Scotland.

SIR JOHN LUBBOCK (London University)

This Bill contains two main proposals—the first, that in the Metropolitan area, the most important of all, the State should supply a telephone service; and the second, that elsewhere the local authorities should be encouraged to do so. The first proposal is in direct opposition to the opinion of our greatest thinkers. For instance, John Stuart Mill said: There is a fundamental distinction between controlling the business of Government and actually doing it. The same person or body may be able to control everything, but cannot possibly do everything; and in many cases its control over everything will be more perfect the less it personally attempts to do. I may also quote the high authority of Cobden, who observed that: I find that you can never make the conductors of these establishments understand that the capital they have to deal with is really money. It costs them nothing, and, whether they make a profit or a loss, they never find their way into the Gazette. Therefore, to them it is a myth—it is a reality only to the taxpayers. Bismarck, in 1893, said: My fear and anxiety for the future is, that the national consciousness may be stifled in the coils of the boa constrictor bureaucracy, which has made rapid progress during the last few years. Herbert Spencer, we know, is strongly of the same opinion. I do not know whether my right hon. friend the Member for the University of Dublin proposes to speak on this Bill, but I might refer also to his interesting works. It may be said that these are merely theoretical opinions. They are, however, fully borne out by experience. Take the results of the system of State railways in Australia. In 1896, the last year for which I have seen the figures, South Australia lost £65,000; New South Wales, £109,000; Queensland, £252,000: and Victoria, £583,000. The total amount lost by Victoria mounts up to no less than £7,000,000. Take, again, a case still more similar to the present—that of the telegraphs. The general impression seems to be that the State is making a large profit by the telegraphs. On the contrary, we have lost £8,000,000, and are losing more and more every year. It is sometimes said that this is because the State gave too much for the telegraphs. But that is not so. If the whole system had been presented to the State for nothing, there would still be a loss of £300,000 a year on the working. My right hon. friend the Secretary to the Treasury has himself spoken most strongly against his own Bill. He has told us that there are "no practical or technical advantages in State management." In reply to a deputation a short time ago he said: He hardly thought the deputation had given full weight to the serious difficulties in the way of nationalisation. He doubted whether it was expedient, unless it were essentially a national service, to increase the amount of work done by the State generally. The Post Office was being overburdened with works in every direction, and he did not think that it was capable of taking this enormous additional burden. If the telephone service was cast upon the Post Office, it would be to the detriment of both the postal and telegraph services. Then, again, it would increase enormously the Government staff. He need only appeal to the Members of Parliament present to say whether they would like to have the weekly appeals for increase of wages from those State servants still further extended. And yet he proposes, as regards the Metropolitan area, to take the very course which he has himself strongly denounced. I now come to the second part of the Bill—that which proposes to invite municipalities to undertake the work. The Chambers of Commerce have surely strong ground of complaint. The Government promised them at the beginning of the session an inquiry into the whole subject. They thought it so important that they proposed, not merely a Committee of this House, but a joint Committee of the two Houses. We do not complain of them for not having kept their promise, but because, while they have not spared an hour to nominate the Committee, that they have devoted hours to this Bill, which prejudges the whole question. So strongly do the Chambers of Commerce feel on the subject, that resolutions condemning the Bill have been passed by the Chambers of Commerce of London, Liverpool, Birmingham, Bristol, Cardiff, Plymouth, Glasgow, Aberdeen, Edinburgh, Belfast, Dublin, and more than twenty others—in fact, by practically all the great Chambers of Commerce. I may quote, for instance, the unanimous resolution of the London Chamber: That it is undesirable that the Postmaster-General should licence the councils or county boroughs to provide systems of public telephonic communication, and that, pending the Report of the Joint Committee about to be appointed by the two Houses on municipal trading, the Telegraphs (Telephonic Communication, &c.) Bill should be postponed. Nor is it only the Chambers of Commerce. The Society of Arts have urged the Government to appoint a Royal Commission to inquire into the subject of municipal trading, and added: They venture to submit that, until such Royal Commission has investigated the subject and reported thereon, no further powers for trading purposes ought to be granted to such bodies. Lastly, the Committee of the Society of Electrical Engineers have resolved: That in the opinion of this Committee it is undesirable, from the point of view of the progress of electrical engineering, for the purely local telephone industry throughout the country to be held as a monopoly; or that legislation on the future of telephony in the United Kingdom should discourage the undertaking of exchange systems within telephone areas by independent enterprise. It is astonishing to me that the Government should force on this Bill against the protests of the Chambers of Commerce, the Society of Arts, and the Society of Electrical Engineers. No doubt, the Municipal Corporations Association is in favour of it. They wish to establish a new monopoly, and have resolved: That this Association affirms the principle that where local authorities have, with the sanction of Parliament, established, or are in course of establishing, undertakings for public benefit, and have not failed in their duties, it is not right or expedient that powers should be granted to companies to compete with them. A monopoly by a municipality is still a monopoly. The debts of our municipalities are rapidly increasing. They are now some £250,000,000, and, at the present rate, will in twenty years be as large as the National Debt. The rate itself is increasing. This year, in one year alone, you have added two new fields for municipal enterprise. The building societies have amongst them a capital of £50,000,000. The Government, not satisfied with this, wish municipalities to enter into this business. If they do so seriously, it means another £100,000,000. In America £50,000,000 is already invested in electricity. If our municipalities are to absorb this field of enterprise, it will mean in a few years another speculation of £100,000,000. Our municipalities will become gigantic speculations, run by amateurs, at the expense of the ratepayers. This is really a struggle between those who wish the municipalities to have gigantic monopolies and those who are fighting for free trade and free competition. Moreover, since this Bill was introduced, the policy of the Government has altered. At first, they proposed to do away with companies after 1911. Now they wisely propose to continue them. That seems to me the true policy. It is the only way to secure competition. But do you suppose that investors will be so foolish as to compete with municipalities? Lastly, I must say one word as regards the effect this Bill will have on the progress of applied science. Already the action of municipalities has seriously checked the development of electrical science in this country. Mr. Sellon has recently told us, at the Society of Arts, that He had had exceptional opportunities of seeing and hearing what was going on in America and Germany, and in Switzerland, and he believed it was beyond dispute that in those countries electrical science was far more highly developed in the interests of the public than in this country; and, secondly, that in those countries it had not been handled chiefly by municipalities Sir, I support this Amendment, because I believe this Bill will inflict serious injury on the manufacturing interests of the country, because it will check the progress of applied science, increase the burden of rates, add enormously to local debts, and last, not least, impair and weaken our municipal institutions.


said his right hon. friend had only to look at the work of the postal service of this country to find at once a reply to his argument that the State could not undertake work of this kind at a profit.


Where there is no competition it is easy to make a, profit.


said he would take the case where there was competition. The Post Office had telephone exchanges in Cardiff and Newcastle, and, badly as the system had been worked, they yielded a considerable profit. He anticipated that when the present restrictions were removed, the profits which the Department would make would be considerably greater. In London there was no alternative to the State taking over the telephones. The telephone area extended far beyond that of the London County Council, and therefore the only body that could grant underground way-leaves, which were necessary to an efficient service, was the Post Office itself. It was intended that one-half of the sum of two millions provided by the Bill should be spent in providing a thoroughly efficient service in the metropolis, and that the remainder of the money should be used to extend the telephone service in those districts where the population was not sufficient to maintain a service of its own. In those areas where the Post Office entered into competition with the National Telephone Company there would be no extension of the company's licence, and therefore in these districts this must be regarded as a final settlement.

SIR J. JOICEY (Durham, Chester-le-Street)

, said the right hon. Gentleman had said that the Post Office in Newcastle, considering the disabilities under which it laboured, had done remarkably well. The only disability that he (Sir J. Joicey) knew it laboured under was that it was not, according to the Treasury Minute, given sufficient money in order to compete with a company like the National Company. But, so far as he had been able to learn, he did not think the Newcastle Post Office suffered particularly under that disability, because he was under the impression that it had always had sufficient money to compete with the National Telephone Company, so far as it was desirable to do so. He was bound to say that he thought the National Telephone Company gave as good a service as the Post Office, and he believed that, with equal facilities, the National Telephone Company would beat the Post Office on its own ground. He was one of those who believed that the rich part of the country, even so far as telephone districts were concerned, should be made to assist the poor parts of the country, as in the case of the postal service. The right hon. Gentleman admitted, if he understood his speech aright, that he was going to spend the bulk of the two millions in London. He thought that was monstrous, and he could not see why the local authorities of London should be deprived of a power which was to be possessed by every municipality throughout the country; but, instead of £2,000,000, he should not object to ten, twelve, or even fifteen millions being spent for the purchase of all the telephone systems in the country. He was certain that when the country came to understand the Bill, the electors would recognise that there ought to be some scheme which would have brought the whole country into telephonic communication. Could the right hon. Gentleman give a single instance, where there had been competition with the Post Office by the National Telephone Company, where the Post Office had not been beaten? He (the speaker) did not know a single case. From what he knew of the telephone company, he was certain they would not give up the battle without a good struggle. The Post Office ran away from competition wherever there had been competition. The policy of the Post Office hitherto had been to prevent competition, and to induce the National Telephone Company to buy up other companies. He was surprised at this sudden change of policy on the part of the Post Office. He could not think that the policy now put forward by the Government was the policy of those who understood the question best. In spending this money in London, the Government were doing a very great injustice to other parts of the country.

MR. PARKER SMITH (Lanarkshire, Partick)

said he could not assent to the proposal that two millions of money should be given to London; it would have been better if the telephone system throughout the country had been taken over by the Government. There were a great many places in Scotland which, while not boroughs, were not thinly populated, and where the use of the telephone was very much wanted. He understood the right hon. Gentleman himself believed that in those places it would be very lucrative to start the telephone; but this Bill did not give any facilities to places which were not of an urban character. The County Council of Lanark, for instance, was greatly interested in this point, and had raised it in a memorial which no doubt many hon. Members had received. Was it the fact that any district that wanted to have facilities for introducing telephones was obliged to form itself into an urban district, and that county councils were not to be allowed to use their credit for introducing telephones into the parts of the country where they were needed?

* MR. CAWLEY (Lancashire, Prestwich)

We know that Glasgow were prepared to give a service for five guineas to each subscriber, and that that sum included the Government royalty and the sinking fund. If Glasgow could do that, why not London? The question is, Why should London pay £15 for the telephone, when it could be obtained for five or six guineas? The right hon. Gentleman the Member for London University has spoken several times about the London Chamber of Commerce. I have no doubt that most members of the London Chamber of Commerce have a very cheap telephone, because they are in a large way of business, and are telephoning every day and all day. They get an enormous benefit. But we want to see the smaller people have the advantage of the telephone if they want it, and it is not fair for these people who can afford to pay £15 to say that these other people who cannot afford to pay so much shall not have it. In Guernsey they have a telephone service for thirty shillings, with one penny per call. Why should not the smaller people of London have a similar benefit to that? There is no sort of reason, except that the big people in London get a very cheap telephone, and do not want their poorer neighbours to have it. This Bill is going to give the smaller people the opportunity, and I cannot see that any arguments have been urged against these £2,000,000 being granted for the purpose of establishing this system. I feel certain it would pay extremely well, and that the Government will not only be able to get the same royalty as they get from the National Telephone Company, but provide the interest on the sinking fund as well.

MR. LABOUCHERE (Northampton)

There may be a good deal of argument against this Bill, but I, for my part, am in favour of it as it stands. Supposing the Bill passes, I cannot see any reason for cutting out this clause. One hon. Member suggested that the clause was bad, because it was limited to London. He said he should be glad to support a clause which gave £15,000,000 in order to have a general service all over the country. That may be good; I should be glad to see a general system; but we know perfectly well that if an Amendment were moved to substitute £15,000,000 for the £2,000,000 in the Bill, it would

not pass the House. We therefore have to take the Bill as it stands. The system is to be first applied to London. As a general rule, I think that moneys ought to be applied to the constituencies of those who are not London members just as much as to London constituencies; but, after all, London is the commercial centre of the whole country. We have got an exceptionally bad telephone system in London, and it is only reasonable that we should test this arrangement of the Government by trying it in London. I believe the thing will pay the Government exceedingly well, and at a lower price than Londoners have at present to pay. The reason is, that the Telephone Company have not underground way leaves. The Government will have those underground way-leaves, so that the service will be better, and, we may fairly anticipate, cheaper. The Financial Secretary is going strongly in the matter; let him fairly test it in London, and, as an eminent South African statesman is said recently to have telegraphed to President Kruger, festina lente.

Question put.

The House divided:—Ayes, 208; Noes, 32. (Division List, No. 295).

Anson, Sir William Reynell Carmichael, Sir T. D. Gibson- Duckworth, James
Archdale, Edward Mervyn Cavendish, R. F. (N. Lanes.) Duncombe, Hon. Hubert V.
Arnold, Alfred Cavendish, V.C.W.(Derbysh.) Elliot, Hon. H. Ralph Douglas
Arrol, Sir William Cawley, Frederick Ellis, John Edward
Atkinson, Rt. Hon. John Chaloner, Captain R. G. W. Fardell, Sir T. George
Bagot, Capt. Josceline FitzRoy Chamberlain, Rt Hn. J. (Birm. Fellowes, Hon. Ailwyn Edward
Bailey, James (Walworth) Chamberlain, J. A. (Wore'r) Ferguson, R. C. Munro (Leith)
Balcarres, Lord Chaplin, Rt. Hon. Henry Fergusson, Rt Hn Sir J. (Manc'r)
Balfour, Rt. Hn. A.J.(Manch'r) Charrington, Spencer Field, Admiral (Eastbourne)
Balfour, Rt. Hn Gerald W.(Leeds Clare, Octavius Leigh Finch, George H.
Banbury, Frederick George Coghill, Douglas Harry Finlay, Sir Robert Bannatyne
Barton, Dunbar Plunket Cohen, Benjamin Louis Fisher, William Hayes
Bathurst, Hon. Allen B. Collings, Rt. Hon. Jesse Fitzmaurice, Lord Edmond
Beach, Rt. Hn. Sir M. H. (Bristol Colston, Chas. E. H. Athole Flannery, Sir Fortescue
Billson, Alfred Compton, Lord Alwyne Fletcher, Sir Henry
Birrell, Augustine Cornwallis, Fiennes Stanley W. Flower, Ernest
Blundell, Colonel Henry Cox, Irwin Edward Bainbridge Foster, Colonel (Lancaster)
Bolton, Thomas Dolling Cubitt, Hon. Henry Foster, Sir Walter (Derby Co.)
Bond, Edward Curran, Thomas (Sligo, S.) Garfit, William
Boscawen, Arthur Griffith- Curzon, Viscount Gedge, Sydney
Brodrick, Rt. Hon. St. John Dalkeith, Earl of Gibbs, Hn. A. G. H. (City of Lon.
Brookfield, A. Montagu Dalrymple, Sir Charles Gibbs, Hon. Vicary (St. Albans)
Bullard, Sir Harry Denny, Colonel Giles, Charles Tyrrell
Burns, John Dillon, John Gilliat, John Saunders
Burt, Thomas Donelan, Captain A. Goldsworthy, Major-General
Butcher, John George Donkin, Richard Sim Gordon, Hon John Edward
Caldwell, James Doogan, P. C. Gorst, Rt. Hn. Sir John Eldon
Cameron, Sir Chas. (Glasgow) Doughty, George Goschen, Rt Hn G. J. (St. George's
Campbell-Bannerman, Sir H. Douglas, Rt. Hon. A. Akers- Goschen, George J. (Sussex)
Carlile, William Walter Doxford, William Theodore Goulding, Edward Alfred
Graham, Henry Robert M'Calmont, H. L. B. (Cambs.) Sharpe, William Edward T.
Gray, Ernest (West Ham) M'Crae, George Shaw-Stewart, M.H.(Renfrew)
Griffith, Ellis J. Maddison, Fred. Skewes-Cox, Thomas
Hamond, Sir C. (Newcastle) Melville, Beresford Valentine Soames, Arthur Wellesley
Hanbury, Rt. Hn. Robert Wm. Middlemore, J. Throgmorton Stanley, E. J. (Somerset)
Hazell, Walter Milton, Viscount Stanley, Lord (Lanes.)
Healy, Timothy M. (N. Louth) Monk, Charles James Steadman, William Charles
Helder, Augustus Moon, Edward Robert Pacy Stirling-Maxwell, Sir John M.
Henderson, Alexander More, Robt. Jasper(Shropshire) Stone, Sir Benjamin
Hermon-Hodge, Robt. Trotter Morrell, George Herbert Strauss, Arthur
Hoare, Samuel (Norwich) Morton, A. H. A. (Deptford) Talbot, Lord E. (Chichester)
Holden, Sir Angus Mount, William George Talbot, Rt. Hn. J.G.(Oxf'dUni.
Houldsworth, Sir Wm. Henry Murray, Rt. Hon. A.G. (Bute) Thornton, Percy M.
Howell, William Tudor Murray, Charles J. (Coventry) Tomlinson, Wm. E. Murray
Hudson, George Bickersteth Nicholson, William Graham Trevelyan, Charles Philips
Jackson, Rt. Hon. W. Lawies Nicol, Donald Ninian Tritton, Charles Ernest
Jeffreys, Arthur Frederick Nussey, Thomas Willans Valentia, Viscount
Johnston, William (Belfast) Oldroyd, Mark Wanklyn, James Leslie
Johnstone, Heywood (Sussex) Parkes, Ebenezer Warde, Lieut.-Col. C.E.(Kent
Jones, William (Carnarvonsh. Pease, Herbert P. (Darlington Welby, Lieut.-Col. A. C. E.
Kemp, George Percy, Earl Whitmore, Charles Algernon
Kennaway, Rt Hon Sir John H Pickersgill, Edward Hare Williams, Colonel R. (Dorset)
Keswick, William Pierpoint, Robert Williams, John Carvell (Notts.)
Labouchere, Henry Pilkington, R. (Lancs, Newton) Williams, J. Powell- (Birmg.)
Lawrence, Sir E Durning-(Corn) Platt-Higgins, Frederick Willox, Sir John Archibald
Lawson, John Grant (Yorks.) Pollock, Harry Frederick Wilson, John (Govan)
Lea, Sir Thomas(Londonderry) Powell, Sir Francis Sharp Wilson, J. W. (Worcestersh, N.
Leese, Sir Joseph F. (Accrington Priestley, Sir W.O.(Edinburgh Wodehouse, Rt. Hn. E.R.(Bath
Leigh-Bennett, Henry Currie Provand, Andrew Dryburgh Woodhouse, Sir J T(Huddersf'd
Leng, Sir John Pryce-Jones, Lt.-Col. Edward Wortley, Rt. Hon. C.B. Stuart-
Lewis, John Herbert Purvis, Robert Wylie, Alexander
Llewelyn, Sir Dillwyn-(Swans. Pym, C. Guy Wyndham, George
Lloyd-George, David Rankin, Sir James Wyndham-Quin, Major W. H.
Loder, Gerald Walter Erskine Ridley, Rt. Hn. Sir Matthew W. Wyvill, Marmaduke D'Arcy
Long, Rt. Hn. W. (Liverpool) Ritchie, Rt. Hn. Chas. Thomson Yerburgh, Robert Armstrong
Lopes, Henry Yarde Buller Royds, Clement Molyneux Young, Commander (Berks, E.)
Lorne, Marquess of Russell, Gen. F. S. (Cheltenham
Loyd, Archie Kirkman Russell, T. W. (Tyrone) TELLERS FOR THE AYES
Lyttelton, Hon. Alfred Ryder, John Herbert Dudley Sir William Walrond and
Macartney, W. G. Ellison Samuel, Harry S. (Limehouse) Mr. Anstruther.
Macdona, John Cumming Schwann, Charles E.
Abraham, William(Cork, N. E. Lawson, Sir W. (Cumberland) Sinclair, Capt. J. (Forfarshire)
Begg, Ferdinand Faithfull Lubbock, Rt. Hon. Sir John Smith, James Parker(Lanarks)
Channing, Francis Allston Macaleese, Daniel Stevenson, Francis S.
Crilly, Daniel M'Arthur, Charles (Liverpool) Sullivan, Donal (Westmeath)
Dilke, Rt. Hon. Sir Charles Molloy, Bernard Charles Wedderburn, Sir William
Dunn, Sir William Morgan, J. Lloyd (Carmarthen) Whittaker, Thomas Palmer
Evans, Samuel T.(Glamorgan) Moulton, John Fletcher Wilson, Henry J.(York, W. R.)
Evans, Sir Francis H.(South'ton O'Connor, James(Wicklow, W. Yoxall, James Henry
Hedderwick, Thomas Chas. H. Pease, Joseph A. (Northumb.)
Horniman, Frederick John Pirie, Duncan V. TELLERS FOR THE NOES
Jameson, Major J. Eustace Power, Patrick Joseph Mr. Buchanan and Sir James Joicey.
Kimber, Henry Price, Robert John

Bill read a second time, and committed for To-morrow.

Another Amendment made.


I rise to move the rejection of Clause 2, which brings into competition the local municipalities throughout the country. I move the rejection of the clause on several grounds. In the first place, because of the increasing tendency to give trading powers to municipalities; in the next place, because it prevents that uniformity of system which is essential in order that the country may get the full benefit, commercially and industrially, of the telephone; and lastly, because it prevents universal intercommunication between all users of the telephone. In some towns we shall have municipalities competing with a licence to which the local authority in question has assented, and on condition that the rates to be charged by both are the same. It is a misnomer to call that "real and effective" competition. It is not a competition, at all events, for the benefit of the user or the public, because the user does not get the benefit of the universality or uniformity of the system; he only gets it over an area which must be restricted by the fact that there is another competitor in the field. The question of municipal trading is a very much larger one. It is the testimony of public bodies, scientific societies, and private employers of labour, that the same amount of work is not got out of the employees of municipalities as is obtained from the employees of private traders and manufacturers. But the chief objection is, that the scheme prevents intercommunication. We have scarcely got used to the idea that it is possible to telephone out of London. Why are we not allowed the same facilities for communicating telephonically with our friends at a distance as we have by telegraph? We are to be subscribers either of the company or of the Post Office—theone or the other; we are not to have inter-communication, although the Post Office admit that they have the power of putting these way leaves underground, the want of which power they say is an hindrance to the company. As a matter of fact, between one exchange and another in London and between the exchanges and the Post Office the Post Office does provide the underground communication. I want to know why the same facility has not been afforded this company——


I do not quite see what the question of Post Office way leaves and the telephone company has to do with Clause 2, which only relates to the fund out of which public authorities have to pay the expenses of carrying out the Act.


It has this to do: that this relates to the provinces; it establishes a system of so-called competition there; and the question of wayleaves which has been so important in London is also quite as important in the provinces, and I wish to point out that while they have been in London by their own willful——


That is quite too remote from this clause. If the hon. Member desires that the Government should make some arrangement as to wayleaves between themselves and the telephone company that possibly may be raised on the third clause; it certainly cannot be on the second.


As regards the provincial towns, I imagine I can argue what is being done or about to be done. Many provincial towns have applied to the Postmaster-General in these terms. They wish to have a company in their locality to whom they should give wayleaves. In that matter the municipalities have the same power in their respective areas as the Post Office have in London. The Government have the power over the whole of the country, and could give these facilities to any company they chose to license. It cannot, therefore, be said that they must employ the local authorities for the purpose of having the provincial towns telephoned. Consequently you are not obliged to give these trading rights to municipal corporations on that ground. The want of uniformity, the want of inter-communication between provincial towns, and the want of facilities for immediate intercommunication make the system one, not of uniformity, but of heterogeneous diversity, and that is my ground for moving the rejection of the clause.

Amendment proposed— In page 1, line 13, to leave out Clause 2."—(Mr. Kimber.)

Question proposed, "That the word 'where' stand part of the Bill."


I am bound to say that I have a great objection to any facilities being given to municipalities to take over the National Telephone Company's, or to develop any other system. Hitherto our municipalities have been able to borrow money very cheaply indeed, the reason being that they have simply used the money for carrying out the ordinary sanitary and other necessities of their own areas. Doubtless some have gone beyond that—they have taken over gas and water companies; but there is, as a general rule, very great reluctance to take over anything which has not been properly tested or tried. Municipalities want to be assured that they are going to make a certain profit before they will take over anything, but who can tell whether they will be able to make a profit out of a telephone system in their own area? I defy any estimate to be made which can be relied upon, and I look forward with some degree of anxiety if this House sanctions a Bill which will enable municipalities and urban district authorities to use public money to carry out schemes of this kind, which are only required for a small section of people within each particular area. If this House gives power to municipalities to go into wild cat schemes—because many of these telephone developments have proved to be wild cat schemes—then, of course, the public will be rather chary in advancing money even on the rates, and the result will be that the whole community will be penalised by having to pay a larger interest for money required to carry out necessary improvement. That is one objection. Another objection is the disadvantage of having two or more systems in one area, because if a person wishes to have general telephone communication he must subscribe to all of them. I am speaking from experience in this matter in Newcastle. I do not know whether the Post Office has made any arrangements with the Telephone Company to meet such cases, and I should be glad if the right, hon. Gentleman would inform us on the matter. Again, the large number of municipal employees in small areas will have far more influence in using their votes for their own advantage than Government employees. On these grounds I will support my hon. friend who moved the rejection of the clause, which I think is most undesirable.


I beg to move to insert after "where" the words "county council or," with a view to giving the same power to county councils as to borough councils. The reason I move this Amendment is because I have had strong representations on the matter from Lanarkshire, where there are considerable districts not included in borough areas. In many of these districts the telephone is wanted, and it could be introduced if the county councils were given the same power as the urban authorities. There are many districts in England in the neighbourhood of cities which cannot be covered by a mere extension of the licence granted to the borough authorities, and where it would be more convenient if they had a telephone extension of their own. The county councils would not exercise that power unreasonably. I would like to ask the right hon. Gen- tleman whether he contemplates the establishment by the Government of telephones in populous districts, and, if not, what authority is to have that power. Is it to be left to a company, and is there to be local or municipal competition?

Amendment proposed— In page 1, line 13, after the word 'Where, to insert the words 'a county council or.' "—(Mr. Parker Smith.)

Question proposed, "That those words be there inserted."


For many reasons it would be impossible to give licences to county councils. It is admitted that, generally speaking, if they had the power they would not exercise it. Only one county council has made an application of the sort, and it simply applied to be included in the Bill. The objection to giving licenses to populous districts not police boroughs is that they have not got the way leaves in their hands. There are, however, populous places in Scotland which are in the peculiar position of owning their own way leaves, and I think they would have some prior claim on the Post Office.


There are also very many populous districts in the county I represent, and it would be a great advantage to them to have a telephone service; and they would be very glad indeed if the Post Office would take the matter into its hands.


After the expression of opinion which the right hon. Gentleman has given, I beg to withdraw my Amendment.

Amendment, by leave, withdrawn.


The Amendment which I now move is one which I hope will receive the favourable consideration of my right hon. friend. It is to leave out from "granted" to the end of the clause, and to insert "Provided always that no part of the area be outside the borough or urban district." My reason for moving is in the interests of the local authorities themselves. When the House is asked to grant power to local authorities to undertake services such as gas, water, or electricity, it is always most careful to insert various restrictions. For instance, power is rarely given to any local authority to extend beyond its own area, and in cases where a local authority desires to supply in any area it has to acquire existing undertakings. We are, however, now asked to sanction an entirely new experiment. We are called upon to grant local authorities power to institute a service in competition with an existing service and in areas outside their own areas. It seems to me that may be an exceedingly dangerous power to grant, especially as we do not know very much about the conditions of the competition. There is no limit as far as I understand the clause to the distance over which a licence may extend. I have no doubt my right hon. friend has thought out this matter carefully, and I hope he will be able to remove the difficulty.

Amendment proposed— In page 1, line 24, to leave out from the word 'granted,' to the end of Clause 2, and to insert the words 'Provided always that no part of that area be outside the borough or urban district.' "—(Mr. Faithfull Begg.)

Question proposed, "That the words proposed to be left out, to the word 'be,' in line 25, stand part of the Bill."


This Amendment, coming from a representative of Glasgow, is certainly one of the most absurd that can be conceived. What about the Glasgow waterworks, and the Glasgow tramways, and the Glasgow sewerage works? All these are not confined to the city, and the idea of restricting the telephone service to a city area would, in very many cases, so far from being an improvement, render the Bill absolutely unworkable.


The object of this Amendment is to destroy the Bill, because if it is carried the Bill will be almost worthless. The telephone area is always larger than the municipal area. The municipal area of Glasgow contains 720,000 inhabitants, but the telephone area has nearly a million inhabitants, and all the outlying districts have joined Glasgow in its application to the Post Office for a licence in order to have the advantage of a Glasgow telephone exchange. If this Amendment were carried there would have to be six or seven dif- ferent telephone exchanges in and around Glasgow. I hope the Government will not accept the Amendment.


The object of this Amendment is to provide a Scotch rate instead of the English rate in Clause 1. The hon. Member for Edinburgh has kindly called my attention to the fact that "police or borough general assessment rate" would not exactly fit the case of Edinburgh. So far as rating is concerned the great majority of the Scotch boroughs are under the general Act of 1892, and are covered by the Burgh General Assessment. Then, so far as the police rate is concerned, that covers Glasgow and also practically Dundee, because Dundee, although it has a local Act, has incorporated several sections of the Act of 1862. There remain Edinburgh and Aberdeen. Edinburgh has a peculiar phraseology of its own, and both it and Aberdeen differ from the other boroughs, because, instead of having separate rates, they have a composite rate with various branches, some paid by the occupier, some by the owner, and others jointly by the occupier and owner. This Amendment will bring in Edinburgh and Aberdeen, and now we have done with the boroughs of Scotland.

Amendment proposed— Clause 2, page 2, line 6, after 'rate,' to insert the words 'or the district fund and general district rate.' "—(The Lord Advocate.)

Other Amendments made.


The Amendment which I wish to move, is to compel the telephone company to deal fairly with the public, and not to deal with one person upon a different basis to another. They should not be allowed to enjoy any benefit under this Bill unless they agree to treat everyone alike. It is manifestly unfair that they should give one person a service over their lines for a subscription, and refuse it to another unless they are allowed to put up a pole on his house. At a time that the company is going to obtain a prolongation of its licence, I submit we are entitled to say that it shall not have it unless it agrees to give no undue preference. If the clause is passed in its present form, it will amount to a statutory authority to the company to give such undue preference, except in those portions of an area in which they had renounced it, and I submit that the company should only have the advantage of this Bill if they agree once and for all to abandon this obnoxious system, which places the public at the mercy of the company, and obliges them to accept just what terms the company chooses to impose.

Amendment proposed— In page 2, line 23, to leave out the words 'within the area, or part thereof, specified in the new licence.' "—(Mr. Moulton.)

Question proposed, "That the words 'within the area' stand part of the Bill.' "


The power to which exception is taken is one which the National Telephone Company possess under their original licence, and, though it is not one which I wish to defend, it is a privilege which the House has no right to take away, except for good reason shown. Now, in this case, we are not extending the licence to the company generally, we are only extending it in particular areas, and this Bill simply provides that in those particular areas this right of undue preference shall be taken away from the company as a condition of getting their licence extended. The fair thing to the company is to say that in those places where their licence is extended they shall renounce this privilege.


thought something in the nature of the Amendment was necessary for the prevention of undue preference.


I beg to move that the further consideration of this Bill be postponed.


Can the right hon. Gentleman say when it will be put down on the Paper?




Can the right hon. Gentleman say whether it will be the first Order?



Further considered, as amended, deferred till To-morrow.