TELEPHONE SERVICE.

HC Deb 04 May 1922 vol 153 cc1594-600

I come now to the telephone service. About this service there is this remarkable feature, that every telephone service, according to its own people, is the worst in the world. Very exaggerated language is used about the telephone service, and I would like to give an example of this exaggeration by reading a quotation from a speech made in an address by a judge to a grand jury, in which he said: I am very sorry that you are about to end your work. I intended that you should investigate the deplorable service rendered by the telephone service of this country. However, I will submit it to another grand jury in the future. That is a quotation which I think most hon. Members will agree is very much exaggerated. It is a quotation from the "Sun" of New York and refers to the service given by the New York Telephone Company. I quote this as showing that in every country the telephone service lends itself to exaggeration, and there is hardly anyone in any country who is willing to agree that his own telephone service is efficient or cheap. I will commence by giving some figures of the progress made during the year in this country. The number of stations has gone up by 15,691 and on the 31st March there were 995,242. The total number of new instruments installed, including extensions, was 134,000. The total number of new subscribers was 71,500. The number of cessations was 64,000, of which 29,000 were due to the increased cost and the rest represented the normal decrease. The rate of cessations, I am glad to say now, is now normal as compared with pre-War figures.

During the year 530 rural call offices were opened at provincial post offices, chiefly in rural districts, whilst 3,290 stations have been opened on rural lines. I particularly welcome the last figure, because it shows that the prejudice existing against the rural line system is rapidly being broken down. The proposals which I have to make for telephone reductions are as follows: In the first place, I will say that I do not pro pose to proceed on the principle recommended by the Select Committee of an all-round percentage reduction, for this reason. An all-round percentage reduction of 7½ or 8 per cent,, which is the utmost I could do with the surplus of £1,200,000 at my disposal, would be of very little benefit to the great majority of telephone users. I hope the Committee will feel, when I have completed my statement, that we have adopted a better way. I propose reductions which will cost in a full year £1,100,000 out of a surplus on the telephone account of £1,200,000. By doing this, I think I am cutting it quite as close as I am entitled to do in regard to a revenue of over £15,000,000 a year.

The reductions this year will cost £880,000. The first of the changes is a reduction in the telephone rent for private users of 30s. a year. This will make the rental in London £7 instead of £8 10s. In Birmingham, Glasgow, Liverpool and Manchester, £6 10s. instead of £8; and in the rest of the country, £6 instead of £7 10s. Some comment may be made with regard to this concession being restricted to private users, but in making that distinction I am following a recommendation of the Select Committee to the effect that the telephone charges for private users should be less than for business purposes. That is the practice in the United State and in Scandinavia, and I think it will be justified by the extent to which it will increase the number of private users, and to that extent it will increase the value of the telephone service to the business community. The cost of this concession will be £200,000 in a full year and £160,000 this year.

The next reduction, and this applies to all telephones, whether for business or private users, is a reduction in the rate of local messages from 1½d. to 1¼d. I wish we could have got rid of the 1¼d., but it is a reduction as it is of 16 2/3 per cent. and that will be of real assistance to the business user, and to those who largely use the telephone service. After allowing for a 5 per cent, increase in the revenue as a result of this reduction, this concession is going to cost the telephone service in a full year £440,000. To take off the other ¼d. would mean a cost of another £440,000, and I have not got the money. This change costs £440,000 in a full year and £350,000 this year. I hope that this concession will do a great deal to meet the difficulties created to the large users by the abolition of the flat rate which undoubtedly had the effect of sending up the telephone accounts of business houses to a very great extent. I estimate as a result an increase of 5 per cent, in the number of calls, but I hope that the existing staff will be able to deal with that increased number without any addition to their strength.

I propose that there shall be a reduction of the extra mileage charge on exchange lines and the mileage charge on private wires and external extensions from £10 to £8 per mile. This means a loss of £142,000 on the full year and £120,000 this year. The Select Committee recommended that the reduction should be from £10 to £5, but to have done that would have cost £360,000, or nearly one-third of my total telephone surplus, which would have gone to a comparatively small body of subscribers.

I come now to the trunk calls, and the principal proposal I make in this respect is for a substantially cheaper rate for calls put through between the hours of two o'clock in the afternoon and seven o'clock in the evening. The telephone service, and particularly the trunk service, is faced with the same problem as that which is connected with the mails, and that is the problem of a peak. The trunk lines are crowded between ten o'clock and one o'clock, and if we can get that evened up in some way we shall not only be able to give a quicker and a more efficient service, but it will be possible to do a much greater volume of business with the present staff, who are kept busy in the early part of the day, and are not so fully occupied during the remainder of the day. The average reduction will be 25 per cent, between 2 p.m. and 7 p.m.

I will give one or two instances as to how it works. From 25 to 35 miles the charge is 1s., and the local fee is 1½d., which is added to the 1s., but in future the charge in the afternoon will be 10d. without the addition of the local fee. In the case of 1s. 6d. calls, the charge will be reduced to 1s. 1d., but as formerly the local fee was added, the real reduction will be from 1s. 7½d. to 1s. 1d. The 2s. charge will be reduced to 1s. 6d. The 4s. 6d. charge will be reduced to 3s. 6d.,and 9s. 6d. calls will be reduced to 7s. 3d. I hope that these reductions, which average 25 per cent., will have the effect not only of increasing the use of the trunk service, but also of equalising the load, and I hope these anticipations will be realised. We propose to abolish the local fees on all trunk calls over 1s. 6d., and to make certain modifications below that charge, but I will not trouble the Committee now with those modifications.

I come now to a part of the service which has always occupied my mind a good deal, and that is the provision of improved telephone facilities in the country districts. The present charges are undoubtedly prohibitive, and amount in a great number of cases to a rental of as much as £20 per annum. This is due to the fact that you have heavy capital charges in connection with most of the rural extensions. The Select Committee attach great importance to this point, and I have been influenced a great deal by their recommendation on this subject in the proposal which I am about to make. Where not less than eight subscribers can be obtained the rental will be £8. The instalment rental will be £8 per subscriber, the local and trunk fees being charged according to the ordinary tariff, and in the case of subscribers at a distance of more than one mile extra mileage will be charged at the standard rate. I think that is a very substantial reduction compared with the present rates. [An HON. MEMBER: "What is the amount of the reduction?"] The present charge is £20 and it is proposed to reduce it to £8, and therefore the amount of the reduction is £12. A day service only will be provided for this class of users, but the cost of the night service, if required, can be met by an additional charge on the subscribers themselves.

Lieut.-Colonel WHELER

What does a day service actually mean?

Mr. KELLAWAY

From 9 a.m. to 7 or 8 p.m. It will be necessary in this case to ask for an agreement for a minimum of three or five years, according to the capital cost involved. I do not propose in the future to require any guarantee for a junction line unless the capital cost exceeds £1,000, including overhead charges. Where the cost of a junction exceeds £1,000 a guarantee will be required to make good the difference between the fees paid by the subscribers for the use of the guaranteed line and half the estimated cost of provision, excluding the overhead charges. Where 15 or more subscribers are obtained the service will be provided at the ordinary tariff rental of £7 10s. for business houses or £6 for residential lines within a mile radius. That last should be a very substantial alleviation of the telephone difficulty in the country side. Where less than eight subscribers are obtained, the rental will be assessed on the basis of cost. I need not trouble to furnish the Committee with more details, as full details will be issued. I have given in broad outline the proposals which I am making.

I leave the question of reduction now to make a brief comment on one of the recommendations of the Select Committee on Telephones which I do not find myself able to adopt. That was the recommendation that the telegraphs and telephones should be united, and the united service completely separated from the mails. I ask the Committee to consider what that would involve. There are 10,000 sub-offices in this country where the whole of the postal work, telegraphic and postal, is carried on in the same office by the same staff. At about 1,500 offices the telegraph, telephone and postal work is carried on by a common staff. I submit that to separate these services and to have in each village or suburb of a town a separate building for telegraph and telephone work, with a separate staff, would not only make for confusion and inefficiency, but would be extremely expensive. I can imagine nothing more extravagant than to establish in all the villages and suburbs of towns in this country a separate organisation where now you have it working together with the same staff and in the same building. Consider the position in the remaining provincial post offices—some 1,300 in number—which are now run by the post-office staff direct. In the other cases they are run by sub-postmasters who are remunerated on a scale according to the amount of business done, but in the remainder of these provincial offices—1,300—except in 40, the postal and telegraphic staff is one. I need hardly point out the advantage of that arrangement; the disadvantage of separation must be obvious. At present the telegraph work comes in rushes and in peaks. Very often telegraph work is busiest when the ordinary postal work is slack.

Under the existing arrangement the staff engaged on the postal side are trained so that they can be transferred to telegraph or telephone work, and in these circumstances I should require much stronger arguments than I have yet seen before I can approve of that recommendation. I would like members of the Committee to consider what would happen to the counter staff. At present, in most post offices, except in great offices where it is necessary, owing to the bulk of work, to allocate a particular class of work to a particular man or woman, the work is dealt with at the counter by the same staff, who deal with Post Office Savings Bank work, postal work, telegraph work, or whatever it may be. What would be the feelings of an ordinary member of the general public who, coming into one of these offices, found that one assistant was doing nothing, because he was allocated to telegraph work, while the assistant who was selling stamps was unable to serve him because he had a long queue standing there? I submit that the arrangement is not one which on examination we ought to adopt, and I do not propose to adopt it.

Mr. ROYCE

Will the right hon. Gentleman tell me what proposal he has to make in regard to the rent for private lines outside the mile area.

Mr. KELLAWAY

I have already given those figures. I do not carry them in my head, but I think the reduction is £2.