HC Deb 12 July 1928 vol 219 cc2481-543

Motion made, and Question proposed, That a sum, not exceeding £35,314,000, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1920, for the Salaries and Expenses of the Post Office, including Telegraphs and Telephones."—[Note.—£22,000,000 has been voted on account.]

The POSTMASTER-GENERAL (Sir William Mitchell-Thomson)

I think it would probably be convenient to the Committee that I should follow the course that has normally been followed during the years in which I have presented the Estimates, and I will attempt to give as shortly as I can, although I am afraid it must be at some length, a general survey of the work of the Post Office during the past year, with particular reference to one or two points. There is one thing I should like to say at once, and that is that I wish to make reference to the position of the staff, because I have noticed a tendency during recent months for increasing attacks to be levied in the Press, sometimes anonymously, against members of the Post Office staff. They get all the abuse possible for failures in the service, but they get little credit for successes. That is both unjust and improper. I am the person who must take the responsibility, and the proper channel through which any complaint should be made is through me, and it is my duty to attend to those complaints, to consider them and to answer them carefully. That I am prepared to do.

I have my own domestic difficulties with the staff. It is impossible, in controlling a staff of nearly a quarter of a million people, not to have difficulties from time to time. We have some at the moment, and I think, probably, it would not conduce to the amelioration of those difficulties at the present moment to discuss them in public. But, speaking generally, I am convinced that the Post Office staff as a whole is conscious of its responsibility towards the public, and is proud of the great service which it helps to administer. So long as I feel that, so long am I prepared in this House, while I hold my office, to attend to complaints which are made, and to benefit by criticisms, without resenting criticisms in any way. I will only add this, that without the loyalty and the loyal cooperation of members of the Post Office staff there cannot be found the means of securing efficiency and economy. I am sure they all desire to give that cooperation, but the sort of attacks to which I have alluded, made in a form in which they cannot be answered, makes all the more difficult my task of carrying out efficiency and economy in this branch of the public service. I thought I ought to say that at the outset, and it is in that spirit that I ask the House to approach the consideration of these Estimates.

Let me take, first of all, the financial side, and I will deal first with the Vote itself, although, as I have frequently explained, it gives a most misleading picture of the financial activities of the Service; but, taking it as it stands, the Estimate, as the Committee will see, for the current financial year is £59,743,191 gross and £57,314,000 net, being a decrease of £334,136 gross and £329,000 net, as compared with the Estimate for the previous year. Lest the Committee may be led into giving me credit for the decrease, I hasten to explain that the decrease is owing to perfectly natural causes. The first cause is that it so happened last year that there were 53 weekly pay days instead of 52, and there has been a fall in the cost of living bonus. Apart from any further fall in the cost-of-living bonus, the Post Office Vote is bound to slow, year by year, an annual increase corresponding to, although not necessarily commensurate with, the growth of the business and of the revenue.

Taking the various Sub-heads of the Vote, there are one or two increases and decreases to which I might draw attention. Under Sub-head N there is an increase of £119,400 in the provision for pensions and other non-effective charges. There are two causes operating to produce this increase, which will continue to operate for some years to produce a somewhat high rate, and those are, first, an increase in the average rate of pension, which takes place as the older pensioners whose pensions were based on pre-War wages die out, and people begin to come on whose pension standard is based on post-War service. Secondly, as I have explained on previous occasions, we are just now beginning to reach the result as regards pension charges of the large increase which took place 30 or 40 years ago in the number of staff of the Post Office.

An increase in the number of broadcasting receiving licences accounts for an increase of £75,000 under Subhead P, and of those Sub-heads which show a decrease on the previous year's Vote, the largest reduction is £579,050 in the provision for salaries and wages under Sub-head A. This figure is the net result of the two large modifications of which I have already spoken—the fact that there was an extra weekly pay day last year and the reduction of the bonus—modified by a number of smaller increases. For instance, there is included in the Sub-head an increased provision of £180,000 for additional staff to meet growth in letter, parcel and telephone traffic, an additional sum of about £60,000 for payment to sub-postmasters in respect of the large increase in the number of contributory old Sage pensions caused by the alteration in the age of pensioners from 70 to 65. There is an additional £200,000 for fresh expenditure caused by the award of the Arbitration Court. On the other hand, as against that, you have to set several decreases caused by the fact that there is one less pay day and the decrease in the cost-of-living bonus, so that there is a net decrease of £579,050 under that Sub-head. Under Sub-head E, there is a reduction of £35,950 in the provision for conveyance of mails. This, again, covers several increases on the one side and decreases on the other.

As regards railway conveyance of letter mails, we have been able to carry through some new arrangements with the principal railway companies on satisfactory terms, and we can take a smaller provision for that in the Estimates as compared with last year. On the other hand, conveyance of parcels by rail, in respect of which railway companies are entitled to 40 per cent. of the postal rate, we provide an additional sum of £86,750 in order to meet anticipated expansion. We have also entered into two new contracts with the Cunard and White Star Lines for the conveyance of the American mail, and as those contracts will come up for ratification in a few days' time—they are on the Order Paper now—I will not say anything about them to-day, but under Subhead E.4 an increased provision of £54,000 is necessary.

Under Engineering Salaries and Wages, there is a large reduction of £330,500, due principally to economy in labour, to reduction in the expenditure on telephone renewals, and, of course, to the fall in the cost-of-living bonus. The provision for stock of engineering stores is down a little bit, as will be seen in Subhead K. Under Sub-head O, Post Office Savings Bank, there is a reduction of £41,370, representing partly fall in bonus and partly economies which have been effected in the administration of the Savings Bank.

With that short comment upon these Subheads, I leave the Vote for the moment altogether, because, as I have frequently explained as a test of Post Office achievement and as a measure of the financial position of the business, the Vote is wholly illusory, because it is purely a cash account. It makes no allowance for depreciation. It is extremely confusing as regards services rendered to other Departments, and for a true picture of Post Office finance you have to go to the commercial accounts. The rest of what I have got to say will be confined to the commercial accounts. Those, of course, are not yet presented to the Committee, and, as I have said more than once, they cannot be available until the autumn. They do not pass the Comptroller and Auditor-General till the autumn and they are not ready for Parliament until the winter, and so it happens that at the time of year in which our discussion of the Estimates always takes place, the accounts are not available in that form.

Lieut.-Commander BURNEY

May I ask whether those accounts could nor be prepared so that we could have them before us at the same time as the Estimates?


That has been considered more than once and there are great objections to it. Still, I think I can profitably give sufficient figures to enable the Committee to follow the position. For the year 1927–28 ending on the 31st March the surplus on the postal service was £8,850,000. These figures are all subject to adjustment. The deficit on the telegraph service was £1,389,000 and the surplus on the telephone service £120,000. The total combined surplus for all services was thus £7,581,000, which, I may add, is the largest surplus since commercial accounts began to be kept by the Post Office.


How does that compare with last year?


I will come to that later. The combined surplus of £7,581,000 is the largest so far in the commercial accounts. It represents an increase in the surplus over last year of £1,800,000. Let me now do what the hon. Gentleman opposite invites me to do, and that is take the items separately. First of all there is the postal side. Postal revenue increased by a sum of £2,900,000. The postal expenditure increased by £900,000, making a net improvement, roughly speaking, of £2,000,000. At the figure at which it stands last year, £8,850,000, the surplus on the postal side of the business is the largest that we have ever had. The resiliency of the postal revenue is really rather remarkable. It would hardly be safe to assume that so abnormal a rate of increase is likely to continue, but there is no reason to suppose that the annual rate of growth in traffic which characterised the period before the War and was from 2 per cent. to 3 per cent. per annum, is not going to continue. Of course, with this growth, the operating expenses also rise, as I have explained to the Committee. But at the present rate of charges the operating expenses do not increase at the same ratio as the revenue.

Coming now to the telegraph service, there was in the year 1927–28, as compared with 1926–27, a slight increase of £40,000 in the deficit, but this is more than accounted for by a change in the method of dealing with the receipts from wireless receiving licences, on the recommendation of the Public Accounts Committee. In previous years these receipts, after payment of the cost of collection and the proportion due to the British Broadcasting Corporation, were treated as telegraph net revenue. However, it is now agreed that the inclusion of this balance really had nothing to do with the operation of the telegraph service proper, and that it only obscured the accounts. Accordingly, in 1927–28, we are bringing into account on the telegraph side only the 12½ per cent. which the Post Office receives as the sum due to cover the cost of collection and enforcement. As far as I am able to ascertain, that 12½ per cent. was an extremely good calculation, and almost exactly balances what we estimated for the cost of collection and management of the service.

The decline in the inland telegraph revenue continued in the year, but the position with regard to foreign services was of course much improved. Owing to the inception of the beam wireless service, it new form and a substantial amount of revenue began to come in. Apart from the reduction of the credit for wireless receiving licences, the telegraph revenue, on the whole, improved by about £57,000, while operating expenses, including depreciation, increased by about £32,000. There was, therefore, on the telegraphs a small net improvement of about £25,000. That, however, still leaves a substantial deficit of £1,389,000. About that I shall have something more to say later. On the telephone side, the telephone service working shows a small surplus. Both revenue and operating expenses continue to grew, but the revenue from the trunk service did not show quite the resiliency that I had expected and hoped. No doubt the continuing depression in the heavy industries had something to do with the matter, but there was a period during last year when the trunk revenue did not come up to expectations. However, I am glad to say that there were indications of a distinct improvement in the trunk traffic during recent months.

I ought, however, to point out that some of the comparisons and comments sometimes made by alleged experts, that the result of the combined working of telegraphs and telephones shows a loss of something like £1,270,000 a year and that this shows how bad the management is—that sort of comment really does less than justice to the service, and lees than justice to the unfortunate Postmaster-General, because such a criticism and such comparisons with great enterprises like the Western Union and the American Telephone and Telegraph Company really distort the facts in at least two very important directions. In the first place it ought to be remembered that it has been the deliberate policy of Governments in this country for many years past, as regards the telegraph service, to run it at rates which do not and cannot pay in the interest of commerce generally, and as far as the telephone service is concerned, it has been the policy to run it by giving back a large proportion of the profits in the form of rate concessions to the users and also by carrying a considerable unremunerative fringe of business in rural areas. Both those facts ought to be taken into account.

That is one of the directions in which I say that comparisons of this sort are really distortions of fact. But there is an even more important way in which that sort of comparison lends itself to misrepresentation. It is really incorrect to compare the results of the services I have given with what you might call the profits remaining available for dividend in the case of a private enterprise. In order to give a true comparison when you are dealing with these accounts, you ought to ascertain what is the figure of the profit or loss which is available to meet interest charges; that is to say you ought to ascertain what the profit or loss is after providing for the sums required for operating, for maintenance, and for depreciation, and see what the resultant figure left is then. That is the figure that is available, subject to the qualifications about the policy of reducing charges and the qualification that while figures in the case of a Government service bear a charge for rates they do not bear a charge for taxes, that resultant figure, the gum that is left after providing for operating, maintenance, and depreciation, to meet interest charges, is the proper comparison with the profits remaining available for dividend in a private enterprise. If you do that, the position takes quite a different shape. You can then see the very real progress which has been made in the last seven years. On that basis the results of 1921–22 working were, that the telegraphs showed, before provision for interest was taken off, a loss of £2,668,771, the telephone showed a profit of £1,095,656, or a combined loss on the joint undertaking of £1,573,115. In 1927–28 the telegraphs showed an estimated loss of £1,023,000, the telephones an estimated profit of £4,201,000, or a combined profit of £3,178,000.

While I am still on the general aspect of the accounts, I might perhaps refer to two activities which, although they do not produce much in the way of net revenue, do form a not unimportant part of Post Office activities. The Post Office Savings Bank business, which of course had been very badly affected in 1926–27 by the industrial difficulties, showed an encouraging recovery last year. The balance due to depositors, which was £282,706,000, at the opening of the financial year, increased by £2,050,000 to £284,756,000 at the end of the year. By normal standards that is not a particularly satisfactory result, but under the conditions I do not think it was bad. The improvement continues, and I hope that the current financial year will show a still better result.

As regards investment business the amount of Government securities held by the Post Office Savings Bank investors in the investment account increased by about £6,264,000 to £201,321,000 during the year. The encashments of National Savings Certificates were exceptionally heavy in 1927–28 owing to the large number of certificates of the first issue which reached maturity. The amount of the certificates outstanding at the beginning of the year was £371,823,000, the repayments £46,772,000, new issues and reissues, £37,416,000, and the total outstanding on 31st March last was £362,467,000.

So much for the general finances of last year. As regards the finances of next year, I am always anxious in committing myself to forecasts, but I will go to the length of saying that I see no reason to modify my anticipation that the realised surplus in commercial accounts next year will be in the neighbourhood of £9,000,000. I do not go further than that. It is very difficult to make an accurate forecast, and I hope that any figure that I quote will not be brought up in judgment against me.

Let me now deal with one or two rather more detailed matters. I come first of all to a form of activity for which the Post Office has only a vicarious responsibility—broadcasting. The first report of the British Broadcasting Corporation was presented to me a short time ago. I at once laid it on the Table of the House and it is now available to Members in the Vote Office. On the whole I think it can be said, and said fairly, that the institution of the British Broadcasting Corporation, which was an entirely new experiment—I confess that I recommended it to the House with a little trepidation—has justified itself. On the whole it can be said that we have established broadcasting in this country on a foundation which is not merely firm, but which is the envy of many other countries. I told the House of Commons when the Corporation was being set up, the general lines upon which it was proposed to proceed, and I have followed those lines very closely. That is to say that in the ordinary matters of detail and of day to day working, the governors are absolutely masters in their own house. I do not interfere and do not seek to interfere with their absolute freedom in those respects and I hasten to say that, because I observe a certain amount of controversy in sections of the Press about the character of the programmes that are being broadcast. If any hon. Member of the Committee, therefore, is desirous of making remarks on the character of the programmes, all I have to say is that I shall faithfully see that what he says is conveyed to the British Broadcasting Corporation and the governors thereof; but as I told the House of Commons at the time when the Corporation was set up I firmly refuse to have any responsibility whatever myself for these details.

As regards matters of general policy, for which I am prepared to take a certain measure of responsibility—because, of course, we must retain a measure of control over larger matters of general policy—the most important, probably, is the new regional scheme. After considerable experiments at Daventry, attended with a good many difficulties, but on the whole successful, the British Broadcasting Corporation made up their mind that they would like to embark upon a regional scheme of large twin stations. They applied accordingly last February for authority to begin this system by erecting a high-power station at Brook-man's Park, near Potters Bar, in substitution for 2 LO. After going into the matter with them I have authorised them to proceed with the erection of the station, and it is expected that it will be completed some time next summer. In the first instance, single wave working only will be adopted from that station until it is seen by further experimental tests whether reception from a twin station is generally practicable. On 14th June, the Corporation applied for general permission to proceed with the preliminary steps—that is to say, the search for sites and the consideration of technical details—for twin wave, high-power stations at Manchester, Glasgow and Cardiff, and for a single wave, high-power station at Belfast. That application is having consideration at present, and I anticipate I shall be in a position to give permission almost at once, and the search for the actual sites will then have to begin.

As regards Empire broadcasting, I authorised the British Broadcasting Corporation to conduct experiments in short wave broadcasting for the outlying parts of the British Empire, and these experiments are still in progress. The Committee may be interested to hear some of the figures about licences. The total number of wireless receiving licences in force on 30th June last was approximately as follows: Paid licences, 2,506,300; free licences for the blind, 12,772; total, 2,519,072. The number in force on the corresponding date of last year was 2,307,678, showing an increase during the 12 months of 211,394, or over 9 per cent. It may further be of interest to note that the number of licences per 1,000 of the population is regionally distributed as follows: England and Wales, 59; Scotland, 37; and Northern Ireland, 21. The receipts from the licences were divided in the following proportion. The total receipts, as the Committee may be aware, were £1,253,150, and, of that, £898,804 goes to the British Broadcasting Corporation, while the 12½ per cent. to the Post Office for cost of collection is £156,644, and the balance retained by the Exchequer is £197,702.

Let me now, continuing the detailed examination of the different sections of the work, come to the question of telephones. Here I propose to be as brief as possible, because, during next week or the week after, there will be other opportunities of discussing telephone finance and telephone development. Therefore, I shall content myself at this moment by observing that last year was a record in the matter of telephone development. The net increase in the number of telephone stations was the highest figure yet achieved, namely, 122,405, bringing the total number of stations up to 1,631,191. I am still not particularly proud of the position which this country occupies among the great telephone-using nations of the world All I can say is that we are improving and we are improving fairly rapidly. London, as a matter of fact, stands third among the great cities of the world in the matter of telephone development—a long way behind New York, it is true, but not so very far behind Chicago.


What about the rural areas?


I shall deal with that later. First let me make one comment upon a matter in regard to which there has been a distinct improvement in the position. Of course it must happen that in various parts of the country, for one reason or another, there will be occasional delays in providing facilities for service. It is impossible to avoid those delays. Development studies are going on continuously in the Post Office. The possible developments in various areas for a number of years ahead are constantly being considered, and engineering programmes are founded on these development studies, but it is, of course, impossible that these should always be absolutely accurate. There are times when an unexpected demand arises in one part of the country and when there is not sufficient plant to meet that demand and, therefore, you have occasionally delays in the provision of services. No one regrets this fact more than I do, but I can assure the Committee and the public that the number of such cases is kept as small as human ingenuity can possibly keep it. Further, the position as regards delay has materially improved during the past year. I think I told the Committee before that I always liked to keep a couple of weeks' work in hand, in order to be able to spread out the work evenly, and to cover light periods of construction. If, during the summer, construction work is slack, one can then maintain a level of work and spread it out evenly, but it is always desirable that the amount of work in hand should not go down below two weeks. The Committee will be interested to learn, however, that 73 per cent. of applications for service are being met within three weeks this year as compared with 70 per cent. previously and 83 per cent. are being met within four weeks as compared with 79 per cent., so that on the whole the position as regards delay has improved considerably.

The development of the automatic system continues. There are now 120 automatic exchanges open in different parts of the country, and this year I anticipate that new automatic exchanges will be completed and opened at Bath, Colchester, Middlesbrough and Walsall. In London a start has been made with the conversion of the exchanges to automatic working. There are big difficulties in the introduction of automatic telephones into London, but I may say that London is not more difficult in this respect than other large centres. The same difficulty which obtains in London obtains also in New York and Chicago. The area with which you are dealing is so large that you are not able to follow the method which is followed in dealing with provincial exchanges, that is to say, taking a whole tract of telephone territory and converting it to automatic working at once. You cannot do so in London; there are too many different exchanges, and, therefore, you have to proceed step by step. The result is that the moment you begin to introduce automatic working, and, as long as the period of transition continues, you will have a state of things in a large part of London in which part will be automatic and part will be manual. You have to bridge the gap between the two, and it is in the bridging of the gap that difficulties, such as arose when Holborn was first converted, take place. Those difficulties have been, and are being, very largely overcome, and the best evidence of that is that the same difficulties have not been found in the case of the other automatic exchange opened in London, namely, Bishopsgate. There are now two open in London, Holborn and Bishopsgate, and six more will be opened, I hope, in the course of this year—Sloane, within a very few weeks, and Western, Monument, Bermondsey, Maida Vale, and Edgware. In the year 1929–1930 there are 12 others scheduled on the programme for conversion to automatic working in London.

I understand some Members of the Committee desire to address themselves especially to rural development, and I would prefer to wait to hear what they have to say before dealing with that aspect of the question. In any event, as I have already said, there will be a further opportunity for discussion of this matter during the coming weeks. I should like to say, however, that when I look back on the figures for the last two years I am well satisfied with the rate of rural development in this country. We have been developing faster than we have ever developed before in the rural areas, and we are developing at a rate which compares satisfactorily with rural development in any other country. We have some fresh ideas on the subject. One of the difficulties with which we have always had to contend has been that of the staffing of small exchanges. Now we think that we are within reach of a small automatic system suitable for a village exchange. I do not know whether our hopes will prove to be well-founded or not, but the experiments which we have conducted on a small scale have been so satisfactory that we are trying a large scale experiment.


Will that affect the guarantee?


My hon. Friend is always anticipating me. I do not in the least object to his questions, but I think it would be better to allow me to pursue my own way. I am trying very hard to be brief and it is almost impossible to get over the ground which I want to cover if I am interrupted. I was saying, that the experiments which we have conducted have, so far, been satisfactory and we have actually placed an order for a number of these machines in order to experiment on a larger scale. If the experiment proves successful the result will be that the maintenance charges of these small exchanges will be reduced; that will affect the loss upon them and that, in turn, will affect the amount of the guarantee. As my hon. Friend has mentioned the guarantee, perhaps I may be allowed to say something on that subject. It has been represented to me from many parts of the country that valuable as the guarantee method is—and it is a very necessary and valuable part of the system because it enables development to take place in areas where the Post Office itself could not afford to start development—yet, in the form in which it has worked up to the present, there has been a certain deterring element which has affected those who might otherwise have been willling to become guarantors. That deterring element has been this, that we have estimated let us say that the cost of working a particular call office is going to be £30. We desire to cover ourselves against that loss, and we have estimated, for our own private information, that the revenue from the call office may possibly be expected to amount to £20; and the guarantee for which we have asked has been one of £30 and not of £10. If our estimate was realised and £20 was collected, all that the guarantors would be asked to find would be £10 but still the fact that they were asked to give a guarantee of £30 has undoubtedly exercised a deterrent effect.

I am prepared to tell the Committee with the concurrence of the Treasury, that I am going to alter that; in future the Post Office will assess what the revenue is which it expects to get from a call office, and the guarantee asked for will only be the difference between that estimate and the estimated amount of the cost. It follows, of course, that any revenue which accrues is, in the first place to be credited against the Post Office estimate, and not till that is exhausted will it begin to be credited against the guarantee, but I am assured, as I said to a deputation representative of all parties in the House which attended at the Post Office on this subject, that that will meet a great deal of the difficulty that has been created in the way of checking development in the rural areas; and, if so, I shall be very glad.

I must hasten on to say a word about the Inland Telegraph Service. I have already given the general financial results, and the Committee will have seen that there is little change in the general trend of these results. Indeed, there has been very little change in regard to the Inland Telegraph Service ever since 1885, when the 6d. telegram was introduced, on a private Member's Motion in this House. There has been since then a continuing deficit, which has varied in the last decade from something like £3,000,000 down to the figure of between £1,500,000 and £1,250,000 at which it stands now. I mention this because, possibly largely owing to the way in which, no doubt from considerations of space, the Report of the Hardman Lever Committee has been recorded in the Press, it is undoubtedly a fact that the impression has been produced on the public mind that an entirely new and unsuspected state of financial decrepitude has been revealed by an inquiry which someone has forced on a reluctant Postmaster-General.

The facts are, of course, entirely contrary. I found that for two generations every Government in turn, Liberal, Conservative, Coalition, and Socialist, had always accepted this substantial loss on the working of the Inland Telegraph Service as something inevitable; and, apart from the very simple expedient resorted to by the Administration of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) of doubling the charges, they had accepted this position I ought to except Mr. Hobhouse when he was Postmaster-General, because Mr. Hobhouse did appoint a committee of very much the same sort as I recently appointed, but the War intervened, their work was cut short, and nothing further was done in that direction. Having regard to this fact and to the views which I held on the subject, I started in the Department two years ago a review of the administrative position with a view to securing further economies. We reached certain conclusions and began the necessary revisions, but it was clear that even with those revisions there was still going to be a very large gap.

All sorts of suggestions were made, from all sorts of quarters, as to how that gap should be filled—from Members of Parliament, from the Press, from private individuals, and from commercial organisations—and they all had different methods. Some were in favour of increasing charges, some were in favour of reducing charges, some were in favour of zone charges, some were in favour of a system of inverted zone charges; and so I decided that I would invoke the aid of three of the best business brains that, I could command and ask them to advise whether anything, and, if so, what, could be done to fill up this gap. I deliberately asked three gentlemen from the outside world, not, as has been suggested, because I was anxious to use their Report as ammunition for an attack on a Government Service, but because, having lived, as I have done, in both worlds, I knew the difficulties which inhere in Civil Service administration, and I wished to see how far they regarded the problem as soluble as a matter of administration, and, if so, how far any of their plans could be dovetailed into the system.

The answer is frankly disappointing, because the Committee found that, even given the most favourable conditions of management by private enterprise, on ordinary commercial lines, the gap could not be filled, and their only suggestion for effecting a substantial reduction in the gap lies in an increase of rates to the public. I am not altogether surprised, because I had reached practically the same conclusion from the inquiry which I made myself, but I am most grateful to the Committee for their examination of this very difficult problem, and although I do not agree altogether with all their conclusions, I think the only matter that calls for criticism and regret is that the most vital paragraph in their Report is so worded that inferences have been drawn from it by critics which are really quite unfair and quite unwarranted by the facts. This matter is really so important that, at the risk of detaining the Committee for a few moments longer, I must explain exactly what has happened. The Committee say, in paragraph 24 of their Report: It is difficult for the Committee to express in figures what savings might be effected with an efficient staff and manage- ment; but in the course of the inquiry evidence was given by practical telegraph men that on the assumption of a free hand as in a commercial enterprise, and with a wider use of machine printing telegraphs, savings varying from 20 per cent. to 33⅓ per cent. of the present operating staff costs could probably be made, and the Committee see no reason to disagree with this view. This paragraph has been widely quoted by critics as amounting to a statement that the present conditions are so inefficient that, if properly revised and with a free hand, operating costs can be cut down by from 20 per cent. to 33⅓ per cent.; and I am not saying that operating costs cannot be cut down. That is precisely what I have been trying to set out to achieve, but I confess that when I read that statement it staggered me, because I thought it was most remarkable that, after I had been groping after savings for months, it should be suggested that the operating heads of my own Department should all the time have had these savings lying right to their hands; and I may tell the Committee at once that I demanded to know what were the savings which had been suggested, and why they had not been suggested to me. When I went into the facts, I found, as no doubt some Members of the Committee have already guessed—those, at least, who have had experience of control of largish undertakings and who know what the methods of the operating side are—that what they said was something quite different. The evidence, so far from supporting such a conclusion, simply negatived it.

What the operating heads said was exactly what the operating side always does say under these circumstances, namely, that their estimated savings in costs from 20 per cent. to 33⅓ per cent. were not absolute; they were hypothetical. They depended upon the creation of a set of conditions ideally perfect from the point of view of operating costs of production, but which had and could have no relation whatever to actual practice. What did they postulate? Their postulate was, in the first place, an entirely new Central Telegraph Office, with the transfer of all the mass of cables to the new situation, at a capital cost which I have not begun to attempt to measure; in the second place, a large expenditure on new apparatus; in the third place, the ruthless scrapping of all operators except those of fullest vigour; in the fourth place, a system of piece work; and, in the fifth place, a slowing down of the speed of service. Shortly, they said what the operating side always does say under these circumstances, namely, "We can give you such-and-such a reduction in operating costs if we are giver absolutely hew machinery, piecework rates, and the maximum of efficiency output."

I am not for a moment suggesting that these gentlemen who expressed these views to the Committee either recommenced such progress as financially wise or as being just to the staff, but they did answer, to the best of their ability, the question, "If you had a free hand, how far could you cut costs?" It is a little difficult, however, to read this from the wording of the Report, and still more from some of the glosses placed on the Report by the critics. I am very sorry still to detain the Committee, but there is so much ground to cover. [Interruption.] I will bring my observations to a close at this point if it is desired, but I think it is a little unfair that I should be asked to do so, because there has been a certain amount of comment with regard to the observations of the Hardman Lever Committee on the work of the Inland Telegraph Service, and this is the first opportunity I have had of saying anything at all about it, in Parliament. I will try to be as short as I can, but there are one or two things I ought to say, because the position has been left rather obscure, and I think I ought to do what I can to clear up the points.

I Lave cleared up already one of the points which was most obscure in the Report, and I should like to say this further, that the existence of a deficit on this portion of the Post Office work is not a phenomenon which is singular to Great Britain. On the contrary, it is the common experience of practically every Government in Europe. They take the view that an efficient telegraph service confers such advantage on the citizens in general, and in the amelioration of conditions of life in general, that it is worth running, even if it be run at a loss. There is much to be said for that, and it ought to be borne in mind by some of those who are always rushing off to America for comparisons with regard to telegraph work in order to draw conclusions derogatory to State management. It is not my business to indulge in any party polemics to-day, and as I have said before, I am not enamoured of State trading. Although it has fallen to me during the last 12 years to have had more association with the conduct of State trading than any other man in this country and, I think, probably than any other man in the world, except Mr. Hoover, I am still not enamoured of it. This is not the occasion for discussing that question, but I do recognise that the case against State trading is only weakened by fallacious comparisons.

5.0 p.m.

I read one scribe who contrasted the deficit on the Inland Telegraph Service here, according to the Hardman Lever Report, with the enormous surplus gained by the American Telephone and Telegraph Company. He founded on that an argument against State management, but when I read that sort of thing I am inclined as an anti-Socialist to say, "Heaven save me from my friends," because the American Telegraph and Telephone Company has nothing telegraphic about it except its name. It does not operate one single mile of telegraphs. The real truth is that the conditions of physical geography in America and the large distances between centres materially contribute to help telegraphic developments.


On a point of Order. Would it be in order to invite the right hon. Gentleman to continue his speech, which we are all enjoying, and to give us another half-day?


I do not understand the last remark.


This is a Liberal Supply day—half a day. We want to encourage the right hon. Gentleman to continue, for we are enjoying his speech. Will he give us another half day?


That is not a point of Order.


It is anything but enjoyable to make a speech on a day when the temperature is what it is at present. I am faced with a certain difficulty, because this is the occasion upon which it has always been customary to have an annual review of the work of the Post Office, and it is very difficult for hon. Members to appreciate what the position is unless I try, as far as I can, to explain it. It is not my fault that the Debate falls on such a short day. That is a matter in the charge, not of any party, but of the authorities of the House. A Debate on Private Business is a matter for the Chairman of Ways and Means, and no reflection can be made on him. However, I will be as short as I possibly can. I should like just to make this point, that distance in America is pro tanto an advantage to the development of a telegraphic system, because they do not get the same competition with mails as is the case in this country. For instance, take the distance from New York to Chicago and from Glasgow to London. If a man in New York makes up his mind at six o'clock on a Monday afternoon to post a letter, and he wants to communicate with Chicago and posts the letter, it reaches Chicago the first delivery on Wednesday morning. A man in London, however, has the first delivery on Tuesday morning of a letter posted at the same time for Glasgow. If the American wants to telephone, it costs him 3.25 dollars or 13s. 4d. It costs the Englishman 5s. 9d. For a telegram of 20 words, it costs the American 95 cents or 3s. 11d., and in England it costs 1s. 8d. Therefore, from the geographical point of view alone, there are considerable natural advantages which a telegraph service enjoys in a large country like America, which are not enjoyed by the telegraph service in a comparatively small country like ours.

I might say of the Report of the Hardman Lever Committee that, although it is very helpful in many respects, it seems to me to lack definiteness, because they failed to distinguish between, on the one hand, a less costly telegraphic service, and on the other hand, one giving greater speed. It is possible to achieve either of these alternatives, but you can only gain acceleration in speed by an increased operating cost, and that cost increases in geometrical ratio to the increasing speed. The Committee will appreciate this if they realise how large are the variations in peak load, which occur not only in the course of the day, but between one month and another. The peak load in the Central Telegraph Office varies from a minimum rate of 2,000 telegrams an hour between 8 a.m. and 9 a.m. up to a peak load of 12,000 an hour between 11 o'clock and noon. Its variation from month to month can be seen by the fact that there were 2,000,000 telegrams in February, and 2,700,000 in July. It will therefore be seen that, if you are trying to get anything like a normal rate of speed, you have to try and have your system so adjusted as to deal with the normal rate of traffic. If you get extra acceleration, you can only do it at the expense of having too many staff. To get an acceleration at the peak hour, you will find yourself with a surplus of staff when the traffic is at the lowest. It is fair to say in this country that our average normal speed challenges comparison with any other country. In the United States there are two great systems, the Western Union and the Mackay, and where there is competition you get an excellent service. In the towns of America the telegraphic service is very much worse than our own, and in the rural parts of America it ceases really to have any pretensions to be a telegraphic service at all. In Germany the ordinary telegraphic service is much slower. They have a system of urgent telegrams at triple the ordinary rate, and a lightning service at 30 times the ordinary rate.

Our best service in this country compares favourably with the best American practice, and with the German lightning service. Our average normal speed of telegraphic operations is certainly up to that of any other country in the world, and is I think a great deal better than most of them. Indeed, I believe it is true to say that it is better than any other. There are a number of other points on the mail side of the business with which I should like to have dealt. I should like to have said something about mail vans and about the development of air mails, and I have one or two matters which I should like to have told the Committee about the Post Office tube, but, in the circumstances, I appreciate that it would not be fair to ask the Committee to listen to me any longer. I must apologise for having taken so long, but the Committee will appreciate my difficulty. The Postmaster-General is in the position of the chairman of a large concern reporting to the shareholders, and it is difficult to do that concisely if it is to be complete. However, I have done my best to compress my remarks as far as I can, and I am grateful to the Committee for the attention which they have given to me.


It is clear from the speech to which we have just listened that for the variety and magnitude of its operations, the Post Office of this country is without parallel in our political and social life. It touches our domestic life at every corner, and it is intimately connected with our industrial and commercial welfare. I quite agree with my right hon. Friend when he entered a caveat at the beginning of his speech against undue criticism. When operations are of such a gigantic nature, as it is clear that they are from the speech to which we have just listened, criticism ought to be fair and just. What struck the Committee is the fact that, not only is this the greatest Department in the State, but it is a Department which is ever growing and expanding. It is a most significant fact to hear that the Postmaster-General himself estimates a surplus next year of something like £9,000,000. That is a very striking and extraordinary figure. The Committee, notwithstanding the length of the speech, will no doubt have noticed that the Postmaster-General, through lack of time, did not refer to many things which are at the moment exciting the public mind.

I refer particularly to the latest reports with regard to the Imperial Cable Conference. There may be some doubt whether this can be discussed on the Post Office Vote, but it is clear to anybody who studies the situation that, obviously, this is an administrative act where the Post Office is very directly concerned. The Committee unfortunately have had to rely upon the intelligent anticipation of the Press for its information, and I should like to ask the Noble Lord the Assistant Postmaster-General, in his reply, to answer one or two questions. It is rather a pity that the Press should be the first, whether by intelligent anticipation or otherwise, to convey to the public the information which ought to have been given in this House first. I would like to ask the Noble Lord whether the Report has been signed, and what are the terms of the scheme submitted to the Imperial Government? I understand that a new communications company is to be instituted.


I am very reluctant to interrupt, but I ought to explain to you, Sir, that the right hon. Gentleman appears to be dealing with what purports to be the Report of the Imperial Cable Conference, of which I was not a member and of which officially I have no knowledge.


I think perhaps that the right hon. Gentleman might refer to the fact that this Conference has sat, but I do not think that it is a matter that can be discussed on this Vote.


I do not want to stop my right hon. Friend in any way. All I was pointing out was that he has started to discuss what he believes to be the details of a Report, about which obviously I can say nothing.


I bow to your ruling, Sir, but I should like to ask a question which I think the Noble Lord can answer. Is this communications company to be administered on private ownership lines, with semi-public control or is it not? I understand that the Post Office has reserved to itself the right to maintain the telephones. Is this communications company going to be in the nature of a public utility company, or is the Post Office advocating that it should be a State company and nothing else? That is a very important point, and the public ought to be informed about it as soon as possible. There is one suggestion that I have seen made in connection with this and it has a great bearing upon the Debate to-day. The suggestion is that any profits which arise out of the successful running of this new company over 50 per cent. should be used in reducing the charges to the public and in providing additional facilities. We on this side of the Committee welcome that proposal. It is a principle which should govern the working of the Post Office of this country, it is a principle which was meant to govern the working of the Post Office, but one Postmaster after another has gradually departed from that principle, and what do we find to-day?

The Post Office of this country, like the Ministry of Transport, is gradually becoming an appanage of the Treasury. The ruling principle now seems to be that whatever Post Office profits there are shall become an intergral part of the central finances of the country. Many years ago that would have been a quite untenable position, and I understood from my right hon. Friend that he, at any rate, was going to make a strong stand against that principle. The proper way in which the Post Office should be run is the way in which any respectable, expanding industry is run, that is, the profits which are made out of that industry are kept in reserve or put back into the business. What do we find here? Yearly the profits are becoming greater. That is no concern of the Chancellor of the Exchequer, but the more the profits the more anxious he is to get them. The result is that we are to-day faced with the fact that the inland postal service is worse than it was before the War, a condition of things which is quite intolerable. Obviously, the profits of the Post Office ought to go towards cheapening the service and improving its efficiency, but the reverse is the case, and notwithstanding what the right hon. Gentleman has said in his speech, the condition of affairs with regard to delivery of letters and postal facilities generally is worse to-day than it was in 1913–14. The right hon. Gentleman shakes his head, but within the last week I myself have sent him three or four cases which support my contention.

Not only is the service worse, but it acts against the very worst principle in public administration, because it flouts the wishes of the entire community. I sent a case to him from Ross-shire, where a system, and a very good system, had been in existence for many years and was accepted by the community. Suddenly somebody comes along and at his instigation, the whole of that administration is upset and the wishes of the entire community are flouted. That is a condition of things which is quite intolerable. I would like my right hon. Friend to pay particular attention to that case; I am sure it is one case of many. Where to-day is the flaunted daily delivery which we were promised immediately after the War? At Question Time I have often listened to hon. Members' in all parts of the House asking for a revival of the old daily delivery in the rural parts of their constituencies. I am not speaking for the North of Scotland alone, but for all rural districts in Wales and England and in Northern Ireland. The right hon. Gentleman might very well be reminded of a phrase which was used last year by my hon. Friend the Member for Oxford University (Sir C. Oman). He said the Postmaster-General to-day is selling inferior services for much higher prices."—[OFFICIAL RETORT, 20th July, 1925; col. 1902, Vol. 186.] That, in a nutshell, is the condition of affairs in all the rural parts of this country. The right hon. Gentleman did not say a word about a return to penny postage. Surely that is a matter of great importance to the public to-day. We have heard on other occasions of derating, of lowering the rates so that productive industry may be assisted. There is not a single business man who is not complaining of the high cost of postage, and longing for and pressing for a return to the old days of penny postage. In 1925 my right hon. Friend became Postmaster-General. We all felt that he, in any case, would put up a good fight for a revival of the good old days. He promised us that he would. I have here a quotation from his speech: As and when we"— that is, the Chancellor of the Exchequer and himself— can afford it, we shall revert to the system of penny postage. It remains one of the objectives of our policy, and we hope to be able to achieve it within the lifetime of the present Parliament."—[OFFICIAL REPORT, 20th July, 1925; col. 1864, Vol. 186.] Why, penny postage is farther away than ever, judging by the speech which has just been delivered. Will my right hon. Friend tell us now that he intends, along with the Chancellor of the Exchequer, to pledge the Government that we are to have penny postage within the lifetime of the present Pariament? That was the pledge given three years ago, but there is no sign that it is being fulfilled.


I do not suggest that the pledge has been qualified, but I would remind my right hon. Friend that it was given before the general strike.


I had a feeling that some such explanation would be given. The general strike is held to be responsible for many things. I have found it provides a very useful answer from the Treasury Bench on occasions. But I remember that the Postmaster-General in the Labour Government, the right hon. Gentleman the Member for Ogmore (Mr. Hartshorn), stated in the same year—1925—in that very Debate, that the Chancellor of the Exchequer in the Labour Government and himself had made up their minds to revive penny postage in that year but were awaiting the finding in the Sutton judgment case. So at that time it was very near. To-day, as I have said, it is much farther away than it has ever been. If we do not get penny postage at home, there is very little chance of what many of us are longing to see again, and that is Imperial penny postage. The right hon. Gentleman believes, as I do, that there is nothing so useful in cementing the Empire as free and frequent communication and personal contact. The Dominion of New Zealand has led the way in this respect, and its publicists are daily trying to get the Empire as a whole to come into line with it and to establish Imperial penny postage. I asked the right hon. Gentleman the Member for Ogmore: Supposing in 1924, there had been a revival of penny postage, what is the estimate of the additional number of letters which would be carried in this country? His reply was that he estimated there would be 300,000,000 more letters posted. That an itself would make up what is now obtained from the extra halfpenny which is being charged. The second point with which the right hon. Gentleman dealt concerned inland telegraphs. It is quite clear that the inland telegraph department has been declining, and the reason for that is not far to seek. Indeed, there are two reasons. One is the reason advanced by the right hon. Gentleman himself, and that is that it is in direct competition with the more efficient telephone service. The right hon. Gentleman spent a great deal of time in justifying his Department in face of the attacks of the Hardman Lever Report. I do not think there was ever so scathing an indictment of a system as is contained in that report. Has the right hon. Gentleman taken any steps to remedy the things pointed out in that report? On page 11, the Committee say in paragraph 17: The fact that the telegraph service has come to be regarded as a diminishing business has introduced an atmosphere of inertia, and the resiliency which would be found in a progressive business is lacking. The Committee are of opinion that the present deficit can be attributed to a considerable extent to the foregoing causes, coupled with the effects of Civil Service conditions, to which reference is made later, together with redundancy of staff, rotation of duties and the grading of work. The right hon. Gentleman told us he took very great pains in selecting the members of that Committee. Their names are household words in the business world. They went very carefully into this particular branch of his Department. They examined everybody and everything, and they came to the conclusion that this Department wants a thorough over-hauling. That report has been in the hands of the right hon. Gentleman for nearly a year.


It was issued in January of this year.


In any case, six or seven months have elapsed since the right hon. Gentleman got the Report. Has he done anything? Perhaps in the course of this Debate he will tell us what he has done, because, as I have said, this is a scathing and damning indictment of his Department, and he cannot now ride off by saying that they have misconstrued instructions, did not quite appreciate what was meant. In black and white they have condemned that Department as being utterly and wholly unsatisfactory. Let me take one or two things they have said. They say: If the telegraph service is to be satisfactory it must have two essentials. It must have a high standard of service, with speed and accuracy, and you must abolish minor irritations. The telegraph itself is probably getting out of date, but this telegraph department is much out of date. My hon. Friend who represents Orkney and Shetland (Sir R. Hamilton) is continually rais- ing a question which concerns the inland telegraph department. Between the mainland and the islands there is a telegraph cable, but he has been asking that the Postmaster-General should now establish a wireless system of communication between them. Two years ago, as he stated in a speech in this House, it took five months in one case and seven months in another for the repair ship to come round to repair the cable. That is not 20th century civilisation. That is not the work of a first-class Department. That is the work of a moribund Department. If, as the Postmaster-General says, wireless is making progress by leaps and bounds, it ought to be utilised to secure efficiency and good work for this country. I have no doubt my hon. Friend who represents Orkney and Shetland will have a good deal more to say. I have merely quoted that case as one of the instances which show that the Department is not up to date. It is utterly out of date, and the sooner a new Commission is appointed to find out how quickly and how efficiently things can be remedied, the better for the Department and for the right hon. Gentleman.

I was very glad to hear from him that there has been an enormous advance in the telephone system of this country. He himself said, not so very long ago, that it was not consistent with the dignity or the commercial importance of this country that our telephone system should occupy so lowly a place in the world. I have had put into my hands this morning a letter from the National Union of Manufacturers. They give figures to show that the telephone density in this country is the lowest among the civilised countries of the world.


Oh, dear me, no!


Certainly, they are at the bottom of my list, and I will read them. They say that the telephone density in Great Britain as compared with other countries is less than that of any other civilised country in the world, and consequently there is a lot of leeway to be made up. Here are the figures: The United States, 148; Canada, 130; Denmark, 91; New Zealand, 91; Sweden, 72; Norway, 65; Australia, 62; Switzerland, 50; Germany, 41; and Great Britain is at the bottom of the list with 31. These are very significant figures. There is no doubt that in this country people must be encouraged to develop what I will call the telephone habit. You must advertise the telephone and make people more familiar with it. I think the Postmaster-General is responsible for the remark that, if from each telephone machine one additional call was instituted in this country, it would be equivalent to an additional revenue of £2,000,000. That is a significant fact, and is it not therefore worth while spending more time and trouble on the development of this fine and useful piece of machinery in the public life and industry of this country?

It is quite true, as the right hon. Gentleman said in the course of his speech, that in every progressive industry there must be a fringe of unremunerative traffic. The Post Office obviously must lose when they start a new extension, and that must be doubly true when you start an extension on the outskirts of a system. I would like to point out, however, that this House has never refused money for any proposal for the extension of the telephone system, and, when the right hon. Gentleman comes forward with proposals for the extension of the telephone, I am sure no one will oppose him, because we see that the telephone is becoming essential to the industry and life of this country. The Postmaster-General himself said that although there was a great difficulty in starting a new exchange, he found from experience that the moment you started an exchange you immediately increased the number of subscribers. That is a very significant fact. It is obvious that the presence of these machines tends to make people more familiar with their use, and by that means you increase the number of subscribers. Surely business dictates that if you continue to develop the outskirts you will be developing more and more one of the greatest boons that has ever come to the industrial life of this country. It is an old story that supply will always make a demand.

I was glad to hear that the Postmaster-General was paying particular attention to rural telephones. Like other hon. Members, I am interested in a rural constituency, and in seeing that rural telephones are established. I must confess, however, that there is still a great deal of impediment in the way, and I was glad to hear that my right hon. Friend was going to review the guarantee system. That has always been an obnoxious system, and one which has favoured the rich against the poor. It has been established upon a sort of flat-rate business without rhyme or reason. It has been laid down that you must get eight subscribers, but there are many cases where you cannot get even seven subscribers to come forward with the amount which has to be guaranteed to the Treasury. My opinion is that the minimum number is too high, and eight is a ridiculous number. I could point out case after case in rural parts of Scotland where you can easily get six subscribers, but it is impossible to get eight. Another point is that the rents are too high. You are charging £7 10s. in some rural districts for a telephone, but that is an enormous rent in the case of a farmer who uses the telephone only on market day. Again, the costs of construction are enormous. I know perfectly well—my right hon. Friend is entitled to have this stated in his favour—that, the further you are from the main system and the more you go into the rural districts, obviously the costs must be higher. I cannot help thinking when I go to remote parts of Scotland that the poles and the wires which I see are almost of too high a class for the work which they are called upon to do. I may be wrong, but I have no doubt that the quality of the speech reception is better with a better wire, but it would be possible to get satisfactory results with a cheaper quality. I think you might get a good pole from the roadside instead of having a highly-polished pole.

I would like the Postmaster-General to consider the question of rates and cost of installing the telephone in those parts where it is not so much used, but where it is nevertheless very essential. If you road the health reports from various parts of this country, you will find that every single medical report says that the country districts will never be thoroughly equipped for health purposes in connection with the doctors and the hospitals until we have an efficient telephone system. Surely, with such a surplus as £9,000,000 coming in next year, the Postmaster-General and Chancellor of the Exchequer might consider what can be done in regard to reports of that kind. The public welfare demands that part of this surplus should be devoted to the alleviation of the lot of the people in our country districts. In many parts, there is no way of communicating with a doctor 40 miles away except over the telephone. Look at the advantage that would be conferred upon country people if they had provided for them a cheap and efficient telephone system. If the farmer was able to communicate with his brother farmers within a certain radius to find out the latest news from the market town, and get to know whether there was a demand for this or that kind of stock, it would save him an enormous amount of trouble, and he would not need to travel many miles by train and by road in order to get that information. If you want to benefit health and agriculture, it is upon those lines that you will be able to benefit them most effectively.

I was glad to hear that there has been a great extension in the public call offices, but I would like to press upon my right hon. Friend one fact with regard to the public call offices. I think that in every one of the rural districts in England, Wales and Scotland there should be a public telephone at every rural post office. We do not want an ornamental expensive telephone box, but we want a box made of good plain deal. I want facilities for rich and poor alike in the more remote parts of this country in order that the people may get into touch with the railway station, the doctor, the minister, or any of those who form a most important part in the body politic and the social life of the remote country districts of this country.

I sat on the Committee which dealt with broadcasting, and I know that the right hon. Gentleman said that he has only a vicarious responsibility in these matters, that he is not a broadcaster but merely a transmitter, and that he was not going to be responsible for the programme. Consequently, I will not criticise him so far as the programmes are concerned, but I would like to transmit to him the general feeling of the people in regard to broadcasting programmes. They say that the public like more variety, and they like it light. They also say that they find the programme intolerably didactic, and the music, I am told, is mostly chamber music and more highbrow than the ordinary man likes to hear.

The right hon. Gentleman said that he was developing a regional scheme. I would like to ask if that affects the North of Scotland. My hon. and gallant Friend the Member for Montrose (Sir R. Hutchison) has been pressing the right hon. Gentleman to get a high-power station established in the North of Scotland. I understand that the Postmaster-General has complete power with regard to the establishment of these high-power stations, and I would like him to give further consideration to the request which has been made by the hon. and gallant Member for Montrose on behalf of the North of Scotland to establish a high-power station there. I hope I have said sufficient to show that there is much need for improvement, particularly in part of the service of this great Department. May I assure the Postmaster-General that if he makes efforts in the interests of the community as a whole, and of industry in particular, to tackle the Chancellor of the Exchequer on these questions, he will have the whole-hearted support of every Member of this House. The Postmaster-General is in control of a service which affects the life of the entire community and the industry, commerce and well-being of the country as a whole, and I think it is high time that he resisted the bureaucratic encroachments of the dead hand of the Chancellor of the Exchequer.


I think we are all prepared to join with the right hon. Gentleman the Member for Ross and Cromarty (Mr. Macpherson) in expressing our warm appreciation of the clearness and fullness of the most interesting speech which has been delivered by the Postmaster-General. I am not quite so sure as regards the observations which were made by the right hon. Gentleman the Member for Ross and Cromarty himself, because he was not quite so clear as regards the true basis of the finance of the Post Office. The Post Office telegraph and telephone services are, after ail, run by the Government as a business, and they are run in order to make a profit. If that be so, the first question that arises is whether that profit should be put back into the business or not. That question should be judged on its merits. I only mean that it cannot in all cases be a foregone conclusion that every penny of money earned by this great Service can go back into the Post Office services themselves.

The observations of the Postmaster-General included one which seemed to me to transcend the interest of a single Department, and really to rise to a question of constitutional importance. I refer to what he told us about the attitude that he takes, and, no doubt, is obliged to take, in regard to the services rendered by the Broadcasting Corporation. I express every sympathy with him in that attitude. The responsibility for programmes is not one that anybody would lightly undertake. I would also register the fact that in that attitude my right hon. Friend has been perfectly consistent throughout, and it has to some extent to be conditioned by the provisions of the Statute. Does it not become clear to us that what was feared by some of us at the outset is happening, namely, that the arrangements and status of the Broadcasting Corporation are really landing us in a complete impasse?

Are there not two possible arrangements which are businesslike in the conduct of such a service? The first is a commercial arrangement. If the service is not found to be satisfactory, the consumers have their remedy; the profits of the concern fall away, the enraged shareholders meet and turn out the Board, and a more efficient Board is put in. Even in the case of a monopoly there is some such remedy as this, in the case of a commercial undertaking, through the shareholders and the pressure of opinion on the part of the consumers. In this case we have not a commercial arrangement. The only other arrangement that we have yet devised in our methods of conducting affairs in the civilised world is what I would call the arrangement of Ministerial responsibility, and that also gives the general public an opportunity of making their voice heard. They can come here on such an occasion as this and say what they think to the Postmaster-General; and, in the last resort, our constitutional remedy would be to reduce the salary of the Postmaster-General, and thus compel him to take action and reform the Broadcasting Corporation.

It is quite clear, however, from our proceedings to-day, that we have not that remedy either, and we are in a most unfortunate position from the point of view of the public as regards the Broadcasting Corporation. Let me hasten to intervene with this observation, that I myself have no criticism to make of the programmes. I think that on the whole they are as good as can be expected at the outset of a new art and a new craft. It is not because I complain of the programmes that I think this point should be made; it is because I think we are drifting into a position which is not workable under our Constitution, a position in which we have a corporation that is responsible to no one, on which commercial pressure cannot be brought to bear, and on which the ordinary constitutional pressure of ministerial responsibility cannot be brought to bear.

Of course, there are many occasions on which a Minister in the position of the Postmaster-General has to get up and say, "This is no affair of mine; I cannot interfere"; but I think it would be found on examination that those occasions are always of one sort—they are occasions in connection with which there is a judicial responsibility confided to the body in question. A judicial responsibility must consist of responsibility in one or other of two classes of proceedings—either proceedings by way of litigation between two parties, in which an impartial decision has to be given, or something in the nature of an inquest or inquiry, in which an impartial report has to be made. Those are judicial proceedings in which, of course, the Minister cannot interfere; but there is no such judicial nature in the functions of the Broadcasting Corporation. They are purely commercial; they are a service rendered to the State—a service of such importance that I cannot see how, in the long run, a Minister can possibly escape responsibility for their conduct.

I can imagine that the answer which would be given, according to the theory on which the Broadcasting Corporation was erected, is that the Broadcasting Corporation is in the position of a public utility company, and that the Minister need be no more responsible for the services that it performs than he is, for instance, responsible for the services of water or gas supply by a public utility corporation. I do not think, however, that that analogy holds good. The Minister of Health, for instance, is now not responsible for services in connection with gas supply which are discharged by a local public utility corporation, because that is a matter of restricted local interest; but, surely, if there were only one great gas corporation in the whole country, exercising a monopoly over the whole of the gas services of the country, it would be quite impossible for the Minister of Health to escape responsibility for it. Supposing that the gas services of some great city were being inefficiently rendered, one cannot suppose that the Minister of Health would escape the closest pressure on the subject in this House. That is a service which only affects the physical welfare of the country; the service rendered by the Broadcasting Corporation affects the whole moral and mental welfare of the country.

I believe we can see very clearly that it will be impossible for ministerial responsibility for the services of the Broadcasting Corporation to be avoided. I do not say that it is necessarily the Postmaster-General who should discharge that responsibility. On the contrary, it may well be that some other Minister will be found more appropriate. In such a Debate as we are having to-day we find ourselves experiencing the position which I have described. One of the most important services lies before the country for development—a great, new development which is going to have an immense effect on the future of the culture of the country; and when we find that we have none of the commercial or constitutional remedies to which I have referred, we see before us a position which is impossible.


I think that Members of the Committee on this side of the House would willingly have listened to the Postmaster-General for a longer period than his remarks occupied, especially in view of the fact that he spent a good deal of the time at his disposal in putting forward a point of view that must have been exceedingly uncomfortable for his subordinate. He has had a good deal to say about the Hardman Lever Report, and to the Postmaster-General, obviously, that Report is as unsatisfactory as it is to those of us who regard it as an exceedingly biased document. I do not think that any Commission of recent years has been so unsatisfactory in its formation and in its conduct of its commission as the Hardman Lever Commission has been. It is all very well to talk about business men of the finest type that can be found for such a purpose as that of investigating the telegraph business of the nation; but these business men, to my mind at any rate, and to the minds of most of us on this side, did not conduct their investigations in a very businesslike way.

I do not want to make any personal attacks, and I certainly do not mean anything of a personal nature, but I do think that the appointment of Sir Samuel Hardman Lever himself, for such a purpose as an inquiry into the administration of the national telegraphs, was a very unfortunate one. He is a director of a big trustified business in this country which has a great deal to do with telegraphs, and which is affected very considerably by the incidence of the management of the telegraphs for the nation. He is a director of the "Daily Mail," and £500,000 of the deficit on the telegraphs is accounted for by the rates at which Press telegrams are taken by the State. I am open to correction, of course, but I do not think I am far wrong when I say that the difference between what would ordinarily be charged and what is actually charged to the newspapers of this country for the transmission of Press telegrams amounts to something approximating to £500,000 a year. [Interruption.] I will withdraw that statement if it is contradicted by the responsible Minister.

That is a very great and a very important sum. I know, of course, that the Hardman Lever Report advocated an increase, and not a decrease, in the charges for Press telegrams, but that does not make any difference in regard to my strictures upon the unfortunate appointment of Sir Samuel Hardman Lever to that Commission, because the cost of Press telegrams to the "Daily Mail" is a matter of minor account. They have their own private wires, and they are a kind of business corporation which spends very heavily upon administrative and technical details of that description. Where, however, a corporation of that kind is affected is in the effect of an increase in the cast of Press telegrams upon the competitors of newspapers like the "Daily Mail." If such an increase is made, the competitors which the Rothermere Press Trust is rapidly buying up are going to suffer, and from that standpoint, in the first place, I think it was very undesirable that this particular question should be adjudicated upon by such a person, however admirable and valuable he may have been in other directions, as Sir Samuel Hardman Lever.

6.0 p.m.

Then, again, with regard to the actual work done by the Commission, they spent two months in investigating the subject. I suggest that a two months' investigation is not sufficient to justify the statements made in the Report of the Commission upon the managament of the telegraphs of this country, and, especially, is not sufficient to justify the implications of those statements and the use made of those implications by people who want to argue against any policy of nationalisation in regard to the telegraph services of this country. I understand that an hour's visit was paid by the Commission to the Central Telegraph Office in order to find out what was wrong with British telegraphs. Another illustration of the casual and, apparently, haphazard way in which the Commission was conducted, is found in the fact that the Union of Post Office Workers sent to the Commission a deputation prepared to make proposals of a character which they considered to be valuable, and that deputation was received by two members only of the Commission, who were in a desperate hurry, and one of those members left before the deputation had a chance to make the full statement that they desired to make with regard to their views about the conduct of the telegraphs of the country. On those grounds I think that we are entitled to consider very carefully and with very important reservations the Report of that Commission. What the Commission did not point out with regard to the telegraph services of the country from a financial point of view is the fact that, apart from the vast amount that the service loses in making favourable terms with the newspapers of the country—[Interruption]. It is all very well for hon. Members to shake their heads and say, "No," but it is a fact that Press telegrams are charged at a very much lower rate than ordinary telegrams. That is a present to the newspapers.


It is a bargain that has been made with them for some years.


I do not doubt it, but when that bargain is used against the financial solvency of the telegraph service, and as an argument against public enterprise, we are entitled to point out that that present is being made year by year to the newspapers. The telegraph service is the inheritor of another bargain of a very disgraceful character. The Government bought out the private companies because they were mismanaging the service, and they did it at a fantastic price. It was described by Mr. Goschen, of all people, as wicked, stupendous and monstrous. The companies' plant was purchased at £2,000,000, and the nation paid £10,880,571 for it, and the telegraphs have had to pay interest upon that amount ever since.

Sir W. MITCHELL-THOMSON indicated dissent.


It is rather extraordinary that these contradictions should be made. I have endeavoured to get accurate statistics on the matter. We are surely paying interest on the amount charged for the companies' plant. I shall be very grateful to have particulars as to how much interest we are paying. My information is that it is 3 per cent., and, if that is so, the difference between the value and the inflated price we pay amounts to another £250,000. I am afraid the whole question of telegraphic and telephonic development is going to be obscured in a niggling sort of economy argument and campaign. The right hon. Gentleman the Member for Ross and Cromarty (Mr. Macpherson) talked about polished standards. I wonder what kind of business principles he is suggesting when we have to economise at the ex- pense of real efficiency. Surely he is not going to suggest that those standards, because they are highly polished, represent extravagance and that we have to put up with something that is not the best but the next best, or perhaps the next best to that.


I was referring to very remote districts.


I thought the right hon. Gentleman was referring to what we see near London. In any case, a good deal has been said of these niggling little economies. I do not think that is the atmosphere in which the question should be discussed. Big business—and this is an important national business—ought to be thought of and developed upon big business lines, and not as an appendage of the Treasury. If we are going to make a business success of a national business, we have to look upon it as a big business man would do. The right hon. Gentleman the Member for Norwich (Sir H. Young) said the commercial profits of the telegraphs and telephones really ought not to be put back into the service, and that we as a nation ought to consider ourselves as a body of shareholders, entitled to enjoy the profits coming from these national services. That would be all very well if you ran them with the adequate development of capital and enterprise which is really demanded for them. If they are still going to be an appendage of the Treasury, you are not entitled to condemn them, and to condemn public enterprise, because one section of the telegraphs does not show a commercial profit.

Some time ago I asked the Undersecretary whether he thought the appropriation for advertising telephones was sufficient. I did not think his answer was satisfactory. I did not think the appropriation was sufficient for such a gigantic enterprise as it ought to be and could be, and one of such manifold advantage to industry, commerce and agriculture. In America there are 150 telephones per thousand of the population as compared with our 32. In America there is a capital expenditure of £400,000,000 on additional plant contemplated during the next five years. Of course, the Chancellor of the Exchequer would look with pained surprise at a proposal of that character. He does not conceive of any capital expenditure for national development at the expense of the Budget. Let us deal with the question from a business point of view, as they do in America, and we may refer to Sweden and Norway as evidence of the success of business enterprise applied to State development, and it is true, as the Postmaster-General has admitted in his speceh, that public enterprise is not always a failure even from the standard of commercial profit. The total capital expenditure on telephones in Great Britain during the last five years was only £44,000,000. If you want commercial profit to go into the public Exchequer you must proceed upon the lines of any big business enterprise and not begin business enterprise with economy campaigns. It is not business, and you cannot expect it to develop on those lines.

I congratulate the Postmaster-General on putting in front of the Committee quite clearly the absurdity of looking upon public enterprise solely from the standpoint of commercial profit. There are lots of public services that do not provide a profit. Westminster Bridge does not pay a profit, but it is a public service and it pays from the point of view of service. The Postmaster-General has pointed out that there is such a thing as development enterprise which cannot be determined as to its value from the standpoint of commercial profit, and one may make comparisons with other countries, not only with regard to telephones but also with regard to railways. What is the characteristic thing with regard to the State Railways of Australia. Private railways would wait for a town to be built and to be developed, the whole thing to be there before the railway was run out to serve it. The State railway, simply because it is regarded more as a service than as a question of commercial profit, drives the railway out in order to encourage the development of the towns. If you are looking at the interests of the nation and looking at the service from the standpoint of the national interest, it is desirable to take these things into consideration, and that is where a great deal is to be done, especially in remote agricultural districts, in the development of the telephone service, judging of the results not only by the pounds, shillings and pence standard, but by bow far the improvement, the cheapening and the development of the service can help to increase trade and prosperity and be to the general advantage of the nation as a whole. I again congratulate the Postmaster-General because, on that point, he has put the Socialist case as well as anyone on this side of the Committee could have put it. We believe in competition for use rather than competition for profit, although we contend that it is simply not true that public enterprise does not pay, even commercially, taking a general average and comparing it with other standards of private enterprise. Even if it were true, there is another thing to be considered, and that is the ultimate value of the service rendered to the efficiency and advantage of the nation as a whole.


Before taking this discussion away up to the refreshing and fragrant zephyrs of the Western Isles, I should like to make one comment on the speech of my right hon. Friend who opened this Debate. His speech was long, but it was as interesting as it was long. I desire to make a few observations on the mail services to and from the Western Isles. If I speak plainly and with a certain amount of feeling, I hope the right hon. Gentleman will not think I am singling him out for any special attack. The Scottish Office and the Treasury are at least equally responsible with him in this matter, but if I address my remarks too directly to him, I hope he will realise that I can see the Chancellor and the Scottish Secretary resting on his broad and manly shoulders. His triple responsibility in the matter is made clear in the recent and abortive contract which was referred to a Select Committee of this House, but which is now no longer a subject for discussion. In the Treasury Minute attached to the contract these words are used: My Lords have before them a contract dated the 2nd and 11th April, 1928, between the Postmaster-General and Messrs. D. MacBrayne, Ltd., for the maintenance of certain passenger and cargo sea services in the Western Highlands and Islands of Scotland and for the conveyance of mails by certain of the vessels so employed. Save in respect of the conveyance of mails, the Postmaster-General acts on behalf of the Secretary of State for Scotland and the Government as a whole. That contract would have provided two new mail steamers for my constituents, but I am bound to say it was their opinion, and mine, which I expressed in my division where I was at the time the matter was discussed in this House, that in every other respect that contract was a miserable failure. In fact, my Lords of the Treasury themselves, unconsciously condemned it in the most definite and damaging terms. They used these words: The mail services will remain unchanged in all essential particulars. That was a very poor response to those Members of this House who have been striving for years to secure an improved mail and transport service in the Highlands—very poor indeed. There is an aspect of this problem which I am afraid has not been properly appreciated by the Postmaster-General. It is this. The mail contract which he makes governs and controls the whole island transport system.

Sir W. MITCHELL-THOMSON indicated dissent.


Oh, yes. I will repeat that. The mail contract which he makes governs and controls the whole island transport system. The subsidy which is given by the Government gives a monopoly, and there can be no competition against the subsidised service. The measure of the efficiency of the mail service becomes the standard of the whole system of island communications. For instance if the Postmaster-General refuses as until now he has refused to provide a daily mail service, there can be no daily steamer service. The mere fact that he is unwilling to give a daily mail service prevents the islanders from having a daily steamer service. His moral responsibility is therefore much greater in this matter than the mere delivery of mails, and we expect him to acknowledge and shoulder that responsibility. We expect him to do all that he can to keep up his own mail standard of efficiency, because by that alone can we have improved transport and communications in the islands. It is not too much to say that the contract is the key to the prosperity of the people who are living on the islands and the West Coast of Scotland. I am bound to say that after the most careful, and after the fullest reflection, I have come to this conclusion, that nothing less than a daily service of mails to the Western Isles can bring complete commercial prosperity to the people who live on these islands. The right hon. Gentleman may reply, "Oh, but a better service would not pay." He may say: "A daily service certainly would not pay." With all respect, I am afraid that I must deny to him the right to make that statement or to take that view. No big business enterprise has ever made any lasting progress on a policy of doing only those things which bring an immediate and direct profit, and that is equally true of Governments and political parties.

I would ask him, if he does set up that defence, to take a longer and a wider view. I would ask him to go up to the Islands himself, and see the people who live there and the conditions under which they live. He would then find, if it is his duty to provide an efficient mail service and an effective postal system, that his administration has been a dismal and depressing failure. He may again respond by saying, "If I have failed, so have previous Governments, so have previous Administrations." I willingly admit that, but that is no answer to the charge of inefficiency and is certainly no solution of our problems. Let me give two examples of the utter inefficiency of the postal service and the ineffectiveness of the whole postal system in the Western Isles. I have here a letter which I recently received from a responsible member of the legal profession who lives in the island of Benbecula. This letter refers to a population of not less than 6,000 people. Here is what he says: Dear Sir,—I beg respectfully to submit for your favourable consideration and attention the following facts, namely, (1) Letters are delivered in this island every Tuesday, Thursday and Saturday. (2) Letters are despatched every Monday, Tuesday, Thursday and Saturday shortly after 11 o'clock in the forenoon. He goes on to say that these letters are taken on these days to South Uist, the neighbouring island which is only about a mile away and to which anyone can cross on foot twice in 24 hours. They are taken there the same day, and they remain lying in the Post Office until 3 o'clock on the afternoon of the following day before being despatched to their respective destination. This rule causes considerable hardship to business people on this island—there are still a few left, and I shall be glad if you will place the matter before the Postmaster-General and endeavour to get him to issue an order to the postal authorities and put an end to this unreasonable and unnecessary delay. That is an example, one out of many, which shows the inefficiency of the postal service in the Western Isles, and I must confess that it is difficult to reconcile this with an earnest endeavour to make an improvement on the part of the Postmaster-General. Let me give another example. Before the War, the mail steamer left Stornoway on six nights a week to cross the Minch and reach the mainland in time to catch the early morning train which left at six o'clock for Glasgow and the South. That early morning connection enabled the business people of Stornoway and Lewis to go to Glasgow, which is the commercial centre of those islands, to transact business, and to leave for home the same night. Contrast that state of affairs with the condition of to-day. The steamer still leaves Stornoway on six nights a week, but not in time to catch the early train. The steamer is delayed for hours giving the impression to the community that the Government stubbornly refuse to expedite the service, with this result, that the passengers and the mails are left on the mainland pier at Kyle stranded for hours, and they are not able to leave for the South until eleven o'clock, five hours after they would have left before the War. That is also an example of the ineffectiveness and inefficiency of the postal system. I should like to know—and here I want to speak quite plainly—what right the Postmaster-General has to inflict these hardships on these people? I say that he has no right. I say further, that if he will make an earnest attempt, together with the Secretary of State for Scotland, and approach the Treasury for enough money, to maintain a reasonably up-to-date service, he will have—and by this time he knows that he will have—the support of every Member of this House.

Lieut.-Commander BURNEY

May I join with other hon. Members in saying how much we appreciated the very interesting speech of the Postmaster-General. I was particularly sorry that he could not finish his speech because of the shortness of time, as he said that he was going to refer to air mails, but was unable to do so. I want for a very few moments to make some remarks with regard to the possibility of an Atlantic air mail service and to raise one or two points in connection with air mails to other of the Dominions. When I was in the United States recently I was particularly struck by the fact that everybody in aviation circles said that the founder of commercial aviation in the United States was the Postmaster-General. That is very different from the position in this country. I, therefore, went into the question as to how it was that the Postmaster-General of the United States had had this great effect, and why it was that the American air mail service was developing at such a great rate. I found the reason quite clear. What the United States do is this. They make a definite contract with an aviation company upon the following lines. They advertise for companies to tender to take the mails between certain places at a definite price per pound and the Postmaster-General then guarantees to dispatch a certain weight every day, tying down the companies under contract as to both regularity and speed. Therefore, the aeroplane companies have a very definite idea as to the revenue they can earn and the obligations they have to perform. The Postmaster-General takes the risk as to whether there will be sufficient mails on that route to go by air or not. The result has been that in the first two or three years the Postmaster-General has lost, but after that time he has made a profit on those lines, whilst the aeroplane companies have been able to develop upon a definite programme.

I now come to the question of the Atlantic mail service, which I went into first with the Postmaster-General over here, and then with the Assistant Postmaster in the United States. In the United States, Congressman Kelly, of Pennsylvania, has introduced a Bill in Congress whereby the United States Government authorises the Postmaster-General to pay a rate not exceeding three dollars, or 12s. a pound for all mails conveyed between the United States and Europe by air. I understood from the conversations which I had over there that their idea was to charter definitely some 35 tons per week if freight space upon aircraft flying between the United States and Europe was available. Thirty-five tons a week is the entire first-class mail that exists between the United States and Europe. When one speaks of first-class mail, one means letters and postcards and first-class materials only, and not printed matter. The British Postmaster-General said that he would pay 8s. a lb. or two dollars a lb., one dollar less than the United States. Instead of chartering space, he would issue a special stamp, say, a 6d. stamp or something of that kind, and those who desired the fastest service would buy that stamp, and letters so stamped would utilise that mail service. The great difference between the two systems is that, on the one hand, those who are endeavouring to put these air services on know definitely on the United States side the amount of revenue they can obtain if they secure the United States contract, whereas under the British system they have no idea as to how much revenue they are likely to obtain.

Another factor which was borne in upon me while I was in the United States was that I understood the idea of the United States Postmaster-General was to make no extra charge whatever for sending mails by air between the United States and Europe, the idea being that the increase in speed will be of so much value to the business interests as a whole that whatever extra cost it might be to the Postmaster-General would be more than compensated for to the country as a whole by increased trade. Why I raise this point now is that in the latter part of this year one ship in Germany and one ship in this country are likely to carry out these demonstration flights across the Atlantic, with the idea of raising money to found a regular and constant service between the United States and Europe. When I say the United States I include Canada, I ought to say, between North America and Europe. It is going to be of very great assistance to those who are endeavouring to raise finance for this purpose, to know definitely what they can depend upon from the various postal authorities. I do not think that any subsidy is required, but I do say that if the British Government and the Canadian Government are prepared to pay 12s. per lb. for all mail matter crossing the Atlantic in 48 hours—and it must be worth while to the business interests of the two countries for that to happen—definite tenders should be published by the Government and called for by public competition, it seems to me that the first step must be taken by Governments on both sides of the Atlantic if they wish to encourage swift transport of mails.

I would, therefore, make this suggestion to the Postmaster-General, that he should get into touch with the Governments of India, Australia, New Zealand, South Africa and Canada and ask them if they will come to some definite conclusion as to how they propose to handle this whole question of trans-oceanic air mails. I do not think there is any doubt in the mind of anybody that trans-oceanic air mails are bound to come. They are probably coming very much sooner than most people expect. If that Committee could be formed, and if it could lay down the definite policy which each Government will carry out, it would be of the greatest assistance to all those who are endeavouring to bring about these developments. It must necessarily bear on the question of the reduction of Empire mails from 1½d. to 1d. Under the present system there is a considerable surplus which could be used for financing faster traffic. We spend many hundreds of thousands a year, it may run into millions, in subsidising shipping companies and railways for carrying mails perhaps one or two days quicker than they would otherwise be carried. I see in the future the possibility of the Postmaster-General securing a very great saving by withdrawing these subsidies, because if there is a faster mail which can take all ordinary letters and postcards and other really important matter, and leave the printed master to go by a slower service, there will be no point in paying these large sums in subsidising shipping companies and railways to carry the whole of the mail two days quicker. I think the eventual result will be that the Postmaster-General will save very considerably on subsidies.


Is the hon. and gallant Member asking for a subsidy? Is he begging for some assistance, in the same way that the Federation of British Industries come to beg?

Lieut.-Commander BURNEY

We are not begging for any assistance. All that I am suggesting is that as the trans-Oceanic air mail is coming, some organisation will have to be set up to deal with that matter, and it will be of great assistance to those who are trying to bring these things about that the Government should decide now upon the lines on which they are going to deal with that question, instead of waiting until a later date. Obviously, if the mail is going to be carried from here to India in a little over 48 hours, it would cost more to do that than it costs now, when it takes 17 days. It is a question whether you are going to adopt the normal postal system and charge the same amount for sending a letter across the street in London as you do in sending a letter from London to Australia, or not. The question which has to settled is whether these air mails are going to have a surcharge or whether the cost of paying for these air mails is going to come from the surplus earned in carrying the balance short distances. I do beg the Postmaster-General seriously to consider these matters, to discuss them with the Dominion Governments and to lay down some definite policy so as to give us guidance and let us know how we are to expect the air mail to be handled.


The whole Committee will have listened with great interest to the speech which has just been made by my hon. and gallant Friend, and will congratulate him on looking forward so wisely to a solution of this problem, which is bound to come up for solution in the near future. I hope that the Postmaster-General will have taken note of the very important remarks of my hon. and gallant Friend.

As this Debate is very shortly to come to a close, I do not propose to detain the Committee for more than a few minutes, but I wish to refer to a subject of great public interest which has not received much attention from the Committee this afternoon, namely, the British Broadcasting Corporation. The Postmaster-General hap touched upon the techncal side of the activities of that corporation. I leave that aspect of the matter in favour of an aspect which is far more important, namely, the general provision of programmes for the public. The Postmaster-General cannot have failed to notice the growing volume of criticism which is being directed against the British Broadcasting Corporation. Not only in private conversation but in every newspaper the utmost indignation is manifested against the corporation. The right hon. Gentleman would be perfectly justified in hiding behind the corporation and refusing to interfere in its activities if its activities were beneficent and if it were taking full advantage of its great opportunities for influencing the life of this country; but the corporation is dismally failing. I prognosticated at the time it was instituted that it was bound to fail.

Any Corporation so constituted is, quite clearly, incapable of discharging the important function with which it is entrusted. If you simply make a collection of ex-politicians and ex-schoolmasters or any other prominent citizens who happen to have nothing to do and who are willing to render service in return for a salary; if you select people on that basis and put them in charge of a new invention, full of great possibilities, you are wrecking that invention at its very inception. What has not been realised is that broadcasting is, or ought to be, as much a profession as journalism, the Bar, medicine or any other profession. There is no broadcasting sense whatever displayed. The microphone is being used to-day simply as a medium for the propaganda of every other art in the country except its own art. The mere fact that a comedian can entertain the public on the stage by the use of facial gesture is considered to be sufficient justification for engaging him to annoy listeners night after night.

What would happen to any other profession that proceeded on that basis? What would happen to a profession which selected my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) simply because he was a great orator, to play the part of Hamlet? That is the whole principle on which this Corporation proceeds. Some gentleman, for instance, has made a special study of snails. He may not be able to articulate the English language, and yet he is called upon to give a course of lectures upon the subject of snails. That will go on until we get a Corporation which understands something about entertainment and something about psychology. The Government have appointed a Corporation which is fitted to be the governing body of some public school. The great advantage of having an impressive body governing a public school is that it does not attempt to govern; but these people on the Broadcasting Corporation are paid. What are they doing for their money? They have simply got hold of plays by Shakespeare and they have taken the most commonplace people from all over the country and inflicted them upon the British public.

They must train broadcasters, just as the journalist is trained. The mere fact that a gentleman knows something about snails does not entitle him to write an article on snails in a London newspaper. Not only must he know something about snails, but he must know how to write. Similarly, the Broadcasting Corporation ought to rain broadcasters, people who are trained to place before the public in an individual way, individual to broadcasting, what they have to say. In so far as they do not confine themselves to giving us bits of music and introducing comedians to us, they give us stale news. The public is really having a very bad time with this Corporation, when it should be instructive and entertaining in a far more efficient way.


How is the training to be given?


In the Children's Hour.


I am astonished that an hon. Member of the intelligence of the hon. Member for Cambridge should ask me such a question. How are doctors trained? How are journalists trained? They have fostered the professional sense. They have something to give to the public which no other profession can give. But the British Broadcasting Corporation has no professional sense. It assumes that because a man can act on the stage he can also talk to the people through the microphone. An entirely different art is required. There is another important point on which I want to ask the right hon. Gentleman a question. He lifted the ban on political controversy. For some extraordinary reason a ban was placed on political controversy. The people were to hear about everything in the world except politics. That ban has been lifted. What has been the result?—a debate between the hon. Mem- ber for Bridgeton (Mr. Maxton) and Sir Ernest Benn. That is the only result of lifting the ban on political controversy. I say that it is dangerous to allow broadcasting on medicine, music, or insects, on every possible subject on which the public is interested, except politics; and it is particularly dangerous in view of the recent extension of the franchise.

We have now complete manhood suffrage. We do not call upon every citizen at the age of 21 to play the piano or understand something about snails, but we do call upon every citizen at the age of 21 to play some part in politics. They get no information, or at any rate less and less information, about politics from the newspapers. They cannot come into the Galleries of this House because they are too small, and, therefore, they have no opportunity of being associated with politics. The Home Secretary, when introducing the Bill extending the franchise to women, said that it was the completion of democracy. It was nothing of the kind. It was a restriction of democracy, beneficent and necessary though it was. Each time you enlarge the electorate, you make it more and more difficult for the individual of independent views to stand as a Parliamentary candidate. He is bound to depend on the caucus, and the caucus governs not only the constituencies but this House. Members simply act like vote registering machines.

What is the corrective for this? It is to associate them with government, to teach them something about the machinery of government, and acquaint them with what is happening in politics. That is the one thing we are afraid to do. How can anyone claim to be a democrat and at the same time say that the people should not have an opportunity of listening to the proceedings of the House of Commons? It is only by that process that you will ever get a real democracy in this country. In Greece and Rome, where democracy did exist, everybody could go into the market place and listen to the politicians talking. [An HON. MEMBER: "God help them!"] Here is an hon. Member who submits himself to the democracy and yet says, "God help them." God help them if they should know what he is doing here, or what he is not doing. We should get rid of people who do nothing if the public knew what some of us did or did not do. Since the days of Greece and Rome you have never had a democracy. You have a representative system in this country. The microphone, for the first time, places democracy within the reach of a large community. It is a wonderful invention which has opened up great vistas full of possibilities, and the British Broadcasting Corporation has been too lame and halting and frightened to take advantage of its opportunities.


I am somewhat tempted to follow the hon. Member who has just spoken in the avenue he has opened up by his criticisms of the British Broadcasting Corporation, but time is too short for me to do so. I entirely agree with a great deal that he has said as to the type of programme which is given, particularly with regard to the news, which seems to be a repetition again and again at different times of the day of the same thing. One is also tempted to explore the possibilities of what might happen to hon. Members if the proceedings of this House were broadcasted on an afternoon like this, and, particularly, if the public had any idea of the attendance in the House on such an important occasion. I want to congratulate the Postmaster-General on the very able and businesslike statement he has presented, and to commiserate with him that his annual Report of the service which comes more closely into contact with the lives of the mass of the people should have been delivered on an occasion when there were so few hon. Members present to hear it. Nothing gives me greater pleasure or delight than to see the right hon. Gentleman trying to reassure himself as an individualist and then delivering an excellent panegyric on the good work of a State-owned enterprise.

After giving us the wonderful record of his stewardship and announcing the biggest surplus ever yet declared on the Post Office revenue he went on to tell us he was not enamoured of State enterprise. We accept his statement but I imagine his education has been improving at a tremendous rate recently, and nobody could have been more uneasy than the Assistant Postmaster-General as he listened to the account of the work done by the Post Office, by a State-owned enterprise, especially having regard to the somewhat unhappy speech which brought him into notoriety some little time ago. I regret that the Postmaster-General did not give the House some report on the newer developments in the service, such as the cash on delivery system and the prospects with regard to the postal cheque system. Having regard to some criticisms which have been passed recently I think the House should know, with regard to these particular developments, that the Post Office trade union have played a most important part in bringing them forward. Twenty years ago in a pamphlet issued by the staff of the Poet Office trade unions, which was afterwards expanded into a publication issued by the Fabian Society, they outlined a scheme of further trade and business which included the cash on delivery system and the postal cheque system. The Associations in the Post Office looked further ahead than the heads of the Department.

When trade unions are criticised that their only concern is hours, and wages, it is well for the House to be reminded that they are also concerned about the development of the trade and business with which they are associated. Twenty years after these projects were adumbrated by the staff themselves we have the Department coming forward and having to admit that the cash on delivery system has been a success; and a success in spite of the administration, because the Government have not utilised all the opportunities which were open to them in order to bring this service to the notice of the public. If any other business concern had had charge of it they would have advertised it extensively, as the Government might have done with the great facilities at their disposal. But their own unwillingness to admit the success of a State-owned service has hampered this service in its development.

I take this opportunity of expressing my appreciation, which I am sure the whole staff will endorse, of the right hon. Gentleman's protest against the attacks which have been made on the staff in the Press and elsewhere, uninformed attacks to which the staff have no opportunity of replying. I am sure the staff will appreciate very much the fact that they have at their head a chief with sufficient courage and fair-mindedness to protest in this House against these attacks and say that if they are to be made they should be directed against himself. Although I can no longer speak as an official representative of that body I know that I voce their feelings when I say, "Thank you" to the right hon. Gentleman. The deficit in connection with the telegraph system has already been referred to. The hon. Member for West Islington (Mr. Montague) suggested that about half of that deficit, £500,000, was accounted for by concessions made to the Press;, and I thought the Noble Lord the Assistant Postmaster-General dissented to that statement. I have looked up the matter and I find that although my hon. Friend was not exactly correct he was yet within tolerable distance of accuracy, because according to an answer given by the Noble Lord himself in 1926 the figure works out at £416,000. Therefore, my hon. Friend was near enough to justify his case.


Can you give me the date?


I will have it looked up. Let me refer to the criticisms in the Report of the Hardman Lever Commission on the staff. They were criticisms made by a man identified with a firm that has gained considerably by cash losses on the telegraph system. The right hon. Member for Ross and Cromarty (Mr. Macpherson) went out of his way to identify himself with the attacks on the staff in the Hardman Lever Report.


I carefully said that criticisms of the staff should be fair and in proper proportion, and I asked whether the Postmaster-General had put into operation any of their recommendations.

7.0 p.m.


The right hon. Member confirms what I have said. When he read the extract from the Hardman Lever Report he was associating himself with criticisms which were distinctly unfair. The Commission exceeded their terms of reference, and on behalf of the staff I say that it was an attack which was without any foundation or any knowledge of the circumstances. One word with regard to the suggestion made as to the development of the telephone system. The telephone system has developed at a tremendous rate, and the City of London can compare with any other city in the world as far as telephone facilities are concerned. I am left quite cold when the comparison with the United States is made, because there can be no comparison between a country which is a continent, with immense tracts of territory, and this country. I still feel that a great deal more might be done by the right hon. Gentleman and his Department to create what one might call the telephone instinct. My hon. Friend the Member for Edgehill (Mr. Hayes) informs me that in Liverpool there is a firm employing 3,000 persons in the manufacture of telephone instruments, which has given notice of impending discharge to a number of its employés owing to diminishing business. I am informed that the full capacity of that firm would be 5,000 persons. With the large surplus which the Postmaster-General has got, it would be good business to employ that firm to the fullest extent on forward orders in order that we might extend the telephone system more rapidly than we do. Instead of that, we seem to be holding back and taking steps only as we are pushed here and there, instead of going forward all the time. If the Postmaster-General adopted my suggestion, he would be helping his own Department, helping the rapid growth of the system and giving employment in Liverpool which is bound to have repercussions elsewhere.

Perhaps the Noble Lord would give us some information with regard to the postal cheque system. Although we all welcome it as yet another step in Post Office development, at the same time it seems clear that the Post Office have again gone with halting steps. They have feared to go the whole journey. One detects in such reports as we have seen, that the influence of the joint stock banks has been at work. Why take, for comparison, Belgium, a small country with nothing like the experience Germany has had of the development of this great system? In Germany, as far as I remember the figures, the business has grown to something like £8,000,000,000 a year. That is a tremendous business well worth developing in a country like this. It will help trade and commerce to a tremendous extent, and will draw into the Post Office a tremendous amount of money not now deposited by small depositors who would not think of going to joint stock banks. In that way the State would be helped by cheap money and trade would be facilitated, which is what we want to-day. I hope we will take this first step, and gradually begin to develop on wider lines.

I would emphasise again, in spite of the criticisms that have been made against our telegraph system, that, as the Postmaster-General has himself testified, the average speed of the telegraphs in this country will compare favourably with that of the telegraph system in any other country in the world. As to our telephone system—well, some of us who have used the telephone in America are not so convinced that they have much to tell this country in regard to that system. An hon. Member says America is far better. He will have to fight that out with the Assistant Postmaster of the United States, who has testified that America has nothing to teach this country with regard to telephones. I do not profess to the intimate knowledge which the hon. Member has, but I have been to America on several occasions, and my knowledge leads me to support the evidence of the Assistant Postmaster-General of the United States on this subject. The Postmaster-General is to be congratulated. I hope he will get to work on the service, and that it will be developed still further, and the public given more facilities.

The hon. Member for the Western Isles (Mr. Livingstone) asked for a daily letter service to the Western Isles, and that would enable them to run a daily steamer to those Islands. I am quite in sympathy with that, but I would point out the awkward difficulty which some of those hon. Gentleman below the Gangway, who are always praising private enterprise, get into when they try to ride two horses, as in this case. They would not dare to make such a suggestion to a private company. It is because it is a public enterprise, which recognises that it is there for service, not profit, that they make a suggestion which is bound to have the sympathy of all right thinking men and women. I would remind my hon. Friends who still have some leanings to private enterprise and against State en- terprise that they land themselves into difficulties, and that they unconsciously pay tribute to the success of State enterprise such as we are now considering. With these comments, and again expressing my appreciation of the Postmaster-General for taking the fair-minded attitude he has done in regard to his staff, I conclude by hoping that another opportunity will be given us later on to discuss the work of his Department, and that he will have ample opportunity to finish the statement cut short some time ago.


May I ask the Noble Lord, seeing that the telephone service is being so extended, why men are being put off now after 30 years of service, with only £45 gratuity?

Viscount WOLMER

With reference to the particular point with which the hon. Member has presented me before my speech, if he will bring a specific case to my notice I will carefully go into it. I cannot possibly deal with the case without notice and without details.


I put down a question at the beginning of this week, but unfortunately it was put off until next Tuesday. Whether it was to obviate this discussion or not I do not know.

Viscount WOLMER

The hon. Member will forgive me if I do not go into that matter now, and I think the Committee will agree with me, because, if my right hon. Friend found it difficult to cover the ground in an hour, it is obviously still more difficult for me to cover all the points, which were made in so many interesting speeches in different parts of the Committee, in 20 minutes. I will select just those points on which I think the Committee would like to have a little information from this bench. I should like to take, first of all, the British Broadcasting Corporation. The right hon. Member for Ross and Cromarty (Mr. Macpherson) asked whether we might expect an improvement in the service in the North of Scotland, an improvement in the strength of the service. I understand that the Corporation are contemplating a change of wave lengths in the Aberdeen station which might, possibly, to some extent, get over the difficulties which are now being encountered.


Will that be with increased power?

Viscount WOLMER

No, that will be a change of wave length. The right hon. Gentleman knows that it is interference from ships and from coast stations that is one of the causes of difficulty at the present moment. The Aberdeen wave length happens to be rather close to the ship band.


I am talking about the district north of Inverness. I understood the hill had something to do with it.

Viscount WOLMER

That is another point; I will go into that. In regard to wave lengths, it is hoped, if it is possible, though I cannot promise it will be possible, to change the wave length. It is hoped that there might then be some improvement in that respect. In regard to the bigger question of how Scotland is to come into the regional scheme of the British Broadcasting Corporation, I can tell the right hon. Gentleman and the Committee that it is part of a plan of the Corporation to have one of their great high power regional stations at Glasgow. They will be able ultimately to give a greatly improved service to Scotland by means of that station. Therefore, I think that the people of Scotland can feel that their needs are not being overlooked and that there will ultimately be an improvement from the difficulties, which, it is admitted, do exist at the present time.

The right hon. Member for Norwich (Sir H. Young) raised a most interesting constitutional point into which I do not think I can go very fully this afternoon. He said that the Corporation was almost a constitutional danger, because it was not responsible to this House and there was no control over it. The hon. Member for Devonport (Mr. Hore-Belisha) made an attack upon the programmes which are now being offered to the public. Personally. I should like to repudiate as strongly as possible the attack that was made by the hon. Member for Devonport upon the programmes of the Corporation. I do not believe that that represents the attitude of the country at all. In fact, I can tell the Committee that, when foreigners come to England, they speak in tones of the warmest admiration for our broadcast service, which, I think, is admittedly the best ill the whole world. That surely is one answer to the right hon. Member for Norwich that, if the programmes of the Corporation do not commend themselves to the public, the Governors will hear a great deal about them. That is one answer.

I need hardly say that the Corporation has a most careful system of analysing the thousands of letters which they receive from listeners-in all over the country. The same means are open to them of gauging what public opinion is on their programmes as is open to a newspaper proprietor or to a board of a great public company of ascertaining whether the public appreciates the stuff that is being offered to them. Beyond that, and on the constitutional point that the right hon. Gentleman raised, I really think he was building himself a little mare's nest. Of course, constitutionally speaking, the Postmaster-General is ultimately responsible for the British Broadcasting Corporation. What my right hon. Friend has done is to say that it is his policy not to interfere with the programmes of the British Boadcasting Corporation, and I believe that in that policy he has the support of this House and the country. I do not think that we should gain anything by having the Post Office interfering with the programmes and technical management of the Corporation. That is a totally different thing from what the right hon. Member for Norwich suggested—that there is no constitutional control over the Corporation. That is not the case at all.

I must pass from that to the Hardman Lever Report on the Inland Telegraph Service. The right hon. Member for Ross and Cromarty asked a number of questions as to what the Postmaster-General intended to do with the recommendations of that Report. He asked what was to be done in regard to the reduction of staff, the grading of duties and the rotation of duties. I can tell him that progress is being gradually made in all those directions, but he knows better than most people that where the staff are concerned all matters must be dealt with in the proper way so as to avoid hardship and the breaking of pledges or understandings or friendly relationship with those with whom you work. The recommendations of the Hardman Lever Committee are already being carried out in those respects. My right hon. Friend has spoken of the changes that he had already inaugurated before the Committee reported.

In regard to some of the other recommendations of the Hardman Lever Committee, I ought to say at once that the Postmaster-General has decided not to increase the telegraphic rates to the public. That was a tentative recommendation of the Committee, but the Government have felt that that would not be a right step to take, at any rate at the present time. With regard to the increase of rates to the Press, that is a matter which is still under consideration. Of course, the Press would have to be consulted. We have received more than one deputation on the subject at the General Post Office, and there have been other representations. Therefore I cannot make an announcement on that particular point this afternoon. There is one other small recommendation which may interest the Committee, and that is the recommendation that the public should in future be absolved from the duty of licking stamps at telegraph offices. My right hon. Friend has decided that that should be carried out forthwith. I think, therefore, that the Committee will see that the Hardman Lever Report has not been pigeon-holed and that in so far as it has made useful suggestions—it has made useful suggestions, although hon. Members on both sides may not like everything that it says—they are not being lost sight of.

I ought to deal also with the question of air mails, as to which the hon. and gallant Member for Uxbridge (Lieut.-Commander Burney) asked a question. The Committee knows that the hon. and gallant Member is a great authority on that particular subject, and I can assure him that everything that he has said this afternoon will be very carefully considered by my right hon. Friend and by the Department. The Post Office is most anxious to encourage air mail traffic, and we have really made very great progress in that respect during the last few years. Last year over 100,000 lbs. of letters and parcels was despatched by air mail from this country to destinations abroad. That is really a very big figure when you reflect what an exceedingly small load an aeroplane can take. It represents a growth of over 40 per cent. during the last three years. These air mails can be run from this country as far as Basra, Moscow, Constantinople, and practically speaking the whole of Europe is now covered by air mail service. This development has greatly increased the possible speed of letter transit. The service has already reached the very large dimensions that I have mentioned. We are all looking forward with the greatest interest to the airship developments that are promised for next autumn. I have not the slightest doubt that the Post Office will take the fullest advantage of any service that the progress of science can give. There will be no one in the State more pleased than the Post Office if the time of transit of letters between this country and India and the Dominions can be largely reduced.

The hon. Member for North Camber-well (Mr. Ammon) asked one or two questions in regard to cash on delivery and postal cheques. Cash on delivery has been a success ever since it was instituted. The hon. Member had to admit that it had been a success, but I admired his ingenuity in attacking the Government because it had not been a greater success. As the Committee know, that service has been run consistently at a small profit. Over 1,500,000 parcels are being carried by it annually. It has undoubtedly proved a great convenience in many parts of the country. It is not costing the country a penny and there has been no difficulty or friction in its working. It is really still too soon to say whether the further extension which the Postmaster-General has inaugurated, by linking up that system with the railway service and thus enabled agriculturists to send large and weighty parcels by cash on delivery—it is too soon to say what dimensions that service will attain. Personally I do not mind confessing that I have been a little bit disappointed by the response to that particular extension. The Postmaster-General gave the figures to the House two days ago. This matter is in the hands of the railway companies, who are advertising the service very widely throughout the country, and I hope that agriculturists generally will realise that it is of real value to them.


It will take them a few years to think.

Viscount WOLMER

The hon. Member also asked one or two questions about postal cheques. The Postmaster-General appointed a Committee to inquire into this matter and report. They presented their report a short time ago, and at the request of hon. Members opposite the Postmaster-General has laid the Report as a Command Paper, and it is now being printed. I cannot say anything more about it until its contents are made public, but I have no doubt that they will receive the careful consideration of the hon. Member. Then I must come to the impassioned and fiery attack that was made on the Post Office by the right hon. Member for Boss and Cromarty, backed up by several of his Scottish colleagues. What was their complaint in general against my right hon. Friend and against the Department? It boils down to this: That we do not have enough deliveries, that we do not have enough telephones, that we are not spending enough money in Scotland or in the country districts generally. It is a very difficult thing to deal with the Liberal party, because whenever you are discussing finance they always stand with——


The Noble Lord need not attack the Liberal party. Members of his own party, in all the Debates on the Post Office Vote, have said the same thing from every corner of the House.

Viscount WOLMER

I am taking the liberty of replying to the right hon. Gentleman who, I understand, still belongs to the Liberal party. Perhaps he does not; I do not know. I was merely saying that what the Liberals are doing on this occasion is what they have done on other occasions. First, they complain that the Government are spending too much money, and then they complain that we are not spending enough. The shorn answer to the right hon. Gentleman must be that these Scottish services are nearly all already run at a loss. We already spend a great deal more money on Scotland than we take out of Scotland To say that Scotland is not getting its fair share of the Post Office service is to say something that is not true.


I was dealing with country districts generally, with Wales and with England also, where there are complaints arising just the same as mine. What we want is a revival of the pre-War service. The War has been over for 10 years and the service in the rural districts of England, Scotland and Wales is worse than it was in 1914.

Viscount WOLMER

I agree with the right hon. Gentleman that we have still great progress to make in that direction and a great deal of leeway to make up, but it is not fair or right to represent the Postmaster-General as having done nothing to improve the service of the Department in the country districts. On the contrary my right hon. Friend has done a great deal. I will give to the Committee a few facts to show what progress has been made. Do not let anyone think that I am arguing that no further progress can be made. On the contrary, we want to make a great deal more progress. Since the Postmaster-General has been in Office over 700 rural telephone exchanges have been established and the number of rural telephone subscribers has increased from 80,000 to 123,000. Over 300 railway stations in the country have been provided with telephones. Rural call offices have increased from 5,400 to 7,600. The, policy of using motor vehicles, which my right hon. Friend has introduced, has improved the Postal Service in many parts of the country. The number of motor vehicles has been increased from 600 to 1,800. My right hon. Friend has almost trebled the number of motor vehicles carrying mails to remote parts of the country. The number of rural telephone exchanges in Scotland has been very nearly doubled since my right hon. Friend came into office.

It being Half-past Seven of the Clock and there being Private Business set down by direction of the Chairman of Ways and Means, under Standing Order No. 8, further Proceeding was postponed, without Question put.