HC Deb 21 November 1928 vol 222 cc1747-875

Order for Second Reading read.

The FINANCIAL SECRETARY to the TREASURY (Mr. Arthur Michael Samuel)

I beg to move, "That this Bill be now read a Second time."

This Bill is a necessary step in giving effect to the recommendations of the Imperial Wireless and Cable Conference. That Conference contained representatives of every part of the Empire. Its Report was laid before the House some time in July last, and was debated on 2nd August. This Bill authorises the sale of the Pacific Cable undertaking, the West Indian Cable, and the two Transatlantic Cables which are in the possession of my right hon. Friend the Postmaster-General. It also provides for the dissolution of the Pacific Cable Board when the transfer of the undertakings for which that Board is responsible is completed. [An HON. MEMBER: "Shame!"] The Bill does not deal with the Beam Service. As the House will recollect, the Imperial Conference recommended the sale of the Pacific, the West Indian and the Atlantic Cables outright. I assume that hon. Members have already in their hands the Report of the Imperial Wireless and Cable Conference, Cmd. No. 3,163, to which I shall refer as I proceed. They also recommended that we should lease the beam—only lease it—for a period of 25 years. We are to receive for the beam a basic rental of £250,000 a year, and for a period of 25 years that represents a present value of, roughly, £4,000,000. If the profits of the Communications Company after three years exceed a fixed standard of £1,865,000, 12 per cent. of such excess profits are received by us; and of the balance of the surplus, half goes to the company and the other half goes to the public in the form of reduced message rates or improved services.

May T come now to the three cable systems which we ask power under this Bill to sell outright? All these three cable systems have, as is known, been seriously affected by wireless and beam competition.


So has the small shopkeeper by the multiple shop.


May I take, first, the Pacific Cable? This is a company owned jointly by His Majesty's Government in Great Britain, by Canada, by Australia and New Zealand. Its financial history has been very chequered. It opened business about the year 1901—to be accurate, I think it was in 1901—and for the next 14 years there were constant deficits on its working and the partner Governments had to defray these deficits each year. From 1915, when the deficits ceased, to 1927 profits were earned, and were largely devoted to the duplication of the cables. These profits were made in times of exceptional traffic: during the War there was exceptional traffic, and also in the period immediately succeeding the War. These profits throw no light upon the present position or on the prospects of the system, because they were earned in abnormal conditions. In the year 1927–28 a Beam Wireless Service was introduced between the British Isles and Australia. This system entered into competition with the cables, to such an extent that for the year 1927–28 there was a fall in the receipts of the Pacific Cable Board of no less a sum than £80,900 for that one year.


How much profit did they make that year?


That I cannot say, off-hand.


It is important.


My right hon. Friend the Secretary of State for Scotland, who will wind up the Debate, will no doubt take a note of that point. I have not the exact figure in mind for the moment.


Is it not to he the Postmaster-General?


It may be. I do not know. That question shall be dealt with in due course. Perhaps this statement will very nearly answer the question of the hon. Member for East Bristol (Mr. W. Baker)—the Pacific Cable is just now earning only sufficient money to pay interest upon its loan capital. If wireless competition continues, there is every reason to suppose that we should return to our former experience of annual deficits. The loan capital outstanding is £1,233,000. I would ask the House to bear in mind that the loan capital is figure again, and I want to avoid causing confusion in the minds of hon. Members. The cable is to be sold on the basis that the Communications Company take over this debt of £1,233,000 and pay, in addition, a capital sum of £517,000, which is divisible between the partner Governments. The price for the cable was recommended to the Imperial Conference by independent financial advisers of great experience as being, in their judgment, entirely adequate. The recommendation to sell, and at this price, has been accepted by all the partner Governments who with ourselves are interested in the finance of the Cable Board. All these partner Governments, who with ourselves would be responsible for future losses, have now come to the conclusion that it is in their interest to accept the offer made. The House will remember that the Dominion Governments are interested in this transaction in these proportions—the Dominion Governments thirteen-eighteenths and His Majesty's Government five-eighteenths.

Now I will refer shortly to the West Indian Cable. The West Indian Cable is owned by Great Britain, by Canada and by some of the West Indian Islands. The partner Governments, including ourselves, have had to meet losses every year since the cable started, and in present condition the loss is a growing one. It has a debt in respect of the original capital of £379,000, and that is evidently far from being a revenue-earning proposition. This cable, upon which there is an outstanding debt of £379,000, will be sold for £300,000. The remaining property is the Imperial Cables. These consist of two cables across the Atlantic operated by the Post Office; one of them is an ex-German cable. These cables have usually earned a small profit of about £6,000 a year: but in the last completed year they earned only £1,300. These cables will be sold for 2450,000.

May I sum up the position? If we take the three properties together, the partner Governments 'are relieved of a debt of £1,233,000 on the Pacific Cable. The partner Governments, besides being relieved of the debt, will also receive in cash £1,267,000. I think that was one of the points which had been raised by hon. Members opposite. Perhaps it will be as well if I split up the £1,267,000, so that hon. Members will see how it is made up. It is made up of £517,000 cash in respect of the Pacific Cable, £300,000 cash in respect of the West Indian Cable, and £450,000 in respect of the Imperial Cable Those three items make up £1,267,000, Apart from that, we receive an annual payment of rent in respect of the beam of £250,000, plus £60,000 cash. The cables are, in fact, barely paying their way, and, so long as present conditions continue, we have to look forward to increased competition both from wireless and also from fresh foreign cables. With this increased competition we have also to look forward to the probability of growing losses. The cables may be, and ought to be, a better earning asset when put into a large cable wireless combination. We are satisfied, and so are the partner Governments, that we are receiving fair and adequate terms.


Will the hon. Gentleman give us the names of the partner Governments?


The Governments participating in the Conference were Canada, Australia, New Zealand, the Union of South Africa, the Irish Free State, the Indian Government, our Colonies and Protectorates, and His Majesty's Government in Great Britain.


Which of those Governments initiated the sale?


I think the Government of Canada suggested the Conference. We are satisfied with what we are receiving, and the partner Governments are equally satisfied. May I now turn to the detailed provisions of the Bill. These deal in the main with matters of machinery on which I need say very little. Clause 1 authorises the sale of the Pacific Cable, undertaking with the consent of and on terms approved by all the partner Governments. It also provides that, if the recommendations of the Wireless Conference are carried into effect, the share of His Majesty's Government in Great Britain in the purchase price shall be paid to the Treasury. As I have, already indicated, the cash payment is to be £517,000, of which the share of this Government will be five-eighteenths or about £144,000. Sub-section (b) of Clause 1 states that the annuities for which the Communications Company assume responsibility shall be paid to the National Debt Commissioners. Further, it continues the Consolidated Fund guarantee of those annuities which formed part of the security on which the National Debt Commissioners agreed to make the original advances. As the sale is to have effect as from 1st April, 1928, Sub-section (c) repeals as from that date certain Sections of the existing Acts which naturally become inoperative under the new arrangement, such as provisions for making good deficits, the division of profits, and allocation to reserve.

Clause 2 gives authority for the sale of the West Indian undertaking. Subsection (a) provides that the payment of £300,000 which the Communications Company make shall go to the National Debt Commissioners in reduction of the outstanding debt of about £379,000. The annuities for debt repayment will then be recalculated. Sub-section (b) continues the charge of those annuities on the Consolidated Fund so far as they are not otherwise provided for. Subsection (c) effects certain repeals of a similar kind to those I have already mentioned in regard to the Pacific Cable.

Clause 3 provides for the dissolution of the Pacific Cable Board on a date to be fixed by Order-in-Council. This can only be determined by the date at which it is found possible to effect the transfer of the undertakings for which the Board is responsible. The whole of the legislation relating to these undertakings will then be repealed, with the proviso that the repeal shall not affect any liabilities which may have been assumed by the Dominion and Colonial Governments interested in the West Indian undertaking.

Clause 4 deals with the sale of the Imperial Cables undertaking. These are the two transatlantic cables which are operated by the Postmaster-General. In this case, there is tm debt to be redeemed, and therefore the Clause provides that the sale price of £450,000 will be paid to the Treasury.

4.0 p.m.

In this Bill, we are following the trend of modern industrial and scientific development. In the unanimous opinion of the Conference, it is impossible to go on with the cables in several different hands and the wireless in other hands. Such a system is wasteful and uneconomic. The object of the present proposals is to avoid overlapping and secure economies for the benefit of the consumer. The scheme is protected by adequate safeguards to secure that end, including an Advisory Committee containing representatives of the different parts of the Empire to watch its working in the interests of the peoples and Governments of the Empire. Before I sit down, I hope the House will give me permission to read the words of paragraph 45 of the Report. I think they sum up, and will convey to the House, exactly what the representatives at the Conference think about the position.

After an exnaustive study of all the factors involved and consultation with all the available interests concerned, we feel convinced that the scheme outlined above provides the best solution of what is a problem of the first importance to all-parts of the Empire. The telegraph service is not only a matter of common interest, but possibly the link on which, more than any other, the several parts of the Empire depend for mutual intercourse and mutual understanding. Our recommendations will, we believe, establish this service on a firm foundation, lead to its development and provide for its administration in a manner well calculated to bring to the communities which it is its function to serve all the benefits which naturally flow from a rapid, cheap and efficient system of communications. That is the considered opinion of the representatives of all parts of the Empire. They are the views held by His Majesty's Government in Great Britain and by all the other Governments of the Empire. For that reason, I beg to move the Second Reading of the Bill.


I beg to move, to leave out from the word "That" to the end of the Question, and to add instead thereof the words: this House declines to assent to the Second Reading of a Bill which sacrifices public utility to private gain by disposing of valuable State undertakings to private interests, and is of opinion that the introduction by the Government of such a measure in the last days of a dying Parliament, violates sound constitutional practice I think we might congratulate the hon. Member upon the economies of explanation which he has practiced this afternoon. As far as I have been able to gather from listening to his speech, what he is asking the House to do this afternoon is, in technical language, to sell to the Com- munications Company a pup. He is going to sell it to them, as far as his explanation is concerned, and, somehow or other, that company is going to be innocent enough to buy it. But is that the position? It is nothing of the kind. Therefore, in order to discuss the business now before us, we must go into some wider field than the hon. Member has trodden upon. This is no question of selling mere cables. This is a question of very high and very deep national and imperial policy. The Government propose by this Bill, and by the action which is going to succeed this Bill, and must succeed it, and consequently must be discussed in connection with the Bill, to alienate public property and public control. That touches the question of the efficiency of our Imperial communications. It touches the question of Imperial safety, and it touches the whole question of Imperial policy in the ownership and control of its essential services.

The first question I ask is: By what authority have the Government at this stage of their life produced a, Bill like this By what authority have a Government like this taken upon themselves the power to depreciate the national asset which it inherited when it came into office? If the Government were private trustees, if the property with which they were dealing was the ordinary sort of property held by trustees subject to legal obligations, the trustees who might come in and succeed the present body of trustees could quite properly take them into a Court of law for an abuse of their trust. In any event, at this moment the Government have no business whatever to pass this legislation as a pure party Measure, forced through this House by a party Division which will find the support, as far as I can make out, of nobody except the Government and the Government's usual own followers.

The hon. Gentleman talked about this Imperial Conference. Is it the new Tory doctrine that if you have an Imperial Conference, or Conference of any kind, not of people holding responsible positions, but of experts—and I am not sure, looking down the list in front of me, they are all experts; personal interest was far more prominent than expert knowledge—is it the new Tory doctrine that when they get a Conference which is either unanimous or not, when that Conference reports in a certain way, it is an obligation upon the Government to accept that Report? I should like to know if that is so. It will be a very convenient doctrine if that is the position which the present Government now take up. The fact of the matter is, that this Conference was purely advisory. The decision of this Conference has taken no responsibility whatever for action off the shoulders of this Government, and it is the Government themselves who have moved in the matter, and not the Imperial Conference that reported.

The question arises, what is going to be the validity of this contract if any action is taken upon it? What is to be the validity of the contract? If its validity is only to run as long as there is a majority in this House that can be driven into a Lobby in favour of it, then that is a very serious position to take up. If the answer, on the other hand, is that a Government in the same position as this Government, within a few months of a General Election, and in view of the declarations that have been made again and again in constituency after constituency, a Government in that position, temporary in every way, and uncertain as to their life, a few months afterwards may, perhaps, on their deathbed sign a contract like this, and ask that that contract shall receive all the respect, all the reverence and all the obligation of a contract signed by a Government which really do represent the country. Again, that is a very serious answer. So whether we say that this contract is to be observed, or whether we say it is not to be observed, the Government put us in a position which no Government have any business to put this House of Commons in. They never took the least step to consult anybody outside themselves, and when they talk about constitutional action, the effect of such action is just the way to bring the constitution into supreme contempt. I am bound to make these preliminary observations, because, judged by the action the Government now propose to take, they have launched themselves and this House upon a policy which is unfair, unjust, unbusinesslike, and in essence and in spirit, if not in form, is absolutely unconstitutional.

Let us take the merits of the position. It is perfectly true that just before the Prorogation there was a discussion upon this subject, but anyone who has read that discussion—unfortunately I could only read it, as I was away—but anyone who has read the discussion in the OFFICIAL REPORT carefully and quietly, and considered all the implications, must have come to the conclusion that that discussion was inadequate. It was bound to be inadequate, taken as it was on the last day of the Session, when the House was nearly empty. That discussion was quite inadequate to the seriousness of the step the Government were proposing to take. Therefore, let us turn to the Report upon which this Bill is based and which this Bill embodies. Let us study this Report from the first line to the last. Let, us try to find out how this Committee arrived at a policy which it finally recommended. There is not a scrap of evidence that has been given to this House to guide it, so as to check the conclusions of the Committee.

The SECRETARY of STATE for SCOTLAND (Sir John Gilmour)

This was not a Committee: this was an Imperial Conference.


I know, and I apologise if I have used the word "Committee" a little loosely. But if I had said "Conference" instead, every word I have said about the Committee I should have said about this Conference. It is, I admit, a slip of the tongue, but not a slip of substance. The Conference was an Advisory Conference, and so on, and every point I make about it in calling it a Committee is absolutely sound regarding it as a Conference. The Government cannot shuffle off their responsibilities. They could have rejected the Report of the Conference, they could have modified it, or accepted it, and whether they accepted, rejected or modified, it was still the Government, and the Government alone, who were acting. Let us consider this Conference. I say there is no evidence presented to us to show the mind of the Conference itself in all its working, with the exception of two points to which I will refer briefly. There is no evidence presented. It gives us a list of witnesses and interests represented, without the least indication of how they advise. There is an indication about a dissent on one point on the part of the South African Government. What the dissent was we are not told. Never has the House of Commons been treated in such a cavalier way as it has been in connection with the business before us, and the Report upon which that business is based. It is a perfunctory Report, and all that we are told to do is to read paragraph after paragraph, page after page, to read the obiter dicta of this Conference for the conclusion to which it has come.

Let us see how it did its business. If hon. Members will turn to page 12, where the real business began, they will find, from the statement at the bottom of the page, that the Conference had to approach the problem in stages, and the very first step that they took revealed that, before they began their business, their conclusion was in their minds. What is more, if this Report is read carefully, hon. Members will find that the Government played into their hands. From paragraph 32, on page 12, we find that the first step was to consider a lease of the Pacific Cable Board's system. They had to approach the Governments concerned to ascertain whether they agreed as regards the first step necessary to come to a conclusion, and, the Report says: We accordingly enquired from the Governments concerned whether they would view with favour such an arrangement, based on satisfactory terms and conditions. The tenor of the replies received was a little different. It was to the effect that: While reserving any decisions until such time as the terms of any proposed arrangement were available for examination, the Governments concerned did not wish to preclude us from conducting enquiries on these lines. Thus the whole case was given away before any consideration was given to it at all. The next stage was in connection with the proposed merger between the Eastern and Associated Telegraph Companies and Marconi's Wireless Telegraph Company. That is in paragraph 33, and this goes a bit further than the previous one. I will read only the last sentence of that paragraph. If the right hon. Gentlemen opposite want anything else put in, they can ask for it. This is the last sentence of paragraph 33: The replies of the Governments indicated that no objection was entertained to a solution of the problem being sought on the basis of a merger, except that His Majesty's Government in the Union of South Africa made certain reservations in regard to their position and that of the Wireless Telegraph Company of South Africa. There, again, stage number two represents a surrender by the Government. There is no text of the communications that passed between the Conference and the Governments. What is the use of throwing this chunk of letterpress about? This Report, if it had shown any consideration for the House of Commons, would have given us the text of the communications sent to the Governments, because everything depends upon that. The Report would have done more; it would have given us also the text of the replies sent by the Governments to the Conference. Nothing of the kind, however, is given.

The ground having been cleared, they were in a position to enter into negotiations on the merger. Now they knew perfectly well, when they raised that question, that the private companies were engaged in the same business themselves. They knew perfectly well that the Eastern and Associated Telegraph Companies and Marconi's Wireless Telegraph Company were negotiating between themselves for a merger: and, oddly enough, here they do give the text of the communication, although it is not of so much importance, while they do not give it where it is of great importance. What is the situation that we. find at that stage? They are in negotiation with the companies. The companies said, "We are prepared to merge, but only on condition that the British Government will lease us their Beam Service." Then they innocently approached the Government, and put the question to them, "Will you lease the Beam Service?" Does any Member of this House live under the delusion that the companies that were so anxious to get this Beam Service did not know what the reply of the Government was to the Conference? If hon. Members are under any misapprehension in that respect, let them turn to the operations on the Stock Exchange that were going on in those days. But again the Conference assumed that there would be difficulty with the Governments in that respect, so that on page 15 we find paragraph 37, which is a very important paragraph, and ought to be read. It says: As indicated in paragraph 31, any scheme of complete fusion would entail also a transfer in regard to ownership or management of the Beam Wireless and Cable assets belonging to His Majesty's Government in Great Britain. We were informed that the arrangements contemplated by the Eastern and Marconi Companies included a transfer to them of these assets; and it is possible that unless the Beam installations were transferred to the new company the merger would not, in fact, take place. Such a transfer"— and I hope that hon. Members will note this— would involve for His Majesty's Government in Great Britain a departure from the policy hitherto adopted in regard to the conduct of wireless services. We felt, therefore, that no useful purpose would be served in pursuing the consideration of such an arrangement until we were advised as to the attitude of His Majesty's Government in Great Britain towards it. In this case also His Majesty's Government in Great Britain, while reserving any decision until precise proposals were available"— I am afraid that they are not available even now— intimated that they did not wish to preclude us from conducting inquiries with a view to ascertaining whether a satisfactory solution could he found on this basis. Step by step and stage by stage the whole case was given away. The Government having said that they were prepared to do that, the Report goes on to say, at the beginning of paragraph 38, We accordingly instituted negotiations with the Companies. That is a very fair survey of the progress of the business and the evolution of the situation up to that point. What had been the function of the Conference up to then? The function of the Conference had simply been that of a go-between His Majesty's Government and the other Governments on the one hand, and these private interests on the other, at every stage opening up the way for the private interests to get a grip upon the control of the Beam Sea-vice which was owned by His Majesty's Government, and, through them, by the nation. The Conference was simply an agent between the Marconi and Eastern merger and the Government of this country, in order to get the Government to agree to the terms which were laid down by the Marconi and Eastern Telegraph Companies.

The Conference has given a very interesting summary, in the earlier pages of this Report, of how the situation might have been handled. They state a set of possibilities in paragraph 24, on page 10. The curious thing, however, is that, although they put as alternatives to their own proposals several possible proposals, not one of which could have held water on a business examination, they never put as an alternative the possibility of the Government owning the Beam Service and making that the centre for the whole of the cable and wireless communications in the Empire. They never included that as a possibility, or, if they did, their notions of public policy and public business were so hazy that they have mixed it up in general phrases; they have not abstracted it, they have not laid it down and paragraphed it with a letter, showing that they did consider it as an alternative. The only alternative which, in relation to the five or six that they laid down, has any serious business solidity about it at all, is the alternative which they ultimately recommended, and that is only possible because they let out the only other practical and businesslike alternative, and the only one that could have been pushed and examined in the national interest as opposed to the personal interests of those with whom they were negotiating.

The position that we take up is this: Why is it that the Government, who held the key of this situation, have thrown away the key? That explains why the Financial Secretary was quite wrong in making it appear that he was selling a pup; he is being sold a pup. He has thrown away the key of the situation, and he tells us this afternoon—I know that he is doing himself a very grave injustice—that he is the innocent gentleman who went to the market and has brought home spectacles in shagreen cases in exchange for something that was of value. The Financial Secretary is too old a colleague of ours, and we have heard him express his opinions both in private and in public too often to be taken in by him when he passes himself off as a rather foolish-minded and unfinancial Moses. The cable companies fell upon evil days when the beam wireless was made a businesslike proposition. I remember quite clearly when, in 1924, the experiments had been conducted at sea by one whose name, both in the history of science and in the history of the application of science to industry, will go down to posterity with honour; I refer to Signor Marconi. I remember perfectly well when the information was brought to us in 1924 that he was experimenting with a new method of transmitting messages. I remember the controversy that took place as to what our attitude should be towards it, and I remember our very definite decision that it was the business of a Government to pursue knowledge, that, without reference in the least, to what interests were involved, every facility that we could give for the conduct of those experiments would be given, and that, as soon as those experiments were proved one way or the other, then the situation that would be created by their success, assuming that they were successful, should be taken in hand by the Government at once and embodied in their policy of inter-Imperial communication.

Since those days the cable companies have fallen upon bad times, but with the Beam Service owned by the Government and held by the Government, as we insisted, never budging an inch, never allowing a little finger to relax its grip on it, the Government to-day, or up to to-day, has been in possession of the key of the whole situation—the economic key, the business key, and the scientific key. The Government could stand pat and let the cable companies do what they liked. That would be a most unwise and unfair position to take up. I quite agree with the observations on that point scattered through the Report of the Conference. The Government, holding the beam, would have said, "Round this system of ours we are going to group the cables and the wireless arrangement which is going to be made by the people who own the valuable property." The Government would have said: "We, holding the beam system. being business people, will group the cable interests round that. Cables must be kept going for this, that, and the other reason. Fair play must be done to the owners of the cables for this, that, and the other reason. But the control of the whole system, the balancing up of the relations between the cable service and the wireless service of the general broadcasting kind and the wireless service of the beam kind, the interrelation, the development of the one against the other, the finances of the one in relation to the other, the keeping of this efficient service going equipped for all emergencies is not going to be put into the hands of private interests but is going to be kept in the hands and in the control of the Government." That has never been discussed, at any rate so far as this Report discloses. Therefore, we have this unfortunate position in which we now find ourselves.

There is another thing. What view did the Government themselves contribute to the Conference That is very important. Is the picture this? Here is the Postmaster-General. Those of us who have been in Office know the tremendously keen interest the Post Office takes in this matter. The Post Office has done a tremendous service from the days of Sir William Preece in the development of wireless, and without the Post Office I do not think even Signor Marconi, great inventive genius and great practical genius as he is, could have pushed our knowledge, and our application of our knowledge, so far as we fortunately find has taken place. Are we going to take this picture: that there was this inter-Imperial Conference sitting discussing wireless, discussing the beam, discussing the cables, and that the Post Office simply put its heels on its mantleshelf and waited until the Conference came to a conclusion Are we going to take this picture: that the Cabinet as a whole, knowing that these gentlemen were considering it, came to a, common decision to do nothing, to offer no suggestion, but just to answer questions when those questions came to them from the Conference? I do not believe it. I have not a high idea of the Government, but I have a higher idea, than that.

What was the policy of the Government? What did the Government say to this Conference? What instructions did the Government give to its representatives who sat upon that Conference? Were those representatives in constant touch with the Government? Having appointed the Secretary of State for Scotland to sit upon it, did they say to him: "Now, away you go, and do not open your mouth to us about cables until you produce your findings, sealed, signed and delivered"? I do not believe it. I think I know the Secretary of State for Scotland sufficiently well to know that if they had asked him to take up that position he would have declined to do it. Let us know what it was. It is certainly not disclosed here. There is the genesis of the policy. That, as briefly as I can put it, is the evolution of the whole thing, from the day the Conference met, first of all, to consider the question until it produced its policy as shown in the White Paper in front of us.

There are one or two very small points. We are told that this Communications Company is a public utility company. It is nothing of the kind. Would the Government tell us what other public utility company is based on the same sort of finance as this? I know a good deal about them. I would not like to say absolutely that there is none, but I say I have never come across one. Perhaps the Government will give us an example of a real public utility company whose business is on this model. Did ever anyone read a more absurd reason for the 50 per cent. of standard income that is given in this Report? Is their idea that if I were to put money into this great company and, get 6 per cent., I should not give the company sufficient incentive unless I had the-chance of getting 7 per cent.? The whole thing is absurd. What is the secret of the 50 per cent. I It is to bring into, the company's transactions that uncertainty which enables private enterprise to manipulate the market and to run the whole thing in its own interest. You have brains on your expert staff, you have electricians, you have men who have studied wireless in all its ramifications and applications in this country second to none. Put those men at the top of affairs. The development of the company is not going to depend upon its financiers-It will depend upon its scientific experts-Put them at the top. Give them a free, hand and treat them properly. We want your 50 per cent. in order to make it worth while for these people to buy the goods which you are selling so cheap.

Then there is a question or two about control. The guarantee that we are going to have that the public interest, will be considered in the first instance—I am only dealing with the first instance—is that two gentlemen will be nominated by the company and approved by the Government. That is the Government representation. Could anything he more absurd? Supposing that was established and the present Government remained in office. Would any of them say, if the company wanted any two men, that they would disagree? Of course they would not. You know perfectly well that the nomination by the company of the two directors—I do not care who or what they are—who are supposed to safeguard the public interest is a mere fraud and an imposition upon the public. These directors may be nominated by the Government themselves. The less connection they have with the company in making their nomination the better for themselves and the better for the company.

The Advisory Committee has not a status, it has not power and it has not a composition, so far as the Report is concerned. There are certain things stated that the Advisory Committee should do among other things. Supposing the Advisory Committee only had the powers indicated in this Report, every business man in the country knows that those powers would be totally inadequate to enable them to compel the hoard of directors to carry out the will and the advice of the Advisory Committee. How many members? What sort of appointments? What composition? All these things must be disclosed and, until they are disclosed, I contend that the Government are trifling with the House. You ask us to take this step, the first step, which will lead to the final conclusion of a total loss of all effective control and power over Imperial communication. Before the House allows the Bill to go out of its control, it ought to receive the very fullest information about control, about finance, about the Advisory Committee, and so on.

There is one thing I am not very clear about. How is all this going to be carried out? Are we going to have a contract like the MacBrayne contract which we were discussing yesterday? Do the Government propose to lay the terms of the contract on the Table? Do the Government propose to give the House an opportunity of saying whether the Orders-in-Council or the other things which may have to be compiled satisfy the House as being sufficiently stringent and sufficiently precise to carry out the responsibility of safeguarding the public interest? There is the valuation of the rights. Why should the Government ask the House to take this for granted? Why should the Government simply say, "We have had certain expert advice, so many hundreds of thousands for this, or so many millions, such and such a rental for this, such and such a gift, £60,000 for some reason which is not very clear, and we are content with that, and we are not going to give you any further information." These things ought to be the subject of an investigation by the House is the way the House always makes these investigations.

There is the question of public control. The House cannot leave that here and now after this Bill has been passed. There is the whole question of the finance of the controlling company. Forty or fifty years ago if a proposal like that was made, after a. general statement by a Minister that the whole business of control should pass away from us, the House would have risen, Liberals and Tories joining each other in revolt. The finances of the controlling company ought to be made the subject of an inquiry by a representative Committee of this House and ought to be the subject of a report to this House before we are allowed to pass away from it. There is also the question of the arrangement between the producing, the manufacturing company, and the communicating company. That is left in a very unsatisfactory condition.

The statement is not a business document, and in this affair, dealing with a great business, we want a business document. We do not want a leading article which the "Times" can publish tomorrow morning. We want something like a business man conducting his own private affairs or conducting affairs as a representative of his client would want. A man must have a document in front of him and be able to examine it item by item so that when he comes to the last item, he will he able to say: "Yes, I will accept that. I will sign it." Or he will say: "No, this item must be changed or it must be discussed," and so on. This House has no such statement. Therefore, it is the duty of the Government—I make this as a sort of halfway suggestion—to see that the contract, whatever form it is going to take, ought to be produced here at once. It ought to be sent to a Select Committee of this House for examination. Such a Committee should have upon it the very best men, the most experienced Members that this House can produce, quite impar- tially drawn from all sides, because, believe me., this is not a little pettifogging, superficial thing. It is one of the biggest pieces of national policy, of national business that has ever been brought before this House, at any rate in my time. My belief is that this House on all sides should make up its mind that it is going to be treated in the only way in which it deserves to be treated; and, in order to give the House an opportunity of expressing its opinion on the question thus outlined, I am moving the Amendment which has been put down in my name.



Lieut.-Commander KENWORTHY

On a point of Order, Mr. Speaker. I 0understand that the right hon. and learned Gentleman the Member for East Walthamstow (Sir H. Greenwood) has caught your eye. I want to ask you if you can give a Ruling as to the responsibility of a Member speaking in a Debate who has an interest in the subject under discussion for disclosing that fact. I understand that as long as that fact is disclosed, the House has always allowed an hon. Member or right hon. Member to address it. I also wish to ask whether you can further rule as to a Member's right of voting. The reason I ask this is, that the right hon. and learned Baronet the Member for East Walthamstow, according to the Directory of Directors of this year, is a director of the Edison Swan Cables, Limited, and the Société Internationale d'Energie Hydrolique, which I understand is a Belgian company connected with hydro-electrical undertakings. I raise this point for your Ruling and also, in fairness to the right hon. and learned Baronet, in order that he may be able exactly to describe to the House his interests. I hope the explanation will be very satisfactory to the House.


My right to speak in this Debate has been questioned, unfairly as I will show, by the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy). I am not interested in the Marconi Company. I am not interested in any cable company except—and here is where the hon. and gallant Gentleman in trying to score and hit below the belt, as I think, makes his mistake—


The right hon. and learned Member must deal with that in his speech and not on a point of Order.


I want to say, in reference to the point which the hon. and gallant Member raised, that the Edison Swan Cable Company is a company which does not make submarine cables, which are the only cables involved in this discussion. It makes cables for wiring in houses, factories and coal mines. It has nothing whatever to do with the subject under discussion. Surely, that is an answer to the question which the hon. and gallant Member has put On the other point, I am a director of an electrical company in Belgium. I am there because there are large English interests in that company, which is of world-wide importance. It does not make submarine cables; it has nothing to do with them. I hope that that explanation will convince the hon. and gallant Member that I have as much right to speak in this Debate as he has, and I have no interest except the interest of this country and the Empire.


With regard to the last point raised by the hon. and gallant Gentleman the Member for Central Hull (Lieut.-Commander Kenworthy), if I were to lay down a Ruling that no Member should speak on a question in which he is particularly interested, I am afraid we should very often lose that expert advice which the House is so often desirous of hearing.

Lieut.-Commander KENWORTHY

I put two points of Order, first with regard to speaking—and I respectfully thank you for your ruling—and secondly with regard to voting. I also put the latter point to you, Sir.


An hon. Member must be his own judge as to how he votes.

Lieut.-Commander KENWORTHY

With regard to the points of Order and the explanations made by the right hon. and learned Baronet, may I say that I accept his statement that he has no interest of a financial character in the matter under discussion.


I suppose that I ought to thank the hon. and gallant Member for raising those points of Order. However that may be, I am sure that the right hon. Gentleman the Leader of the Opposition carried the whole House with him when he said that this Debate raised a subject of high national and imperial importance. I am bound to say—the right hon. Gentleman spoke in a serious, earnest tone, which, I think, was adequate to the importance of the subject—that we all agreed with his tribute to Senator Marconi. I am prepared to give him and his late Government credit, for they deserved it, for insisting upon Senator Marconi having the permission of the Government of which the right hon. Gentleman was the head, to experiment—at his own expense it is true—with the four beam stations which are now the very centre of the whole low power short wave beam systems of the world. But I would remind the right hon. Gentleman—and I am sure he will recall the fact—that the experts of the Post Office, who are quite entitled to oppose the present scheme, opposed them. I know that he showed his wisdom and, if I may say so, the strength of his Government in overruling the experts who opposed Senator Marconi because he desired to make those experiments of world-wide importance. The same experts have opposed and will oppose the present scheme or merger which is the subject of the Debate this afternoon.

Therefore, on the question of Post Office experts, while I agree with him that you have able men and certainly men swayed with a great desire to serve the public, they have, on the question of this particular policy, stood in the way. The right hon. Gentleman and his Government as a Government were entitled to the credit for overruling their experts and giving Senator Marconi his opportunity. May I say further, that Senator Marconi—this is what everybody who has followed this question knows—bought his beam stations from the Government or rather he had to pay the Government £160,000 for the right to prove the efficiency of the beam system and the Marconi Company were the losers by the transaction. Those same stations under this scheme before the House are leased by the Government for £250,000 a year to the merger company—a very profitable transaction for His Majesty's Government in London. [An HON. MEMBER: "We are giving them away!"] I hope that the hon. Member as a landlord is just as successful with his rents in proportion.

5.0 p.m.

I would like to criticise some words which fell from the right hon. Gentleman with reference to the Imperial Conference. What makes this question so important Imperially? It is the result of on of the few Imperial Conferences that have arrived, after six or seven months' deliberation, at a unanimous conclusion. This Conference is not composed of experts in the main. There were experts there. It was composed of representatives of all our Dominions and of the Colonies. Experts reinforced the Conference. You had Post Office experts, you had representatives of the War Office, of the Navy and of the Air Force. But the Conference itself was a Conference of representatives of the Overseas Governments. First of all, may I respectfully say, in case there are any Members of this House who do not know the origin of of this Conference, it did not start because of any action by the Imperial Government. The Conference started because of the competition of the Post Office beam system with the Pacific Cable system, which was subsidised by Canada, Australia and other parts of the Empire. One Government Department in England, namely, the Post Office, was undercutting the Pacific Cable system which had been subsidised by England and by the different Dominions. The position became so acute and ridiculous that the Prime Minister of Australia., the Prime Minister of New Zealand and the Prime Minister of Canada insisted upon this Conference. The Conference was set up. It considered, as the right hon. Gentleman said, the Pacific Cable system, because they were all financially interested in it. They had all risked large sums of money. They were all losing by its continuance. I understand the right hon. Gentleman's point of view because he believes in national ownership and makes the best case he can, but here is a case where all his doctrines break down. You can have national ownership within a kingdom, but it is much more difficult and almost an impossible thing to have national ownership in an Empire where the component parts of the Empire will accept neither the doctrine nor the practice of it. That is the case. That is the strict line of cleavage in principle and practice, and that is where this question of nationalisation breaks down. This question was considered on its merits. The representatives of the Dominions took the view that the first essential thing was, and that view has been adopted by His Majesty's Government, to have the cheapest and most efficient inter-Imperial wireless and cable system. That was the object. It became obvious, in spite of the strong cap 'e put up by the representatives of the Post Office, that the Dominions and Colonies Could not and would not accept any national system such as that suggested by the right hon. Member for Aberavon (Mr. R. MacDonald). The result of the Conference, after six or seven months' deliberation, was the Report now before the House. I leave the question whether the systems should be owned nationally, which in this case would have meant inter-Imperially, because, even if that were possible, the facts are quite clear that the Conference did not think so.


Should we not be better able to judge if we had the evidence before us? Are we not entitled to have the evidence before us in a White Paper, so that we can judge for ourselves?


That question ought not to be addressed to me. I am only speaking from public facts, I have no secret information.


How has the right hon. and learned Gentleman got all his facts?


I have read the documents.


I understood the right hon. Gentleman to question the validity of the contract.


I have not questioned the validity' of the contract. Perhaps the hon. Member will allow me to proceed in my own way. The Imperial Conference came to a unanimous conclusion. That conclusion was the result of constant negotiations between the Overseas Governments and the members of the Conference here in London. The Imperial Government, unless it wished to disagree with and to over-rule the desires of the Conference, was compelled to accept the results of the Conference. It is no use the right hon. Member for Aberavon saying that on the home beam system we could build up some great imperial scheme. The Imperial Conference would not have it.


Because private enterprise was there.


Because the representatives on the Conference believed in private enterprise.


You have given the show away.


Why not sell them the Post Office?


The expert representatives of the Post Office did not agree but, subject to their opposition, all the Dominions and Colonies interested, and also His Majesty's Government, accepted the private enterprise solution as one that would make for the best interests of cable and wireless in the Empire.


How is the right hon. and learned Member able to give the House such a detailed account of the evidence which was offered?


I have not quoted one word of evidence.


The right hon. Gentleman tells us specifically what took place at the Conference.


The hon. Member for North Aberdeen (Mr. Benn) has raised a question as to my personal knowledge. I am sorry to have to remind hon. Members that I was once a Member of a Government. This is a very old question. The question of the ownership of the wireless system of this country and of the cable and wireless system of the Empire, is not a new one. The Government of which the right hon. Member for Aberavon was the head took one very decided view which reversed the policy of the late Mr. Bonar Law's Government, which Government believed in private enterprise. The Imperial Conference have made discussion, theoretical and otherwise, on this question useless at this moment, because they have come to their unanimous conclusion. The House of Commons is asked either to adopt not only the view of His Majesty's Government, which is one important factor, but the view of one great Imperial Conference, or to reject it. That is the issue.

The results of this policy mean, and have already meant, a great impetus to wireless and cable development. The Government have sold their interest at a great profit and continues to enjoy the profits of this great enterprise which, if the House agrees, will be entirely under private control. A cause of irritation between Governments in this country and Governments in our Overseas Dominions and Colonies will be removed if we adopt this scheme. While the new enterprise is to be operated under private control, I hope the Government will take care that all those officials who have done faithful public service in the past in operating Government-owned wireless and cables, will be amply provided for. I think we are all agreed that that ought to be done. [HON. MEMBERS: "What about the consumer?"] The great object of this scheme is to reduce rates. There can be no question about that. We can only wait for the future in regard to that matter. I would not support the scheme and nobody would 'have supported it unless it meant increased efficiency, which also means reduced rates. I think this is a constructive piece of Empire building. We shall have a. central control of the wireless and cable system connected with the whole Empire, which will be capable of development so that the remotest homes in the Empire will be brought into the closest contact with this old country. I congratulate the Government on carrying the matter through and I think they have done something that will appeal to the whole Empire.


This is the third time in a very short period that I have had to speak on this subject, and I would once more ask the House to be patient with me in a statement which is likely to be detailed and uninteresting. Before I come to my statement I should like to say a word in regard to the right hon. and learned Member for Walthamstow, East (Sir H. Greenwood). I was not aware that my hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy) proposed to raise a point of order or to refer to the Belgian company, which is known as Sidro. I fully and whole-heartedly accept the statement of the right hon. Gentleman that, as far as he is aware, he is not interested in the Marconi company or in the cable companies, but I do not know how a director of a company like Sidro, a holding company, holding shares in electrical undertakings all over the world, can say that at any particular moment his firm is not interested in the Marconi company or any of the cable companies. Our case is that an international gang of financiers has been working to force His Majesty's Government and the Governments of the Dominions to come to the conclusion at which they have arrived. I accept the statement. of the right hon. and learned Gentleman that so far as he knows Sidro has no connection with the other companies, but will he permit me to say that I shall be surprised if that turns out to be true?

This situation has arisen owing to international financiers and the large newspaper and industrial interests organising their forces in an endeavour to force His Majesty's Government and the other Governments to take a course which was convenient to them. I should like to interpolate at this point an unusual reference appertaining to the Subject before the House. On Friday last, I handed to a messenger a note addressed to the Financial Secretary to the Treasury, asking that he would be good enough, in view of the large number of documents to be examined, to supply me with certain information for use in this Debate. It may be that he did not receive my request, or it may be that he did. At any rate, I have had no acknowledgment of the request and the information was not forthcoming. I should have thought that if the Government have the strong case that they imagine, they could have afforded one of their opponents the opportunity of looking at the simple figures for which I asked.


I received the letter and I signed a letter in reply, which was sent off yesterday.


I apologise for having made the statement, but will the Financial Secretary to the Treasury permit me to say that the letter has not been received. I inquired for the letter as late as 2.15 this afternoon, and it had not been delivered to my secretary.


I certainly remember signing it.


I am glad to find that my hon. Friend was as courteous as he usually is. The private interests were very quick in organising their forces for this very great attack. It has to be remembered that the beam services are very young. The service to Canada was opened on 25th October, 1926, the service to Australia on 8th April, 1927, the service to South Africa on 5th July, 1927, and the service to India on 6th September, 1927; yet the Postmaster General announced in this House on 19th December last that the Imperial Conference had been called. We have been given to understand that the present situation has arisen because the cable companies were unable to stand against the competition of the Imperial beam services. It is very remarkable that the Imperial Conference should have been called before the whole of the four beam services had been working four months, in order to arrange for their salvation.

There is a further point of significance, and that is that we have been told the Postmaster-General will take no part in this Debate. The Postmaster-General has a very honourable record with regard to this particular matter, and it is a very remarkable fact that in each of the Debates which have taken place, and again to-day, the conduct of the case should be handed over to gentlemen who have no first-hand knowledge of it. The matter does not rest there. The Report supplies us with very definite information with regard to this matter. Paragraphs 33 and 37 say that the negotiations towards the merger had been instituted before the first meeting of the Conference, and that the arrangement contemplated by the Conference included the transfer to the merger of the Government beam and cable assets. Is it not rather extraordinary that this merger should have been in active negotiation and that Lazards should have taken the first step for this great merger, with the extraor- dinary condition that the Government should hand over their assets to it, before the Imperial Conference had been called I Every piece of evidence with regard to this business indicates the point of view that I have been putting forward, namely, that the Government have acted under instructions and were compelled to call the Imperial Conference because their masters, the big financial interests, insisted on that course being taken. The sittings of the Imperial Conference were held in private, and therefore no evidence is available.

I want once more to draw the attention of the House to a fact which cannot be too often stressed. The first meeting of the Conference was held on 16th January, and on 15th March the "Evening News" announced that the properties would be transferred to the merger company. In this House the Prime Minister has repeatedly failed to give information, and the Report of the Conference was not available to hon. Members until 6th July, 1928. I complain once more of the Government's failure to safeguard information of this character, and of the constant leakage to the public Press which enable speculators to make vast fortunes. I believe this Government dare not tackle that matter. There is also a further point. The Government were in such a hurry to get a decision before they went out of office that they had not time to permit a witness representing the Board of Directors of the Amalgamated Wireless of Australia, Limited, to travel to this country in order to give evidence. It is remarkable that a delegate from Australia could not be heard because the Conference declined to wait a few weeks while he was traveling here. It is frequently alleged that Australia is willing to hand over these services to a private concern, and in those circumstances I should like to draw the attention of the House to a. document I have here as to the experience of Australia. The quotation is rather long, but I do not think I need apologise for that on this particular occasion. It says: The Commission which reported as recently as September, 1927, stated that the charges by the company for the use of patents and broadcasting transmitters and receiving sets were excessive, and ought to be reduced, and, failing this: it recommended that the Government (after having ascertained whether the company's patents were valid) should acquire control by purchasing the privately held shares. The Commission also recommended State acquisition of the wireless coastal stations from the company. The Commission's Report said: As a result of the company's acts and omission, the company is regarded with suspicion, and its business methods have been disapproved throughout Australia. Its own selling agent in West Australia states he knows that the Amalgamated Wireless Company is undoubtedly the worst hated firm in Australia. The company's beam service was unsatisfactory and involved serious delays, due largely to the fact that none of the company's senior officers had previous experience of the cable traffic. And this is the company which Marconis were able to force on the Australian Government as an alternative to the original suggestion that this should be an imperial scheme. Under this system the company is composed of 50 per cent. private shareholders and 50 per cent. Government; with one vote in favour of the Government. These four beam stations cost approximately 2240,000. At the end of the first completed year the Postmaster-General put the gross receipts at £470,000 a year and the profits, before charging depreciation or interest, at £212,000 a year. These figures refer to the first year of a new service, yet these stations are to be leased to the Communications Company at £250,000 per annum, plus 12 per cent. of any increased profits, plus a lump sum payment of 260,000. That means that if the 260,000 is paid during the first year in addition to the rent of £250,000 the Company will get the undertaking during the first year at £160,000 less than the original gross receipts for the first year's working, and in subsequent years they will get the undertaking for £220,000 less than the original gross receipts, with the pleasant prospect of receiving 88 per cent. of profits above that level.

I do not think it is realised that on 1st February, 1928, the Post Office had 19 wireless stations in operation and several stand-by stations for emergencies. The Post Office runs a number of Continental wireless services side by side with its own cable services to the Continent. I need not trouble the House with a list of the places to which they work, but I want to ask the Secretary of State for Scotland when he replies to these say whether the Post Office wireless service to these countries is to be continued. If so, there will be the extraordinary situation that after the Imperial Conference, and despite its Report, there will be three competing services to the Continent of Europe, namely, the Post Office cables, the Post Office wireless and the Communications Company's wireless. Under the 1925 Agreement the Marconi Company have to pay a royalty to the Post Office wherever the Continental wireless service competes with the Post Office cable service, and I should be glad to know whether the merger company will have to pay this royalty to the Post Office when the change has taken place.

Now I want to come to the point as to the right of the Government to lease these beam services in the way they are proposing. In the Telegraph Act, 1868, Section 5, it is laid down that for the sale of a telegraph by a company to the Post Office it is necessary that two-thirds of the shareholders shall be present themselves or by proxy at a specially called meeting and shall signify their consent before such sale can take place. The remarkable thing is that there is no provision in the reverse direction. Before a telegraph undertaking can be sold to the Post Office you have this extraordinary safeguard for the protection of private interests, but when the Post Office, acting under the instructions of the Government, is compelled to hand over valuable property to private enterprise their appears to be no check at all, and, as far as I can see, it has not even to be submitted to the House of Commons. There seems to be an absence of information with regard to the rights of the Postmaster-General in this respect. Under the same Act he has power to lease Government property, but, as far as I know, there is no limit to the term of years. I suggest that the power of the Postmaster-General to lease public property to a private company has been a source of very grave danger and disadvantage in the past, and that it is certainly a serious matter on this occasion. I hope that at no distant date this situation will be remedied.

I ask the Secretary of State for Scotland: where is this going to end? We are dealing to-day with the question of communications between this country and the Dominions. Is there any justification for thinking that these carefully laid plans are leading up to the transfer of inland telegraphs to private enterprise'? We have been repeatedly told by people outside that there are purchasers for the inland telegraphs despite the fact that they do not pay under present conditions. I should like an assurance on this point. Take the question of telephony. In this Report it is laid down that the Postmaster-General should reserve the right to conduct external telephonic services, yet private interests have already got their hands upon it. I understand that private interests are opposing the development of wireless telephony from Rugby and are insisting that they are the only people who can do it efficiently. There is a grave danger, if this Bill goes through and these arrangements have been mace, that the grab, grab, grab will go on, and if this Government succeed in getting back to the House of Commons again they will not be content until the nation has been robbed of every item of national property. The "Times" published a special article to-day of two columns in length dealing with this subject, and after stating that beam wireless had been developed in the face of the persistent opposition of the State department concerned, suggests that the beam stations should be used for wireless telephony. I think it is a little unfair to say that "the State department concerned" has been in persistent opposition, because when Senator Marconi came to this country as a poor man and without any big friends the Post Office placed the whole of its apparatus at his disposal for his experiments, and it is more than probable that but for that generous act the present wireless system would not exist. That sort of criticism of a State department is unfair, but, apart from that, we are bound to take notice when the "Times" advocates definitely the transfer of international telephony to this new merger company.

I come to the Pacific cable. The original cost of the Pacific cable in 1902 was £2,000,000. It was duplicated in 1926, and the duplication cost £2,720,000. I understand that experts place the life of a cable at between 40 and 45 years. The price to be paid for these two cables by the merger company is £517,000, plus the outstanding debt of £1,233,000. The hon. Member who opened the Debate this evening rather led us to believe that the Pacific Cable Board was in as bad a way as other cable companies. My information is that although the traffic receipts on the Pacific cables for 1927–1928 were down by £80,000 as compared with the previous year, that is about 17 per cent., the expenditure was reduced by about £32,000, and despite the drop in receipts, which was mainly in the cheaper traffic, the surplus available for division between the Governments was £42,100, after devoting £77,544 to the payment of interest and repayment of capital and placing £10,000 to reserve account. In the case of public undertakings, whether it is trams or telegraphs, you always come up against the same problem; a private undertaking talks of its capital, and the public undertaking talks of its debt. I submit that a Pacific) Cable Board which makes a profit after paying over £77,000 in interest and repayment of capital, and places £10,000 to the reserve fund, and then has £42,000 for division, is not in an extraordinarily bad position. If you turn to paragraph 18 of the Conference Report you will find that even this report admits that the Pacific Cable Board, unlike the other cables, had not been brought to a serious position by keen competition.

Before I leave that Board I want to deal with one point regarding annuities. The merger, as part of the purchase price, is to assume responsibility for the payment of annuities created to repay the cable loan. I invite hon. Members to look at page 3 and paragraph 2 of the Bill. A similar provision is made in the case of the West Indian cables. But if we turn up the Act we find in Section 1 (b) and Section 2 (b) that the same annuities shall, unless provided for as aforesaid or otherwise, continue to be a charge on, and be paid out of the Consolidated Fund of the United' Kingdom or the produce thereof. I submit that under the terms of that Act the Consolidated Fund of the United Kingdom is responsible for these annuities and has no right whatever to transfer that responsibility to a private company, no matter how influential. In the event of anything going wrong with your communications company the responsibility for these annuities comes back on to the British Government, I submit that that is a. point of considerable substance, and I hope that the Secretary of State for Scotland will deal with it in his reply.

We now come to the two Atlantic cables. The first of these cables was taken from Germany under the Peace Treaty. That cable was laid between 1900 and 1903. It appears in the Post Office commercial accounts at its original cost, less depreciation, at the date of taking over. I understand that the figure is £1,480,000. I am unable to state what the original cost was, because that is one of the figures that I had hoped to receive from the Financial Secretary to the Treasury. The second cable was laid in 1874 and was purchased from the United States Company for £570,000. The total cost of the two cables was £2,050,000. The depreciated value on 31st March, making the calculation on the system which is applied to the Post Office commercial accounts, is £770,000. That is given to the merger for £450,000. The West Indian cables were originally laid in 1890 and have been supplemented at various dates up to 1924. As was stated in the opening speech, the original cost was £364,797, and that is to be handed over for a round sum of £300,000.

Let us summarise these figures and see where we come in. The Atlantic cables cost £2,050,000; the Pacific cables £4,720,000; the West Indian cables £364,797. That is a total of £7,134,797. We are handing over all that property to the merger for £2,500,000. I do not know how that sort of thing can be justified. I know that it is quite easy to talk about depreciation, but is depreciation the only thing that operates so far as Government cables are concerned? Is there no goodwill? I am certain that any of the business men on the other side would like to be able to buy up businesses where they had merely to deal with the original cost and depreciation. Let us look at the other side of the picture. The merger and the communications company are to acquire the Government undertakings at cost, less depreciation. But what happens to the private undertakings that are going into the same concern 1 The merger is to acquire the ordinary shares of the cable companies and the ordinary and prefer- ence shares and debentures, if any, of the Marconi Wireless Telegraph Company. The capital of the new company is to be £30,000,000, arid its standard revenue is to be based on that figure. The cable companies and Marconi's, being taken on the basis of their shareholdings, are in an altogether different position from the Government undertakings with which they are being amalgamated. I want to see those two things reconciled to a much great extent.

I said earlier that the life of a cable was something between 40 and 45 years. So far as I can ascertain, nearly every one of the cables in private hands was made more than 40 years ago, and if the Government undertakings are to be handed to the communications company at a scrap price because they have been subject to so much depreciation, I demand that the capital of this communications company shall not be based on the shareholding, with the whole of their enormous cash reserves set aside in a separate compartment, but shall be based on valuations of the cable system, which they admit that they can no longer continue to run in competition with the Post Office beam services.

There is a further point and perhaps rather a small point. If the capital of this communications company is to be £30,000,000, why is the standard net revenue of 6 per cent. to be £1,865,000? Then there is the point with regard to the cash reserve of £20,000,000. It seems to me to be an extraordinary position that the Government should hand over its cables and its beam service to this communications company at a scrap price and should permit standard revenue to be based on capital which has regard mainly to the shareholdings of the company, and that it should permit the whole of the enormous cash reserves to be set aside to earn large interests quite apart. I have a quotation here from a newspaper called "The Overseas Telegraph," dated December, 1927. It says: Seeing that subsidies totalling £4,170,000 were paid to the cable companies, it is pertinent to ask who paid for the cables. I went over the whole of that ground in my last speech. I do claim that the enormous cash reserves which have been built up because of preferential Government control, because of enormous Government subsidies and the life of their cables, should all he taken into account in fixing the capital and the standard net revenue, and that it is not satisfactory that the Government's undertakings should be taken on one basis and the private undertakings taken on another. Then there is the question of rates. The Report of the Imperial Conference says, in paragraph 11, that The agreement between the Postmaster-General and the Marconi Company provides that the rates should be fixed so as to attract the largest possible volume of traffic, with due regard to economic considerations. Under existing circumstances each country, be it this country or the Dominions, controls the rates which are to be charged. I want to know what the guarantee is for the future, and where the safeguard is to be found in the present Bill. I submit that the commercial user is being robbed, because it will no longer be the policy to reduce rates. I find evidence in support of my view in the report which we are considering. Paragraph 18 says: The cables were working with a large margin of annual surplus. Seeing that these cable companies are the predominant partner in the merger you may be quite certain that it will continue to work with a very comfortable margin. Recommendation 6 of the Conference Report in effect means that rates are to be stabilised at their present point. This is emphasised in paragraph 18, where special attention is drawn to the absence of financial crisis when beam and cable rates are identical. I do not think we need have any fear of financial crisis, once the merger has assumed full control of the cables and the wireless.

Before I leave this Section I wish to say one or two words with regard to the comparative cost of administration. I have no means of ascertaining what the cable companies pay in salaries to their managing directors, but I would like to start with the illustration of the Postmaster-General, who controls an organisation much vaster and more complex than any other of the concerns which are under our purview. The Postmaster-General, for the very efficient administration of perhaps the largest industry in this country, receives £2,500 a year. The British Broadcasting Corporation, a concern which is nothing like as important, pays its chairman £3,000. The Marconi Company pays the right hon. F. G. Kellaway £10,000, of which 20 per cent. is paid by the International Marine Company, plus fees amounting to £800 or £900 a year. The "Times" for 10th November, 1927, said: During the seven years ended December, 1025, the directors' salaries and commissions of the Marconi Company amounted to £503,000. That is over £70,000 a year. I really do not wonder why hon. Gentlemen opposite prefer private enterprise. Why the Postmaster-General should do work for £2,500 a year when he might, like a certain Noble Lord, be roaming the world at any figure up to £100,000, I cannot imagine. I think this House ought to pay its testimony to the Postmaster-General. We have all heard the story that the Chairman of this merger is to receive a salary of £15,000. It is perfectly preposterous. If the Chairman of the Marconi Company is worth between £10,000 and £11,000 it may very well be that the Chairman of the larger concern is worth £15,000. All I have to say is that we shall want to have a revision of official salaries in order that some of the attraction may be toward the Government service and not all of it away. In conclusion, I draw the attention of the House to a quotation from the "Encyclopaedia Brittanica" which, I think we may say, was written without any regard to this particular dispute. On page 602 it says: Perhaps nothing contributed more in the past to the leading commercial position of Britain than her enterprise in the matter of telegraphic communication. Fortunately too, she also recognised that the problem of the Empire is largely a problem of communication. The Imperial Wireless Telegraphs Committee in its report, on page 4, states: The objects to be served by an Imperial scheme of wireless communication are twofold—strategic and commercial. In my last speech on this subject in the House I endeavoured to stress our experiences during the War, when we were handicapped by the fact that the whole of these means of communication were not under Government control. I cannot help thinking that the Government have overlooked the necessity for watching the strategic side of this business. In the course of this report there is a paragraph dealing with this point which lays it down that the fighting services should have the right to erect their own wireless stations and lay their own cables. I respectfully submit that that is contrary to all experience. If you want to have effective Imperial means of communication in times of emergency you can only have them at a reasonable cost, by using them commercially during the intervening periods—just in the same way as you encourage civil aviation in order, as you say, that you may have an air arm in time of necessity. My party is not a war party, but I think the point will probably appeal to hon. and right hon. Gentlemen opposite. If it be true, as the Norman Committee have said, that there are two aspects, the strategic and the commercial to be considered, I say we are not likely to serve the best interests of the nation by divorcing those two and encouraging the fighting services to run their own wireless and cable services.

What we have to do is to see that the nation is adequately protected by securing complete control of these Imperial means of communication, not only in times of crisis but, during the whole period. It is only by maintaining that control that you will be able to secure to the commercial user, the service which he needs at the lowest possible price. When I last spoke on this subject here, I ventured to hope that many men in commerce, many small users of the Imperial telegraph services would get to understand what this problem was. My postbag indicates a growing tendency to regard this problem as one of importance. There is a growing understanding of the nature of the problem and I suggest that unless hon. and right hon. Gentlemen opposite are extremely careful, many of their erstwhile supporters will find that their interests are not identical with the big interests which stand behind the Treasury Bench.


The hon. Member for East Bristol (Mr. W. Baker) has repeated the indictment which he made on a previous occasion against all connected with Marconi or cable finance. I quite agree that his indictment has been couched in courteous and unexceptionable terms but in his view there has been a large amount of public corruption and this corruption has had an influence upon the decision come to by the Conference, and ultimately on the decision come to by the Government, I want to examine that proposition. The hon. Member complained of leakage and of speculators and of the pressure of private interests. If there has been leakage, if people have made money out of secrets which they ought to have kept intact, I wish there were some means of bringing those people to book. But that there should be speculation in shares, that some members of the community should either gain, or guess at information which is not available to the rest of us—that will always occur. There always will be people who will see the way that the price of shares is going to move and will benefit thereby. But does that affect the question at issue? We have to consider, as the Leader of the Opposition says, a great matter of national and imperial interest. We have to decide the future of inter-Imperial communications and I put it to the hon. Member For East Bristol that the last part of his speech was the part that touched the real issue.

In that part of his speech he dealt with the bigger issues and showed why, in his view, all cable and Marconi communications ought to be retained by the Government, and not handed over to the Communications Company. But I cannot believe—and this is my answer to him—that those corrupt influences had any effect on the distinguished statesmen who signed the Conference report, or on His Majesty's Government. Unless they had such effect, surely the hon. Member's whole charge falls to the ground. He says that there is some corrupt influence at the bottom of this business. On whom is that corrupt influence acting? He cannot accuse all these distinguished Imperial statesmen of being corrupt, and I do not think he will make that accusation against the Postmaster-General, or the Secretary of State for Scotland, or the Financial Secretary to the Treasury.

May I deal with one point in regard to which I thoroughly agree with the hon. Member and that is that Government salaries are far too low. When the hon. Member expressed the hope that Government salaries would be raised to the level of commercial salaries, I did not observe that there were cheers from the Treasury Bench, but I am certain that if those cheers were not explicit they were implicit, and I am certain that any proposal of that sort would receive the hearty assent of members of the Government. To speak seriously, I think it is very serious that commercial salaries are running right away from the very small remuneration paid to members of the Government in political life, and I think that is a matter which the House might very well consider.

When the hon. Member went on to complain that the Government-owned cables were being sold for a fraction of their cost, he left me cold. I am afraid it is only one more example added to the long and mournful procession of Government enterprises that have lost money. The hon. Member pointed to the fact that these cables were being sold for less than they cost, but he did not try to prove that they were worth any more than the amount for which they are being sold. The fact that they are being sold for less than they cost, is surely not an argument that will reinforce the call for Government ownership. Now I come to the speech of the Leader of the Opposition. He said this represented a departure from our present practice. I agree that it is a departure, but the right hon. Gentleman is hardly the man to be critical of a departure from policy. I have never heard of a leader of a Socialist party objecting to departures from policy; and the only criticism the right hon. Gentleman can make is that this is a departure in the wrong direction. May I take that question step by step. The right hon. Gentleman does not deny that some sort of unification is advisable. He himself said in unequivocal terms that if we were to leave the cables to the competition of the beam, it would be disastrous. Therefore, some sort of unification is a matter of common agreement, and the only question is: Should that unification be under the State or under some public utility company?

The right hon. Gentleman said that the Government have prejudged the issue by the answers given to questions which were asked by the Conference. The Conference asked two questions. The first was, "Are we to preclude the possibility of the sale of Government cables?" and the second was, "Are we to pre- clude the possibility of the sale or lease of the beam system?" The Government said, "No, you need not preclude these possibilities." Surely the Government were right in giving that answer. They did not commit themselves. All they said was, "In the decision to which you come, you need not rule out these possibilities"; and unless they did that all the work of the Conference might very well have been futile. The Conference had to have all the possibilities before them, in order to arrive at a proper decision, and I cannot agree with the right hon. Gentleman that the Government prejudged the issue in that way. Then he went on to say that the Conference did not mention unification under the Government. Of course they did not. It is clear from the Report that they could not have supported it. Even, if this Government had been in favour of unification under the Government, it is perfectly clear that the Dominion Governments would not have supported it. My right hon. Friend the Member for East Walthamstow (Sir H. Greenwood) has shown that it is almost impossible to have nationalisation inside our scattered Empire. I think right hon. Gentlemen opposite will find it very difficult inside the United Kingdom, but it would be impossible to have a unification which the Dominion Governments would never have accepted.

6.0 p.m.

May I say a few words, at this stage, about another matter. I welcomed the right hon. Gentleman's praise of Senatore Marconi. Years ago, I had the privilege of crossing the Atlantic in the same ship as Senatore Marconi, and I spent all the time I could with him. I formed a clear opinion of his character and, whatever may be the abuses which have prevailed in the finance of the Marconi Company I do not believe for one moment that Senatore Marconi is responsible. I am not here to defend all that has been done. I know certain things have been done that I should not approve of, and that no one would approve of, but I hope that hon. Members when they attack the Marconi Company, will not attack Senatore Marconi because I do not believe such an attack would be justified. We are all agreed that there ought to he unification and, as I say, the question is: Should it he under the State or under a public utility company? I formed from the very beginning a very strong opinion that the public utility company was the best—[An HON. MEMBER: "This is not a. public utility company."] Certainly, the Communications Company is a public utility company as I shall show. The disadvantages of Government ownership are these: First, you compel them to take over the cables, which, as the hon. Member for East Bristol has clearly shown, are wasting assets. I do not want the Government to buy something that is depreciating in value. Hon. Members talk as if the beam was well established, but the beam system is quite recent. It superseded the the previous system, and no man on earth can say that the beam itself will not be superseded. It is immensely successful, cheap and easy to work, and certain, but it may be superseded to-morrow. Again, I do not want to risk taxpayers' money on something that may be put out of action. If any hon. Member who challenges that will go outside these walls and look at the ratepayers' money that has been lost on tramways and power in London, they will see a very tragic fact. If a man chooses to lose his money, it is unpleasant to him, but lit does not matter to the State; but if the Government loses, it loses the taxpayers' money. It is not too much to say that the unification of power in London was held up because the local authorities were bunged up with obsolete plant. They had invested the ratepayers' money in plant that might. have been the last thing when it was bought, but it became obsolete in time, and just because it was bought with ratepayers' money, the plant could not be scrapped, as it would have been if it had belonged to a private manufacturer, and for years it held up the unification of power in London. Would that not occur also under Government ownership here?

Do not forget that it has never been contradicted that when the beam was introduced the Post Office opposed it, and it was the Government that insisted on the Post Office adopting the beam. I am afraid you will always get what I might call conservatism in a Government Department, and you will never get acceptance of the new idea and of improvements. Again, has the relationship of the Post Office to the Treasury been entirely to the advantage of the Post Office? Has not the Treasury in times of stress taken money from the Post Office that would much better have gone to development? Has not the tendency of all Chancellors of the Exchequer been to regard the Post Office as a revenue-producing concern and nothing else, and would not exactly the same thing occur here? If it was a profitable Government enterprise, it would be regarded as a revenue-producing enterprise, but I want it to be looked upon as a great Imperial concern, out of which a standard dividend of a low figure is paid and a large part of the balance is spent in development that must be continuous.

May I say what I think ought to be the features possessed by this Communication Company? First of all, it must control rates; secondly, it must have limited dividends; thirdly, a large part of the profits, over the limited dividends, ought to go in development; fourthly, the personnel and the control should be British, and no foreign body of shareholders—and here again I think I shall get the support of the hon. Member for East Bristol—should be allowed to obtain control of the shares of the Communication Company; and, lastly, in war or in times of national stress the Government ought to have complete possession of all the stations and cables. If those features are secured in the Communication Company, I submit that it is by far the best way of settling the question. It is not a question that we can settle entirely in this House. It is much bigger than this House, for the interest extends all over the Empire; but if it is a question of communication, I believe that the future of our Empire largely depends upon good and cheap communications. I am afraid that under the Government they will not either be so good or so cheap as they will be under a public utility company. I believe that if the hon. Member for East Bristol were given the Post Office to-morrow as a business concern, certain reforms would suggest themselves to him which would secure economy and efficiency. I believe that we shall do far better by properly limiting and controlling the company in the public interest, and not by placing all these cables and wireless communications in the hands of the Government.


I think most hon. Members who have given any attention to this question must have been rather amazed at the speech of the hon. and gallant Member for Ripon (Major Hills), who seems to have indicated that he cannot have read the Report. I want, first of all, to meet the inference that he threw out that there had been some aspersion cast from this side of the House on the reputation and position of Senator Marconi. Might I recall to his memory the fact that in the Debates that have taken place here both my hon. Friend the Member for East Bristol (Mr. W. Baker) and myself have been emphatic in pointing out that we paid a very high tribute to both the genius and the character of Senator Marconi, and regretted that his name had got linked up with associations that were not altogether on the same level? To that position, of course, we continue to adhere. The hon. and gallant Gentleman went on to ask where the evidence of corruption was to be found. If he needs direct and specific evidence, perhaps it is difficult to advance, but at the same time it is well to call his attention to the remarkable speech that was delivered by my hon. Friend the Member for East Bristol when this matter was last before the House, to which no answer has been given from any quarter, as to the influences brought to bear and the interests that were concerned in this particular merger.

Further, on two occasions I have traced out, without contradiction, the resolutions passed by former Imperial Conferences, laying it down as essential that the communications should be under the direct control and ownership of the State. Again and again, Conferences laid down, but for some inexplicable reason it was always set aside, and eventually the late Mr. Bonar Law made a statement in this House, without any warrant and without consulting the House, which set aside all that had been done by those Conferences. I say that the onus does not lie on Members on this side, but that it lies on the Government themselves, to make clear why this action has been taken. The hon. and gallant Member for Ripon talked about this being another instance of Government property depreciating and being sold at a scrap price, but that is not the case at all, because the cable companies' cables are at that point when either they must be renewed or scrapped, and that is not the case with regard to the State property, which is being handed over practically new and at scrap prices.

I wish the hon. and gallant Member would give a little more attention to what is under consideration when he talks about the difficulty of getting the Government to agree with regard to business arrangements. The very thing we are discussing is an indication that the Government have agreed within the Empire. The Pacific Cable Board is an instance where they have agreed, and they have been running this particular business successfully hitherto. It was rather naive of the hon. Member who introduced the Bill to-night to suggest that capitalists were so generous that they were going to relieve the State of a wasting asset and a losing business in order to prevent us making further losses, and that they were going to take over this matter out of pure kindness of heart. Why, his own Report on the very Bill that he brings before us indicates the contrary view. It indicates that the Pacific Cable Company has at least been paying its way, for in paragraph 19 it says; The Pacific Cable Board finished the financial year 1927–28 with a small profit, in addition to payment of full amortisation, owing to drastic economies and to the fact that they had budgeted for a surplus of £100,000. Anyway, there is an indication that it was not quite bankrupt and derelict, but that, after all, is not the whole story. "We are risking the taxpayers' money," said the hon. and gallant Gentleman, and he indicated losses on tramways and so on; but it would be very interesting if only we could get a real return of the percentage of failures in private enterprises as compared with those undertaken by the Government and local authorities, and I, for one, have no hesitation in saying that the publicly-owned services would come out easily and handsomely in front.


I do not mind a private individual losing his money.


The hon. and gallant Gentleman went on, in order to bolster up his case, to refer to what he called the impossibility of getting Governments to accept new ideas, but the very fact that the beam wireless got a run and that Marconi had his chance in this country was due to the Post Office of this country. Senator Marconi admits that they gave him support and help in his early days. The fact is that very often the State bears the expense of experiment and early investigation, and that then other interests step in, after all that work has been carried through to a certain measure of success. I cannot help feeling that the Government have been very much in the position, at this stage, described in the parable of the unjust steward. The day of punishment appears to be near at hand, and they appear to be sharing out among their friends as much of the spoil as they can against the day of judgment. Look at some of the things that are causing a little interest just now. There is a certain amount of concern at what may he happening in regard to the Anglo-Persian Oil Company and the Government interests. There is a suggestion that the tramways are to be handed over to a public concern with the help and connivance of the Government's friends. There is the case of the Overseas Credits, and some suggestion that they might go also. All these things indicate that the Government seem to be squaring themselves with their friends, and putting themselves right before there is a change of sides in the House.

Is the Postmaster-General to take any part in the Debate, and tell us the opinion of the Post Office on this matter, and what went on behind closed doors? I have no special knowledge, but I have every reason to believe that the Post Office has been constantly opposed to this on grounds both of commercial equity and of strategic possibilities in the event of trouble breaking out again between this nation and other nations. It has been said in previous Debates, and it cannot be denied, that this nation found itself in great difficulties in the initial stages of the War, when serious leakages took place owing to the cables being in the hands of persons other than the State. It was only after matters had gone on for some considerable time that the State took control and that was prevented. What is to happen in regard to this question? Are we to have the spectacle of the Government being willingly plunged by the majority party in this House into the extra expense of having to maintain separate lines of communication for military and naval purposes? They ought to use them for commercial purposes in peace times, so that in an emergency they can be free to take them over. This is the first link in a much longer chain that it is intended to forge. The Pacific Cable Board is the first experiment in long-distance State-owned cables, and it has been successful.

Hon. Members should bear in mind that in this particular business, all the ordinary methods of business are ignored. Where there has been competition between firms carrying on rival businesses, it is usually the successful side that absorbs the unsuccessful. In this case, however, it is nothing of the sort. It is admitted in the Report that, owing to the competition of the State-owned wireless services, the ordinary cable companies are being put out of business. It. would seem to be the natural order that negotiations should be opened up to see how the State can co-ordinate these services with its own successful business, but it is proposed to hand the State business aver to the unsuccessful business, in order that they should have it for their benefit. The right hon. Gentleman the Member for East Walthamstow (Sir H. Greenwood) referred to the fact that one of the reasons why we wanted to do this was to get cheaper and more efficient means of communication. He cannot have read the Report, for it is set out in the Report that, owing to the operation of the beam wireless service in competition with the cable service, the cable companies have been forced to reduce their rates by from 3d. to 6d. per word. If the State were not prepared to take over the cable companies at the present time, it should appeal to the gospel of hon. Members opposite that the ordinary method of competition should be allowed to go on, and that the cable companies should fight it out with the State-owned service to see which is the better. In that struggle the public would gain the advantage in cheaper rates. Not only have we these reductions as the result of the beam wireless, but it has been admitted that the reduction has brought additional service to the cable companies.

Something has been said about the limitations that are being set on the amount of profit that is to be made. Was there anything more fantastic than the suggestion that this company can be compared with public utility companies with their limitation of profits? There is not the faintest resemblance between a public utility company and the present Marconi Company. The whole machinery of it, the whole aspect of it, and the whole design is on purely commercial lines, and the whole make up of the Board is such that it will watch and look after the interests of the commercial companies as against the State. Look at the proposals that are made in regard to the business itself. On page 18 of the Report, Recommendation (V), we read: A standard net revenue of £1,865,000 (exclusive of non-telegraphic investment revenue) from the Communications Company services to be fixed to the purposes of the company: all net revenue from Communications Service in excess of that sum to go as to 50 per cent. to the company, and as to 50 per cent. to reduction of rates or such other purpose as the Advisory Committee may approve. If additional capital expenditure is incurred by the Communications Company in relation to traffic, there shall be added to the above initial standard revenue an appropriate charge for interest at such rate as may later be agreed. In effect, there is to be first an assured 6 per cent. before any consideration like this can take place. What is more, this Advisory Committee, as far as we can see, has no powers whatever, and we want to know what are the contracts and what is the machinery to set this going. Here are the very generous terms that are being given to the cable companies. Suppose the beam wireless had been owned by another private company, and run in competition with the cables. There would certainly have been an arrangement, but not so generous as has been given at the public expense in favour of the losing company. In an article in the "Times" to-day special reference is made to a remark made by my hon. Friend the Member for Spring-burn (Mr. Hardie) with regard to the development of the wireless service by the Post Office. No one can contradict the fact that the ownership of this service belongs to the State, and it is now being surrendered and given up by the State to private companies and other private interests.

One wonders where the great Conservative party is when it is lending itself openly to what is a financial ramp at the expense of the nation. The way that the people have been betrayed in this matter, and have been handed over to an interest in which one of the dominant companies has a reputation not too savoury in financial matters, and which appeared prior to the announcement of the merger to be a failing concern, will have to be told throughout the length and breadth of the country. This service is to be handed over to them in order to bolster them up. I hope that the House of Commons, concerned with its own reputation, will take a stand against this sort of thing until at least we get fuller information. We have a right to know what evidence was given to this Committee, and the pressure that was brought to bear on the Conference to make them change their mind; because it is on the record that the Imperial Conference has always stood against handing over these communications to private interests. This has somehow been set aside, and not least significant is the silence of the Postmaster-General in these matters, the putting up of the Financial Secretary to the Treasury, who stuck very closely to his brief, to say practically nothing about it, and the handing over of the Chairmanship of the Conference to the Secretary of State for Scotland.

When I last spoke on this matter I mentioned that the Scottish Office was the only Department of State that had not passed a specific resolution declaring that it was to the advantage of the State that this wireless business should be State-owned and State-controlled. Probably for that reason the right hon. Gentleman has been appointed to this office. It would be interesting to know why the position has been given to him, and why the Post Office is silent, and whether we are to get any real information in order that we may dissipate the very unsavoury atmosphere existing about the whole business. It seems to be a matter of giving away—not selling—public rights to a gang of financiers who have been praying for this for a series of years, and who, by some mysterious power, have been able to set aside the decisions of the Cabinet and the Imperial Con- ference. The hon. and gallant Gentleman the Member for Ripon (Major Hills) referred to the impossibility very often of getting Government Departments to embark on new enterprises. I agree that that is quite true as far as the Government with which he is associated is concerned, but I would remind him that this Report indicates that there was for a short time in office a Government who had the courage to set aside even the advice of its official experts, and to make an experiment in regard to this sort of thing; and they were the means of establishing the beam wireless. The bench opposite has already paid a tribute to that. Therefore it is a question of the nature and the composition of the Government in regard to these matters. I hope, even now, that the House will not stultify itself and sully its good name by lending itself to any such proposal as this.

Captain FRASER

The hon. Gentleman the Member for North Camberwell (Mr. Ammon) recommended, in the middle of his speech, that it might have been wiser for the Government to allow the present companies to go on until the cables were more or less bankrupt, when some arrangement might have been come to much more easily than at present. I do not desire to comment upon that, beyond pointing out that the hon. Gentleman's Leader, who put down the Amendment said earlier in the Debate that that was not a course that would have recommended itself to him. The right hon. Gentleman spoke of such a course as being unfair, and he used the word "disastrous." Evidently, therefore, there is a difference of opinion on those benches between the Leader and one who must be one of his principal advisers in Post Office matters.


I am sorry to interrupt the hon. and gallant Member, but he has no right to say that I am in favour of cutting out the cables. I said quite distinctly that the process should go the other way—that the State should acquire the cables as the dominant partner.

Captain FRASER

Presumably they would not be acquired until the process of competition had led to their being worth nothing at all. That may be done sometimes in private enterprise, but that particular thing was the one, I understand, which the right hon. Gentleman himself said he would have regarded as unfair and disastrous.

Mr. MacDONALD indicated dissent.

Captain FRASER

The hon. Member for East Bristol (Mr. W. Baker) and the hon. Member who spoke last both fear that the scheme which is inherent in this Bill, even if it does not lead to an increase in rates, will at any rate give no guarantee that there will be a reduction of rates. Both said that we had had reductions in rates while there was competition, but that henceforth there would be no more reductions. They accused some of my hon. Friends on this side of the House of not having read the Report. If they have read the Report themselves, they will have noticed the recommendations regarding the rates, which are very specific. This Advisory Committee is to be advisory in name and in general, but in certain particular matters it is to have ultimate power. It is to be in a position where it can dictate what is to happen to certain funds, can say whether they are to be applied in relief of rates or in development. That, surely, is a guarantee of public control of a very strong kind over the vital questions of development and rates. The hon. and gallant Member for Ripon (Major Hills) pointed out that the Leader of the Opposition had made a great deal of play with questions which had been asked of the Government and their replies. The Government had been asked he said, "Would you allow consideration of the question of selling these Government undertakings or of leasing the Beam?" and the Government had replied, "We would not desire to prevent discussion upon such a matter."

I think this is a very important part of the right hon. Gentleman's indictment of the Government, and I want to press him, or someone who may speak for him, to answer this question: Had he been in power, how could he have answered that question from the Conference, a Conference representing all the Governments of the Empire and set up, presumably, with discretion to consider this vital matter? They say to the Governments of the Empire: "May we know whether there is any likelihood of a solution being found on these lines, namely, that the cables should be sold and the beam leased? May we know that, because without that information we cannot go on considering the matter?" Would the right hon. Gentleman have said, "No, as far as we are concerned we would never consider it, whatever the recommendation of all the rest of the Governments in the Empire?" Surely he could not take up that line. I venture to suggest that it is a little presumptuous for the Leader of the Labour party, even though he has been Prime Minister, to claim to know better what should be done than the united Governments of our Empire. I submit that he paid scant courtesy to the representatives of our great Dominions. He spoke of them rather as if they, too, were a gang of thieves who had joined together in a conspiracy to rob the British people of some of their rights. If he did not mean that, what did he mean? He and his colleagues have been talking about corruption, about ramps and financial gangs and what not.

Who are parties to this arrangement? Apart from the Marconi Company, about which there may be criticism, who are the parties? The Governments of the Empire. Not only our Government, but accredited representatives of all these Governments are parties to this arrangement, which they believe to be sound, yet the right hon. Gentleman and his friends try to suggest that this is a financial ramp, in which a number of rather evil people are engaging. I think he cannot dissociate the remarks he and his colleagues have been making as to the evil in this arrangement from an indictment of the Governments of the Empire for having themselves done evil.

May I turn to a point made by the hon. Member for East Bristol with regard to quite a trivial matter in Australia? He complained that the Government were in such a hurry to get on with this so-called ramp that they could not even wait for a representative from Australia. He then went on to show how undesirable, in his own opinion, and in the opinion of a Committee from whose Report he quoted, was the particular company which was sending this representative. Surely the statesmen of our Dominions gathered here in London need not wait weeks while a gentleman comes from a company which was so much criticised in Australia, according to his own showing. It was not a very important argument, I thought, though the hon. Member made a great deal of it. With humility and all sincerity I would ask hon. Gentlemen and right hon. Gentlemen in the Labour party to answer this question, which seems to be the really vital one, when the words of the Amendment of the right hon. Gentleman are read. What are those words? We are accused of handing over a public utility for private gain. I should have thought we were handing it over in order that private persons may manage it for the public good. Even if there is private gain, is that the worst thing the right hon. Gentleman can find to remedy in this country? Surely gain by private citizens is a gain to elements in the community of which we are all a part, and surely out of that gain comes taxation and the wealth of the country upon which our industries and all development of our industries depend. Is private gain necessarily such an evil thing that there must be none of it? I suggest that this phrase, which has been imported into the Amendment, is one which those who print Labour party pamphlets might keep set up in type. It appears in almost every pamphlet. It is one of those parrot-like inanities which are designed for platforms and not for Parliament, and I am surprised that the right hon. Gentleman should bring it here.

What does this Amendment go on to say? It goes on to speak of valuable undertakings of the State being almost given away, to use the words of the hon. Member for North Camberwell. What are these valuable undertakings which are being sold? They are cables which the hon. Member himself admits would very soon be worth nothing; he would have wished to wait a few months until they were worth nothing. Comparison was made between the cost prices and the prices proposed to be paid for these undertaking's, and the hon. Member for East Bristol asked if there was not goodwill as well as depreciation to be taken into account. He even went so far as to tell us, in detail, what were the profits of the Pacific Cable Board in a particular year, and said, "If this Board can pay this interest and make a reserve and then divide £42,000 amongst the owning units, the Empire Governments, surely it is a very valuable business." Every business man will know that you can only judge the real value of any undertaking by looking at the figures of it over a series of years, by seeing not whether a profit was made last year—the last profit that probably ever will be made—but whether takings have decreased, and whether there is competition which cannot be avoided and which is likely to kill it. An examination of the figures of the Board would show, I am confident, that it is reasonable to suppose that the Pacific Cable Board will make a loss either this year or next, and if that be so, how can you talk about goodwill? Surely goodwill is something which suggests an expectation of future profits, and not something for which you paid large sums some years ago.

The right hon. Gentleman is so obsessed with the necessity for taking every action which can be taken—at all times and, perhaps, particularly now—which will give his members, at present lacking substance for political orations, opportunities for showing how the party in the House is always striving to buy up everything in the community, that he puts down an Amendment which I frankly believe is 95 per cent. designed for his political platforms, leaving only 5 per cent. as a contribution to the business of this House. It is his desire to show, whenever and wherever he can, that his party, if returned, would buy everything for the nation, whether it would be practicable or not, whether there are four or five great Dominions to be consulted or not, whether it is business or not, does not matter. He says, "We must show that if we had been in power we would have bought these things for the people." I suggest that the Government are taking not merely the right course on this matter, but the courageous course, in facing the criticism, I would even say the false criticism, with which they may meet in the country. They are going to set up a unified system, the only system which is at present practicable having regard to the feelings of all the Dominion Governments, and it is rather a serious indictment of the party system that in bringing forward this almost inevitable solution we receive no constructive help from His Majesty's Opposition, but that they simply use the opportunity to construct a political platform.

In my last remark, I would refer to the fear of the hon. Member for East Bristol that these beam stations may some day be used for telephony. He said, as if it were part of the conspiracy, that in the "Times" to-day there is an article which suggests that the beam stations are to be used for telephony. The tone of his voice indicated that he thought that would be a really dreadful thing. Why should this be considered to be such a dreadful thing if beams happen to be good for telephony. Highly successful experiments are going on in the use of the beam for this very purpose, and I regard it as almost inevitable that these beams will be used for telephony. When the beams carry one or two streams of telephony, then possibly broadcasting may go down the same channel. I ask hon. Members who are not definitely committed to following the Leader of the Opposition in regard to this Amendment to realise that under all the circumstances in which the Government had to deal with this problem they had no other course open to them than to take the line which they have taken, and I hope that their sense of business and the necessity for co-operation in a matter of high Imperial importance may lead to them not pressing this matter to a Division. I hope that they will not use this opportunity for purely partisan ends.


I beg to move, "That the Debate be now adjourned."

I want to ask the Financial Secretary to the Treasury where we stand in regard to procedure. We have been talking a great deal about the Advisory Committee and our control of the rates, but I cannot find anything about those matters in the Bill. We hear that the Government will appoint two directors, but I cannot find a word about that point in the Bill itself. Perhaps the Financial Secretary will tell us where we can find a reference to these matters in the Bill.


This is merely an enabling Measure, and the Bill we have before us does not deal with the points which the hon. Member has raised.


For the reasons I have stated I intend to move the. Adjournment of the Debate, because I am unwilling to dispose of these valuable assets in this way until we know the terms upon which they are to be sold. I hope my Motion for the Adjournment of the Debate will be accepted unless we get a full statement of the terms on which the whole of this business is being conducted. We have been told that there will be an arrangement under which any profit which is made in this business will revert to the reduction of rate as to 50 per cent. of that profit. How do we know that? There is not a word about it in the Bill. We are told that two directors are to be appointed by the Communications Company with the approval of the Government, and it is claimed that that will ensure the necessary control. I express no opinion upon that point, but I ask: How do we know that there will be two directors appointed because there is not a word about that point in the Bill?

We are told that the beam system is going to be sold, but there is nothing to that effect in this Measure. The Postmaster-General has been repeatedly questioned about this point, and I find that on this vast question involving the sale of our ownings in the Pacific Cable and the Atlantic Cable and this highly successful beam service the only remark he has made is: "I have no official knowledge of the subject." If I required an additional reason for moving the Adjournment of the Debate, it would be that we must have the terms upon which the new arrangement is to be set up, and we ought to have the views of the Post Office on this subject. I think that course must commend itself to hon. Members opposite, putting aside party considerations. I do not think that these interests should be sold as they will be after the passing of this Bill without a word from the Postmaster-General as to whether he considers the terms of the bargain are proper. As for the beam system, the hon. and gallant Member for Ripon (Major Hills) said that at least it was experimental.


I said it was new.


At any rate, that is not the view taken by Mr. Kellaway and Signor Marconi. Apparently, there was a little campaign last year, and both those gentlemen made long speeches which were reported in the "Times."


This is the latest Bill, but nobody contends that it will be the last Bill.


Mr. Kellaway, who ought to know, and Signor Marconi, who certainly does know, made long speeches describing the beam system as being not only the coming thing, but something that would be the means by which we should have wireless telephony. The rights for telephony are to be reserved to the Postmaster-General. I hesitate to address questions to the Postmaster-General because silence seems to have been imposed upon him, and I feel sure that more ready replies would come from the Assistant Postmaster-General who seems to be like the pantry boy who was brought into the house to let the burglars in.

What position shall we be in after the passing of this Measure? We shall have handed over the system to somebody else, although we shall have reserved the right to operate foreign telephony for the Post Office. That means that we shall be simply making difficulties for the Post Office in this matter, and I hope in his memoirs he will tell us what are his views on this question, because we are absolutely in the dark about all these matters, and we have not the terms of the contract before us. The White Paper we are considering is not a contract, an Act of Parliament, or a document in any contractual sense. Do not let hon. Members imagine for a moment that if they consent to the Second Reading of this Bill anybody is bound by that document, because it means nothing, and it has no value whatever as a contract. We are to hand over our property to the Marconi Company and to certain cable companies. The beam system was set up by a Socialist Government, and we are told that anything a Socialist Government touches is doomed to disaster. I noticed that the "Times" this morning paid a wonderful tribute to those who set up the beam system. It appears that the patriotic gentlemen who control these companies succeeded in their object by a threat to sell their belongings to the foreigner if they could not have their way. In any other circumstances, that would be described as blackmail.

I do not think the case put forward by the Government that this arrangement has been pressed upon them by the Dominion Governments is supported by evidence. We do not know what wars laid before the Committee, but we can imagine that the influence of a British Cabinet Minister, and especially the right hon. Gentleman opposite, would be extremely strong with the Dominion representatives. There is no evidence whatever to show that the Dominion Governments are to-day pressing for this Measure; in fact, the evidence is in the opposite direction. What is the view of the South African Government? On this point, we have to depend upon what we see in the newspapers. The South African Government say that they are not inclined to commit themselves. There was something appeared in the "Times" the other day to say that Mr. Madeley's attitude towards this proposal was causing considerable complexity. On this matter, I am absolutely in the dark, and on this subject all those who are not in the know are in the dark. It would be very interesting to know what is the view of the South African Government on this question. Anyone reading those documents would be under the impression that when this Report was signed in July the Indian Government had assented in a general way to the Report. Yes, but, if you read the debate in the Indian Legislature in September, you find a representative of the Indian Nationalists making a criticism of the scheme, and you find a Government representative explaining that the Government of India had expressly reserved its opinion in order to get the advantage of the opinion that might he expressed by the Assembly. Yet in this document it is stated that the Dominion Govern-

ments, which it was understood included the Indian Government, had given their assent. As regards New Zealand, the Government have since fallen. This contention that we are to have nothing to do with it because the Dominions are pressing it upon us is not supported by evidence. In view of the fact that we are seeking to dispose by this Bill of State assets and we are not given at the same time any document whatever to show the terms on which the disposal is to be made, and no particulars of the contract which is to carry out the Report of the Committee and in view of the fact that in this matter Post Office property is to be disposed of and the Postmaster-General has been prohibited from speaking, I move, "That the Debate be now adjourned."


Standing Order No. 23 gives me the choice of three alternatives: Either to allow the Motion to be debated or to put it forthwith or not to put it at all. I choose the middle course and put the Motion forthwith.


On a point of Order. Does not the middle course which you have selected permit, if not enjoin, some brief reply by the representative of the Government?


No, it does not do that.

Question put, "That the Debate be now adjourned."

The House divided: Ayes, 113; Noes, 219.

Division No. 11.] AYES. [7.4 p.m.
Adamson. W. M. (Staff., Cannock) Gardner, J. P. Kirkwood, D.
Alexander, A. V. (Sheffield, Hillsbro') Garro-Jones, Captain G. M. Lansbury, George
Ammon, Charles Georqe Gibbins, Joseph Lawrence, Susan
Baker, J. (Wolverhampton, Bliston) Gillett, George M. Lee, F.
Baker, Walter Gosling, Harry Longbottom, A. W.
Barker, G. (Monmouth, Abertillery) Greenall, T. Lowth, T.
Barnes, A. Greenwood, A. (Nelson and Colne) Mac Donald, Rt. Hon. J. R. (Aberavon)
Beckett, John (Gateshead) Grenfell, D. R. (Glamorgan) MacNeill-Weir, L.
Bellamy, A. Griffiths, T. (Monmouth, Pontypool) Malone, C. L'Estrange (N'thampton)
Benn, Wedgwood Grundy, T. W. Maxton, James
Bondfield, Margaret Hall, F. (York, W. R., Normanton) Mitchell, E. Rosslyn (Paisley)
Bowerman, Rt. Hon. Charles W. Hall, G. H. (Merthyr Tydvil) Montague, Frederick
Briant, Frank Hardie, George D, Morrison, R. C. (Tottenham, N.)
Broad, F A Harris, Percy A. Mosley, Sir Oswald
Bromfield, William Hayday, Arthur Murnin, H.
Buchanan, G. Hayes, John Henry Naylor, T. E.
Cape, Thomas Henderson, T. (Glasgow) Oliver, George Harold
Cluse, W. S. Hirst, G. H. Palin, John Henry
Compton, Joseph John, William (Rhondda, West) Parkinson, John Allen (Wigan)
Connolly, M. Johnston, Thomas (Dundee) Pethick-Lawrence, F. W.
Cove, W. G. Jones, J. J. (West Ham, Silvertown) Ponsonby, Arthur
Davits, Evan (Ebbw Vale) Jones, Morgan (Caerphilly) Potts, John S.
Duncan, C. Jones, T. I. Mardy (Pontypridd) Richardson, R. (Houghton-le-Soring)
Dunnico, H. Kelly, W. T. Riley, Ben
Edwards, C. (Monmouth, Bedwellty) Kennedy, T. Ritson, J.
Roberts, Rt. Hon. F. O. (W. Bromwich) Snowden, Rt. Hon. Philip Wellock, Wilfred
Robinson, W. C. (Yorks, W. R., Elland) Stamford, T. W. Westwood, J.
Saklatvala, Shapurji Stephen, Campbell Wheatley, Rt. Hon. J.
Salter, Dr. Alfred Stewart, J. (St. Rollox) Wilkinson, Ellen C.
Scrymgeour, E Sutton, J. E. Williams, David (Swansea, E.)
Scurr, John Taylor, R. A. Williams, Dr. J. H. (Llanelly)
Shiels, Dr. Drummond Thurtle, Ernest Williams, T. (York, Don Valley)
Shinwell, E, Tinker, John Joseph Wilson, R. J. (Jarrow)
Short, Alfred (Wednesbury) Tomilnson, R. P. Wright, W.
Sitch, Charles H. Townend, A. E. Young, Robert (Lancaster, Newton)
Slesser, Sir Henry H. Viant, S. P.
Smillie, Robert Wellhead, Richard C. TELLERS FOR THE AYES.
Smith, Rennie (Penistone) Watson, W. M. (Dunfermilne) Mr. B. Smith and Mr. Whiteley.
Snell, Harry Webb, Rt. Hon. Sidney
Acland-Troyte, Lieut.-Colonel Falls, Sir Charles F. Macquisten, F. A.
Albery, Irving James Fanshawe, Captain G. D. Maitland, A. (Kent, Faversham)
Alexander, E. E. (Leyton) Fenby, T. D. Maitland, Sir Arthur D. steel-
Amery, Rt. Hon. Leopold C. M. S. Forestier-Walker, Sir L. Makins, Brigadier-General E.
Applin, Colonel R. V. K. Forrest, W. Margesson, Captain D.
Astbury, Lieut.-Commander F. W. Foster, Sir Harry S. Marriott, Sir J. A. R.
Astor, Maj. Hn. John J. (Kent, Dover) Foxcroft, Captain C. T. Mason, Colonel Glyn K.
Balfour, George (Hampstead) Fraser, Captain Ian Merriman, Sir F. Boyd
Barclay-Harvey, C. M. Frece, Sir Walter de Milne, J. S. Wardlaw
Beckett, Sir Gervase (Leeds, N.) Fremantle, Lt.-Col. Francis E. Mitchell, W. Foot (Saffron Walden)
Benn, Sir A. S. (Plymouth, Drake) Gadle, Lieut.-Col. Anthony Monsell, Eyres, Com. Rt. Hon. B. M.
Bentinck, Lord Henry Cavendish- Galbraith, J. F. W. Moore, Sir Newton J.
Bethel, A. Ganzoni, Sir John Morrison-Bell, Sir Arthur Clive
Betterton, Henry B. Gates, Percy Nail, Colonel Sir Joseph
Bevan, S. J. Glimour, Lt.-Col. Rt. Hon. Sir John Nelson, Sir Frank
Birchall, Major J. Dearman Grace, John Neville, Sir Reginald J.
Bird, E. R. (Yorks, W. R., Skipton) Greaves-Lord, Sir Walter Newman, Sir R. H. S. D. L. (Exeter)
Blundell, F. N. Greenwood, Rt. Hn. Sir H.(Wth's'w, E) Nicholson, O. (Westminster)
Boothby, R. J. G. Granted, Edward C. (City of London) Oakley, T.
Bourne, Captain Robert Croft Grotrian, H. Brant Ormsby-Gore, Rt. Hon. William
Bowater, Col. Sir T. Vansittart Guinness, Rt. Hon. Walter E. Owen, Major G.
Braithwaite Major A. N. Hall, Capt. w. D'A. (Brecon & Rad.) Penny, Frederick George
Brass, Captain W. Hammersley, S. S. Perkins, Colonel E. K.
Brassey, Sir Leonard Hanbury, C. Parring, Sir William George
Briggs, J. Harold Harland, A. Peto, G. (Somerset, Frome)
Brittain, Sir Harry Hartington, Marquess of Pilcher, G.
Brooke, Brigadier-General C. R. I. Harvey, G. (Lambeth, Kennington) Pilditch, Sir Philip
Brown, Col. D. C. (N'th'l'd., Hexham) Harvey, Major S. E. (Devon, Totnes) Preston, Sir Walter (Cheltenham)
Brown, Brig.-Gen. H. C.(Berks, Newb'y) Haslam, Henry C. Preston, William
Brown, Ernest (Leith) Henderson, Capt. R. R. (Oxf'd, Henley) Price, Major C. W. M.
Buckingham, Sir H. Henderson, Lieut.-Col. Sir Vivian Radford, E. A.
Bull, Rt. Hon. Sir William James Heneage, Lieut.-Colonel Arthur P. Rawson, Sir Cooper
Burman, J. B. Henn, Sir Sydney H. Reid, D. D. (County Down)
Carver, Major W. H. Hannessy, Major Sir G. R. J. Remer, J. R.
Cassels, J. D. Hills, Major John Waller Rentoul, G. S.
Cautley, Sir Henry S. Hilton, Cecil Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Cecil, Rt. Hon. Sir Evelyn (Aston) Holbrook, Sir Arthur Richard Roberts, E. H. G. (Flint)
Chamberlain, Rt. Hon. N. (Ladywood) Hope, Capt. A. O. J. (Warw'k, Nun.) Robinson, Sir T. (Lanes., Stretford)
Chapman, Sir S. Hopkins, J. W. W. Ruggles-Brise, Lieut.-Colonel E. A.
Charteris, Brigadier-General J. Hopkinson, A. (Lancaster, Mossley) Rye, F. G.
Churchill, Rt. Hon. Winston Spencer Hudson, Capt. A. U. M. (Hackney, N.) Samuel, A. M. (Surrey, Farnham)
Churchman, Sir Arthur C. Hume, Sir G. H. Sandeman, N. Stewart
Clayton, G. C. Hume-Williams, Sir W. Ellis Sanders, Sir Robert A.
Cobb, Sir Cyril Hunter-Weston, Lt.-Gen. Sir Aylmer Sanderson, Sir Frank
Cochrane, Commander Hon. A. D. Hurd, Percy A. Sandon Lord
Cohen, Major J. Brunel Hurst, Gerald B. Sassoon, Sir Philip Albert Gustave D.
Conway, Sir W. Martin Hutchison, Sir Robert (Montrose) Savery, S. S.
Cope, Major Sir William Inskip, sir Thomas Walker H. Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W)
Courthope, Colonel Sir G. L. Iveagh, Countess of Simms, Dr. John M. (Co. Down)
Cowan, D. M. (Scottish Universities) Jones, Henry Haydn (Merioneth) Sinclair, Col. T. (Quean's Univ., Belfst.)
Craig, Sir Ernest (Chester, Crewe) Jones, W. N. (Carmarthen) Skelton, A. N.
Crawfurd, H. E Kennedy, A. R. (Preston) Smith, Louis W. (Sheffield, Hallam)
Crooke, J. Smedley (Derltend) King, Commodore Henry Douglas Smithers, Waldron
Crookshank, Col. C. de W. (Berwick) Knox, Sir Alfred Somervilla, A. A. (Windsor)
Culverwell, C. T. (Bristol, West) Lamb, J. Q. Southby, Commander A. R. J.
Davidson, Major-General Sir J. H. Lloyd, Cyril E. (Dudley) Spender-Clay, Colonel H.
Davies, Ellis (Denbigh, Denbigh) Loder, J. de V. Stanley, Lieut.-Colonel Rt. Hon. G. F.
Davies, Maj. Geo. F. (Somerset, Yeovil) Looker, Herbert William Stanley, Hon. O. F. G. (Westm'sland)
Davies, Sir Thomas (Cirencester) Lougher, Lewis Steel, Major Samuel Strang
Davies, Dr. Vernon Luce, Major-Gen. Sir Richard Harman Storry-Deans, R.
Eden, Captain Anthony Lumley, L. R. Stott, Lieut.-Colonel W. H.
Edmondson, Major A. J. Lynn, Sir R, J, Streatfeild, Captain S. R.
Elliot, Major Walter E. Macdonald, Capt. p. D. (I. of W.) Sugden, Sir Wilfrid
Ellis, R. G. Macdonald, R. (Glasgow, Cathcart) Thom, Lt.-Col. J. G. (Dumbarton)
England, Colonel A. MacIntyre, I. Thomson, Rt. Hon. Sir W. Mitchell
Evans, Captain A. (Cardiff, South) McLean, Major A. Titchfield, Major the Marquess of
Falls, Sir Bertram G. Macmillan, captain H. Tryon, Rt. Hon. George Clemant
Turton, Sir Edmund Russborough Watts, Sir Thomas Wood, Rt. Hon. Sir Kingsley
Vaughan-Morgan, Col. K. P. Wayland, Sir William A. Wood, Sir S. Hill-(High Peak)
Waddington, R. Wells, S. R. Wright, Brig.-General W. D.
Ward, Lt.-Col. A. L. (Kingston-on-Hull) Windsor-Clive, Lieut.-Colonel George
Warner, Brigadier-General W. W. Winterton, Rt. Hon. Earl TELLERS FOR THE NOES.
Warrender, Sir Victor Withers, John James Captain Viscount Curzon and
Waterhouse, Captain Charles Wolmer, Viscount Captain Bowyer.
Watson, Rt. Hon. W. (Carlisle) Womersley, W. J.

Question again proposed, "That the words proposed to be left out stand part of the Question."


I think it is possible to discuss the general principles as well as to deal with some of the objects and consequences of the Bill. The whole transaction here and the object of the Bill consists of collecting the assets of various concerns and giving them to the merger company. The consequence will be the distribution of compensation to various merging bodies. This is a very long chain, and the only link in the chain which we can discuss is this Bill. My submission is that I am in order to bring to the notice of this House a consequence of this Bill, although it is not actually in the Bill. My suggestion is that the whole of this scheme is one, and I am in order in bringing to your notice one particular result. One of the objects of the Bill is to distribute moneys to various persons interested—the compensation which is properly due to the merging company and its shareholders. There will he distributed to the merging company and the shareholders the compensation due to the merging company. My attention has been drawn to a considerable correspondence in the Press, and particularly to a letter which was sent on 2nd August this year by the Secretary of the Marconi Company to a shareholder. If I may, I will read it: It will, as you see, be necessary for my board in due course to prepare a scheme defining the terms on which the shares in the merger company will be offered to the holders of the different classes of shares in the merging company. Those terms have not yet been finally settled, and the offer cannot be finally made until the merger company has been formed, but it is the intention of the board that the offer of the exchange of shares shall he made, not on the basis of the liquidation or winding-up, but shall he such as the board considers fair and equitable as between the different classes of shareholders. If that means anything it means a manoeuvre in which the legal right of the shareholders is going to he ousted by some trick, and, though I know and fully appreciate that it is the last thing the Government would tolerate if they knew about it, yet at the same time I think it is absolutely essential that I should bring it to their notice for, if in the ultimate distribution of these assets there is a grave scandal, as there will be if this intention is maintained, that scandal will be laid to the door of this House and the Government and ourselves. I am sure that it is only necessary for me to point out to the Government what is contemplated, so that they may see, in framing their subsequent action on this Bill, that due justice is done to all parties. It is quite a simple thing to do, and, as far as I am able to judge, it appears to me that it is intended to carry out this manoeuvre by the offer of certain shares only to certain shareholders. In that case, of course, the other shareholders might be left in the lurch, not having accepted the terms. My suggestion to the Government is that the right way of dealing with this point is to insist that the compensation payable to the Marconi Company should be paid to the company, and that the directors should be bound under the Articles of Association, as they would he bound, to distribute it according to their legal rights and powers. If they do not do that, they are subject to the courts of law. I hope that my right hon. Friend will not think that I have spoken in any spirit of hostility. Far from it. I only wish to draw his attention to the matter, because I am quite sure that, when his attention is drawn to it, he will hold up this Bill and prevent it from going through in such a form that injustice is done. I urge the Government, in their own interest and in the interest of honest business dealing, to see that this is observed.


I took part in the discussion on this matter last August, and some of the predictions that I then made have been borne out to-day. My remarks at that time were replied to, not by the Government Front Bench, but by others who assumed the position of being able to reply; but it has been proved that the statements which I made then were correct. There has been some talk today about the wiping out of the cable companies, but I would like to point out to the House that, when competition in the ordinary business sense is spoken of, that word is always used in its general application. It would seem, however, that when it comes to certain private interests held directly by Members on the opposite benches, then the word is not to be used in the ordinary way, but competition is only to be spoken of in regard to what is called an outside business, and that, wherever any business can be connected with the Government, competition has to be submerged in the interests of private capital. That is the position that has been proved to-day—the wiping out of the cable companies, as it is called, need not take place.

What is the reason for anything being wiped out? This is the theory that I have been hearing for the past six years from the Tory benches in this House. It is because the thing wiped out ceases to be fit to compete with modern developments. Do hon. Members on the other side, some of whom, I know, are interested in big business, such as multiple shops, consider for a moment, when they put down a multiple shop by the side of a man who has a small business, whether he is going to the wall, or whether he should have special consideration and whether his assets should be considered? Would hon. Members opposite say that to-day, and go back upon all that they have said with regard to the advance of scientific development Would they say that they have been wrong, and that anything which is not advancing with the times, and keeping up with them in regard to scientific development, should nevertheless be considered; or would they say that, because it is not up to date in experiment and results, and cannot, therefore, compete, it should go out of business? I do not know why there should be this tendency on the part of the House to say that this competition should not apply to the cable companies, but apparently, from the remarks, particularly of the right hon. and learned Gentleman the Member for East Walthamstow (Sir H. Greenwood), Government security is to be brought in to help decaying and inefficient cable companies, in order to secure a return upon money which ruder conditions of fair competition would be lost.

Why should not the cable companies go under? Why should they not face the same competition as other people have to face? The beam wireless system has been developed entirely by the British Government—by British Government engineers with British taxpayers' money. Why, because this has happened, should the principle which the Tories apply to everything else be wiped out? I can imagine, as I said before, the howl that would have gone up from the benches opposite if the expenditure on beam wireless had resulted in failure. There would have been cries of "Another failure in enterprise by the State!" But the moment it is successful, arrangements are made for stealing the results that will come in the form If profits from the use of the beam wireless. They are to be stolen from the nation in order to pay certain people. Even although the Bill is not yet passed, you are able to read who is going to be the Chairman and what his salary is going to be, and who are going to be the directors and what their salaries are going to be. All this is being done before this Bill is through the House of Commons, because the Tory road-roller majority think that they are going to travel over every kind of sense that people have of the relationship between the State and the business of the State. The right hon. and learned Gentleman the Member for East Walthamstow—I am sorry he is not here at the moment—had a lot to say on the last occasion, but to-day he was rather silent, although he was asked a lot of questions. Probably, however, such silences mean more than what is actually said. I had hoped that the boycott was going to be lifted from the right hon. Gentleman who has charge of the Post Office, and who really controls these matters, and that we were going to hear something direct from him, as we should in an important matter like this.

We have been told to-day that the arrangement which is being brought forward in this Bill is in accordance with the modern trend of industry. Is it? Is it the modern trend of industry to carry on with a system that was in existence before the latest invention was made? Not at all. The trend of industry, past and modern, has always been that the latest invention scraps everything that has gone before it, and men of real business capacity never hesitate to scrap that which is superseded by invention, because, the better the machine, the more profits are made by anyone who knows how to use it. Then a plea was made for fair play, but we are pleading for fair play; we are pleading that the nation should continue to own what it has produced, and no one can deny that it produced this system which is known as the beam wireless. We are pleading that the people should not have taken from them that which has been produced by their own money and their own engineers, that it should not be stolen from the nation, but that the profits which are accruing now and which will accrue should be used for the purpose of helping the nation out of its financial difficulties, instead of being engineered by a Tory Government into the hands of a private enterprise gang of what I call commercial thieves. You may legalise theft, but it is theft nevertheless. This is a form of theft, and nothing else, and I regret very much that a Scotsman should have been the chairman of the Conference that was responsible for bringing it about.

The hon. and gallant Member for Ripon (Major Hills) asks how we are to know that this beam wireless will not be superseded? Well, what about its being superseded? It is a very stupid mind indeed that cannot see that, from the moment of a new invention being made, the very fact that it is a development means that it is going to be the cause of further development and improvement. Any man that sees at all must see in one invention the birth of another. The hon. and gallant Member's mind seems to he absolutely closed to what is meant by progress and development, especially in scientific invention. Why should he fear an improvement on the beam wireless? He fears that because, under the present system, it is in the interest of those who have investments in an improvement to hold that improvement or invention until they can take out of it all that they have invested in it; but that is the antithesis of all progress. Why should not the present system be superseded? I hope it will, and soon. But, if the State owns it, there will always be an increase in value to the State when it is superseded, while, on the other hand, if private enterprise owns it, they say that they have to meet the claims of those who have invested in it, and to make so many payments in interest that the whole invention of the world must be held back because a few speculators have taken shares in something that has been already invented. Surely, in this year 1928, when we are all claiming to be proud of the great advances in science, it is astounding that even Members of the Tory party should be trying to walk backwards so far as science is concerned. I would like to see something else besides the beam wireless superseded, and perhaps, before next June, we shall have that chance, so that a common-sense Government will supersede the one that is at present on the opposite benches.


Anyone who has sat through the larger part of this Debate must have felt that almost every speaker has made, at any rate, one statement with which he could agree. I certainly find that that is my position to-night, because even the hon. Member for Springburn (Mr. Hardie) has impressed me with his intense desire to secure that whatever scheme is evolved in connection with this service of telegraphs shall at least secure to the people of this country the best results from the enterprise that has been put into it in the past, both on behalf of the State and on behalf of private persons. Perhaps, however, the one remark made to-night with which we all can agree was that made by the right hon. Gentleman the Leader of the Opposition when he said quite clearly that it was well to realise that this subject which we are discussing to-night is not a small matter, but is one of high Imperial and national policy. Of that I think there can be no doubt; but it is probably correct to point out that, although this Bill does not contain—and here I agree to a large extent with what was said by the hon. Member for North Aberdeen (Mr. Benn) —any details of the scheme which is set out in the Report of the Imperial Conference, at the same time I think it has been accepted in all quarters of the House that this Bill forms a part of the greater scheme, and that, in passing it, this House and the Government are committed, at any rate in principle, to the proposals set out in the Report of the Conference. It seems to me if that were not so it would have been entirely out of order to-day, as speakers from all parts of the House have done, to discuss the principles set out and the detailed proposals in the Report which, presumably, will be brought before the House on another occasion. Although I entirely support the principles of the Report, the suggested scheme for a merger company and for the Communications Company, at the same time there are details connected with these proposals which will require the most careful scrutiny before they are finally accepted by the House and the country. There is, for example, on page 19 a statement which I am bound to say makes it a little difficult to understand exactly what is going to happen when this Advisory Committee is set up. It is there stated: For this reason it should be provided that in all such matters of general policy the Communications Company should consult the Imperial Advisory Committee. That is all very well, but I should certainly like to know exactly what is implied in those words. Consulting the Imperial Advisory Committee may be one thing, but what happens when the Imperial Advisory Committee gives advice which the Communications Company does not appreciate? It seems to me this Advisory Committee has no powers and there is no particular definition in these proposals as to how the Advisory Committee is to be set up, whom it is to consist of and what is to happen if it has totally contrary ideas to those held by the Communications Company or its board of directors. I mention that because it is a point that should be cleared up before the proposals which must come before the House are finally accepted. There does not appear to be any definite control of the rates that are to be charged. There is a definite statement that no increase of rates can take place without the approval of the Committee. That in itself is a very good thing but surely it is not unnatural for people who are not experts to say that in the course of time the development of this traffic may make it possible to secure, not an increase, but a very large reduction in rates, and if that is to be the case, surely it is desirable that the State should have some say in the future as to what those rates are to be. I do not know enough of the subject to say there is bound to be any reduction of rates but, looking ahead, as one must do in a huge scheme of this kind, I say the State should have some further power than merely to say there will be no increase of rates without the consent of the Advisory Committee.

The Leader of the Opposition said these proposals were the entire responsibility of the Government. He also said the only alternative to them was nationalisation. I agree with both those statements. The proposition that we are considering is not really a very difficult one to understand though there are a good many details which will require to be gone into. The State owns the Beam system, for the introduction of which and the support of the experiments made tribute has already been paid to the Labour Government in their time of office. We have the Beam system, which is from all the evidence undercutting all other means of communication, but the Government, I would remind the House, also owns cables, so that the first point I would mention is this. The Government not only have the best system, and therefore the best part of all the assets to sell to the proposed company, but they have wasting assets as well. They are in this business from two sides. They have to consider it not only from the future of the Beam but also of the cables that they own.

There is, however, a bigger question. You could allow the cable companies to go out of existence by means of cutthroat competition between the beam and the other systems. What would happen then? You would be dependent entirely upon the beam system, which we have been told in various quarters it may be inadvisable to entirely depend upon because there are likely to be new developments in the course of the next few years. We are then dependent entirely on the beam system, which by no means reaches all parts of the Empire, and it would be highly dangerous in present circumstances to be dependent upon one form of communication. What is the Government's position? What is the nation's position? It is simply that they must either cut out the beam system, the most effective, the most efficient and the cheapest, to allow their own and other cables to exist, or they must allow cutthroat competition to go on and force the cable companies, and their own cables, out of existence. It seems to me the only proper system for them to adopt is to combine all the interests of these various concerns and their own interests as cable owners with their interests as the owners of the beam system as well, and get a joint scheme which will ensure not dependence upon one form of communication alone but upon all forms and will give, as far as possible, unified control over all these various means of telegraphic communication.

If there is no real opposition to the scheme which has been set forward by the Report so far as it concerns what ought to be done—and I do not think there is any real opposition—then the only point remaining is that of political views between one side of this chamber and the other, i.e., whether the scheme shall be brought into operation—because it would be the same scheme—under nationalisation or in the form of semiprivate enterprise—because that is really what it is—as is set out in the report of the Conference. I do not propose to give in detail the reasons which would weigh with me in opposition to any scheme of nationalisation, any more than I take it hon. Members opposite would think it necessary to go into evidence to show that nationalisation can in certain circumstances be successful. It is clear to us on this side that we have no evidence, either in this country or anywhere in the world, that there is any likelihood of a State scheme giving us any better facilities, or indeed, facilities anything like as good or at as cheap rates as a system such as is set out in this report is likely to do. I leave it at that because it seems to me that is the only real point between the parties to-night. There is, as far as I can see, no real opposition to the scheme set out in the report. It is of the utmost importance that we should maintain these various means of communication, that we should get the cheapest possible rates and that above all things the State should have control where it is necessary in time of emergency and lastly, we should maintain an all-British route to our own possessions in the way of telegraphic communication.

I entirely approve the principle of the scheme set out in the Report. I want the Government to go on with it. I want the Government to press it through for the sake of communications abroad and for the sake of the numerous people throughout the Empire who are anxiously waiting for better, cheaper and more efficient telegraphic communication. The whole future of this Empire, and possibly the peace of the world, depends on our getting better and better telegraphic communication between ourselves and the rest of the world. I am most anxious that we should get on with it, but there are points in the Report which will require very careful looking into in the proposals, which, perhaps rightly, have not been brought forward to-night and on which it will be necessary for the Government to satisfy the House very clearly that the partial control they are to have is sufficient to ensure, not only for this country but for the different parts of the Empire, an increasingly efficient service and, as far as possible, a really economical one.


The hon. Member has rightly said the only division of opinion that there is on this subject is as to whether there shall be public or private control of this service. I thought he glided very lightly over the essential position when he overlooked the fact that the real trouble from that point of view is that a national service of wireless has really given economical service. It is for that reason that the trouble has arisen. We have not in Great Britain too many State-owned services, and it is always possible for hon. Members opposite to argue in theoretical terms about Socialism and to deride the possibility which may conic from it, as against the typical private company of the last century. I should have thought, from the sporting point of view, as good cricketers, when the State has developed an experiment which has proved itself to be so remarkably successful, hon. Members opposite would have taken every conceivable precaution to preserve it and to see what would become of it in the future.

We have overwhelming arguments from the other side that Socialism cannot do anything and will take the country to the bad, and here is a case where, just because an experiment in State Socialism has done so well, the whole of the Members on that side of the House are wanting to put an end to it. It says on page 7 of this Report that the cable rates to Australia in January, 1927, were standing at 2s. 6d. and the Beam wireless rates were 1s. 8d. The cable rate to South Africa was 2s. and the Beam wireless rates were 1s. 4d. The old rates to India were 1s. 8d. and the Beam wireless was 1s. 4d. It is under the influence of this competitive pressure that the cable companies have been threatened with bankruptcy. Under these circumstances, taking the hypothetical position some 50 years hence, when the relative position as between socialised and privately-owned industries may be expected to be somewhat reversed, you will find that a Labour Government will be sufficiently sporting, if a good case can be made out, to let the experiment of private enterprise continue. I should have thought at this time the Conservative Government, when it is so anxious to find a. way out, would have allowed this thing to work for a few years in order that the nation might have the benefit of the experiment.


The hon. Member appears to be trying to maintain that the success of the beam wireless is due to the fact that it is a State-owned service. Surely, to use his own expression, it would be more like cricket if he told us what would happen to the beam service under the State and under private enterprise. I know he cannot do that, but the two things are not parallel.


I am not trying to work out a balance-sheet of private enterprise. I am saying that you have a very successful experiment in public enterprise and, as such, it ought to weigh with certain Gentlemen on the other side of the House.

I confess that I find it very difficult to understand why the Prime Minister changed his mind in this matter. As recently as 1923, when this matter came up for consideration, he made the following statement: It is necessary in the interests of the national security that there should be a wireless station in this country capable of communicating with the Dominions owned and incorporated by the State. We are discussing a very big subject. It concerns perhaps the most vital of all the communications between the various parts of the British Empire. It is a development which is in its infancy. What we are about to do is to decide between the relative merits of public and private control of this vital system of communication throughout the length and breadth of the British Empire.

I want to ask the Postmaster-General as well as the representatives of the Dominions and the Colonies whether, in view of the importance of this question not only now but' in the future, and the very great part this service is going to play in binding together the people of the Empire both in peace and, it may be, in times of war, we cannot have from His Majesty's Government the real reason and a considered statement why this highly successful piece of State Socialism should suddenly be sold and handed over to what some of my most moderate friends on this side of the House described as "a gang of private exploiters." I think we are entitled to ask at this stage, in the light of the great success of the experiment and the momentous nature of the decision between private and public control of one of the most important means of communication in the British Empire, that at least the Postmaster-General should get up and tell Us why the Prime Minister has changed his mind and why, as the representative of this particular Department, he has consented to sell this very important public service to private enterprise for a consideration.


I intervene in this Debate only to ask the Postmaster-General if he has given sufficient attention to the drafting of this Bill, because, in my view, it is one of the most unintelligible pieces of drafting ever presented to this House. I am not going to deal with policy, and it would be improper if I were to do so, because it is not a matter on which I have very great knowledge, but it occurs to me that the Communications Company which appears in Clause 1 of this Bill is not defined in the Bill at all except in the Preamble. I always understood it to be a good canon of construction that we need not look to the Preamble of a Bill in order to find the definition, and it is extremely doubtful how far the Preamble of a Bill is part of a Bill. The Preamble says: Whereas it was recommended by the said Conference that a company should he formed (called by the said Conference and hereinafter referred to as the Communications Company'). Beyond that there is no definition of the Communications Company in the whole of the Bill. If we again look at the Preamble to find out the meaning of "the Communications Company," we are in fact giving power to the Board to sell to a Company which is in every way undefined. We do not know whether it is incorporated, whether it has any personality or what sort of a company it is going to be. We know nothing whatever about it. There is another thing in the way of drafting which I see. It is this. It is described in the Preamble that the Company to be formed as the Communications Company is to take over all undertakings. Therefore, as I understand it, when we come to Clause 1 and to the question of selling the Pacific Cable undertaking to the Communications Company, power is given to sell to a body which, in fact, at the time of the passing of the Bill, does not exist. There is nothing in the Bill to say that it is formed at the time the Bill is passed. That, again, seems to be a matter which makes the drafting extraordinarily unsatisfactory. Surely, whatever the intention of the Government is in this matter, it should be put into clear and lucid language in this Bill. I cannot think, having regard to the importance of the question, and the very slovenly wording, the intentions of the Government are expressed in this particular Bill in a manner worthy of the importance of the subject. To recapitulate, I say there is no definition of the company to whom that body is to be sold, that no indication is given as to the legal nature of this company, whether it is an incorporated company which is purchasing this, whether it is to be a limited liability company or not, or whether it is to come under the Companies (Consolidation) Act. The position is exceedingly vague and the only mention of this company at all is that it was recommended by the Conference that a company be formed. I do not know whether that Conference recommended the particular type of company to be formed or not.

If it is the intention of the Government to follow the recommendation of the Conference, I would suggest that it would be very much better if the Bill stated in terms what the company was, not in the Preamble, but in the body of the Bill. Moreover, I think the future sale to a body that does not exist at the time of the passing of the Bill is a matter worthy of consideration by the Government from the point of view of drafting. Whether you can give power to sell to a body which is not in existence at the time assuming that the company is going to be legally constituted, is a matter worthy of consideration. I intervene in this Debate only because we have had so much difficulty in drafting these Bills, and I think that before the Bill assumes its final form these and other legal considerations are worthy of attention.


I do not know whether I can answer the technical objections of the hon. and learned Gentleman the Member for South East Leeds (Sir H. Slesser) on the ground of the drafting of this Bill, but I think that possibly I can make it quite clear what this Communications Company is going to be. I think the hon. and learned Gentleman must really know, if he has taken the trouble to read the Report, that a proposal apparently reached the Conference from the Marconi Company to the effect that if satisfactory agreement was come to with the Governments concerned they would be prepared to form a Merger Company with the Cable Companies. This Communications Company is an emanation from that Merger Company. The Merger Company can only come into existence if a satisfactory contract is realised, and consequently the Communications Company can only come into existence after the Merger Company. It would seem to be very difficult in a Bill authorising the sale of the Government assets to the various companies to define more clearly and closely the nature of this ultimate Communications Company. [Interruption]. It is not in the Bill. I think it would be almost impossible to define it. It is something which is hypothetical.


Will the hon. Gentleman explain to the House how a Judge can be called upon to interpret the terms of the contract if the purchaser is not defined?


We must leave that to the imagination. I am not attempting to define the thing. I see extraordinary difficulties which must confront the Government, and the only intelligent course for them to pursue was for them to go ahead with the liquidation of their assets and so assist the formation of the Communications Company. That is not the point, however, on which I wish to address the House.

Two or three points have been raised during the Debate which, I think, want answering. There was a suggestion made by the right hon. Gentleman the Leader of the Opposition that this matter had been left very late in this Parliament, and that in fact the Government in the last year of this present Parliament had no moral right and no public sanction for the tackling of this problem. This matter has been under discussion for a full year at least. I see that this inquiry began on 16th January of this year. It is not a fact that we have only had a single debate on this topic. We have had two debates. One in the early spring—I think it was in May, when I made a small contribution to the debate. Nor does it seem accurate to say that the British Government have in its hand the key which it threw away when it could dictate terms, because it had a contract with the Marconi Company for the operation of the beam stations. In fact, the cable companies, it seems to me, had the key in their hands. They had it in their power before the beam wireless system was perfected, when secrecy was still imperfect, and when there was still fading—particularly when used in a westerly direction towards Canada—the cable companies had it in their hands to dictate to the Government as to what they should do with their assets. One of the menaces which the Government had to meet was the possibility that the cable companies, anticipating the future development of beam wireless, would exercise their undoubted right to dispose of their assets, possibly to a foreign company, and a company not interested in the problems of our Empire and its communications. It seems to me that the Government were forced to act and at once. Quite early, had the Leader of the Opposition cared to do so, he could have forced a debate on this House and have had the essential principles thrashed out.

It is to one of those essential principles I want to refer, because I feel, and I think a good many people feel, not in a party sense, a little anxious about some of the results of these proposals. The total cost of the four beam wireless stations in this country, according to an answer which was given by the Assistant Postmaster-General in reply to a question which I put to him, was £242,000. That includes the price of the land. I believe that the sum actually paid to the Marconi Company was £180,000 for the four stations. The profits during the first year of operation, the net profits on that official outlay of £240,000 were, according to a reply I received from my hon. Friend, £166,000 on gross receipts amounting to £440,000. This new beam wireless means of communication may very well be one of the most amazing and most beneficial steps forward that has ever been made in the history of the world's communications, not merely in a scientific sense, but in its financial effect on the users of cable communications, and on traders in all parts of the world, particularly in the British Empire. Already in a single year it has been possible to write off, possibly, two-thirds or three-quarters of the total actual cost of the installation of that service. The whole of these four stations communicating with four parts of the Empire did not cost in their outlay the price of a single cable ship which one of those great cable companies have to maintain. It appears likely to involve a positive revolution in the cost of Imperial telegraphic communications.

8.0 p.m.

We have had very valuable reductions in the cost of transmissions between this country and India and other parts of the Empire. In regard to India, for instance, there has been a reduction from 4d. to 2½d. for a Press message, and with regard to full rate messages a reduction, I think, of 8d. The result has been that no less than 30,000,000 words have gone over this beam wireless system in the first 12 months of operation. Official figures show that this service has by no means reached the limit of its expansion; it is still expanding very rapidly. During the first complete week of operations, the number of paid words to Australia was 53,000; during the week ended the 11th November, 1928, the number totalled 181,000. The number of paid words to Canada in the first week of the service was 59,000, compared with 113,000 a week or so ago. The figures with regard to India are more remarkable. In the first week the number of paid words totalled 115,000 compared with 253,000 a week or so ago. To South Africa the number of paid words in the first week totalled 88,000 and the number a week or so ago 200,000. A remarkable expansion is going on, and in view of the fact that almost the total amount of the capital cost of establishing the service was written off in a single year, there seemed to be every hope of further rapid reduction to the consumer in the cost of transmission. It is possible that we shall still get a big reduction, and sincerely hope that will be the case. But when we look at this new service, which cost hardly more than the price of a small international toy, compared with the cost of the old cable system, and we find it linked up with a communications company, with a capital of £30,000,000, I am a little apprehensive. Will not this new service, which cost less than a quarter of a million sterling to establish in this country, tend to be rather swamped in this vast aggregation of capital?

I am by no means satisfied that any alternative was possible. Certainly, the last think that I would like to see would be any form of national management. [HON. MEMBERS "Why?"] I will tell hon. Members why. It is one of the best features of this scheme that we do, at last, get this service out of the hands of the British Government. My chief reason for that view is that in connection with our telegraph and telephone service in the last 10 or 12 years we have made a loss of over £20,000,000. Last year alone we lost £1,500,000 on the telegraph service. Owing to something which can only be described as fortuitous, there came into the hands of the Government in 1924–25, at a price very much below its real value, from the Marconi Company —the only time that that company has ever been done down by any Government —a very valuable asset, but I see no reason, judging from the way in which these things are administered nationally, that this new service would be run in the most economical way and with a maximum public advantage in the hands of the Government. I do not believe that such would have been the case. Certainly the service would have made profits, but whether the maximum benefits would have been given is another matter.

My belief is that the Government were absolutely forced to take action. According to my information, the Canadians were very anxious about the liquidation of their interests in the Pacific Cable Board. They were very much averse from the construction of the second cable across the Pacific. It is another instance of the lack of good management in connection with business conducted by a Government, that the last cable across the Pacific was constructed by the Pacific Cable Board after the first beam wireless station had been started. The laying of the cable had not been finished when the first beam wireless installation hail been put in hand. Surely, an intelligent Government Department should have anticipated the possibilities not only of the wireless system as a whole but of the beam system, and that should have deterred them from constructing the new cable. The Government had to take action. I do not think they could have delayed further. I do not think the initiative came from London. There was very great risk of the cable companies taking some action which would have been very adverse to British interests. They have vast assets, and, with the good sense with which a commercial organisation anticipates the future, they were prepared to sell, and would have sold. It was at that juncture that the British Government had to come in, with the results that we have seen.

My point is that the capitalisation may be excessive and that the beam system, which cost so little to establish, ought to be safeguarded in the midst of so great an aggregation of capital. When the Advisory Committee comes to be appointed —I understand that there is to be an Advisory Committee, which will inspire and watch the Communications Company—that committee ought to have on it the most strenuous personnel that the Government can find, and it must be a committee most carefully instructed to watch the public interests and to see that we have further—and the maximum possible —reductions in beam wireless rates.


The two hon. Members from the Government Benches who last addressed us doubted whether State enterprise can be carried on as efficiently as private enterprise. Both hon. Members seem to have forgotten history. When the War broke out, in fact the very first day that war was declared, the Government issued a Moratorium in order to save the bankers. We discovered that we could not get sufficient steel produced for munitions, on account of the inadequate plant and machinery in the various steel works of the country, and the Government had to step in and take control of the steel works, because private enterprise could not produce the steel and the munitions. We also found that the mine owners could not produce sufficient coal, and the Government had to take over the coal industry. We found that in the engineering industry private enterprise could not produce the necessary machinery to carry on the War and to produce munitions, and the Government had to take over the engineering industry. So the process went on until practically everything was under the control of the Government, because private enterprise had failed to produce the goods during a time of national emergency.

Speeches have been made to-day pointing out the fatal mistake that the Government are embarking upon in introducing this Bill. Hon. Members opposite seem to forget that the men and women of this country, especially those with whom I have been in contact during the last week-end, are keeping their eyes on the Government so far as this movement is concerned. At one of the week-end schools which I attended I heard a speaker dealing very effectively with the changes that are taking place in this country and in the world. He pointed out that there is a greater revolution taking place to-day than the great industrial revolution of a century ago. He remarked that, a few weeks ago, a German aeroplane crossed the Atlantic in a period of something over 48 hours, and we had the spectacle of the German people coining into direct contact with the American people not only by wireless but in person. We have our wireless sets, and we simply put our finger on a knob and we get music from the Continent and other parts of the world. We can enjoy their music and they can enjoy ours. There is a mutual exchange of music.

We have this great revolution taking place and we see the present Government to-day doing exactly as the capitalists and financiers did during the industrial revolution. In the former revolution they took the people from their homes, where they lived in communal state, some producing food, some producing clothes and other goods and exchanging with each other, and they put them into factories, workshops and mines, men, women, and children under 12 years of age, in order to produce great profits and dividends for the capitalists and employers of those times. Hon. Members opposite may smile, but those. who study history, economics and international movements, particularly miners, railwaymen, steel workers and cotton operatives in the evening schools and at lectures given by some of the finest professors, do not regard it as a laughing matter. It is a very serious matter to them whether in this great revolution which is taking place to-day in wireless, in flying and in everything else, they will continue to be the drawers of water and the hewers of wood, as they have been since the last revolution. Recently, we have been trying to bring the chief capitalists of the country and the Members of trade unions together to come to a better understanding as far as industry is concerned.


This seems to be going a long way outside this Bill.


Two hon. Members were doubtful as to whether private enterprise or State enterprise was the better system, and I am pointing out that the capitalists and their representatives in the great industrial revolution of 100 years ago monopolised everything in this country, land, banks and the productive industries; and the working-classes who are reading and thinking of these things today are not going to allow a repetition of it in these times.


We cannot have a general discussion on the merits of private enterprise as against State control.


Here is the Government owning a beam wireless, a Socialist proposal, which is in its evolutionary stage. It should be helped and encouraged by the Government in the interests of the country and Empire, but, instead of that, they are handing it over to private interests in order to create more disputes in the future than we have had in the past. This is a very serious proposal from the point of view of the rank and file in the country. Hon. Members opposite do not realise it because they do not mix with them as we do. They can have the last word here and in the Lobby when the Division is taken, but the workers of the country are going to have the last word in the ballot box and hon. Members opposite will find it out at the next Election. I should protest with all my might against any Government, Conservative or Socialist, handing over anything that was important in the national interest to a private concern.


There are one or two points I want to bring before the Secretary of State replies. First of all, I want to express my sympathy with the Postmaster-General on this occasion. I notice he is taking no part in this discussion. He must be very glad, because it would be a difficult task for him. The Assistant Postmaster-General has expressed himself in different terms on another occasion, but the Postmaster-General must be thoroughly opposed to the Measure now before the House. It would have saved much time if one of the Ministers who are handling this Bill had intervened in the Debate and told us what safeguards they were going to give the country to prevent the company being bought up by foreign interests. This criticism has been levelled by almost every speaker on both sides of the House, and I hope it will be thoroughly explained when the Secretary of State comes to reply. That is one important omission in the Bill. Another omission, equally important, is that there are no safeguards for people who are at present employed by the State. I include in that all kinds of labour from the high officials and technical advisers down to the manual staff. We ought to know what safeguards as regards their pensions, security of employment and terms of their service are to be obtained when they are transferred from State employ into the service of this new private company.

I am very sorry that the Government have not been more open in regard to these transactions. It would have been much better to have published the full evidence heard by the Conference. This House in the past has had a good deal to do with wireless transactions; and they have not been of too savoury a character. It would have been much better, in order to remove all vestige of doubt, if the Government had laid before the House all the evidence given before the Conference. We should like to know who is to be the chairman of this new company. Is there any truth in the statements in the Press that a Noble Lord who used to be Lord Chancellor is going to be the chairman? Who are to be the directors? Why should there be any secrecy as to who is going to control this new organisation? Why should we not be told who is to be the chairman and who are to be the directors to control this enormous property, built up entirely by the money of the public?

One or two minor questions arise out of the report of the Conference. On page 5 there is a reference to the board of directors of Amalgamated Wireless (Australasia), Ltd., and in the second paragraph it is stated that the Conference was unable to suspend its deliberations for the purpose of receiving witnesses from Australia. Why was it that for a Conference which extended over all these months no arrangements were made to get representatives from Australia? Any-one who has followed the state of wireless in Australia knows that the Amalgamated Wireless (Australasia), Ltd., is a combination of the Marconi Group in America and the Australian Government, and many criticisms have been made about the working of this combine company in Australia. For instance, the high cost they have to pay for their material, and so on; and it is very likely had witnesses come from Australia during the sittings of the Conference that their evidence would not have been satisfactory to the general conclusions which have been unanimously reached by the Conference. It would he interesting to know as a matter of fact. who were invited to give evidence. In the next paragraph but one of their Report we see that communications were received from the Federation of British Industries and the London Chamber of Commerce, and if we turn to the appendix we find a list of the witnesses who were examined, and every one of them, every single one, represents a vested interest in this concern. Did the Commission take any steps to obtain witnesses from any other group? Did they hear any witnesses representing those who are employed by these concerns, the workers, and from highly scientific bodies in the country? There are in the City of London many organisations which look upon this question quite dispassionately, without any vested interest at all. What steps were taken to solicit the advice and assistance of these organisations?

Reference is made in their report to the threat from foreign enterprise. Surely it does not say very much for the patriotism of these concerns if, after all the British money that has been poured into them, after all the subsidy which the British Government has paid, they were going to consider transferring their interests to some foreign company? I do not think that that argument really holds good in this connection. But the real question at issue is something very much more fundamental. This Bill is only a very small beginning of the transfer—should there be a Conservative Government in this country—of far wider interests from the State to private enterprise. The next step will be the transfer of the beam service. That is quite clearly indicated in the report. Those who have read in the newspapers the very violent Press campaign against the efficiency of the telephone service, must realise that the transfer proposals are going very much further. I should not be at all surprised to see the Government proposing, if they remain in office for many years, to transfer the telephone service to a private company, probably to the same international group. In fact the Assistant Postmaster-General has already expressed himself in favour of that proposal. If they hand back the telephones why should they not hand back the telegraphs? And why not hand back that wealthy corporation, the British Broadcasting Corporation, until all these State services, which are now run very efficiently, are handed back to private enterprise?

I would like to see a greater expansion of State control, I believe that we could do more with telegraphs and telephones than we are doing now. In the meantime we could enter the manufacturing side of the business. We have a great many difficulties to contend with in our dockyard and arsenal towns. It is not my own opinion, but the considered opinion of Labour organisations in the dockyard and Arsenal towns, that one of the spheres of useful work on which the dockyards and Arsenal could be employed, is the manufacture of telephones and telephone equipment for this service. I would like to see further expansion along those lines. After all, at Woolwich you are situated right in the centre of the electrical industry. There is one other factor, and that is the scientific aspect of the question. I do not think that the general public fully realises the importance of the developments in the ether. The progress between ordinary cable transmission and beam transmission has been tremendous. I understand that the rate of transmission of a cable is something like 40 words per minute in one direction, but that the rate of transmission by beam wireless is something like 200 or 220 words per minute in both directions at the same time. That is stupendous progress, but it is nothing at all compared with the possibility when we reject the present method of telegraphing by worse through beam wireless and we adopt television.

I do not think it is unlikely that we shall see the transmission of messages by television before very long. I have had an opportunity of seeing most of the experiments that are going on in this country. A year ago the experiments were very crude. It was then possible to see by wireless the image of a fellow human being in rather distorted form and on the rather large squares of a screen. When I saw further experiments a few weeks ago, the development had been very rapid indeed. It is now possible to recognise a human being when transmitted by wireless telegraphy—by television. But that is only one side of it. The important thing is the possibility of seeing news sheets or large sheets of paper with messages printed on it, from one end of the world to the other. When you can do that, the rate of transmission will be still further increased from 200 words per minute to possibly several thousand; in fact it is impossible to estimate what the rate will be when we achieve that end.

The other day I saw the transmission of words by television. It is true that it was only by means of large block capital letters. But progress in wireless science is very rapid, and I think that in five or 10 years at the outside, television will be a practical accomplishment in this world; that is to say, if the British Broadcasting Corporation and other interests are not allowed to restrict its development. I believe that all these developments are only in their infancy. That is the aspect from which we have to look upon this question. Television, broadcasting and general wireless communication are enormous factors in the social life of the people. I believe that they are among the largest factors making for world peace to-day. They are breaking down the barriers and bringing the people of different nations together, so that not merely from the point of view of war—that is the interest which affects the Government's considerations—hut from the point of view of world peace it is imperative that we should keep this tremendous potential weapon for world peace in the hands of the State, and not allow it to be the instrument of private interest or private propaganda or private personal gain.


I hope that the right hon. Gentleman in his reply will ease the minds of some of us on the Government side of the House by letting us know what the next step will be. As a matter of fact this Bill, as we have heard over and over again, is only one to enable the sale to take place. But there is a great deal more in the report upon which this Bill is based. The question is, what really is the company going to be, what are its powers to be, and what is the protection of the public to be when the company comes into being? Is it proposed by the Government to come to this House again with the agreement that may be come to? Many points have been raised to-day about the protections that might be needed. There is another one that I would like to suggest. Some of the existing companies that are coming into this, purchase their material with a very narrow margin. I take it that any communication company that is set up will, from the public point of view, have to go much wider than an ordinary company does, especially in view of the fact that the manufacturing side, I take it, does not come within this agreement? You may find yourself in the position that a company on the lines of a public utility company, deals entirely with just one section. That is a position which will have to be legislated against, in order to make quite sure that if this be a public utility company, as we understand it is to be, it will act as such and will got to an open market and not to what I might call a monopoly market. I hope that the right hon. Gentleman will meet some of our difficulties on these points when he makes his reply.


I have some hesitation about entering into a Debate of this character, but, having listened to a considerable number of the speeches here to-day, and having read the Committee's Report, It seems to me a very singular thing that the Financial Secretary to the Treasury in introducing this Bill should have spent a great deal of time in depreciating the value of the beam wireless system. It is a very bad auctioneer who depreciates his own wares. In the Report I find that this Socialist experiment has in fact been highly successful. We have been told many times in this House that State enterprise is an absolute failure and that it is not to the advantage to the nation to continue it. Yet here we have a State enterprise which has been abundantly successful. Paragraph 9 of the Report shows that the beam rates are about 15 per cent. cheaper than the cable rates, and paragraph 20 confirms the view that the beam system is making high profits. There we have a State enterprise which is rapidly redeeming its capital and reducing the charges to the consumer. What earthly reasons can be adduced to show that it is in the interests of the nation to dispense with such a highly successful service? I agree with the right hon. Gentleman the Member for Aberavon (Mr. MacDonald) that a Govern- ment which is nearing the expiration of its life, had no business to bring forward a Measure of this kind.

I cannot understand the reason for this Bill. It seems to me that the cable companies are not in a prosperous condition. 1s this Bill brought forward to salvage the capital of the cable companies? If so, it is another case of the State bolstering up the failures of private enterprise; and that, in itself, is a bad principle for this House to endorse. If the cable companies ought to be preserved; if it is in the interests of the nation that we should have more than one means of communication between the various parts of the Empire, then I want to know why the question of nationalising the cable companies has not been taken into consideration. I find that the Committee looked at this question of nationalisation and dismissed the idea because, they said, it would not be acceptable to the Government. It seems to me as if this Committee had been appointed for the purpose of finding excuses for the Government taking over these companies. The fact that the Committee have made such a confession as that nationalisation would not be acceptable to the Government, shows very well that there is political bias at the basis of this arrangement.

The interests of the country have not been considered. The interests of the country are being sacrificed to the private interests of the cable companies. Personally, I very much regret that a Measure like this is being brought before the House. Wireless is in its infancy and has immense potentialities. No man, even of the widest vision, can fully visualise the potentiatlities of this system, and it should be kept in the hands of the nation, especially when it is costing the nation nothing, but is, indeed, yielding a profit to the nation. Why should we hand it over to private enterprise to make it a monopoly and to form a merger, as they call it. The Committee are in favour, not of nationalisation, not of pooling, but of fusion —that is they are in favour of extending the power of this monopoly. As a layman I know little about the subject, but, taking a cursory glance at it, and listening to what has been said about it, I think it would be in the national in- terest to retain beam wireless in the hands of the Government.


It is rather interesting to notice the way in which, both in this House and in the London County Council, at the present time, the handing over of public property to private interests is being engineered. I confess I heard with some amazement the speech of the hon. and gallant Member for Ripon (Major Hills). I am amazed that an hon. arid gallant Member whose name has appeared as one of the organisers of a little combine of financial papers should have made that speech. It seemed to me utterly absurd coming from anyone with any pretence to knowledge of finance. He told us that he did not believe in the State—or I suppose in a municipality—buying a wasting asset. Surely it all depends upon what the profits of the wasting asset are going to be in the years during which you use it. If those profits are going to be sufficiently large to wipe out the capital expenditure is it not a justifiable proposition? Everybody knows that in municipal finance, machinery is bought which has so many years of life, and the cost of which is spread over a number of years, and the same thing applies to a large extent in connection with the provision of any of those public needs which are in the hands of municipalities.

The hon. and gallant Member said that the London tramways provided a good illustration of his point. It is amazing that the hon. and gallant Member, who is supposed to be enlightening the City of London with his financial papers, should have spoken of the London tramways as he did. Anybody who knows anything of municipal finance knows that to a large extent, the so-called losses of the London. tramways really represent the paying back of capital. An ordinary person who did not know much about municipal finance and who heard the hon. and gallant Member, might imagine that the capital of the tramways undertaking was the same to-day as it was when the largest amount had been expended upon it. As a matter of fact, the London County Council trams have paid off about £8,000,000 or £9,000,000 of capital. Yet the hon. and gallant Member, because the London trams, like all tramways systems are experiencing difficulties at present, uses them as an illustration of what he regards as the awful tragedy involved in the State taking control of industry. He seems quite oblivious of the fact that other tramway systems in private hands are also in difficulties.

The real problem which he did not tell us about, was allowing a private industry such as that of the motor omnibuses to compete with a municipal service. That seems to amuse the Noble Lord the Assistant Postmaster-General, but everybody in London knows that that is the problem and I fail to see why it should excite the Noble Lord's amusement—unless he feels some satisfaction in the thought that a municipal undertaking of the people of London should have been endangered by private enterprise. However, this is not the time to discuss that question. We shall have other opportunities of doing so and I should not have alluded to it had it not been for the extraordinary speech of the hon. and gallant Member for Ripon. The first thing that happens is that some enterprising man connected with the industry gets his company in connection with some other companies, and behind the scenes you begin to have a combine formed. Then it is discovered that the great obstacle to a complete combine in the traffic of London is the municipal service.

Mr. DEPUTY-SPEAKER (Mr. James Hope)

I do not know what the hon. and gallant Member for Ripon (Major Hills) may have said, but surely the hon. Member is going into detail on a matter which is to be the subject of a private Bill, which is a little remote from the question before the House.


As a matter of fact, I think we are not supposed to know that it will be the subject of a private Bill, but I was taking this as an illustration in reply to the remarks of the hon. and gallant Member. You get your combine —and I am not talking about the traffic combine, but have in mind a combine that has been formed in connection with the cables—and then you begin to find that the time has come to approach the Government officially, to ask if they will hand over the State service, and the Government reply by appointing a Commission or in some way beginning to negotiate. We then find that every effort is made to run down the public service. The Noble Lord, the Assistant Postmaster-General, fully understands this, although in this respect he was a little ahead of his time, because he had already arrived at the point where he wished to depreciate the Post Office. A campaign goes on, backed up very easily by a Press that is controlled by friends, if not actually by those interested in the proposal, against the service itself; and we are told to-day that the cable services of the State are in a very unsatisfactory condition. That is what I gathered from the hon. Member who introduced the Bill, and we see exactly the same thing in other ways, but, as a matter of fact, it is not the cable services of the State alone that are in an unsatisfactory condition, because on page 9 of the Report it says: But in spite of this it has been represented to us that the cable undertakings affected by the wireless rate reductions and the Indo-European land-line service have been brought to a serious position. I conclude that all the cable services are so affected, and indeed it must be so, because my hon. and gallant Friend the Member for North Aberdeen (Mr. Benn) pointed out that certain of those responsible for the cable services have threatened to sell them abroad because they were in such an unsatisfactory condition. Therefore, we arrive at the position that it is not alone the State cable services that are unsatisfactory, but all the cable services. Now how are these cable services going to be renewed? Here we come to the position that the Government, thanks to the action of the Labour Government when it was in office, and thanks to that alone, had in their hands, in the beam service, the means by which they could dictate policy. The Government had all the cards in their own hands if they chose to play them, and they need never have given way to the demand that has been made that this service should be handed over.

That brings us to two questions to which I must call attention. The first is this: If this is going to be in ally way a. public utility service, how far are the public interests recognised and cared for? The extraordinary position as to the appointment of the two directors who are to represent the Government has been pointed out earlier. It does not say that the Government can appoint any one they like, but it says that on the nomination of the Company the Government can then express their view. It does not say anything as to what happens supposing the Government should not approve of anybody proposed. Suppose a Labour Government said they would like to appoint two Socialists. I understand that under this arrangement the right hon. Gentleman has very carefully seen to it that that would be impossible, because, of course, the new Company that is to come into existence has to nominate, and it would refuse to nominate two Socialists. In the end if the Government and the Company refused to give way, I suppose that nobody would be there at all to represent the Government, and that there would be no Chairman of the Company whatever.

The next question is this: How are you going to guard against the rates going up? It is obvious that the object of the Combine is to save their cable companies. How are they going to do it? It must either be by getting money from the beam service, which we imagine is much more profitable than the Government pretend, or by having the Combine placed in such a position that they are either going to reduce expenses or to increase rates. Now unless the beam brings in such a large income that it floats the cables successfully along with it, which of the other two means of making profits is going to be followed? Does the right hon. Gentleman expect the savings of the Combine to be so large as to provide the extra profits, or does it mean that the rates are going to go up? There is an Advisory Committee that presumably is to have a say in regard to any change in the rates, but what happens if that Committee refuses to give way to the request that the rates should be increased? Who will finally arbitrate? Will it mean, if the thing is not paying, that the veto of the Advisory Committee will still hold?

I was very glad that my hon. and gallant Friend also pointed out the danger, in connection with all these utility companies, that by means of subsidiary companies which provide the necessaries you can really nurse the profits and make them what you want them to be. That is one of the root objections to these utility companies. But quite apart from whether or not it is a paying concern, I think it is a tremendous mistake to hand over certain great public services to a private company. I suppose that if I were to suggest to hon. Members opposite that, in view of their great belief in private enterprise, they ought to hand over the Navy to private enterprise, they would say it was absurd. We always understand that the Navy is very efficient, although it is a State service. To my mind, it is just as absurd to hand over the cables into private hands.

I should like to put forward one or two outstanding objections to handing over into private hands what is practically the control of information coming to this country. How far is it possible, for instance, that the business men who are on this Committee could so use their position that they could get important information coming to this country before other people got it, simply because they happened to be on the Board of this Company? Take the Chairman, in years to come. In all probability his activities would not be confined to this Company, but he might be Chairman of some other great corporation as well, and supposing he said to his officials: "We are expecting very important news coming through from America; before it is made public let me know." What is to prevent that? What is to prevent the manipulation of the Stock Exchange by some man connected with this Company? We are legislating for years to come. The men whom this Government may appoint may be perfectly honourable men, but we have to think of what the position might be. What is to prevent those who are on the Committee getting news ahead, so that they can use it for their own financial ends? What is to prevent great financial combines who have their representatives on this Board getting news first?

It is a fundamental mistake that the staff who are responsible for an undertaking like this are to look to business men on whom they are to be dependent for their livelihood and to whose word they are to listen; and if these men are not of the highest character, there may easily be abuses which the public will have no possibility of checking. If there are abuses of this kind in the public service, there is an opportunity in an elec- tion of making a change or of the matter being ventilated. If Government news goes out in secret and code, how far can it be tapped by those responsible, if they desire to know the news? At present, this is a Government service, and the staff and everyone concerned sees that the Government information goes through; but suppose there were a Government which was in conflict with the vested interests which are to control this thing, how far can we be satisfied that Government news will not be tapped? There might be a Labour Government in power faced with a great industrial problem, and they might be compelled to send their messages through those who might at that time be engaged in bitter conflict with them.

These are matters that interest us supremely as representatives of the Government of this country, on whichever side of the House we sit. I wonder that the great business interests are satisfied that this should be handed over to private hands, because there are conflicts between vested interests as bitter as any in the State, and I should have thought that they would have much preferred a public service of this kind to remain in the hands of those who are quite independent. This is a very serious and retrograde step, and one which is entirely opposed to the best interests of the country. Even those who sit on the Liberal benches recognised in the past that there were great services that had to be in the hands of the public in some way or another, and, if they had been in their places now, I should have suggested to them that this is a service that essentially ought to be kept in the public hands. I hope that the Amendment which my right hon. Friend has moved, in order to defeat this attack upon a public service, will be supported by as many Members as possible, because I am convinced that it is against the interests of the nation, and that, if we really had a regard for linking together the Empire and thought more of the great interests of the nation than of private and vested interest, which wish to gain control over something that is interfering with their movements, we should certainly not agree to the proposal of the Government.

9.0 p.m.


I want to enter a protest against the right hon. Gentleman the Secretary of State for Scotland, who is apparently to reply at the end of the Debate for the Government, for not before now attempting to make some reply to the speech of the Leader of the Opposition and the many other questions that have been submitted to him in the Debate. There are three main reasons why one is justified in opposing this Bill. The first is the secret means adopted in the taking of evidence. The Leader of the Opposition asked the right hon. Gentleman in charge of the Bill to explain why this evidence was taken in secret, and why it has not been made available for Members of the House. The least that the right hon. Gentleman could have done was, earlier in the Debate, to have indicated why the evidence was taken in secret and why the Government withheld from Members the very necessary evidence upon which they could base their judgment upon this Bill. It is a very bad precedent, but such a precedent as one might expect from the present Government. I want to protest against this Measure for reasons very largely advanced by the hon. Member for Finsbury (Mr. Gillett). He indicated that there are no guarantees against an increase in charges, or any sort of Government control over information submitted from one side to the other. None of the ordinary safeguards have been provided, as far as one can see, in the Bill.

The two members of the Advisory Committee are to be nominated by the Communications Company, and it is obvious that they will only nominate two members who will do the bidding of the company. There can be no sort of safeguard in two members of that description; they might very well satisfy the right hon. Gentleman in charge of the Bill and his colleagues who were members of this Conference, but that sort of representation will not satisfy the average member of the community who takes an intelligent interest in these subjects. Another reason why one might very well enter a protest against a proposal of this description is that, while it may be urged, as indeed it was urged by the hon. Gentleman who moved the Second Reading, that the decision of the Conference was unanimous, the moment one looks at the names, one is satisfied that they were unanimous as to the outcome actually before the Conference began to sit. Obviously, the Secretary of State for Scotland will always come down heavily on the side of private enterprise. His political predilections would prevent him from even considering the retention of any nationalised service, so I attach little or no importance to the vote he cast towards the unanimous decision. Neither could I accept the vote of his colleague the present Financial Secretary who, with political predilections which are too well known to need reference, will have made up his mind long before the Conference commenced its sittings. One could go through the whole list of these representatives.

It is perfectly obvious, as my hon. Friend the Member for East Bristol (Mr. W. Baker) said this afternoon, from the late birth of many of these services in 1927, whilst the Cable Companies themselves were seeking a. merger in December, 1927, that the Conference was convened, not for the purpose of determining how best to use this Beam Service in future, not convened for the purpose of providing the necessary safeguards for the general community, but for the purpose of providing the easiest possible means of transferring a successful Socialist experiment into the hands of private profit-making concerns at the earliest possible moment. When he replies, the right hon. Gentleman will probably retaliate by saying, so far as future charges are concerned, that there can be no increase in existing rates when the Communications Company comes to operate unless they have been sanctioned by the Advisory Committee. I repeat that the Advisory Committee will be representative of the cable companies and not of the general community, for the Communications Company will nominate and virtually select the Advisory Committee.

Sir J. GILMOUR indicated dissent.


The right hon. Gentleman nods dissent. Does he dissent from the statement I make that the Communications Company will nominate every member of the Advisory Committee, including the two members who ostensibly will be representing the Government or the general community?


Yes, Sir, I do dissent. I will explain later.


Surely the right hon. Gentleman has read his own recommendations. May I refer him to page 18, where it states: The board of directors of the Merger Company, the Communications Company, the Cable and Marconi Companies will be identical. Two of the directors, one of whom shall be chairman of the Communications Company, to be persons approved by His Majesty's Government on the suggestion of the cable companies. That seems to show, obviously, that there will be no direct representative of the general community. On the question of the possibility of increased rates in future, I would like to draw the attention of the right hon. Gentleman to the statement on page 19, where it says: No increase of rates prevailing at the date of the formation of the Communications Company to be made except with the assent of the Advisory Committee. That may be all very well, but there is no reference in that paragraph to the possibility of a reduction of charges as a result of the development of the service. We have already seen that the success of the Beam Service compelled the cable companies to reduce their rates. The service has increased considerably as a result of that reduction of rates, and assuming, as one may very well do, that there will be a continuous increase in the amount of business resulting from the decreased charges, will the right hon. Gentleman tell us why no safeguard is inserted which will assure the general community that when, with this increasing volume of trade, a decrease of charges is justified, no steps will be taken to insist upon a reduction? One is bound to reach the conclusion that the members of the Conference were so partial that an impartial decision was well nigh impossible from the very commencement. They have not only been partial in their conclusions as to what ought to happen to the Beam Service in future. Apparently, they have done their level best to hand over this wonderfully successful experiment, lock, stock and barrel, without even asking 4½d. for the goodwill.

An hon. Member who spoke from below the Gangway made reference to the small sum of money invested in the Beam Service, £242,000. He wondered what was likely to happen when this successful service, which cost £242,000, and is defeating concerns which have cost millions of pounds, becomes merged into a £30,000,000 scheme. I think there are very sound reasons for doubt as to what is going to take place. One thing that is certain is that this nationalized service has been a real success. The last speaker indicated that the success of the Beam Service has not only diverted trade fro u the cable companies, but has compelled them to reduce their rates, and bearing in mind the first few words of paragraph 18, where it says: Before the opening of the beam services, the cables were working with a large margin of annual surplus, it seems to me that once this cable combine get hold of the Beam Services it will be their aim and object always to have a large margin of annual surplus. Profits will be the first consideration, and if the general community get any consideration at all it will be as a very bad third. From every conceivable point of view the interests of the general public have been submerged. It has always been the case in the past that wherever a nationalised service or a municipal service has been a real success hon. and right hon. Gentlemen opposite have never been happy until they could get it for their friends. I cannot forget what happened in 1925. We had proof positive all over the country that the electricity undertakings owned by our municipalities were the one bright spot in the electricity industry. Then an Act of Parliament is passed to insist upon national production and distribution, with the result that large areas have been handed over to private enterprise, which in the past has been such a colossal failure.

Now we have another instance of a nationalised and successful concern being handed over to private enterprise. It seems to me that the Government are obliged to divert this enterprise from national control to private control, or at the next election they will be deprived of their usual cry. The Parliamentary Secretary to the Ministry of Health, the right hon. Gentleman in charge of the Bill, the Postmaster-General and all their colleagues will be telling the electorate all over the country: "Wherever Social- ism has been tried it has been proved to be a failure." Hon. Gentlemen opposite will be telling the electorate the same things in the future as they have done in the past. Here we have an acknowledged success in which as a result of the policy of the Labour Government in 1924 we have built up our own goodwill. We are now being charged a colossal sum for an inefficient system which private enterprise managed very badly, and it is going to be handed over to private enterprise so that they will be able to say, "there is no successful socialistic experiment in the country," and thereby win votes at the forthcoming election. Once the general public really understands what, is lurking behind this Measure, they will not only give the right reply, but they will never give the Government another opportunity of handing over national property to private profit snaking concerns.


I rise for the purpose of getting my mind cleared up, if that is possible. I am a simple man easily confused. I am addressing an equally simple man in the Secretary of State for Scotland and a still more simple man in the Financial Secretary to the Treasury. The Financial Secretary has demonstrated to the House to-night how simple he can be, and still remain the Financial Secretary to the Treasury. I have listened to several back bench speakers on this question, and each of them has left in my mind a doubt as to the wisdom of the proposals of the Government. The majority of hon. Members who have spoken from the Opposition Benches this evening have declared their doubt, and they have asked the Government representatives to clear up their doubts as to what is likely to happen under the Government proposals. I should never have thought of suggesting that it was possible for the Government to have allowed their humble and simple followers to become so confused. Under these circumstances, it will be easily understood why someone like myself, who is somewhat suspicious of the Government in this matter, should become equally as confused and doubtful as my hon. Friends are with regard to the wisdom of these proposals.

I remember a good many years ago an occasion when we were not selling a successful bit of State enterprise, but when we were in the market buying the telephones. The Postmaster-General of that day was also a simple Scot who wanted to make a bargain with the telephone company. The Postmaster-General of that day bought up the telephone system at a price that has left the telephone business of the country waterlogged ever since. On that occasion, the Government bought in a dear market, and now we are going to sell in a cheap market. As a consequence of that unbusinesslike transaction some years ago, we have had complaints from every part of the country as to the cost of the telephone service, and severe criticisms have been passed as to its efficiency as compared with the systems m other parts of the world.

We have heard to-day statements made with regard to the inefficiency of our telegraph department. May I be pardoned for giving an illustration. Recently I happened to be in the United States, and when I got into the City of Hartford I wanted to send a telegram to a place in Massachusetts and then it was to be sent on to Ludlow. This was done under the Western Union in a land where efficiency is supposed to rule supreme. At the station at Hartford where I despatched my telegram they charged me 32 cents. I was informed when I got to the little town of Ludlow that the telegram had been delivered a considerable time after I had sent it, but there was a demand for another 30 cents for delivering the telegram. With that indignation which animates all Scots when they feel that they have been done out of anything, I spent another 40 cents travelling to Springfield to interview the Western Union people. I learned that the telegram was sent to Springfield, but, instead of telegraphing it they telephoned it to Ludlow, and because there was no telephone at the place of address, a man was sent to deliver it, and they charged another 30 cents. I was told that I had been overcharged to the extent of 10 cents, and they offered to return that amount to me, but I was too angry to take it. That was my experience in a town of 5,000 inhabitants which was a centre of industry that had no telegraph service in it. What should we say in this country if that kind of thing occurred? That was done under private enterprise by the Great Western Union system of America.

On another occasion I was in Stamford in Connecticut staying with a friend. I had to meet my daughter in New Haven on the following day. My friend persuaded me to stop on that night, and I despatched a telegram to New Haven. The following morning I set out and got there after lunch, but discovered that the telegram had not arrived. It came in about half-an-hour after I had reached there. Again, indignation got the better of my good judgment, and I went to see the man in the little grocery store who sends out the telegrams when they come his way. He did not care a rap about the thing, and he told me so. I got from him the address of the head office of the Western Union, and I wrote to them. I got the explanation that in Stamford they should not have received my telegram as it was too late, but they returned my money with a very kindly and courteous letter. That is an example of efficiency elsewhere, and, when I hear hon. Members in this House, or when I read that wonderful Press of ours, denouncing the telegraph service of this country, I think of my own somewhat limited experiences—which I could multiply, though I have given as many as I thought the Deputy-Speaker would stand.


The hon. Member has set an admirable example of relevance in his anecdotes, which, I hope, other speakers will follow.


I must thank you for a compliment that I do not think was quite entirely deserved, but, still, these little bits of comfort, do gratify one occasionally. Let me dwell for a moment on a matter that seems to me of supreme importance, and that is the relation of the Press to this particular question of information from other countries or from this country. The tendency of the Press to-day is to get into fewer and fewer hands. We have one or two gentlemen who seem to have a great deal of money, and some of them seem to be ever desirous of conquering more worlds. They have conquered them in various directions, but they still want to be supreme in the matter of the Press in this country. I can easily conceive, as other hon. Members will be able to conceive, a situation that might arise that would be of vital and almost of life and death importance to this State of ours where one of these gentlemen, in the desire to gain supremacy in supplying news, would—I will not say world, but that it is possible that he might—in moment of temptation, in order to compete with the other fellows, use information which came in this way. If we are going to see that no State secrets of that importance are divulged, I submit that the House would be wise to think and think once again, before allowing this matter to get out of ifs control.

Calls have been made upon the Postmaster-General to-day again and again to rise and tell us what he thinks, but that demand has fallen on deaf ears as far as he is concerned. The reason why, I do not know. It may be a natural diffidence which another fellow Scot may feel, the same as the rest of us, who never like to hear ourselves talk. It may be that that feeling is predominant with him, but I do hope that when we get a reply, the Secretary of State will fill in the omissions, and will reply to these relevant questions which need replies. I hope he will meet them when he rises and remove the doubts from his own side if he can, and assure us that this is not going to be used as a ramp by some company or other to secure millions of profits from the Bill, as they have done already in the States of America from the rising of shares which has gone on. In Wall Street and on the Stock Exchange the shares of the cable companies were rising because of the British Government's handing over something that we on this side consider of paramount importance in maintaining the usefulness of a service which ought to be held inviolable by us, but which they are going to hand over to whatever the concern may be to make the best use of in their interests and not in the interests of our country.


I would not have sought to intervene hut for the contribution made by the hon. Member for Penryn and Falmouth (Mr. Pilcher). The position we are debating this evening is the projected sale of a State enterprise, which, commercially and industrially is in itself very successful. The justification urged by supportes of the Bill is that the cable companies, which are not successful and which have been losing money because of the successful competition of the State concern, are necessary for imperial telegraphy, and in the interests of telegraphic communication between various portions of the Empire, and that although they are competitively a failure, because of the great success of the Beam wireless, they must be kept in existence by means of transferring the Beam wireless to a merger company, so that the successful concern shall, on balance, enable the unsuccessful concern to survive. It is held that it is impossible, or undesirable, to run any risk of there being just merely wireless telegraphy between the various parts of the Empire, and that we must keep the cables in existence. The only practical way of doing that, it is said, is to sell out, to a merger company under private enterprise, a State concern which is profitable, for the benefit of the private concern which is unprofitable. There may be an argument—indeed, there is and it is a Socialistic one—for looking upon public services of every kind from a broad point of view, and realising that a service is important even though it may not on occasion be commercially profitable. That kind of development of service is exemplified in the Australian railways. There, prior to the development of new areas, they put out a line in order to assist the development of those areas, waiving immediate profits for the sake of the social advantages accruing presently.

There is a perfectly good argument in favour of that, but the hon. Member for Penryn and Falmouth, like the majority of those who want to argue against State enterprise, makes the vague assertion that, where concerns are run by the State or by public bodies, they have undesirable features and are commercially unsuccessful. I have heard that statement made again and again, and I read it constantly in the capitalist newspapers, but I have never heard any attempt made to justify it or show that it is accurate. I must say that the hon. Member to whom I am referring was exceedingly unfortunate in his illustrations. He spoke of the telephones and of the telegraph services of the country as an instance of the inefficiency of State enterprise. Let us suppose, for the sake of argument, that it were true that the telephones and the telegraphs were services that did not pay. Even if that were so, they are part of a much larger service which does pay, and it is obvious that telephone and telegraph services are a necessity. If the argument in favour of selling the beam wireless to a merger company under private enterprise be good, in that it is necessary to keep an unprofitable cable concern in existence, it is just As good an argument to say that, even if the telephones and telegraphs do not pay, yet they render a service, and there is good reason for regarding them as a part of the larger concern—I mean, of course, the Post Office—which does pay, and pays the State handsomely.

After all, however, there is more to be said about that supposed illustration which is so constantly given of the inefficiency and commercially undesirable character of the telephones and telegraphs of this country. My hon. Friend the Member for St. Rollox (Mr. J. Stewart) mentioned the fact that the telephones were water-logged, but that is not all that there is to be said. It must never be forgotten that the telephones were bought over at a. time when they were at their lowest point of efficiency, and when the conditions were indeed scandalous. That was defended and justified because of the fact that war had taken place, and, consequently, the conditions were not normal. But consider the history of the telegraphs of this country. It was a Tory Government that bought the telegraphs and made them a State concern, and it was a Tory Chancellor of the Exchequer of no mean renown who described that piece of Tory business as A scandalous ramp; and to-day the responsibility remains of paying a very large sum—I believe it is some millions of pounds, but I am not sure as to the figure—to the account of the telegraphs, because of the scandalous way in which private enterprise was able to load its own inefficiency upon the State with the help of a Tory Government. What is the use of bringing forward cases like the telegraphs and telephones as an argument against State enterprise?

A public enterprise must he considered fairly. The commercial point of view is not the only point, of view from which we ought to consider public services. I can conceive of public services not being commercially profitable and yet being a very big success from the standpoint of social service. One does not ask whether the Woolwich Free Ferry pays, or whether Westminster Bridge pays; we have to consider the service as well as the financial return of any State or municipal enterprise, or public enterprise of any kind. As a matter of fact, however, all over the world State enterprises in overwhelming numbers can be shown to be financially successful and supremely efficient. I have no time to deal, and this is not a Debate in which I can deal, with the justification for those statements, but I make them all with the assurance that I possess, because I can justify them, and am willing to do so when there is an opportunity. We have only to look at the Municipal Year-Book, which is published annually in this country. It gives the results of municipal enterprise and private trading of all kinds in this country, looking at it, not merely from the point of view of the provision of capital or the repayment of debt, but from the point of view of the cost of the service and the return obtained from it, and giving page after page of figures; and, in the overwhelming majority of cases, indeed in nearly every case, those municipal services in this country are a splendid success and a splendid justification of public enterprise. And yet, time after time, Members get up in this House and merely repeat the assertion that public enterprise is a failure, and that it is a dangerous and bad thing for the State to retain or achieve public possessions and public property for the purpose of social service.

The last point that I wish to make is to emphasise what my hon. Friend the Member for St. Rollox has said about the private monopoly effort to supply all news, because that is really what is means. Let it be remembered that in May of next year there will be some millions more people on the Parliamentary registers of this country. Democracy at last has been achieved in this country, or will have been achieved at the time of the next General Election. These people are becoming politically important and politically conscious, having political responsibilities. This vast democracy depends for its political information, and for information of every other kind, upon a Press which is from top to bottom not merely a capitalist Press but a syndicated Press—a Press which is in the hands of just a few rich people with interests to serve, who will use their own Press only for the purpose of preserving and securing the development of their own interests. And now, at the end of it, we are to have, not merely a syndicated Press controlling political information, but also syndicated wireless and cable services that will be able to control the very news upon which any kind of opinion can be based. I suggest that that is a very dangerous condition for democracy, and it is one of the strongest reasons why I oppose this Bill.

This Bill is one of the last of a long series of reactionary Measures for which this Government have been responsible. The whole business of Toryism in this country, through its Press, in Parliament, upon local authorities, and upon public platforms, has been to depreciate public enterprise and to serve the interests of private enterprise at the expense of public property and public development. I hope that the result of the General Election will show that the people have seen the insidious character of the kind of propaganda and the kind of political work that has been going on since Toryism became dominant in the politics of this country, and that they will return a party which stands for public service and which will not tolerate the use by private interests and private enterprise of the nation and the nation's Parliament simply to conserve their own interests against the public advantage.


The Leader of the Opposition, in moving the rejection of the Bill, indicated that the subject that was raised was one of great national and Imperial importance, and he pointed out with very great force the social and political implications of this scheme. I propose to invite the attention of hon. Members to some of the business aspects of the Bill and to ask the simple question whether this is a bargain which should be made by Parliament in a matter of undeniable importance to this country and to a very large part of the British Empire. The first consideration is that we are parting with a considerable amount of public property. Hon. Members in all parts of the House will agree that in every matter of that kind we are here as stewards and trustees, and it should be an elementary principle that we are even more careful with the property of others than we seek to be with our own. Unless there is some overwhelming and commanding reason for this handing away to private interests or public utility interests of what is publicly owned, the scheme should not proceed. I submit that there are all kinds of alternatives within the sphere of public ownership and control which would be even more efficient and certainly far more advantageous to the taxpayers than what is contained in this Measure.

There is another consideration, and it has been illustrated over and over again in the course of the Debate. Fundamentally, we are understood to be divided, that side of the House believing in what remains of private ownership and control, and this side believing in public ownership and the building up of some efficient and healthy system of running our industry and our commerce on these lines. But here we have undertaken, as we have done in many other spheres, an important part of the pioneer work at the public expense. I recognise what has been done by private effort even in the matter of beam wireless, but the fact remains that you have had your Post Office and your public money and the rest of it behind this development, and over and over again in our public life the State and the taxpayers are left to do that onerous pioneer work and then the Government recommend that at some appropriate point what has been done should be handed over to private enterprise and control. We had an illusstration of that only a day ago in the export credits scheme. It was frankly conceded by hon. Members opposite that there was no proper provision in the private field for a certain branch of credit insurance covering considerable exports from this country, and, if the Government had not embarked upon that plan in 1919, modified and improved in later years, it would not have been undertaken. But now it has been built up and further strengthened by an out-and-out guarantee to the banks, again backed by the tax- payers' resources, and the Government adds a condition to the recommendation of the Estimates Committee, which only aimed at administrative efficiency, and suggests that this new Committee should inquire as to when this, too, will be handed over to private enterprise.

I recognise that there is an overwhelming majority against our point of view in this House of Commons, though there will not be in the next. But there is a plain business proposition. Surely we must concede that it is unfair that over and over again the taxpayers should be left to do that onerous pioneer work, and that at the moment it looks like passing to remuneration and return the advantage should be taken from them. That is exactly what is happening tonight. We do this work, we take the risk, and others are apparently to reap where the public has sown. Of course, the Government will argue that they are doing it in terms of public utility and control, and that they are safeguarding the public interest in the process, but it will not be difficult to dispose of an argument of that kind.

The next question that confronts us is that of the alternatives that are embodied in the White Paper. One of the great difficulties of this Debate is that we are dealing only with an enabling Bill, the text of which conveys very little to Members in any part of the Chamber. I dare say most of us will agree that one or two of the suggested alternatives outlined in the White Paper are clearly not practical politics to-day. I think, for example, it is no use talking of subsidy. It is not very much good suggesting for a moment that we should do nothing at all. That is plainly impossible. The difficulties of regulated revenue are very great. But the Government has apparently concluded that some kind of fusion is wanted, and the real difference between the Government and this side of the House to-night is that in that fusion they have, as we think, sacrificed the public interest, while we seek to preserve it.

Look at the nature of this scheme. Be it remembered that you are not here dealing with some separate, distinct, identifiable company to which you are transferring these properties and these obligations. In practice, you are dealing with three events, if I may so describe them at this stage. You are dealing with a merger company which has been created and which is the foundation of this plan, and the link between that merger company and the new Communications Company is this leasing of beam wireless and the transfer of Government-owned cables. So that you have at least two great organisations, the merger company on the one side, which you segregate because there are manufacturing interests and investing interests which, apparently this Conference wishes to keep entirely distinct from what you propose to do in the field of communications, and the Communications Company on the other.

That is by no means the end of the story. We have all followed in the financial Press, as best we can, the wave of speculation, charge and counter-charge, about Marconi and other interests, and I should like the Secretary of State for Scotland to tell the taxpayers of the country exactly what have been the reactions of this proposed Communications Company on the merger and the general operations in that field which have taken place within recent times. I make no personal charge, but I am bound to say if a similar state of affairs had happened in at least some part of the reputable business enterprise in this country. It would have been most emphatically criticised and condemned. Here you are handling a very large sum, a very great public interest which we should try to handle in the spirit of the trustee and the steward, and with the very greatest care that we could exercise. I do not think in the last resort that anybody disputes what has gone on during recent months, and, moreover, under its auspices indirectly there have been some of the greatest abuses in speculation that have ever taken place in Great Britain. So much for the merger company.

Let us pass now to the terms of the transfer of this Beam Wireless and the Government-owned cables. The terms are clearly set out in the White Paper. They are an annual payment of £250,000; an addition equivalent to 12 per cent. on the profits of the new Communications Company, but not until three years have elapsed, and only after that Communications Company has earned the standard revenue, to which I will refer a minute or two later, and a payment of £60,000 which, I understand, relates to certain administrative and other displacement. In reality we are dealing with a business proposition. The transfer is the Beam Wireless and the Government-owned, cables against which this new Company undertake certain responsibilities for the burdens, liabilities and other considerations. But up to this stage, through all the long course of this Debate, as a plain business proposition, no figures have been submitted to the House in justification of these terms. They have been described as good, but what material have we at our disposal for either agreeing with or differing from that conclusion? I understand according to the report that the Conference had the benefit of the assistance of Sir Otto Niemeyer, and Sir William McLintock, with both of whom I have been associated in public work in other spheres. I do not doubt that they would give very valuable information to the Conference. One of them is certainly an outstanding chartered accountant.

But before the House of Commons parts with public money, before any member in any party can take that responsibility, he is entitled to know in black and white what these men said. Moreover, before he parts with that public property, if he is dissatisfied or has reason to question the report which they presented, if he feels, as will be felt in many another connection, that independent advice is required, he should be entitled to get it. Otherwise we have no right to stand on a public platform and say that we voted this way or that way large sums and large public properties of the State. Not a single iota of information of that kind has been submitted to the House of Commons in connection with this proposal. It is not in the Bill. The Bill, as we have seen, is in purely general terms. It is not in the White Paper. I assume that there would be no difficulty in getting information, but it has not been forthcoming. The speech of the Financial Secretary to the Treasury, as he himself would agree, was very largely in general terms as to the financial basis of this change. I suggest that, at the very least, the House of Commons should delay, if it does not defeat, the consideration of a proposal involving so much. We ought not to go on until we know exactly what is involved.

10.0 p.m.

Let us pass, in the next place, to the Communications Company itself. Here the Government take their stand undoubtedly on terms of public utility. They say to us in effect, "You are wrong in suggesting that we are alienating out and out what has been built up so far from popular resources. We are putting it in the form of public utility control, and in view of its Imperial and other importance we are preserving a certain measure of Government discretion and even control, if that should be required." That, as I understand it, is the line of a good deal of the argument which has, so far, been presented, mainly in the last Debate, in the defence of the Government's case. What are the plain facts of the position? This new Communications Company, to which they are passing the lease of the Beam Wireless on the terms which I have already mentioned, and the property of the Government-owned cables and certain other properties has a capital of £30,000,000. The Government White Paper tells us that that capital is appropriate to the duties and the tasks which this Communications Company has to undertake.

I again ask the Government and any Member of this House, where have you figure proof, statistics or any other information on that point? How do you know that capital of £30,000,000, which, remember, regulates the standard revenue of approximately the 6 per cent. which is going to be paid, is appropriate capital? It may be I do not know. On the other hand, it may not. You should never pass it until you know exactly what is involved, because behind its consideration there is a lung line of charges extending at least a quarter of a century if this scheme goes on. That is the proposal in the White Paper, if this scheme proceeds in the form in which it is presented to-night. You have no information about the covering capital of the Communications Company. Not a word of technical detail from the Financial Secretary. From the point of view of the users of this service this is vital in the charges that are going to be made and in the standard revenue; and also in excess above the standard revenue, divided terms of 50–50, to use a popular phrase, between the consumers in reduced charges on the one side and the shareholders of this undertaking on the other.

Is there any business man who would pass a proposal of that kind in this form? We are often reminded of the phrase about buying pigs in pokes. That is exactly what the House of Commons is invited to do now. You are offered an enormous financial hag. What is inside no Member of this House really knows, because this White Paper gives only an outline. We get no basis on which to proceed. We have none of the material which is fundamental to any ordinary commercial or industrial transaction in this country. What about the form of public control? You have £30,000,000 of capital. You have guaranteed a standard revenue of £1,865,000. You have a proposal to safeguard the consumers by giving them 50 per cent. of any excess profits above that revenue, and the new Communications Company takes the other 50 per cent.

What is the safeguard? As far as I can judge, only the Advisory Committee. If hon. Members will read the White Paper from beginning to end they will find that the Government will have no real voice beyond their suggestion that the Advisory Committee should include representatives of the Governments interested, and they are so far bound up with the Merger and with the ordinary terms of the Communications enterprise, because the boards are identical, that we are entitled to ask, how far are they going to be effective, even if they attempt to be effective, under what look like the most disadvantageous conditions that you can possibly impose upon one or two men? They will say: "We have power, according to the Government, to withhold our assent to increased charges that may be planned above the standard revenue as at the time when the concern is taken over under the terms of the proposal."

It may be that the Merger and the Communications Company are so far satisfied with the events in the past that they will be prepared to accept that position; but I do not know. We are, at any rate, entitled to know, and these questions should be answered: Have the various interests which are referred to in the White Paper agreed to the terms in the White Paper? Are they satisfied with this scheme? If my information is correct, there are influential elements behind this proposal which are not satisfied. If they are not satisfied, then there is a thousand times stronger reason why the House of Commons should not pass this Bill to-night. I ask, in plain language, can hon. Members imagine anything more absolutely ridiculous than this proposal? Here is a case in which we have no real information on which to proceed. In fact, we have here every circumstance which should make us hesitate before we part with this important public property. I might ask, in passing, when is the scheme to be put into operation? What is the date that is contemplated in the Bill? What are the next steps to be taken in the House of Commons in the terms of legislation? Are the Government going to lay a White Paper embodying the contract with the various interests, or how are we to know exactly what we are getting, or what we are going to get, if this Bill becomes law? These questions deserve to be answered to-night.

My constructive suggestion is this. I say, with little fear of contradiction, that we could have preserved British enterprise in this undertaking in the terms of public corporation, that is, in the terms of public ownership, without any real difficulty. The right hon. and learned Member for East Walthamstow (Sir H. Greenwood) said: "You can do that, if you are dealing with some enterprise within the State, but you cannot do that if you have to negotiate with Governments outside." I entirely agree that when the other Governments have their own property to consider and when they have, under existing conditions, full freedom to make their economic system what they will, they are entitled, and we do not dispute their right, to reach their own verdict on this matter. But that does not rid the House of Commons of the duty to reach a definite verdict where British property is concerned. The same experts who have given us this scheme could just as easily have given us a scheme in terms of public ownership, preserving all essential rights. There are precedents in this country in connection with similar enterprise, admittedly within the State, but in which the principles were substantially the same. It may be suggested that there is a kind of common principle in what was done in the Railways Act of 1921 with regard to the regulation of revenue and the distribution of benefit to the public, after standard revenue had been earned. The real test is what we did in regard to the broadcasting scheme, which was taken over from a public utility undertaking and transferred to the British Broadcasting Corporation. In the present instance the Government are reversing the process. In a sphere which is far wider and far more important they alienate to a form of public utility, while in a sphere far less important they change over to a public corporation. We could link up these great enterprises on the lines of a public corporation without difficulty, and in so doing steer clear of the manifest financial and business errors to be. found in the present proposal. We could preserve the public interest not only in this country but within the British Empire in a service which we all recognise as fundamental to our commercial, industrial and social progress.


I have been described across the Floor of the House in more than one way to-day. While I submit myself to the House very conscious of the differences of opinion which may be held as to my ability to discharge my duties, I have no hesitation in putting this case for His Majesty's Government, not only before the House of Commons but before the general public. The Leader of the Opposition, who moved the Amendment, seemed to assume that the recommendations which had been made to the respective Governments were not made by those who were representatives of the various Governments concerned. I must emphasise the fact, and the House must realise, that the body that was called into being to consider this important problem was the Imperial Conference, with delegates representative of their respective Governments, speaking for their Governments, responsible to their Governments, in close communication with their Governments, and whatever opinions may be held as to the recommendations which have been made by that Imperial Conference, beyond doubt and beyond refutation the Governments concerned, having received the advice which this body tendered to them, after long and mature consideration, after having before them a mass of evidence, and having the advantage of special, properly accredited and admittedly competent financial advisers, came to the conclusion, as f told the House in August last, that they could approve of these proposals. It is following upon that and out of that, that His Majesty's Government now come to the House of Commons to bring before them that part of the scheme which requires legislation in this House. This is an enabling Bill. His Majesty's Government have already announced to the House of Commons and the general public that they accept the recommendations of the Imperial Conference. We had a Debate on that subject at the end of the summer, and it is clear that this recommendation, which is a unanimous one, concerns not only the interests of this country but the interests of the Dominions and Colonies overseas, and is very properly described, as the Leader of the Opposition described it, as a matter of great national and Imperial concern.

What were the problems which brought this Imperial Conference into being? They are very obvious, not only to His Majesty's Government, but to the Government of Canada and the Government of Australia. These Governments across the sea urged and requested His Majesty's Government to call this Conference; and is it not part of the general Empire policy of all parties in this country to work in harmony, if possible, and with unanimity if it can be achieved with the Dominions? This is not a problem which concerns solely His Majesty's Government. Anyone who has taken the trouble to read the White Paper and follow the discussion on this subject must be well aware that the competition of the beam, whether it is the competition of the Post Office beam or a beam outside the Post Office, with the cable systems of the world, was bringing about a crisis in all cable services whether owned by the Government or by private enterprise. Let me remind the House that one of the main issues which the Conference had to keep before it was the absolute necessity of maintaining alive in some form or another cable communications in face of the great advance in wireless communication. This essential fact remains: that whatever advance is made in wireless you cannot ensure secrecy for Government purposes or business enterprises without cable communication.

The right hon. Member for Central Edinburgh (Mr. W. Graham) said that of the various alternatives which lay before the Government and the Imperial Conference, he was not going to say that a subsidy was the method which ought to be pursued, nor, as I understood him, was he prepared to do nothing. In fact, he is agreed that a method of fusion was essential. if we have advanced so far, I think it is clear that one of the first and elemental facts which came up when we discussed this problem was the urgent necessity of finding some form of unit which would serve all the factors of cable and wireless. The right hon. Gentleman the Leader of the Opposition and his friends would prefer State management, and I presume that if he was going to pursue that line he would ask the taxpayers of the country and this House to find the necessary capital to purchase and maintain the cable system which is essential for the Empire. On that let me say that the problem of communication is not one which we can deal with solely by ourselves. There are two ends to every kind of communication, and it became apparent at an early stage that those who were interested in this problem, both in the Dominion of Canada and in the Dominion of Australia, did not look upon it in the light in which the right hon. Gentleman looked upon it, and that, therefore, if we had pursued, or advised our Government to pursue, another policy—the policy of the acquisition and maintenance of these Government cables—we should have had to buy out the interests of Canada and to operate the communications, if possible, at the other end in Canada. The fact remains that we have not adopted that policy, and I think that we have wisely not adopted that policy.

Let me say a few words about the losses upon these cables. Of course, right hon. and hon. Gentlemen to-day have said that the Government-owned assets of the beam have materially altered the position in world communications, that they have cheapened these communications. Of course they have. They have made the position of some of these cables in- creasingly difficult, and the deficit which this country and the taxpayers have had to face upon these cables is an increasing one. If you take the Pacific Cable Board, it is true that in the year ended 31st March, 1928, there was a profit of £42,000, but the latest estimate for the present year is that the accounts will only just about balance. On the West Indian cables there was, in 1925, a deficit of £15,299; in 1926, of £13,000; in 1927, of £12,000; and the deficit for 1928 is estimated at £24,000. On the Imperial cables in 1925–26 there was a loss of £37,000, and in the next period of £40,000, and now undoubtedly it is a great deal more.

But if there are these heavy losses on the Government-owned cables, jointly owned by this country and the Dominions, so too there have been heavy and crushing losses incurred by the privately-owned cables. We were faced with the problem of maintaining cable communication by the least costly and expensive method to the general taxpayer, and at the same time we were faced with the problem of finding some method of working with the freest development and expansion of the latest inventions and methods of communication by beam wireless or by any other method which may be devised. As the House knows, we are only at the fringe of what may take place in the development of these methods.

Lieut.-Commander KENWO RTHY

That is our point.


Let me, then, take the House step by step through the reasoning which guided this Imperial Conference, and let me again emphasise that we went into that Conference with no pre-conceived notions. [Interruption.] I say most emphatically upon my honour and in the name of the Conference, that there was no prejudging of this problem. Every aspect of this matter was discussed through the months that the Conference sat. I can assure the House that whatever may have appeared in the Press was in no sense justified in connection with the Conference, and I repeat, and I emphasise, that it is unfair and unreasonable for hon. Members opposite to say or to hint that there was any such pre-judgment.


There have been hints before about Marconi in this House.


There may have been any number of hints, but the Conference, and this House, if I may say so, are not concerned with hints but with solid facts. We came to the conclusion that a merger company formed between the great cable interests of this country and the wireless interests would be the proper solution of the problem, but that we should take out of that merger company that which pertained to the actual communications with which this Empire is concerned. That is the second recommendation, and I would only say on that point that our financial advisers, having had the fullest access to all the information, both of the Governments concerned and of the wireless and cable companies, came to the conclusion and advised the Conference—backed by the information which they supplied to us—that the capital of that Communications Company should not exceed £30,000,000.

I am asked what right have we to sell Government cables and to transfer by lease Government beam services. All I will say is this—that, clearly, the Government cables could not continue in their present condition with the assent of the Dominions, and a solution had to be found. That meant either purchase or some arrangement, and by common consent of all parties in this Conference the recommendation of the sale of the cables was approved, and the terms of the sale are set out in the White Paper. They commend themselves riot only to this Government, but to the other Governments concerned. It will be observed that, while we sell the cables which everybody knows to be in the nature of a wasting asset, we only lease the beam services. We are leasing them for a period of years, to be worked in the most economical and practical manner for the general advantage of the public, and the financial return to the taxpayer will be amply adequate. The right hon. Gentleman the Member for Central Edinburgh, when he spoke of the transfer of these beam services, omitted, I think, to point out that in addition to the basic sum of £250,000, there is an additional 12 per cent. on the net increase in the company's profits from communication services above the Standard revenue and, in addition, a payment of £60,000.


He said so.


I missed that point. This Communications Company, about which some doubts have been raised, does, in the opinion of the Government and all the others concerned, represent a company which is concerned solely and entirely with communications within the Empire, and there is linked up there, in the most efficient manner, to be used for the public service, under sufficient safeguards, a proper communication service. Now I turn to the fact that we have excluded from this Communications Company the manufacturing of the plant. The Conference felt that there were many aspects of that on which the Governments and those for whom they spoke were not directly represented, and they felt above all that this Communications Company—and this answers a point raised by one hon. Member during the Debate to-day—should be completely free to be able to purchase their requirements in the open market and in a manner which would be most efficient and most to the advantage of the general service.

I want to say something about the control of the working of this Company. In the first place, there are to be two Government Directors, who are to he nominated by the Cable Company, but who must be approved by His Majesty's Government. [An HON. MEMBER: "What a joke!"] I am a little at a loss to understand the hon. Member. There are two Directors to be nominated by the Cable Company upon this Board, who will always be there and who must be approved by His Majesty's Government, and one of these two gentlemen must be the Chairman. Then there seems to have been some confusion between these two individuals and the control by the Governments concerned which is to be exercised through the Advisory Committee. There was confusion as it was put to this House by one hon. Member, as far as I can recollect, and I want to make it perfectly clear that, in addition to these two Directors who are approved by the Government, a further Advisory Committee will be established, representing all the Governments concerned, and that they will have a complete veto upon any increase of rates unless with their assent.


Will the right hon. Gentleman tell us how many members form the Board as a whole?


It states: At the outset the number of directors will, in consequence of the amalgamation, be large. It has however been proposed to and accepted by the Companies, that as and when the opportunities offer this number will he reduced to a smaller figure, say, twelve. That is the statement in the Report.


Then these two will make 14?


They will be two out of the 12, but this is not a case of a majority. These Directors are there in order that they may be in close touch with and aware of everythting that is being done. [Laughter.] I ask hon. Members to observe that over and above the financial control of the Directors, there is a very important addition which is representative of all the parties concerned.


How do you know that?


The hon. Member may find it in the White Paper.


Where is it in the Bill?


The Bill, as I have said, is concerned only with that part enabling the Government to transfer the cables. His Majesty's Government have explained to the House of Commons more than once that they accept the terms of this recommendation, and that these terms will be embodied in a contract with the Company. I would again emphasise the fact that under that contract the Advisory Committee will have full power to prevent a rise of rates, and to prevent the scrapping of any services unless they consent to it and there are other services to take their place. It is obvious that this Advisory Committee, representative of the Dominions, will see to it that the general interest of the communications within the Empire will be their concern. Behind that Advisory Committee, there is the Government responsible for these problems in each country and Dominion. I submit that in these circumstances the Government have established a system on the basis of a public utility company, with safeguards which will ensure to the general public that they will be properly served. In addition to that, it is agreed, and it will be embodied in this agreement, that there will be British control of all the companies, and the Government may assume control of cables and wireless systems either in time of war or in a national crisis.

I have heard it said to-night that this country suffered at the outbreak of the last War by not having that control. I am not prepared to accept or dissent from that view, but, if it was so, under these provisions and with these safeguards that cannot occur in future. The Fighting Services will be permitted to carry out the communications which they have at present, and which they may find necessary for their purpose. Obviously, the general business of the Government, both of the Fighting Services and the other branches of the Government service, will in the main be carried on through this large Communications Company, but that there should be certain safeguards for the Fighting Services, the House will agree. The telephone services are reserved—[An HON. MEMBER: "Until when?"]—until this House determines otherwise.

I will close, as I began, by saying that the solution which has been submitted in this Bill is the outcome of a long and serious consideration of this problem not alone by those who speak for this Government, but by those who represent all the other Governments concerned, and in a marked fashion there is complete unanimity between the Governments concerned. I do not think that it can be said, either of His Majesty's Government at home or of either of the other Governments concerned, that we have sold too cheaply those matters which affect the public interest, or that we have not taken adequate safeguards in the interest of the general service and well-being of the community as a whole. I look forward to the development of this scheme with no small confidence that it will bring about more rapid communication among all the peoples of the Empire, that it will maintain the secrecy which is essential for our services, and that it will lead to the development of research and to new developments in communications, of which this country should have the fullest advantages.


May I ask the right hon. Gentleman this question before he finishes? Supposing he gets this Bill, when is he going to put it into operation? Will he put it into operation before the complete procedure he outlined in the White Paper is absolutely completed, sealed and signed?


I am quite certain that, as far as the Government are concerned, before any assets are passed over the documents embodying the safeguarding conditions must, of course, have been ratified and signed.


Will the right hon. Gentleman tell the House the difference betwixt this transaction and common theft?


The right hon. Gentleman spoke of a contract being entered into. Will he tell us now when that contract will be laid before the House, and whether it will have to be ratified by this House before it is regarded as conclusive?

Lieut.-Commander KENWORTHY

May I ask a question of the Postmaster-General, if the Secretary of State for Scotland has already exhausted his right to speak? We have not heard from the Postmaster-General. Perhaps he would he good enough to answer the question put by my hon. Friend the Member for Rochdale (Mr. Kelly), which I had put down on my notes to ask him also. Is this House to see the contract, as in the case of the MacBrayne contract? Is the contract to come before the House; and, if so, when are we to have it? The next question is this: I understand that at some time in the future the board will consist of 12 members—or 12 members in addition to the two Government nominees; I was not quite clear on that from what the Secretary of State said. But in the meantime, owing to the merger, there will be a greater number of directors. How many directors will there be during the most important and vital period of the carrying out of this Bill, and how long a period is to elapse before the normal board of 12 or 14—I am not sure which—will be sitting?

Those are two questions which, I think, are pertinent. There is another. I listened carefully to the speech of the Financial Secretary, and also to the speech of the Secretary of State for Scotland, waiting to hear whether there would be some answer to or refutation of the points put and the charges made—they were charges indeed, at any rate of leakage—by my hon. Friend the Member for East Bristol (Mr. W. Baker) just before the House rose for the Autumn Recess. Those hon. Members who were in the House will remember that my hon. Friend gave a very carefully documented and a very reasonable account of Stock Exchange manipulation which had taken place between the time when the Advisory Conference had reported and the time the scheme was made public. I think we are entitled to have some answer from the Government on this point. The case made out by my hon. Friend certainly needed an answer. It must have impressed a great many people, and it received a very wide publicity. The newspapers reported my hon. Friend as few of us on these benches are ever reported. The Government have had many weeks in which to prepare a reply, and a reply is called for. The Secretary of State for Scotland has spoken about the necessity of secrecy in the public interest, and he contends that this can only be obtained by cables and not by beam wireless. At any rate, the Government have made an extremely bad start in regard to this question, and if no answer is given to our questions we can only conclude that the Stock Exchange leakages ought to be investigated.


If I may, by leave of the House, I will answer the questions which have been put to me. It is clear that this Measure is an enabling Bill, and there will have to follow a number of agreements which must be discussed with the various Governments concerned. I cannot say when those agreements will be definitely concluded. Perhaps I may say, in addition, that those agreements cannot in any sense be altered or debated in detail. The terms are outlined in the White Paper, which contains the actual sums involved. The House has debated this subject on two occasions, and there is nothing being hidden from the House. Everything has been fair and above board, and there is no reason why the House should refuse to pass this Measure, the details of which have been in the hands of hon. Members for some months. The Committee to be formed will consist of 20 Members, to be reduced later on to 12.

There is one other point which I intended to touch upon. I think it is one upon which the House would like an assurance, and that is the suggested treatment of the staffs. I can assure the House that that is a matter which was very carefully considered by the Imperial Conference and the Government, and the arrangements to be made for the transfer of the Government cable and beam system will include provisions for the transfer to the company of existing staffs. Full consideration will be given to that aspect of the question, and no effort will be spared to secure a just settlement. I can assure the House that ample opportunities will be given to the staffs concerned to examine the proposed arrangement, and make such suggestions as they may think fit.


Will the right hon. Gentleman answer my question? Does he or does he not intend to lay the contract before the House of Commons?


I shall have to consult some of the other Governments concerned before I can make any announcement on that point.


The Secretary of State for Scotland has said that the agreement would be made, but that the House of Commons would not he permitted to deal with the details of those agreements. There is a Standing Order, No. 72, which deals specifically with telegraphic contracts. I do not know whether this particular contract will come under it, but may we have a Ruling from the Chair which will assure us that the House will have its ordinary rights in the matter of this contract, notwithstanding anything that the Secretary of State for Scotland may say now about his intentions to infringe them.


I have not yet had an opportunity of seeing whether Standing Order No. 72 affects this question, but I will see that the rights of Members are protected.


On a point of Order, May I ask your guidance. Would the Government be in order in disposing of the assets before the terms of contract are approved by the House?


That is not a point of Order.


I think the House ought to have the fullest possible discussion it can give to this matter, especially in view of the statements which we have heard from the Government benches. The only statement that seemed clear to me in the answer of the Secretary of State for Scotland was that this Bill was perfectly open. In some respects I think it is. Every speech that we have heard in support of the Bill has left it perfectly open that the Government for some reason, at which the House can only guess, have taken a number of highly capitalised companies which, on their own admission were on the verge of bankruptcy, and have presented them with a very profitable State undertaking and given them practically a guarantee of a 6 per cent. return on their initial capital. It seems to me, and to the ordinary person, to be an extraordinary inversion of the business rules which are continually preached from business men on the opposite side of the House. They tell us that when a business is inefficient or out of date or cannot pay it has naturally to be swallowed up by the efficient and up-to-date business which succeeds it.

That is the doctrine which the Conservatives preach, but when it happens to suit their interests, because the inefficient business belongs to private enterprise, to bolster it up with the capital and enterprise of the taxpayer, they come to this House and entirely take back all the good Dr. Smiles precepts that they are in the habit of preaching. To-day, instead of saying, "Let the modern business take over the old business," they say, "Let us take our new modern, paying State enterprise and give it to the old private capitalists who cannot make their business pay, and then when we have given them all these advantages which belong to the taxpayer, let us give just sufficient representation to satisfy our conscience without giving the public sufficient representation to check our friends from making exorbitant profits, and moreover, let us make it a starting arrangement that our friends, who would be bankrupt if we did not step in to save them, shall have 6 per cent. interest on their money, and, if there is any profit left after that, not only shall they have the 6 per cent. originally arranged for, but a committee, in which they themselves shall be in a majority, shall decide how much more of this superfluous profit they are entitled to."

I suggest that in this House in the past it has always been the custom, whatever the political views of the Government of the day, to clothe private rapacity with at least a decent veneer of public sympathy, but in this case there is not even the decent courtesy of attempting to hide the fact that the Government are deliberately giving away to private enterprise an extremely valuable State property. This hardly seems to me to be an issue on which one's political colour need determine the Lobby into which one goes. I should be very sorry to think that good citizenship and honest representation were the prerogative of any particular party, or that the only men who would stand out against a public ramp in favour of private enterprise were to be found on these benches; and I sincerely hope that, in the Division which I suppose the Government intend to force upon us in a very few minutes, and in which, as my right hon. Friend the Member for Central Edinburgh (Mr. W. Graham) has

pointed out, Members are to be asked to give away State property without even the slightest decent attempt to give them any details and figures regarding the matter, it will not be left to those on these benches, who are often taunted with knowing very little of business, to stand as the sole bulwark for decent business regulations for the safety of the property of the nation. I suggest that, in the dying days of this Parliament, when the huge minority-majority on the other side of the House are in the throes of meeting the electorate whom they deceived not five years ago, they might at least have the decency to work out and give to us full details, and present some arrangement by which at least the public may be safeguarded, and not endeavour with indecent haste, at the side of their own death-bed, to perpetuate one of the biggest ramps ever known in Parliament.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 258; Noes, 134.

Division No. 12.] AYES. [11.0 p.m.
Acland-Troyte, Lieut.-Colonel Cassels, J. D. Fenby, T. D.
Ainsworth, Lieut.-Col. Charles Cautley, Sir Henry S. Forestler-Walker, Sir L.
Albery, Irving James Cayzer, Maj. Sir Herbt. R. (Prtsmth.S.) Forrest. W.
Alexander, E. E. (Leyton) Cazalet, Captain Victor A. Foster, Sir Harry S.
Allen, Sir J. Sandeman Cecil, Rt. Hon. Sir Evelyn (Aston) Foxcroft, Captain C. T.
Amery, Rt. Hon. Leopold C. M.S. Chapman, Sir S. Fraser, Captain Ian
Applin, Colonel R. V. K. Charteris, Brigadier-General J. Frece, Sir Walter de
Apsley, Lord Churchill, Rt. Hon. Winston Spencer Fremantle, Lt.-Col. Francis E.
Astbury, Lieut.-Commander F. W. Clarry, Reginald George Gadie, Lieut.-Col. Anthony
Astor, Maj. Hn. John J. (Kent, Dover) Clayton, G. C. Galbraith. J. F. W.
Astor, Viscountess Cobb, Sir Cyril Ganzoni, Sir John
Atholl, Duchess of Cochrane, Commander Hon. A. D. Gates, Percy
Barclay-Harvey, C. M. Cockerill, Brig.-General Sir George Gault, Lieut.-Col. Andrew Hamilton
Beckett. Sir Gervase (Leeds, N.) Cohen, Major J. Brunel Gilmour, Lt.-Col. Rt. Hon. Sir John
Bellairs, Commander Carlyon Colman, N. C. D. Goff, Sir Park
Benn, Sir A. S. (Plymouth, Drake) Conway. Sir W. Martin Gower, Sir Robert
Bevan, S. J. Cope, Major Sir William Grace, John
Birchall, Major J. Dearman Cowan, D. M. (Scottish Universities) Grant, Sir J. A.
Bird. E. R. (Yorks, W. R., Skipton) Cowan Sir Wm Henry (Islington, N.) Greaves-Lord. Sir Walter
Blundell, F. N. Craig, Sir Ernest (Chester, Crewe) Grenfell, Edward C. (City of London)
Boothby, R. J. G. Crawfurd, H. E. Gretton, Colonel Rt. Hon. John
Bourne, Captain Robert Croft Crooke, J. Smedley (Deritend) Grotrian, H. Brent
Bowater, Col. Sir T. Vansittart Crookshank, Col. C. de W. (Berwick) Guinness, Rt. Hon. Walter E.
Bowyer, Captain G. E. W. Crookshank, Cpt. H. (Lindsey, Gainsbro) Gunston, Captain D. W.
Boyd-Carpenter, Major Sir A. B. Culverwell, C. T. (Bristol, West) Hall, Lieut. Col. Sir F. (Dulwich)
Braithwaite Major A. N. Curzon, Captain Viscount Hall, Admiral Sir R. (Eastbourne)
Brass, Captain W. Davidson, Major-General Sir John H Hall, Capt. W. D A. (Brecon & Rad.)
Brassey, Sir Leonard Davies, Maj. Geo. F. (Somerset,Yeovil) Hammersley, S. S.
Bridgeman, Rt. Hon. William Clive Davies, Dr. Vernon Hanbury, C.
Briggs, J. Harold Davison, Sir W. H. (Kensington, S.) Harland, A.
Briscoe, Richard George Drewe, C. Harrison G. J C.
Brittain. Sir Harry Eden, Captain Anthony Hartington, Marquess of
Brocklebank, C. E. R. Edmondson, Major A. J. Harvey, G. (Lambeth, Kennington)
Brooke, Brigadier-General C. R. I. Elliot, Major Walter E. Harvey, Major S. E. (Devon, Totnes)
Brown, Col. D. C. (N'th'l'd., Hexham) Ellis, R. G. Haslam, Henry C.
Brown, Brig.-Gen. H. C. (Berks, Newb'y) England, Colonel A. Henderson, Capt. R. R.(Oxf'd,Henley)
Brown, Ernest (Leith) Erskine, James Malcolm Monteith Heneage, Lieut.-Colonel Arthur P.
Buchan, John Fairfax, Captain J. G. Henn, Sir Sydney H.
Burman, J. B. Falle, Sir Bertram G. Hennessy. Major Sir G. R. J.
Carver, Major W. H. Falls, Sir Charles F. Hills, Major John Waller
Hilton, Cecil Monsell, Eyres, Com. Rt. Hon. B. M. Sinclair, Col. T. (Queen's Univ., Belfst)
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Moore, Sir Newton J. Skelton, A. N.
Holbrook. Sir Arthur Richard Morden, Col. W. Grant Smith, Louis W. (Sheffield, Hallam)
Hope, Capt. A. O. J. (Warw'k, Nun.) Morrison, H. (Wilts, Salisbury) Smithers, Waldron
Hopkins, J. W. W. Morrison-Bell, Sir Arthur Clive Somerville, A. A. (Windsor)
Howard-Bury, Colonel C. K. Murchison, Sir Kenneth Southby, Commander A. R. J.
Hudson, Capt. A. U. M.(Hackney,N.) Nail, Colonel Sir Joseph Spender-Clay, Colonel H.
Hudson, R. S. (Cumberland,Whiteh'n) Nelson, Sir Frank Stanley, Lieut.-Colonel Rt. Hon. G.F.
Hume, Sir G. H. Neville, Sir Reginald J. Stanley, Lord (Fylde)
Hume-Williams, Sir W. Ellis Nuttall, Ellis Stanley, Hon. O. F. G. (Westm'sland)
Hunter-Weston, Lt.-Gen. Sir Aylmer Oakley, T. Steel, Major Samuel Strang
Hurd, Percy A. O'Connor, T. J. (Bedford, Luton) Storry-Deans, R.
Hutchison, Sir Robert (Montrose) Oman, Sir Charles William C. Stott, Lieut.-Colonel W. H.
Inskip, Sir Thomas Walker H. Ormsby-Gore, Rt. Hon. William Streatfeild, Captain S. R.
Iveagh, Countess of Owen, Major G. Stuart, Hon. J. (Moray and Nairn)
Jackson, Sir H. (Wandsworth, Cen'l) Pennefather, Sir John Sugden, Sir Wilfred
Jones, Sir G. W. H. (Stoke New'gton) Perkins, Colonel E. K. Thorn, Lt. Col J. G. (Dumbarton)
Kennedy, A. R. (Preston). Peto, G. (Somerset, Frome) Thompson, Luke (Sunderland)
Kindersley, Major Guy M. Pilcher, G. Thomson, Rt. Hon. Sir W. Mitchell-
King, Commodore Henry Douglas Pilditch, Sir Philip Titchfield, Major the Marquess of
Kinloch-Cooke, Sir Clement Power, Sir John Cecil Tryon, Rt. Hon. George Clement
Knox, Sir Alfred Preston, Sir Walter (Cheltenham) Turton, Sir Edmund Russborough
Lamb, J. Q. Preston, William Vaughan-Morgan, Col. K. P.
Little, Dr. E. Graham Price, Major C. W. M. Waddington, R.
Lloyd. Cyril E. (Dudley) Radford, E. A Ward, Lt.-Col. A. L.(Kingston-on-Hull)
Locker-Lampion, Rt. Hon. Godfrey Raine, Sir Walter Warner, Brigadier-General W. W.
Loder, J. de V. Rawson, Sir Cooper Warrender, Sir Victor
Looker, Herbert William Reid, D. D. (County Dawn) Waterhouse, Captain Charles
Lougher, Lewis Remer, J. R. Watson, Rt. Hon. W. (Carlisle)
Luce, Major-Gen.Sir Richard Harman Rhys, Hon. C. A. U. Watts, Sir Thomas
Lumley, L. R. Richardson, Sir P. W. (Sur'y, Ch'ts'y) Wayland, Sir William A.
Lynn, Sir R. J. Roberts, E. H. G. (Flint) Wells, S. R.
MacAndrew, Major Charles Glen Robinson, Sir T. (Lancs, Stretford) Williams, A. M. (Cornwall, Northern)
Macdonald, Capt. P. D. (I. of W.) Ropner, Major L. Williams, Com. C. (Devon, Torquay)
McLean. Major A. Ruggles-Brise, Lieut.-Colonel E. A. Williams, Herbert G. (Reading)
Macnaghten, Hon. Sir Malcolm Russell, Alexander West (Tynemouth) Wilson, Sir Murrough (Yorks,Richm'd)
Macquisten, F. A. Rye, F. G. Windsor-Clive, Lieut.-Colonel George
Maitland, A. (Kent, Faversham) Salmon, Major I. Winterton, Rt. Hon. Earl
Maitland, Sir Arthur D. Steel- Samuel, A. M. (Surrey, Farnham) Wolmer, Viscount
Makins, Brigadier-General E. Sandeman, N. Stewart Womersley, W. J.
Margesson, Captain D. Sanders, Sir Robert A. Wood. E. (Chest'r. Stalyb'ge & Hyde)
Marriott, Sir J. A. R. Sanderson, Sir Frank Wood, Rt. Hon. Sir Kingsley
Mason, Colonel Glyn K. Sandon, Lord Woodcock, Colonel H. C.
Meller, R. J. Sassoon, Sir Philip Albert Gustave D. Wright, Brig.-General W. D.
Merriman, Sir F. Boyd Savery, S. S.
Milne, J. S. Wardlaw Scott, Rt. Hon. Sir Leslie TELLERS FOR THE AYES.
Mitchell, W. Foot (Saffron Walden) Sheffield, Sir Berkeley Mr. Penny and Captain Wallace.
Adamson, W. M. (Staff., Cannock) Graham, Rt. Hon. Wm. (Edin., Cent.) Longbottom, A. W.
Alexander, A. V. (Sheffield, Hillsbro') Greenall, T. Lewth, T.
Ammon, Charles George Greenwood, A. (Nelson and Colne) Lunn, William
Baker, J. (Wolverhampton, Bliston) Grenfell, D. R. (Glamorgan) Mac Donald, Rt. Hon. J. R. (Aberavon)
Baker, Walter Griffith, F. Kingsley Mackinder, W.
Barker, G. (Monmouth, Abertillery) Griffiths, T. (Monmouth, Pontypool) Maclean, Neil (Glasgow, Govan)
Batey, Joseph Graves, T. MacNeill-Weir, L.
Beckett, John (Gateshead) Grundy, T. W. Malone, C. L'Estrange (N'thampton)
Bellamy, A. Hall, F. (York, W.R., Normanton) Maxton, James
Benn, Wedgwood Hall, G. H. (Merthyr Tydvil) Mitchell, E. Rosslyn (Paisley)
Bondfield, Margaret Hardie, George D. Montague, Frederick
Bowerman, Rt. Hon. Charles W Hayday, Arthur Morris, R. H.
Briant, Frank Hayes, John Henry Morrison, R. C. (Tottenham, N.)
Broad, F. A. Henderson, T. (Glasgow) Mosley, Sir Oswald
Bromfield, William Hirst, G. H. Murnin, H.
Buchanan, G. Hirst, W. (Bradford, South) Naylor, T. E.
Cape, Thomas Hudson, J. H. (Huddersfield) Oliver, George Harold
Charleton, H. C. Jenkins, W. (Glamorgan, Neath) Palin, John Henry
Cluse, W. S. John, William (Rhondda, West) Parkinson, John Allen (Wigan)
Compton, Joseph Johnston, Thomas (Dundee) Pethick-Lawrence, F. W.
Connolly, M. Jones, Henry Haydn (Merioneth) Ponsonby, Arthur
Cove, W G. Jones, J. J. (West Ham, Silvertown) Potts, John S.
Dalton, Hugh Jones, Morgan (Caerphilly) Richardson, R. (Houghton-Is-Spring)
Davies, Evan (Ebbw Vale) Jones, T. I. Mardy (Pontypridd) Riley, Ben
Davies, Rhys John (Westhoughton) Jones, W. N. (Carmarthen) Ritson, J.
Day, Harry Kelly, W. T. Roberts, Rt. Hon. F. O.(W.Bromwich)
Duncan, C. Kennedy, T. Robinson, W. C, (Yorks, W.R., Elland)
Dunnico, H. Kenworthy, Lt.-Com. Hon. Joseph M. Saklatvala, Shapurji
Gardner, J. P. Kirkwood, D. Salter, Dr. Alfred
Garro-Jones, Captain G. M. Lansbury, George Scrymgeour, E.
Gibbins, Joseph Lawrence, Susan Scurr, John
Gillett, George M. Lawson, John James Shepherd, Arthur Lewis
Gosling, Harry Lee, F. Shiels, Dr. Drummond
Shinwell, E. Sutton, J. E. Wlikinson, Ellen C.
Short, Alfred (Wednesbury) Taylor, R. A. Williams, David (Swansea, East)
Sitch, Charles H. Thurtle, Ernest Williams, Dr. J. H. (Llanelly)
Slesser, Sir Henry H. Tinker, John Joseph Williams, T. (York, Don Valley)
Smillie, Robert Tomlinson, R. P. Wilson, C. H. (Sheffield, Attercliffe)
Smith, Ben (Bermondsey, Rotherhithe) Townend, A. E. Wilson, R. J. (Jarrow)
Smith, Rennie (Penistone) Travelyan, Rt. Hon. Sir Charles Windsor, Walter
Snell, Harry Viant, S. P. Wright, W.
Snowden, Rt. Hon. Philip Watson, W. M. (Dunfermilne) Young, Robert (Lancaster, Newton)
Stamford, T. W. Wellock, Wilfred
Stephen, Campbell Westwood, J. TELLERS FOR THE NOES.
Stewart, J. (St. Rollox) Wheatley, Rt. Hon. J. Mr. Charles Edwards and Mr. A.
Sullivan, J. Whiteley, W. Barnes.

Question put, and agreed to.

Bill committed to a Committee of the Whole House for To-morrow.—[Mr. A. M. Samuel.]