HC Deb 01 July 1924 vol 175 cc1286-92

Considered in Committee under Standing Order No. 71A.

[Mr. ROBERT YOUNG in the Chair.]

Motion made, and Question proposed, That it is expedient—

  1. (1) to authorise the issue out of the Consolidated Fund of such sums not exceeding in the whole seventeen million pounds, as are required for the further development of the telephonic system and to authorise the Treasury to borrow money, by means of terminable annuities or by the issue of Exchequer bonds, for the issue of such sums or the repayment thereof to the Consolidated Fund, and to provide for the payment of the terminable annuities or of the principal of and interest on any such Exchequer bonds out of moneys provided by Parliament for Post Office services or, if those moneys are insufficient, out of the Consolidated Fund; and
  2. (2) to make provision with respect to the application of sums arising from the sale of any property acquired for the purposes of the telephonic system."—(King' s Recommendation Signified.)

Mr. HARTSHORN

The Committee will be aware that the whole of the capital required for the extension of the telephone system is borrowed from the National Debt Commissioners on the authority of periodical Acts of Parliament, known as Telegraph [Money] Acts. They authorise the Treasury to pass the programme submitted by the Post Office engineering staff and to authorise the carrying of this programme into effect. Once Parliament has authorised, by the passing of these Money Acts, the expenditure of certain sums of money, the Post Office does not thereafter come to Parliament to get sanction for any of its subsequent proposals, but goes for authority and sanction to the Treasury. This Resolution is put down as a Telegraph [Money] Resolution, but the whole of the money which we are asking Parliament to sanction by this Resolution will be spent on telephones, and none of it on telegraphs. Up to date, the total amount of capital expended on the telephone system is approximately £68,000,000, and of that sum £25,500,000 has already been repaid. The loans which are obtained from the National Debt Commissioners are repaid by means of instalments spread over 20 years. The last Money Act that was obtained was in 1922, and that Act authorises the raising of £15,000,000, £13,500,000 of which had been expended by the 30th of last. April, and the remaining £1,500,000 will have been expended by the end of this month, and it is therefore necessary, it the telephone development of this country is to be proceeded with, that a new Act should be obtained during the present month.

This Resolution is an essential preliminary to the introduction of a Bill asking for authority to borrow £17,000,000, which is the amount that if is estimated will be required to meet the need of the next two years. The sum authorised by the Treasury for the current year, 1924–25, amounts to £8,200,000. We have £2,217,000 of that from the previous Act, and a further £6,000,000 will be required in the current year in order to carry out the programme. If this £17,000,000 is passed, £6,000,000 of it, as I have already said, will be expended daring the current year, and the remaining £11,000,000 is the amount estimated to carry us on till about June or July of 1926. The whole of this capital expenditure is, of course, strictly confined to the extension of the system. All the cost of maintenance, and the renewal of worn-out plant, is borne on the Post Office Estimates, and charged against revenue. The capital expenditure on the telephones in the past, and the demands for expenditure in the future, which will be equally heavy, and probably heavier, may appear somewhat alarming, but I think it is necessary, in considering this Resolution, to bear two or three rather important considerations in mind First of all there is the fact that telephone development in this country is very far behind that of America and most of the Continental countries. According to the latest available figures in the United States there is one telephone to every seven persons; in Canada, one to every nine; in Denmark, one to every 12; in Germany, one to every 29; and in Great Britain, one to every 38. Obviously, therefore, there is a large field for expansion in this country. The next consideration is that if plant is not provided in sufficient quantity it is not possible to comply with the orders which come in. Further, if the existing lines become congested, the quality of the service immediately deteriorates. That is the real reason why we had such a defective telephone service during the years succeeding the War. Development during the War was suspended, and the lines became congested, with the result that we had a very inferior service; but the very considerable sums which have been put into the service during the last four or five years have very considerably improved that service, and it is only by continually adding to the capital expenditure that we can hope to maintain anything like an efficient service.

The Committee will be pleased to know that the financial position of the telephone service is improving year by year. For a number of years we had very heavy deficits on the service. During 1919–20 there was a deficit of, roughly speaking, £2,000,000, and in 1920–21 there was a deficit of £4,750,000. There was then a revision of the telephone rates, and from then on there has been a surplus. When that revision took place it was agreed, and the pledge was given, that as the deficit was wiped out, and surpluses were realised, prices should be brought down. I may say that during the last two years there have been reductions in prices amounting in the aggregate to £3,500,000. The programme which has been agreed to for 1924–25 may be summed up as follows: It is proposed to spend, in round figures, £2,800,000 on the trunk lines. That compares with £2,800,000 spent last year, and £2,600,000 the previous year. A very great development is taking place in the construction and the laying of underground cables. I would just like to give one illustration of the improvement and greater efficiency that results from the laying of these cables. In connection with the London-Manchester cable we had, before it was laid, 1,300 calls a day. Since it was laid we have had 2,300. Before the cable was laid it took 25 minutes to get a call; under the cable system the average is eight minutes. We have a number of other cables already completed and others in course of construction. I see that hon. Members are anxious to go to a vote, but I shall be very pleased to give further details to them. I can assure the Committee that to complete the schemes we have begun, it is necessary to have this Resolution passed and authority given for raising and spending the money.

Lieut.-Colonel MOORE-BRABAZON

I have no intention of obstructing business, but we hear so seldom the voice of the Postmaster-General that we have pleasure in listening to him. We are very thankful to him for showing us the spirit of progress which animates the Post Office, but I was surprised to hear from his supporters behind him that they intended to vote a large sum of money without any indication of vote was going to be done with it. We thank him very much for telling us what the policy of the Post Office was, but I would like to ask how the question of automatic exchanges is going on, because it is perhaps beneficial to have a big capital expenditure for machinery which will eventually be a saving. I am also glad to think that the unsightly overhead lines which disfigure the country in every direction are soon to disappear in favour of the underground system. I hope before we get this actual Vote the right hon. Gentleman will tell us whether there is any possibility of the automatic exchanges spreading.

Mrs. PHILIPSON

If this Resolution be carried—and I sincerely hope it will be—I should like to ask the Postmaster-General if he will consider the need of telephonic communication with Holy Island. It is really a most urgent need, and perhaps he will give me a promise to consider it.

Sir FREDRIC WISE

I support the hon. Lady about Holy Island, where I have dwelt. I congratulate the Post-master-General on the telephone surplus. He stated that the money could be raised by terminable annuities, but the Resolution says it can also be raised by the issue of Exchequer Bonds. I should like to know whether it is proposed to issue Exchequer Bonds that will add to the National Debt in a different way from terminable annuities. I note that the capital expenditure is stated at £69,000,000. How much of that has been repaid? In the Memorandum it is stated that this £17,000,000 will be repaid. How much has been repaid up to now? Further, will this expenditure mean cheaper telephones, especially in the rural districts? What will be done for Holy Island? Are these contracts let out to private enterprise, or is the work done directly by the Post Office engineering department as a commercial concern? I would like an answer to these questions.

Lieut.-Colonel Sir J. NALL

The capital expenditure up to date, we are told, has been £69,000,000. This further expenditure represents an addition of 25 per cent. to that capital expenditure. Is that going to increase the revenue by 25 per cent. Will the number of telephone subscribers be increased by 25 per cent., or is the new money to be devoted to merely improving the present system, without any corresponding increase in revenue or in the number of subscribers? Is any provision made for writing off the expenditure on existing exchanges that are to be replaced, supposing, of course, it is proposed to rebuild any existing exchanges? The House has shown that at this late hour it is not in favour of any lengthy explanation by the Postmaster-General, but I think we ought to be told a little more as to what this expenditure involves and whether it will be a revenue-producing expenditure.

12 M.

Major MOULTON

I should like to put in an appeal for greater telephonic facilities for the agricultural parts of England. It is desirable that the farmers should carry on like ordinary business men, and they ask for facilities in connection with their farms so as to limit the number of visits they need to pay. They get very few facilities. I should like to see the Post Office take a step in advance, for once they establish themselves in a district new subscribers would come along. I trust, for the sake of agriculture, that the right hon. Gentleman will do something—he may do a great deal—to help the farmers in a way of which the Minister of Agriculture would approve.

Mr. REMER

Does the money in this Resolution include money for the erection of a new post office at Macclesfield? We have been promised consideration of this matter several times.

Mr. HARTSHORN

If I had made the statement I intended to make when I first got up I probably would have saved a good many of the questions now put. As to Macclesfield, I have already stated that the whole of this money will be spent upon telephone development, and nothing else.

Mr. REMER

But I include the telephone facilities there as well as the general building.

Mr. HARTSHORN

That is not in the Vote at all. What we have done generally has resulted in increased business. There has been an increase in the number of telephones in this country of 190,000, the total number now in use being 1,460,000. During the year the trunk calls have been increased by 11,000,000—from 59,000,000 to 70,000,000—a record increased percentage in the history of the service. This has been, no doubt, very largely due to the material improvement, as a result of the very substantial expenditure that has taken place. There has been an increase of from 700,000,000 to 800,000,000 local calls in the year. There is ample evidence to show that very material results are accruing from the expenditure that is being put into the telephone system I have been asked how much of the £69,000,000 has been repaid. I have, I think, already stated it, but it is about £25,500,000.

As to automatic exchanges, they are on the increase at Southampton, Dundee and various other places, and are in various stages of progress at Sheffield, Brighton, York, Glasgow, Hanley, etc. So far as London is concerned, it is intended ultimately to work the whole system by automatics. But the problem of the automatic system in London appears to be very great indeed. Already we have over 100 separate exchanges with over 400,000 telephones working in London, and it is estimated that within 10 years we may have 1,000,000 telephones. When the whole of that huge mass of organisation and work is going on one can realise what a huge engineering problem it is to bring it to fruition. The system is making rapid progress, and in the course of a few years we hope that a number of additional exchanges will be brought into existence. As far as the initial expense is concerned the plant is more expensive than under the manual system, but the reduced running cost more than compensates for the initial outlay. In reply to the point raised by the hon. Member for Berwick-on-Tweed (Mrs. Philipson) I will promise to go very carefully into the request she made in reference to telephone communication with Holy Island and see if something can be done.

Resolution to be reported To-morrow.

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock upon Tuesday Evening, Mr. DEPUTY-SPEAKER adjourned the Hoare, without Question put, pursuant to the Standing Order.

Adjourned at Nine Minutes after Twelve o'Clock.