POST OFFICE AND TELEGRAPH (MONEY) BILL.

HC Deb 15 May 1931 vol 252 cc1495-564

Order for Second Reading read.

The ASSISTANT POSTMASTER-GENERAL (Mr. Viant)

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

It will probably be as well if hon. and right hon. Members understand that all of the £32,000,000 referred to in this Bill, with the exception of £2,800,000, is for the telephone service. As was stated in the debate on the Financial Resolution, we have about £2,000,000 in hand, and, with the £29,200,000, this will give us a total of £31,200,000 for telephone development. We are basing our estimate on what has taken place during the past three years—in other words, we are moving from the known to the unknown. We are anticipating, as a result of an intensified system of canvassing and so on, that we shall be able to increase the demand for the telephone service, and we shall be able, we hope, at no distant date, to justify our asking for a further sum. Some criticism has been offered to the effect that, in asking for this sum of £32,000,000, which will have to be spread over three years, we are not asking for sufficient; but we think that it is far preferable, in framing this estimate and asking the House to grant this sum, that we should be able to inform the House that we have good reasons for asking for this sum, and we do so knowing that, should we need more, we can again come to the House and ask for a further sum. We are optimistic in this sense, that during the past three years, in spite of trade depression, we have put on 110,000 new subscribers in each of the three years. [Interruption.]

An hon. Member asks, "Is that all?" We hold that the Department has done exceedingly well, especially bearing in mind the fact that as regard's America and Germany, to which countries our attention has been directed, we find that in America the diminution in development has been considerable—that the total extent of their growth during last year has been no more than 1,054—while in Germany the growth has been only 50 per cent. of ours. Therefore, the fact that we have attained a growth of 110,000 is, I think, good reason for congratulating the Department on its achievement. We are asking for this sum as a result of our experience of the problem during the past three years, and, as my hon. Friend remarked during the debate on the Financial Resolution, we are optimistic in our belief that by means of an intensified system of propaganda we shall be able to add considerably to the number of subscribers. It has been suggested that, even if development in Great Britain continues in future as in the past, we shall still remain a fifth-rate power. Such suggestions, however, ignore the fact that only two countries have more telephones than Great Britain, namely, the United States of America and Germany, while only two towns have more telephones than London, namely, New York and Chicago. As to telephone density, we are surpassed by the United States and Germany only. Germany is not far in front, having five telephones per 100 of the population, as against our 4.4. France, Spain and Italy are far behind.

Viscount WOLMER

Would the hon. Gentleman say exactly what he means by that statement with regard to telephone density?

Mr. VIANT

I am speaking only of countries which have a substantial population. We have to bear in mind certain facts in connection with our own telephones. We have an exceedingly good postal service in this country. We can post a letter here in London early in the evening, and that letter is received in Ireland or far beyond the Tweed the next morning. [Interruption.] I am not speaking of the more remote parts, but it is no mean achievement that you should be able to post a letter here early in the evening and know that your friends will receive that letter without a shadow of doubt the next morning in Aberdeen. [Interruption.] Our postal services are undoubtedly exceedingly good. Furthermore, our means of transport are exceptional. As yet, unfortunately, the bulk of our citizens in this country view the telephone as being more in the nature of a nuisance than an aid or a tool in industry.

That is not because of any shortcomings of the service, but because of our natural conservatism towards any mechanical instrument. It is not an uncommon thing, when one is paying a visit to friends, for the telephone bell to ring, and I am not going to repeat the words that are often used when the telephone bell does ring—not against the telephone service, but they treat the telephone as being a nuisance. The Department has to a very great extent been successful in overcoming that point of view. Until we can get the general public to understand that the telephone is to be accepted as a mechanical device which will enable people to accomplish a certain type of work, we shall not have removed one of the chief obstacles in connection with our telephone development.

I rather hoped Members of the House would have been appreciative of those difficulties and, furthermore, been willing to appreciate the development which has already been achieved. In view of the criticisms which have been levelled at the Department, I will ask the House to bear with me while I give them some of the achievements during the last five or six years. In March, 1919, the number of stations, excluding Southern Ireland, was 830,000, and the increase in the 12 post-War years has been 1,150,000, or nearly 140 per cent. The number now closely approximates to the 2,000,000 mark, and the second million stations have been added to the system in rather less than nine years. That in itself is indicative of the development of the telephone service. The system had been in operation for 40 years before the first million stations were obtained. The system was then in the hands of the National Telephone Company, since when the State has taken the Department over and developed and improved the service. There are now 35,000 public call offices. Over 10,000 of these are installed in kiosks in public thoroughfares and are there available for callers at all hours of the day and night. The growth in call offices since 1025, when the right hon. Gentleman the Member for Croydon (Sir W. Mitchell-Thomson) took over the administration, has been 85 per cent. In that period kiosk call offices have increased nine-fold. Rural call offices now number about 14,000, the increase in the last six years being 135 per cent., and the increase since March, 1929, being 70 per cent. The number of private house telephones has increased by over 100 per cent. in the last six years. The present number of 536,000 compares with 158,000 in July, 1922, when the special tariff for residence lines was introduced.

We have established a considerable number of rural exchanges. No fewer than 1,000 of these have been provided in the last six years, representing a growth of over 40 per cent. In the last two years most of the rural exchanges have been of the automatic type and provide a continuous service. On 31st March last there were 360 exchanges of this type. The revenue derived from this type of exchange is exceedingly small. The Department during the last two years has gone a long way to meet the demands of the rural areas, in so much that, if we can find eight persons who are prepared to become subscribers, we are prepared to meet them with the establishment of an exchange. We have gone further and, where we have been able to find three or four persons in a rural area who are prepared to become guarantors for a call office, we are prepared to meet them in this way. We assess the capital cost of installing a service. We are then prepared to foot the bill as to a loss of £10 per annum in connection with the installation. The four or five guarantors are then asked to provide the remaining portion, and, should the revenue derived be over and above that which we anticipate, we are prepared to relieve the guarantors to that extent. As a result, there is considerable development going on in the rural areas.

I have often heard critics in the House quote what is being done in Sweden and the manner in which they suggest that the service there endeavours to meet subscribers, but we are doing far better than Sweden. I find that, if an exchange there has fewer than 50 subscribers, the subscribers must provide their own lines and maintain them and pay the operators' wages for local operating. They must also contribute poles or services for junction lines if the anticipated revenue is not sufficient to cover the cost. We have to remember that we are not permitted to entail a loss on the running of the Department. We are expected to make it a revenue-producing Department.

The development of our telephone system in London has really been remarkable. There has been a considerable increase in the number of telephones and an improvement in the quality of transmission during the past year. The introduction of what is known as the "repeater" system, a device which amplifies the attenuated currents received over a long line and thereby renders the volume almost equal to that received over a short line, has undoubtedly improved the standard of transmission. The number of exchanges in the London area is now 150 as compared with 137 at the end of 1929, and 32 of these are automatic.

Here I pause for a moment, having in mind some of the apprehensions in the minds of hon. and right hon. Gentlemen concerning the staff as a result of the introduction of the automatic system. Questions have been asked in the House as to whether staffs have been dismissed as the result of the introduction of the automatic system. None of the staff is dismissed, but, if I may use the term, an intelligent anticipation on the part of the Department is applied, and recruiting is held up, so that what really happens is a slowing down of recruitment. That enables the Department to avoid having to effect dismissals. I think that that will commend itself to Members of the House. The introduction of this system is inevitable, and many say that where the automatic system is operating it is far preferable to the old system. Whether we have yet had sufficient experience of that or not, I am not in a position to say, but on all hands we are receiving statements that our subscribers rather appreciate the automatic system.

The total number of telephone stations operating in the London area at the end of 1030 was 703,500, representing au increase during the year of 41,523, or 6.4 per cent. The calls in the London area have gone up by leaps and bounds. During 1930 the number of local calls originating in the London area amounted to 668,000,000, an increase of 3.1 per cent. over the year 1929. Considerable progress has been made in providing call offices and subscribers' circuits with the pre-payment type of multi-coin boxes. At the end of 1929 the number of call offices and kiosks thus provided was 3,823, and there are now 5,296.

In previous Debates the Department has been criticised for its high costs, and in this connection the Noble Lord the Member for Aldershot (Viscount Wolmer) has been most active in some of our debates. I often think that those who criticise the costs of the British telephone system fail to appreciate the difference in our system compared with the systems of other countries which they use as illustrations. The difference in costs in Great Britain, as compared with Sweden and the United States of America, is very largely accounted for by what is acceptable to the citizens of those two countries as compared with what is acceptable to our citizens. The people in this country desire not only the utility of the telephone system but its asthetic appearance. Here we find that local authorities go almost to the length of insisting upon all our installations of wires being placed underground. In America ample provision is made in the building of the cities and the towns not only for electric cables but for telephone cables. Furthermore, in the designing of the buildings the architects always make provision for channels wherein the cables for the telephone can be inserted. In this country, if a building has been erected, we have to chase out the walls in order that the telephone wires may be hidden from view. This all adds to the capital costs of installing telephones. So much for the difference between this country and America.

I will now take Sweden. There they have an undoubted advantage to start with in that they have the timber required for their poles on the spot. Furthermore, it is the exception to have their cables or wires underground and not the general rule as it is becoming here. The result is that should they have to put a cable underground the difference between the cost there compared with what obtains in London or in this country generally is as much as six times. To restore the pavements and roads in London or large towns in this country costs six times as much as it does in regard to the type of road that obtains in Sweden. These are facts which cannot be argued away; they are facts which have to be faced. The telephone service in this country has to face up to these facts, and it adds to the initial charges of our telephone service.

Despite that fact, I am happy to say that, as a result of the good co-operation between all sections of the staff in the Post Office, new methods are being introduced—distasteful, I agree, in many instances, but, none the less, they are being accepted with the best of spirit—and we are now in a position, taking into consideration the fact that wages have come down, in addition to the reorganisation, to say that our costs to-day are 20 per cent. less than they were when the previous criticisms were levelled at the Department. In addition, as a result of improved organisation and improved methods we find that we are now able to comply with orders very much more readily than we were hitherto. We find—and the House will be interested here—that the orders completed within one week during the year 1925 were 26 per cent., in 1929 it was 36 per cent., and in 1930 it was 42 per cent. The percentage of orders completed within two weeks was, in 1925, 50 per cent., in 1929 63 per cent., and in 1930 67 per cent.; orders completed within three weeks, in 1925 were 65 per cent., in 1929 78 per cent., in 1930 80 per cent.; orders completed within a month, in 1925 were 75 per cent., in 1929 87 per cent., in 1930 88 per cent. Those figures are an indication of the improvements that have been effected.

Mr. O'CONNOR

I cannot quite follow the figures; they are a little confusing. One would have thought that they ought to total up to 100 per cent. of orders effected in a week, in three weeks, and so on. Apparently, the hon. Member is referring to different sets and types of orders. One would like to know what the orders were in each case.

Mr. VIANT

I can only state that I am giving a table showing the rate of improvement that has been effected in the completion of orders at a week's notice, two weeks' notice, three weeks' notice, and within a month.

Mr. O'CONNOR

Orders that were specifically asked to be done in those periods of time.

Mr. VIANT

Not necessarily. An order is given for certain work. In 1925, we were only able to effect 26 per cent. of orders in one week. Now, we are able to give effect to those orders to the extent of 42 per cent. within one week, and improvement has taken place all the way through.

Mr. O'CONNOR

That means 56 per cent. of orders only.

Mr. VIANT

The orders were completed within a week, a fortnight, three weeks, or a month.

Mr. CHARLES WILLIAMS

The month would include the two weeks.

Mr. VIANT

We are not manufacturers, and in many instances we have to wait for the delivery of certain installations. Consequently, we are unable to complete the installations until the delivery has been effected. I will give an illustration. Questions have been put to us in the House with respect to the hand micro-telephone. We are not the manufacturers of these telephones, but we have arrived at a stage where the delivery from the manufacturers amounts to 3,000 per week, and orders are now coming in at the rate of about 1,500 per week. Therefore, our ability to give effect to the orders has increased considerably as a result of the deliveries from the manufacturers. That is an indication of the way in which improvement has been effected.

I hope that I have not unduly wearied the House with the figures that I have presented, but we seldom get an opportunity of displaying to the House what the Post Office is capable of achieving. I hope the House will appreciate the fact, from the figures that I have given, that there has been a decided and general improvement from 1925 onwards. I wish to pay my mede of praise to the spirit of co-operation that has been shown and the assistance that we have received from all sections of the Department, by way of improving the service. We are optimistic enough to believe that, as a result of improved methods and the proposals that my hon. and gallant Friend the Postmaster-General will place before the House before the Debate closes, we shall find that within the next three years we shall have to come to the House to ask for more money for the development of the service. We shall then be able to show every justification in asking for more money, in consequence of the improvement and increased development of the service, and the development of a telephone sense among the general public.

Viscount WOLMER

It is a little refreshing to know that there is at least one Member of this House who is thoroughly satisfied with the telephone system in every phase.

Mr. VIANT

I did not say "thoroughly satisfied."

Viscount WOLMER

That is certainly the impression that the hon. Member conveyed by his eloquent and very charming speech. It is my complaint against the Postmaster-General, his Assistant, and the Department generally that they are much too satisfied with the state of affairs at the present time. One would think, to listen to the Assistant Postmaster-General, that we were one of the most highly developed telephone countries in the world and one of the most efficient telephone countries in the world, whereas everybody who has studied the matter and everybody who is in touch with the telephone service knows that that is not the case.

There was one thing that I noted with pleasure in the hon. Member's speech, and that was that he held out hopes of the spending of this sum of money in a shorter period than the three years which the Postmaster-General estimated. When we discussed the question on the Financial Resolution there was universal dissatisfaction with the attitude of the Government. They got no support in any quarter of the House, because it was felt that to budget for expenditure of an additional £32,000,000 during the next three years was making totally inadequate provision for the telephone needs of the country. But the Postmaster-General was apparently quite satisfied with that. He said: …. our provision of capital is really at the rate of little more than £11,000,000 a year. … This is an increase in the actual figures of rather more than £1,000,000 a year over the expenditure of the past three years, and the expenditure for those past three years was again in excess of the previous three years. That is as it should be with an expanding service."—[OFFICIAL, REPORT, 21st April, 1931; col. 878, Vol. 251.] I am glad to hear that the Assistant Postmaster-General is not quite so satisfied as the Postmaster-General in that respect. The Postmaster-General and his predecessor, and the Labour Government have spent less every year in telephone development than the Conservative Government did, although when we were in office we were hotly attacked by hon. Members opposite for not developing the telephone system fast enough.

The Postmaster-General gave the figures in an answer to a question by the hon. and learned Member for Nottingham Central (Mr. O'Connor), who asked the amount spent on telephone development for the last three years. His reply was that in 1928–20 it was £10,199,000, in 1929–30, £10,054,000, and in 1930–31, £10,000,000. That is a progressive decline ever since the present Government came into office. The Postmaster-General said that he was going to spend £1,000,000 more a year: and I would remind him of this, that the Secretary of State for the Dominions when he was Lord Privy Seal gave a definite promise to the House that the Government were going to accelerate their telephone development programme by £750,000 a year.

I want to know whether that has been done or not. If it has, it means that the programme of this Government instead of being £10,000,000 was only a little over £9,000,000; if it has not been done the House is entitled to know why it has not been carried out. We shall attach more credence to the Postmaster-General's optimism of being able to spend more in the future than in the past when we are satisfied as to how far the promise of the then Lord Privy Seal has been fulfilled. The Postmaster-General has pleaded that the figures for telephone development are smaller because costs have been reduced. If a reduction in costs accounts for any appreciable part of the reduction in development expenditure, then I want to know whether he has passed the reduced costs on to the public in reduced charges. If he has not, then he has no right to complain about the lack of public response to his canvassing appeals, nor has he the right to contend that his programme has been diminished by a reduction in costs. The facts are that practically nothing has been passed on to the consumer in reduced charges. The hon. Member for Walthamstow (Mr. Wallace) on 20th April asked the Postmaster-General— what reductions in telephone, telegraph, and postal charges have been made since 1st April, 1925; the dates of any such reductions; and the resulting total annual gain to users? In reply the hon. Member gave a long list of very trifling reductions and ended by saying: The estimated sacrifice of revenue involved in these reductions is nearly £250,000 per annum."—[OFFICIAL REPORT, 20th April, 1931; col. 602, Vol. 251.] On his own admission the public are gaining less than £250,000 a year in reduced charges, yet the Postmaster-General has pleaded that the reduction in costs produces an unfair comparison between his telephone development and ours.

It is the same if you take the actual telephones that have been installed. The Postmaster-General, speaking on the Money Resolution, said that our net, annual number of new subscribers was round about 130,000 and he claimed that those figures were much better than the figures under the tenure of the right hon. Member for South Croydon (Sir W. Mitchell-Thomson).

The POSTMASTER-GENERAL (Mr. Attlee)

May I correct the noble Lord. I never said anything of the sort.

Viscount WOLMER

May I read what the hon. Member did say. I was speaking, and I said that the Postmaster-General was— anticipating an expansion of 120,000 telephones per annum. That is to say, he is content to budget for a lower figure than my right hon. Friend the Member for South Croydon was able to record in his last year of office.

Mr. ATTLEE

I said that the figure was regarded as necessary in order to meet the capital expenditure. I said that with an increased capital expenditure we should need an increased amount.

Viscount WOLMER

If I misunderstood the hon. Gentleman I apologise, but I understood him to say there was an increase of 120,000 a year.

Mr. ATTLEE

No.

Viscount WOLMER

Whatever may be the the exact difference in the rate of increase between this Government and the last, the hon. Gentleman will agree that there is no very material difference.

Mr. ATTLEE

A very material difference.—[OFFICIAL REPORT, 21st April, 1931; col. 885, Vol. 251.]

I say that the hon. Member is not entitled to claim a very material difference between the rate of progress under this Government and the rate under the last Government, except that the difference, insofar as it exists, is on the wrong side.

Mr. ATTLEE

I have no wish to contest those figures, and, if I appeared to do so, it must be a mistake.

Viscount WOLMER

I entirely accept the Postmaster-General's very generous disclaimer. The facts are that so far from there being an increase of 130,000 new subscribers the increase is only 100,000. Since this Government have been in office we have had an increase of 227,000 new subscribers compared with 245,000 during the last two years of the Conservative Government. The rate of telephone increase is now appreciably lower than it was when the Conservative party were in power, and yet we were hotly criticised by hon. Members opposite for inadequate telephone development. The Postmaster-General will no doubt plead that there has been a period of trade depression which has made it difficult for him to extend the telephone service. The Assistant Postmaster-General has drawn attention to the very severe effect of the slump in America, and has pointed out that whereas the number of new subscribers in America in 1929 was about 800,000, in 1030 it had fallen to 126,000 figures which are not very much better than our own. That, of course, is due, as everybody knows, to the tremendous financial collapse in America, which has gone further in that country owing to the practice of buying on the instalment system than it has in this country. But when you couple that fact with the fact that saturation point in America has much more nearly been reached than in this country, it is not surprising that the decline in telephone demand has been much greater in America than in England.

This is the point to which I wish to draw attention: How has America dealt with the situation? Although there has been this great falling off in telephone demands in America, in 1930 the American Bell Company spent £117,000,000 on telephone development. That is nearly 12 times as much as we spent; and for this year, 1931, they are budgeting to spend £90,000,000 on new telephone development. They say in their annual report that they are deliberately doing this for two reasons; in the first place to give employment to their fellow-countrymen at a time of unemployment; and, secondly, in order that they may be prepared in every part of their system to take advantage of the demands which they know will come directly times improve. I commend that example very respectfully to the Postmaster-General. If a private company in America can spend £200,000,000 in development at a time when development has, comparatively speaking, almost ceased, in order to provide employment for Americans and in order to be ready to take advantage of the boom when it comes, I think the Postmaster-General might do a little bit more in that direction on this side of the water. If he did so he would get the support of all parties in the House.

12 n.

Therefore, my criticism of this Bill is that the Postmaster-General's figures of development are deplorable, that his complacency at our rate of development is far worse, and that the facts of the last two years are even worse than he has made out. I advanced the view, and the Assistant Postmaster-General dealt with it, that we shall never get the, rate of telephone development in this country that the economic needs of the nation require unless there is a thoroughgoing reform of the Post Office first. I think I am entitled to claim that public opinion is coming round very fast to that view, and for two reasons. In the first place it is because the people have found that there is not the slightest improvement in telephone administration or development under the control of the present Government. In that connection the Assistant Postmaster-General gave figures to the House with a most self-satisfied air—an air of complete satisfaction with the efficiency of the department in this respect—figures of telephones installed within a fortnight of application. Let me tell the House what is the standard in America. About half of the telephones installed in 1929 were put in under the appointment plan, by which the sub- scriber names the day on which he wishes the telephone to be installed. During 1930 more than 82 per cent. of the telephones were put in under this plan and 96 per cent. of the appointments were met.

Mr. VIANT

How far in advance were the appointments made—a fortnight or a month?

Viscount WOLMER

In that case if you say you want a telephone to-morrow it goes in. It is just like ordering a leg of mutton. As the result of the improved methods and improved administration and training the telephone plant is increasingly free from trouble. In 1930 there was trouble on 3 subscriber's line on the average only once in every 22 months as compared with once in every 20 months in 1929; also 90 per cent. or the troubles were corrected on the day reported as compared with 87 per cent. in 1929.

Mr. EDMUNDS

From what is that a quotation?

Mr. BOWEN

Is that a statement made on behalf of the company or is it a statement in criticism of the company?

Viscount WOLMER

It is the report of the American Telephone and Telegraph Company for 1930.

Mr. BOWEN

Then that statement would be equivalent to a statement by the Postmaster-General here?

Viscount WOLMER

Yes. That is the standard that I wish the Postmaster-General would try to work up to, instead of showing such complacency and ascribing our backwardness to some unaccountable unreasonableness on the part of English people. I think I may also say without conceit that the public are viewing this proposal to reorganise the Post Office with increasing doubt because the department has made not a single effective reply to the figures which I have published from time to time in the Press and given in this House.

Mr. VIANT

What indications are there as to that?

Viscount WOLMER

That the public are changing their mind? I should have thought that the Debate on the Money Resolution would have convinced the hon. Member. There is not a single Member of the House who has spoken in favour of the department except the Postmaster- General and the Assistant Postmaster-General, and that, when the Socialists are in power, is a very significant state of affairs. I quite agree with the Postmaster-General that it is no use providing telephone plant and equipment beyond the demand that he has reason to anticipate. My contention is that the lack of demand in this country is not due to a natural dose of original sin on the part of John Bull, but is due to the high telephone charges, and those high charges are due to the high costs of the department now and in the past in its telephone construction. I was delighted to hear the Assistant Postmaster-General state that the inquiries and reforms which the late Postmaster-General inaugurated have led to a reduction of 20 per cent. in the costs of our construction. That is a very great improvement, but that figure ought to be carried a great deal further.

I have more than once drawn the attention of hon. Members opposite to the fact that the plant investment cost of our telephone system works out at £77 per instrument, whereas that of the American system works out at £47 per instrument. The Minister of Education when he was Postmaster-General tried to make out that that difference was due to the fact that a very high proportion of the English system was underground as compared with the American system, but such is not the case. It is a great mistake to think that the American system is mainly overhead. A large proportion of that system also is underground. The difference in plant investment cost between the two countries amounts to £50,000,000. That is to say, if our telephones had been constructed as cheaply as the American telephones they would have cost £50,000,000 less. Now I come to the question of underground plant. It is quite true that the percentage of British mileage underground two years ago was 83 per cent. I do not know what it is now but it cannot be much greater. The percentage of American mileage underground is 66 per cent., so that although we have a greater percentage underground, it is not so much greater as some hon. Members seem to think and it is nothing like sufficient to account for the difference in expenditure.

Mr. ATTLEE

May I ask the Noble Lord whether that figure includes all American undertakings?

Viscount WOLMER

This refers to the whole of the Bell system.

Mr. ATTLEE

But the Noble Lord is aware that there is a very large number of other companies and that there is a fringe of unremunerative business which, apparently, he is not taking into account.

Viscount WOLMER

No. I have made the whole basis of my comparison, a comparison with the American Bell system which is a far greater system than our system, and which has its unremunerative fringe.

Mr. ATTLEE

That represents 80 per cent., but the noble Lord in comparing the two countries must not leave out the other 20 per cent. of less efficient services.

Viscount WOLMER

I suggest that that consideration really does not enter into this comparison at all. I am comparing two systems, namely, the American Bell system and the British Post Office system, and my complaint is that our telephones have cost £50,000,000 more to construct than they would have cost if we had done the work as cheaply as the Americans have done it. The only advantage that we have got, in compensation for that extra cost, is the fact that we have a higher percentage underground than the Americans. Our plant investment cost on underground work in 1929 was £56,000,000 and if we had only the same proportion underground as the Americans it would have been £45,000,000. Thus, there is an increased cost of £11,000,000 owing to the greater proportion that we have underground. If we compare the cost of laying cables underground in America with the cost in Great Britain, we find that it is more than twice as much in this country and it is fair to say that, if this extra percentage, which is laid underground in this country, had only cost what American underground cables cost, our extra expenditure would only have been £6,000,000. Therefore, I claim that there is £44,000,000 unaccounted for in our cost of telephone development. That is a terrifically big figure and it is quite sufficient to account for our high telephone charges and that, I suggest to the hon. Gentleman, is the basic cause of our telephone inferiority.

What was the reply of the right hon. Gentleman who is now Minister of Education when I challenged him on that point? He repeated the figures which I have given, but he did not dispute them. He said, however, that I had overlooked the fact that the annual cost of a telephone in America was slightly greater than the annual cost of a telephone in Great Britain. He subsequently gave details which showed that taking into account management, operation, maintenance and depreciation, the annual cost of a telephone in America is slightly higher than the annual cost of a telephone in this country. But that is due to two causes. First, the American operators and workmen are much more highly paid than they are in this country; and, secondly, the American system is much more complex than the system in this country. I hope that the House will forgive me for dealing with these technical points, but this is a technical question, and it must always be borne in mind that the greater the telephone development, the greater the telephone density, the more costly is the system per instrument. You do not gain in this respect by mass production because the increasing complexity of the system adds to the cost on each instrument, and practically the whole of the difference between this country and America in regard to the annual cost charge arises on the items of management and operation and is due to the increased complexity of the American system. My only point is that it has nothing to do with the capital cost here. It does not account for that £44,000,000 and I say that that £44,000,000 has been lost and wasted, owing to mismanagement at St. Martin's-le-Grand, and owing to the fact that we are asking a Government Department to do business which ought to be earned out by an organisation which is organised for business purposes only.

The Assistant Postmaster-General says that one of the reasons why American telephones have been constructed more cheaply is because of the town-planning arrangements in America. He says that when they build a city in America, they plan it in such a way that the telephone lines can fee brought behind the blocks of buildings instead of in the streets, and that the architects and builders of houses arrange for the insertion of telephone wires. That is true, but what an awful reflection it is upon the British Post Office if a private company in America can bring about that state of affairs by suggestion, by propaganda, by negotiation, by being on good terms with the municipal authorities, by being in touch with architects and builders, if you like. Think what an opportunity the British Post Office has had, as a Government Department, with a monopoly during the last 17 years. I should like to ask the hon. Gentleman how many town planning Bills have there been since the Post Office had control of the telephones, and in regard to how many of them has the Post Office shown the slightest interest in town planning?

Mr. VIANT

May I be permitted to ask the Noble Lord what steps he took to bring this matter to the notice of local town planning authorities?

Viscount WOLMER

If the hon. Gentleman looks in the files of the Post Office he will see what efforts I made in the Department to bring about reforms.

Mr. VIANT

That was not my specific question. I asked what steps did the Noble Lord take while he was there, to carry out the proposals which he is now suggesting should be carried out by us?

Viscount WOLMER

The hon. Gentleman asks me a question to which I would have to reply in some detail. He knows perfectly well that the Assistant Postmaster-General cannot do very much. He knows, in the second place, that the Postmaster-General, if he brings about any change, has to face the House of Commons. In my view, none of these reforms could have taken place without the complete separation of the Post Office from Civil Service conditions and political control. The right hon. Gentleman the Member for South Croydon did dissociate the beam service and the cables from Civil Service conditions and political control, and arranged for them to be undertaken by a public business company. Hon. Members opposite criticised him very heavily for doing that, and, furthermore, they said that he had no mandate to do it. I have always said, and I repeat now, that the late Conservative Government would not have been justified in putting the Post Office under a statutory authority without the matter first being ventilated in public, and it is in order to bring about that change that I have proceeded to ventilate the matter in pubic.

Mr. ATTLEE

The right hon. Gentleman has rather left the specific point that he was asked. He has asked why we have done nothing in regard to town planning, but the question was: What did he do during his period in office?

Viscount WOLMER

If the right hon. Gentleman looks at the record in the Department, he will see a certain amount of correspondence on the subject; but I am not attacking the Postmaster-General for not having linked town planning with Post Office development. My criticism has never been of the right hon. Gentleman, except in regard to his complacency. My criticism is against the system which has brought about these results, and I am blaming all parties and all Postmasters-General, or rather the system, because there have been so many Postmasters-General that not one of them has been able to get that complete grip of the Department that a business man, spending the whole of his life in it, would eventually acquire. I say that when the Assistant Postmaster-General points to the liaison between the telephone companies and the municipalities in regard to town planning in America, he is criticising, not his own administration, but the system under which the Post Office, which has been in charge of this development, has entirely failed to bring about a similar liaison in this country.

Mr. VIANT

I am not getting a reply to my question. I asked the Noble Lord to give an instance where he sought to—

Lieut.-Colonel HENEAGE

He asked you first.

Mr. VIANT

I am asking a legitimate question—[Interruption]—and a number of hon. Members who are interrupting were not present when the original question was put. I am asking in what way the Noble Lord sought to bring these very very necessary points to the notice of local authorities with a view to their meeting the Department in connection with the installation of telephone equipment. I have served on local authorities and town planning committees—I know the difficulties—and I am convinced that until we have developed a telephone sense within the general public, this demand will not be made upon the architects.

Viscount WOLMER

If the hon. Member wants instances, he will find them in the case of the Newcastle telephone exchange and the Manchester telephone system; he will find quite a lot of correspondence with regard to both those places. But you cannot do a thing like this by spasmodic action. The question ought to have been dealt with in the first town planning Bill that was introduced, and that was before the war [Interruption]. It was not before the State owned the trunk lines, but the State has owned telephones since 1912, and there has been a good number of town planning Bills since then. I say that the Department and the Government as such, and all Governments, have not shown anything like the same foresight and prescience as this private company in America which the Assistant Postmaster-General was quoting. Therefore, I claim that that excuse of the Assistant Postmaster-General is no justification for the fact that we have spent £44,000,000 more on our telephones development than we have got telephones to show for it.

When you talk about America, the Postmaster-General says, "Oh, yes, but America is a country of great distances"—I have heard him use that argument more than once—"with a comparatively scattered population, which requires telephones more." I commend those words to some of the hon. Members who sit for Scottish and Welsh constituencies, and who are always trying to get the telephone in their scattered areas. If the scattered area is an argument for having a high telephone development in America, it ought to be an argument for having a high telephone development in Scotland and Wales as well.

Let me take the case of Sweden. The Assistant Postmaster-General and the Minister for Education, when he was Postmaster-General, both pointed out that in Sweden, if you want a rural telephone, unless there are 50 subscribers the local people are asked to put up the telephone themselves, and have their own exchange and their own operator until they have 50 subscribers, and then the system takes it over. I submit that that is far the most economical and practical way of doing it. If the Post Office had only allowed that to be done in the past seventeen years in this country, we should have had a far higher rate of telephone development than we have had.

Where people have put up their own telephones in this country on their own farms they have been able to do it very much more cheaply than the Post Office. I hope this House will hear a speech to-day from my hon. Friend the Member for Cambridge (Sir D. Newton), who is one of the few people in this country who have got an internal telephone system on their farms. He can give to the House the exact details of what it has cost him. But you can only have an internal telephone system in this country; the Post Office will not allow you to put up your own poles and wire, and connect with its system, and I maintain that if we had had the same facilities as they have had in Sweden, our rural telephones would have cost very much less, and we should have had a far higher increase of rural telephones than we actually have had.

I would point out to the House what a terrible waste of money has taken place with this very expensive system of rural telephones that the Department has insisted on putting up itself, which is too costly for the public to avail themselves of, and has landed the Department in a very heavy expense. It is a fact that no telephone exchange pays unless there are 50 subscribers. We have 3,361 rural telephone exchanges, and of those 2,538 have less than 50 subscribers. Every one of those exchanges is being run at a loss, and a wholly unnecessary loss, as I maintain, because if the local inhabitants had been allowed to put up their own telephones, they could have done it very much more cheaply than the Department. [Interruption.] Does the hon. Member think the people of this country are less intelligent and enterprising than the people of Sweden? And Sweden is not the only country in the world where this system of putting up their own telephones exists, because it has been tried in a great many countries which have a high telephone development.

Take also the question of automatic telephones. Until my right hon. Friend the Member for South Croydon became Postmaster-General, there were, practically speaking, no automatic country exchanges at all. One of the reforms which he was largely instrumental in carrying out was to draw the attention of the Department to the desirability of designing an automatic telephone exchange suitable to the country districts. To employ an operator for an exchange for 10 or 20 people is, of course, a gross waste of money, and there were automatic telephone exchanges in many countries of the world years before there were in this country. We could have saved an enormous amount of loss on our rural exchanges if there had been more automatic exchanges, and we could save more money if these automatic exchanges were housed in garages or private houses, where there is an electric lighting system to give the necessary power, which is small, rather than by erecting separate buildings, and sending an engineer out once a fortnight to work an engine or plant. In all this country development the Post Office system has cost the State hundreds of thousands of pounds, and though it is run at a loss, we cannot bring it within the financial means of the country people. You could not get a better example of the unsuitability of entrusting these commercial propositions to men who, whether they are politicians or civil servants, have not the particular business training or business aptitude which alone produces efficiency in a case like this.

Finally, may I draw the attention of the House to what has been done in a country—a comparatively poor and backward country—where the telephone system was taken over by a private company. I refer to Spain, which, of course, is a country whose telephone development was not anything up to standard. In 1924 its telephone system was handed over to an American company, and in five years the number of telephones has been doubled in Spain. In the corresponding period our telephones have increased only 50 per cent., so that in Spain the rate of development under this management has been double that of this country.

Mr. VIANT

What is the size of the system?

Viscount WOLMER

It was 100,000 and is now 200,000 telephones. The 1930 report of the National Telephone Company of Spain shows a profit of over £1,300,000, from a revenue of £3,000,000. It shows that not only had there been very rapid telephone development, but great profits to the company as well.

Mr. R. RICHARDSON

Who paid the profits?

Viscount WOLMER

The profits were earned by the company. Over 65 per cent. of the telephones of Spain are now-automatic—the highest percentage of automatic telephones in any country in the world, and, under the régime of the National Telephone Company of Spain, their outside trunk messages have increased four times.

It is for those reasons that I submit we shall never get the telephone development of this country up to requirements unless the Department is put on a business basis. Does the right hon. Gentleman think that it is a good system that there should be a new Postmaster-General on an average every two years? There have been 25 Postmasters-General in the last 50 years, and, under normal vicissitudes, it is extraordinarily difficult for a man temporarily in charge to have that grip and mastery of purely technical business which he ought to have. Does the right hon. Gentleman think it is a good system that we should pay our technicians only about one-third of what technicians are paid in private enterprise? Does he think it a good thing that our whole system of recruitment, promotion, and remuneration should be governed by Civil Service standards? Does he think that it should be impossible to bring an outside man into any important position in the Department?

It is that for which I am asking. I am not trying to make this a party question. I criticise hon. Members opposite for their complacency, and I am entitled to point out the difference between their promises in Opposition and their performances in office. I am not making any charge against individuals, or even against Governments, but I am making a charge against the system. I want to see the Post Office treated as hon. Members opposite want to treat the London traffic system. I want to see it put under a public utility authority completely divorced from the Civil Service, com- pletely divorced from politicians, dealt with by technicians, managed as a great business and free from those vicissitudes which affect the Postmaster-General at the present moment. I believe if we got that we should see a very great improvement in our telephone service, and a corresponding telephone development. The same is true of the telegraphs and posts. I am afraid that I have been led into speaking about twice as long as I meant to do, and I apologise. I have not any time to deal with the telegraphs and the posts, but I believe that there is very great room for improvement in the administration of this great service, and it can only be done by treating the Post Office as what it is—a business proposition, and not an ordinary Government Department in any sense of the word.

Sir DONALD MACLEAN

The Noble Lord has furnished the House with a wealth of detail and, indeed, of technical knowledge for which we are grateful, and has drawn a horrid picture of the passage of Postmasters-General across the Parliamentary stage. "Transient and embarrassed phantoms" have flitted, I believe, to the number of 25 in 50 years. He applied that to his own suggestion, to which I am not at all unalterably opposed, that if we cannot get a thoroughly business administration of the telephone system in this country, I, myself, am quite open to consider whether we cannot try some other way with it. I do not know whether the Noble Lord is aware that that is one of the proposals in the Yellow Book. I welcome, in the knowledge which the Noble Lord displayed, what, I thought, were some tendencies towards the Liberal position, because he opened his speech with a most remarkable endorsement of the policy for which we stand, namely, that there should be, even in these times, a much larger devotion of public funds to the development of public services. Even towards the close of his speech, we had a further and hopeful sign in his emphatic endorsement of a progressive policy of town planning. I do not take the criticism that he did not do anything in this direction, at any rate not anything that was over-noticeable, while he was in office, but I welcome him with open arms as, at any rate, a promising recruit. So much am I encouraged, that I will present the Noble Lord with a copy of the Yellow Book, and I shall be glad to give him my own personal copy.

I do not know whether the House will take any other Order on the paper to-day, but I am sure that it cannot do more useful work than make a thorough examination of this most important question. I was not at all ungrateful for the speech of my hon. Friend the. Assistant Postmaster-General, but I think that there were traces of satisfaction which I do not entirely share. There was a noticeable play with percentages, which I am accustomed to associate mostly with Tariff Reform speeches. When he brings to our notice the position with regard to other countries, what we want is not so much the play of percentages as the real facts about this country and other countries. He has dealt with America so thoroughly that I do not need to say any more about it than that the policy which has been adopted in America and the whole system is almost up to 80 per cent. of compliance with public demand, and they had during the last two years of unemployment dealt with further telephone development as the Liberal party has been urging the Government in this country.

I was astonished to hear the figures quoted by the Noble Lord from official sources that, while the telephone system is so highly developed in America, they have spent and are now spending at the rate of at least £100,000,000 a year in further development. If you compare their position with ours, it leaves us in a position about which, instead of having any degree of satisfaction, we ought as a nation to be ashamed. Take the case of Canada. They have 132 telephones per thousand of the population. In New Zealand they have 100. Both those countries are in active competition with our own agricultural producers, and they know the importance and the economic value of a proper telephone system. Denmark, another of our rivals, has 93; Sweden 77; Australia 72; and Norway 64. Switzerland, which has considerable physical difficulties in extending the telephone system, has 56; Germany with 42 is not much better than ourselves, although there is a considerable margin. We have 38. The percentages which gave my hon. Friend so much satisfaction leave me, in face of these facts, quite alarmed that we are still in so backward a position in this country.

I want to turn from that to say a word or two about finance. While the United States of America are spending £100,000,000 at a time when they have a deficit on their Budget this year of £150,000,000, we are proposing to spend £30,000,000 in three years. There was a hope of better things in what the Assistant Postmaster-General said when he indicated that, if there was sufficient demand, the Government would come to the House again—and I assure them they can come with confidence—and ask for a further and, I hope, a much larger sum. I do not know how far they have spent this money this year, but really it is rather pitiful to compare our telephone system and our proposed expenditure and to pride ourselves on spending this year perhaps £12,000,000 on capital account. If the Postmaster-General will take heart, he will have the House of Commons solidly behind him in the endeavour to bring us much more up-to-date than is at present unfortunately the case.

The Assistant Postmaster-General quite rightly pointed out that capital costs were greater in this country. I dare say that they are, but I do not know that it is necessary always to have the most expensive plant when you are dealing with a rural area; it may not be necessary. So far as the underground cost is concerned, surely that is a good investment. If telephone wires are put underground, they are not liable to be swept down by storms, and a great undertaking like the Post Office can safely look years ahead and wait for the return which must come; and, if they put down their undertaking in a more costly manner, it will lead to a great reduction in cost of repairs and equipment.

There is another point which should be looked into. My hon. Friend made the point that we should stimulate people in this country to regard the telephone as a tool and instrument of their business. They do so. The real trouble is that they have been so disappointed so often under so many administrations that they have lost heart about it. I am glad to hear that the Post Office is speeding up so much. It was a very hopeful series of statistics which my hon. Friend gave to us, showing that so many telephones have been installed within a week or ten days of the demand. The Noble Lord suggested that the applications might have been dealt with even more quickly, likening the process of ordering a telephone to ordering a leg of mutton—not a very lofty ideal, I think. At any rate, there has undoubtedly been improvement in this respect, and I welcome it. The point I would like to impress, from my knowledge as a business man, as well as the representative of a constituency which in the main is agricultural, is that I know there is a real keenness and eagerness on the part of tens of thousands of people to instal the telephone system, but on two conditions. The first condition is that they can get it installed within a reasonable time after they have asked for it, and the second, and this applies particularly to rural areas, that the price is not prohibitive. With regard to the first point, I quite agree there has been a great improvement; and as regards the second point, I congratulate my right hon. Friend the Postmaster-General on the improvement which has taken place during the past few weeks. It is certainly noticeable, and I hope it is going to be progressive.

I have a case in mind in a rural area about which I have written to my right hon. Friend. There are two towns there at a comparatively short distance from one another, but instead of there being any direct line of telephone communication between them the messages have to go on a triangular circuit. A direct line would not only facilitate business between those two centres and all the rest of the county of Cornwall but en route would pick up at least three or four other centres which are waiting to go on. In default of a line being able to serve some other purpose it is, I know, asking a great deal of the Postmaster-General to put down a new line through scattered areas in order solely to serve them, but I am quite sure that if a business corporation had been dealing with this matter such a development would have taken place long ago in the ordinary course of business. It is the same all over the country.

My right hon. Friend the Member for Ross and Cromarty (Mr. Macpherson) made a speech in Committee covering the whole ground with regard to rural telephones in our relatively inaccessible districts. In what we call inaccessible districts there are mines of potential industry and of commerce waiting the chance to be linked up with centres which can deal with their produce.

When business is bad, an ordinary business concern, which has reserves, or has command of finance on reasonable terms, instead of mourning over the loss of customers and saying how bad trade is, goes out to seek new trade. The Post Office have established a staff of about 500 or 600 canvassers. A large part of the work of these canvassers is not getting new business but seeing whether orders have been carried out. I would suggest to my right hon. Friend that he should develop that side of it, advertise much more widely the facilities which already exist. The demand is waiting, it does not need to be stimulated, it is waiting to be taken advantage of, and I assure both my right hon. Friend and my hon. Friend who are responsible to the House for this most important part of the Post Office service that in meeting that demand they will not only render a great public advantage but, what is most important in these days, they will increase employment and develop hitherto untapped sources of fruitful business.

Mr. F. RILEY

I have listened with very great pleasure to the speeches made on this question, especially to the speech made by the Noble Lord the Member for Aldershot (Viscount Wolmer). As an old Post Office man I was particularly interested to hear the Noble Lord deal with some of the technical questions with which he came into contact as Assistant Postmaster-General. It is very clear that he gave a great deal of attention to his work when he held that office, and worked exceedingly hard, and that he has retained his old interest in the service. I would like to compliment him on his speech, if only for the wealth of detail he was able to give the House, but I do not agree with him naturally on some of the points he put forward. I do not agree with his policy—he has always been perfectly frank about it—of transferring the Post Office to a public utility company. We remember the experience of the public when the telephone service was in the hands of the National Telephone Company. For years the experience of the public under that company was as bad as it possibly could be. Scarcely a day passed on which we did not see in the newspapers complaints against the telephone service, and public opinion reached such a state of indignation that the Government of that day had to arrange to take over the company.

Then began the troubles of the Post Office in regard to the telephone system. I cannot imagine that one could find a supervising officer of that day who was satisfied with the state of the plant. I will not say anything about administration—when it was taken over by the Post Office. It was taken over at an exceedingly high figure—exceedingly high—and that outlay has been a burden upon the Post Office ever since. I do not agree with what the Noble Lord said about the high charges of the Post Office. I think they are moderate. From my personal experience, which I admit is not a wide one, I am of opinion that the charges are not high, but I think that some of them are influenced by the burden of capital expenditure on the purchase of the system, an outlay which has not yet been redeemed.

The Noble Lord also referred to the question of the automatic telephones, and I wish the Assistant Postmaster-General had referred to that question. It is, I suppose, a natural industrial development of the system. I have always looked upon it as such, and it would be extremely difficult even adversely to criticise it as a part of the administration and development of the telephone system. There is another side to the question, about which I would like the Assistant Postmaster-General to let us know something. I want to know whether the Postmaster-General has decided to go on with the transfer to the automatic system which is a new phase of rationalisation in the Post Office. Some of our opponents often assume that in Government service and in the Post Office there is no question of rationalisation, and they assert that the Post Office is out-of-date and all the rest of it. In my experience rationalisation was practised in the Post Office many years ago, and Frederick Taylorism was practised long before Taylor came to the notice of Englishmen or Americans.

The transfer to automatic telephones is a case of rationalisation in the course of ordinary industrial development, but it means that a certain number of people may be thrown out of employment, and there are hundreds of girls in the Post Office who are quaking in their shoes as to whether their particular exchange is going to be included in the change-over. I know that in a number of cases the Post Office—this must be attributed to the late Government as well as to the present Government—has been able by a re-arrangement to absorb in some other direction a number of women who have been displaced by the opening of automatic exchanges. I am told that these possibilities are being realised, and that there is very little chance in the future, where there is a change-over, of women being out of employment, because they will be able to get another job in the Post Office in some other direction. That is a matter of very great concern to those who would otherwise be thrown out of employment, because it is very difficult, once these women are out of a job, to find another situation. Therefore, it is a matter of extreme importance to them that the Post Office should have a definite policy upon this question and whether they are going to carry out that policy. I hope that the Postmaster-General, in his reply, will deal with that point, because I am sure every Member of this House is very anxious upon this question of unemployment.

1.0 p.m.

I would like to deal with another aspect of this case which does not seem to get sufficient attention on the Post Office vote. I refer to the correspondence branch which I do not think has been mentioned in this Debate. I suppose the reason for that is that the correspondence branch as it finds most of the revenue is not considered to be worthy of attention. I feel that the express delivery system is worthy of a great deal more attention than it has received in the past, and, as we are about to undertake an advertising campaign I suggest to the Postmaster-General that more attention should be paid to it. It is a very wide service and offers a great many advantages. It can be used for almost the minutest object that comes within the rules, as well as the largest object, and I believe the Post Office would accept anything for delivery including a person, a lap dog or even an elephant if it comes within the conditions laid down. [Interruption.] I read the regulations only yesterday, and have read them many times before, and I feel pretty sure that those objects would be accepted. At the moment, my view is that the charges for this service are quite 100 per cent. more than they were before the War, and I think they are excessive. Sixpence per mile might be justifiable in certain conditions, but it could not possibly be justified in many of the country districts. In some of our industrial towns it is a very heavy charge indeed to put on an object for delivery plus the postal payment.

There is another matter which I think is very serious. The express service still obtains in regard to overnight letters upon which payment has been made of 6d. per mile, and those letters are retained and delivered with the ordinary correspondence delivery in the morning. I have suffered from that system myself, and I suggest to the Assistant Postmaster-General that it is not fair to the members of the public, because it is really taking from the public money for a service which the Post Office does not render, and there is no justification whatever for that. I know all the arguments which have been used by the Department in regard to the taking of that money, but the simple fact remains that the majority of those letters are retained overnight, and are delivered by the postman with the ordinary correspondence in the morning.

I will not go into the mysteries of the box service and box register service, because that is not so popular, and in the main little criticism can be made against it. I would like, however, to raise another point which may be of some interest to the House. The Noble Lord the member for Aldershot (Viscount Wolmer) referred to what really amounted to rationalisation in the Post Office. If we take the section which is the greater part of the correspondence branch, namely, the sorting offices, if anyone who had been out of the Post Office for eight or 10 years now went into a comparatively large office in an industrial town, he would be perfectly lost; there has been such a great change—some say an advance, and I think I agree—in the implements with which the men work, and he would have to bring to bear in a large degree his own facility as a workman in order to adapt himself to the new circumstances. On this question of change to a new implement system, there was practically complete agreement between the staff and the administration, and I think on the whole with happy results. That change over to a new system of implements or tools resulted in a material increase of output—

Viscount WOLMER

Hear, hear!

Mr. RILEY

I am glad that the Noble Lord agrees. There is no doubt that the increase of output was quite material. I do not know its exact extent, but I should say it was from five to eight per cent. at least, and in some offices, I know, the increase was much greater. The point that I want to note is that no increase of wages whatever resulted from that increase of output, and the members of the staff, and the members of the Union representing the staff, had no voice whatever in determining whether the improved method of working, which resulted in an increase of output, should result also in an increase of pay. At the present time, men, and women in some cases, are turning out from 5 to 10 per cent. more work than was possible with the old implements; the new implements were all so powerfully devised by members of the Union; but the men have no voice whatever in regard to the question of increase of pay, and I want to appeal to the Postmaster-General and the Assistant Postmaster-General to consider that matter if it is at all possible. This increase of output is not limited to sorting offices; it applies also to the increased value of the work, which is somewhat more fugitive, but which is noticeable in certain sections of the Post Office, particularly in such work as counter work. That work is of a highly technical nature, and I do not think it is too much, when we are dealing with this Bill, to ask that the Postmaster-General and the Assistant Postmaster-General should take note of these facts.

Sir DOUGLAS NEWTON

I should like to congratulate the Postmaster-General on choosing a Friday for the introduction of a Bill of this nature. In this House we are becoming accustomed more and more on Fridays to looking at matters not so much from the political standpoint as from the point of view of the merits of the case, and I do not think there is any Vote or service which it is more important to look at from a non-political point of view than the Post Office Vote and the Post Office service as a whole. This Bill authorises an expenditure of £32,000,000, drawn from the public at a time when they are extremely short of money, and, therefore, this proposal calls for the closest consideration and attention of the House. A Bill which demands so much money emphasises, first of all, the great importance of adopting efficient and businesslike methods in the Department, and also the paramount need for careful administration of the money. Personally, I take the view that the more money the Post Office spends effectively and administers efficiently, so as to bring in a proper and adequate return, the better it is for the workers employed in the Post Office, the better it is for telephone and telegraph users, the better it is for the public generally, and the better it is for the taxpayer. Therefore, I view with no concern this demand for £32,000,000 if it is going to be efficiently administered by the Department. Unfortunately, we have had no opporunity so far of commenting on the work of the Post Office during the past 12 months, and I hope that the Vote may be taken before very long, so that we may again have a chance of reviewing the position.

The Assistant Postmaster - General appeared well satisfied with the progress that is being made in telephone development in this country, but, comparing answers given to questions in the House quite recently with the figures which the hon. Gentleman gave us to-day, I find that one recent answer showed that in England there were 44 telephones to every 1,000 people, that in Iceland there were 51 per 1,000, and in Hawaii 75 per 1,000; while a statement made to-day-showed that there were 132 per 1,000 in Canada. I do not think that we can or ought to rest satisfied with our present figure of 44 telephones per 1,000 population, more particularly when we realise that we have as great a density of popu- lation per square mile in this country as is to be found almost anywhere in the whole world.

I am particularly interested in the development of the telephone system in rural areas, and I feel that there has been a kind of strangle-hold by reason of the rules and regulations issued by the Department which have to be obeyed and to which the local engineers have to conform, whether they think them desirable or not in the particular cases in question. Par too much is done by rule and regulation, and far too little latitude is given to the local engineers of the Department to carry out their own ideas and develop the system according to the needs of each particular case. I believe it has always been a rule that you must have a creosoted post if you are putting up a telephone in a rural area. That is not the case in other countries, and it is not necessary. In many cases posts are available which would be quite suitable for the purpose, giving a life of no less than 20 years, which is quite sufficient. Again, I believe the height of the post has always been governed by some rule or regulation, and not by the needs of the situation. If you are crossing a piece of marsh-land, a height of 10 feet is perfectly reasonable and safe, and there is no need for a 20-foot post, with climbing steps, supporting struts, and other expensive fittings, in an outlying district. It is partly these rules and regulations, and the failure to obtain the assistance of local labour and local knowledge, that makes the cost of these rural telephones so high.

Again, the Postmaster-General—I am not blaming the present Postmaster-General in this case, because I think it has been the policy of all Postmasters-General—frowns on anyone who desires to co-operate with him in regard to telephone expansion. He refuses to give connection to a telephone which has been put up privately and to allow it to be connected to any part of his service. That is not the case in other countries. Provided the line has been built to standard specification in the proper way, with standard materials, surely there is no need for the Postmaster-General to refuse to connect it, on proper terms, with the general system. He need accept no responsibility for the service if it is so connected. If the Postmaster-General could see his way to recognise these privately built lines, it would be possible for farmers in many cases to erect lines very cheaply and it would open up considerably telephone development in rural areas without imposing heavy liabilities upon the State. Those who live in rural areas look upon the telephone not as a luxury but as a necessity. There is the nurse, the doctor, the fire engine, which is generally seven or eight miles away. In this matter I speak feelingly, because my own house caught fire on a perfectly still evening and would have been completely burnt away had it not been for the telephone, which enabled me to get an engine up in time to save my old home. These advantages of the telephone are constantly arising and it is of the greatest importance that provision should be made to give this service.

Great efforts are being made to spread electricity—heat, light and power—in the rural areas. To do that, the Post Office lines have to be crossed. I am sorry to say that the Department is in many cases proving very obstructive. It is trying to force overhead electric lines underground, or else to insist upon very expensive protective arrangements being made before it will allow the passing of the overhead lines. The proper way to deal with this situation is to take the cheapest course. If it is easier to bury the telephone lines, they can be buried, or if it is cheaper to insulate them, which will generally meet the needs of the situation, let him adopt that method. I hope the Post Office will not continue to he unreasonable where these overhead lines are concerned. I believe it is left sometimes to the discretion of the local engineers. Some of them are extremely helpful, while others put every kind of difficulty in the way of the spread of the overhead line to bring electricity into the country areas.

A good deal has been said about rural automatic exchanges, and the Assistant Postmaster-General has said that, where three or four potential subscribers are gathered together, he will always give them telephones. I am very glad to think that the automatic exchange system is being developed. I have always regarded the party line as an unsatisfactory system of communication. It gives rise to gossip and brings about more quarrels than almost anything else that you put into country districts. Therefore I welcome the rural automatic exchange and the continuity of service that it renders day and night. I understand this system has been evolved by the brains and enterprise of engineers in the Department. I think we should all join in congratulating the engineers of the Post Office that they have been able to develop such a splendid service as can be, and is being, given by the rural automatic exchange. I should like however to ask whether the general scheme of development of these automatic exchanges has been carefully thought out by the country as a whole. I notice that, in the area in which I live, six telephone lines were erected recently to fairly distant points, and now I understand they are all going to be scrapped. Surely there should be some co-ordinating system by which lines need not be scrapped shortly after erection because another system is to be brought into operation.

My Noble Friend the Member for Aldershot (Viscount Wolmer) pointed out that use ought to be made of existing facilities for automatic exchanges. There is no need to build an elaborate new house or to instal power plant for each new exchange. At present the power plant that is put into each is not even operated by the local man. A man comes eight, ten or twelve miles once or twice a week to start the engine up and charge the batteries, all of which could be done locally with great economy. I make these observations because complaints are frequently made that it does not pay to give a telephone service to rural areas. These are the sort of reasons why it is so expensive to give that service. I feel, too, that in the development of automatic exchanges adequate provision should be made for compensation for those who are thereby displaced. I hope steps will be taken to see that sub-Postmasters and those who assist them will be properly compensated if their business is taken away or reduced as the result of the setting up of an automatic exchange.

Reference has been made to the question of development in the Post Office. I am not satisfied that those who work in the Post Office and, by their enterprise and knowledge, give ideas to the Department which result in cheaper methods of carrying out particular processes receive adequate reward. I have been told by several employés of the Post Office that it is almost useless to make a suggestion to headquarters. If a suggestion is of any value, before it actually gets through all the dossiers that it has to pass through, the man who originally made the suggestion is probably forgotten altogether and, if any reward is given for the suggestion, it is not likely to reach him. It ought to be possible to devise a system by which, if any employé thinks out some method of improving the work of the Department, he himself should get a reward. Surely it would be possible to devise a simple formula by which the man who originally put up the suggestion should get not less than say 50 per cent. of whatever reward is given. It is very easy to improve, to add to, or perhaps to steal another man's idea without any acknowledgment to the original author. If employés felt that if they could put up helpful suggestions leading to an improvement in the service, or to a saving, they would get adequate rewards, it would stimulate enterprise. I should like to give a simple illustration. Telephone lines frequently get blown down and in the old days they used to be connected up by soldering the lines. Someone discovered a simple kind of connector which twists the wires together and makes an absolutely good joint, but the man who invented it never received adequate reward for the very great advantages gained and saving effected as the result of the use of that simple little connection.

I will pass from this question to the difficulties which members of the public sometimes find in operating their switchboards. I am blessed with a switchboard which has three shutters, which, I notice in the official description of them, are called "eyeball indicators," and three rows of handles, 12 in a row, and some of them red no doubt as a compliment to the present Postmaster-General. I find that there are innumerable combinations and connections to be made with those shutters and rows of handles. All that I have to fall back upon is a document—T. 592—which is very lengthy and which, when the ordinary person has read it, he finds he is quite unable to understand. I suggest, with all respect, that the Postmaster-General should see whether a simple working diagram cannot be provided which would enable people to understand the working of house switchboards. It is all right if the ordinary operator is able to do the job, but if for any reason someone else has to take on the duty, it is impossible for him to work it satisfactorily.

There is also the question of deposits in connection with telephones. It is almost a scandal that the public should be asked to pay such large sums of money as deposits for their telephones. I hesitate to quote a personal case, but I happen to have two telephones, with a deposit of £12 upon one and £20 upon the other. In the case of the £20 deposit, my bill for last year was only £32 19s. 10d., and my highest quarter did not amount to £10. I cannot see why I am asked to pay £20 deposit when my total bill was only £32 for the year and that in no quarter was it more than £10. The deposit seems to disappear; there is nothing on your account to show that you have a deposit. When the account comes in not a word is said about your deposit. Not only ought the deposit to be shown on the account which is rendered, but I also think that you ought to receive interest by way of a certain number of free calls, or in some other way for the money which you lend to the Post Office to enable it to carry on its business. I have said sufficient to indicate that there are many points—small points they may seem; and I apologise to the House for bringing up such small points—requiring consideration. It is only when however they are ventilated in public like this, that they receive attention. I have shown that there are many things which should be investigated by the Department. I respectfully suggest that the Postmaster - General should consider whether it would not be well to set up some kind of committee upon which the public could be represented apart from the officers of the Department. In saying that, I do not suggest that the public on the whole are dissatisfied. I think that we get a wonderful service from the Post Office, a wonderful service in every department and in every way. But, in saying that, I realise that there are many little things perhaps which need criticism and investigation. The Postmaster-General should consider whether he could not establish some kind of permanent committee partly composed of business men and drawn from various sources, including Chambers of Commerce and other bodies.

Mr. ATTLEE

There is an advisory council.

Sir D. NEWTON

I know that there are certain committees. I mean a committee to deal with the sort of points I have been raising to-day which could best be dealt with by officers of the Department, assisted by a committee to look at the matter impartially and from the point of view of efficient administration.

Mr. HOLFORD KNIGHT

On a point of Order. May I suggest that when exchanges are occurring between Front Bench Members, we might have the advantage of hearing what they are?

Sir D. NEWTON

I thank the House for the very kind way it has listened to my criticisms.

Mr. BOWEN

Discussions on the Post Office telephones are always very interesting, because of the criticisms which those discussions bring, but, quite apart from what has been said this morning, one can hardly believe that there is in the country such widespread criticism of the Post Office telephones, because, if there were, that feeling would be reflected upon these benches at the present moment. No one, however, should object to well-founded criticisms. They are helpful in showing those in authority that their actions are being very carefully observed; and, if there are any possibilities of improvement, the administration can hardly object to suggestions which are put forward. On that point, therefore, I am entirely in agreement with the speakers this morning.

I find myself in profound disagreement with many suggestions which have been made and certainly with some of the criticisms of the Noble Lord to which I desire to refer, if I may have his kind attention, in the course of what I have to say. The speech of the right hon. Gentleman the Member for North Cornwall (Sir D. Maclean) was also very illuminating, because he found solace in the fact that the noble lord seemed to have assimilated some of the doctrines of the Yellow Book. I wondered, when the right hon. Gentleman the Member for North Cornwall was speaking, whether, in his demand for an expansion of Post Office telephones and for the expenditure of large sums of money, he had in mind the policy which has been laid down by his party at their conference now sitting at Buxton. I read this morning in the "Daily Herald" that a resolution was carried at that conference which aimed at the reduction of the pay of Government servants to not more than 50 per cent. above pre-War level. If that was done, as stated by the President of the National Reform Union, it would mean a saving of £5,000,000 a year on the Navy, and a saving on the Post Office of £10,000,000. I venture to ask Members on the opposite benches whether, in looking for the saving of the additional £10,000,000, they have in mind the policy of the Yellow Book, because I, personally, could not advise that it was going to do the telephone service or the public any good to be searching for reductions of pay among the staff.

The Assistant Postmaster-General rather invited comment when he pointed to savings to the extent, I think he said, of 20 per cent., part of which was due to reductions of pay. In that connection, the House must observe that reductions of pay, as far as the staff are concerned, have been going on for many years. So much so that they have become the bane of the people concerned, and efforts were made early this year to bring about a stoppage of the reductions. Therefore, when a claim is made for an expansion of the telephones, and when on the Government benches we hear statements about savings through reductions of pay, and from the Liberal benches we hear suggestions that there should be expansion of the telephone system and that more money should be spent upon it, while on the other hand it is suggested that there should be reductions of pay to the extent of £10,000,000, we are justified in saying that they are not aiming at a good service. They are aiming at, and they will secure, a disgruntled condition among the staff, which will do the service more harm than good. I would invite hon. Members opposite to take that fact into account, and, if they can give me an assurance that the policy of their party at the conference is not necessarily a Parliamentary policy, then there may be something for me to consider.

When we are talking about expenditure upon and expansion of the telephone system we must have direction from the House of such a character as will lead us to understand what precisely the House desires to get. The right hon. Member for North Cornwall quoted figures showing the density of usage of telephones in different countries. I cannot see what sense there is in comparing this country with those other countries. I cannot see how hon. Members are going to find any guidance as to the needs, demands and desires of the people in our own country from the figures which they quote in support of their case from other countries. Australia, New Zealand, Denmark, Sweden, Norway and Switzerland have been quoted. What possible comparison can there be between this country and those countries either physically, geographically, industrially or socially? The question must be answered on the basis of the needs of this country. When you turn to an industrial country like Germany you are on sounder ground, and Germany shows a figure of 42 per cent. as against this country's 38 per cent. of telephone usage. There is very little difference therefore between this country and Germany from the point of view of the usage of the telephone.

It is easy to exaggerate the needs or the demands of this country. When hon. Members sail away to America in almost every other sentence for illustrations, I am inclined to think that by and by they will get drowned in the Atlantic. There are wide disparities between the conditions in this country and the conditions prevailing in America. That must be clearly evident. Take, for instance, the simple illustration of the usage of different kinds of telephone poles in this country as against the poles used in other countries. I do not subscribe to the suggestion that you can have a simple, cheap rural telephone service which is going to be of permanent advantage to the rural people. You cannot use any kind of telegraph pole in this country, because of the climatic conditions. It is quite certain that if we did, as has been suggested by the last speaker, put up rural telephone poles anyhow and of any height without regard to the safety which is necessary through the development and extension of electrical power, we should have serious charges from the public that the Post Office does not properly protect their safety. What the Post Office have been trying to do, from my personal knowledge, is to meet the demands of the public as expressed in this House year after year, for more protection from many points of view.

I suggest therefore that one can go too far in demanding a cheap telephone service for the rural areas. In the end, I am convinced that such cheapness would be false economy, because of the replacements that would inevitably have to take place. When hon. Members talk about the prairies of America, where they stick down poles anywhere, where the farmers do their own telephoning and put up their own service, one can understand that kind of thing, but when in this country we are dealing with rural areas which you can cross in a few hours, the conditions are quite different. The people in this country demand that when you are doing any work, particularly if it is under State control, it shall be of the best, and that there shall be no complaints against the service afterwards.

Sir D. NEWTON

The high cost of construction inevitably leads to very excessive charges to the user.

Mr. BOWEN

I agree, but you have to make up your mind to what extent you will allow yourself to be allied to a demand which it may be uneconomical to meet. To what extent does the rural population of this country demand telephones and to what extent is it prepared to pay the bill? To what extent will hon. Members agree that the telephone charges are too high, that telephone expenditure is too high, that development is too slow, and that there must be some restriction in some form or another? The Noble Lord wants it all ways. He wants huge sums to be spent in this country on telephone development. He has compared our meagre £32,000,000 of expenditure in three years with the development policy of the Bell Company in America, who are spending some £100,000,000 or more. Then he talks about the high charges in this country and the wastage in the Post Office. I respectfully suggest that it is impossible to have gymnastic exercises in rhetoric of that description. You have to get down to bedrock facts and to bedrock needs, and when one talks about those facts one has to relate them to what would be considered in this House a wise expenditure of public money. In these circumstances, I suggest that in regard to the criticisms of the Post Office—I know the Post Office very well, having been associated with it all my life—it is unwise for hon. Members publicly to declaim against it because sometimes it may suit party politics, and sometimes because the Post Office is a public institution.

The British Post Office has no equal in the world, and I challenge anyone on that point. Our postal service is unequalled in any country. That too must be admitted. Our telegraph service is as good as any that can be found in any country.

Mr. O'CONNOR

Absolutely wrong.

Mr. BOWEN

I repeat that our telegraph service is as good as can be found in any other country.

Mr. O'CONNOR

Nothing of the kind. You cannot get delivery after 7 o'clock at night.

Mr. BOWEN

The hon. and learned Member clearly does not understand the Post Office or its telegraph service; otherwise, he would not make such remarks. The point that I wish to emphasise is that there is an exaggerated complaint against the Post Office telephone system because it is a State system. If it were controlled by private enterprise we should not hear a word about it in this House, while outside the House the people would swallow it without any complaint. If they wrote letters to the company making complaint they might or might not be taken notice of. What is the good of our trying to make criticism of the kind that we hear against the telephone system?

I am sorry that the Noble Lord is not present. I had hoped that he would be in his place to hear my reply to his criticisms of the Post Office. I hope he will do me the honour of reading what I have to say. When he said that practically nothing had been passed on to the consumer he did the Post Office an injustice. He only quoted part of the answer given by the Postmaster-General to the question of the hon. Member for Walthamstow East (Mr. Wallace), who asked what changes had taken place in the Poet Office telephone service which had been passed on to the public as concessions as the result of changes in money value. It is agreed that the amount of £250,000 is a small sum, but, when we look at the details of the reply, we find that on the exchange lines the free mileage radius has been increased from 1½ to 2 miles; in the case of rural exchanges with from eight to 14 subscribers the rental has been reduced to normal tariffs, the guarantees for call offices and junctions have been reduced; in the case of trunk calls there are reduced charges for distances over 200 miles and between 2 p.m. and 7 p.m. for distances over 150 miles, and in the case of Canada and the United States the charge has been reduced from £5 to £3 per minute and subsequently to £2 per minute. The Noble Lord might have given the House that information in order to round off the answer which was given by the Postmaster-General whom he was criticising.

To any suggestion that we should spend more money in order to give employment, I find a good deal of support in my own mind but I am very much alarmed when the noble Lord makes this suggestion at this late hour, because a few years ago I took part in pressing upon his administration the necessity for development, and nothing was done. To-day I understand we are to get support from all parties. I welcome the support of all parties, and I would encourage the Postmaster-General to take advantage of this opportunity. I would say to him that £32,000,000 is a very small sum and that it is very unwise to say that he is prepared to come to the House on a future occasion if he wants more money. Now, apparently, is the appointed time, because all parties are agreed, and the Postmaster-General might just as well take power now to spend money rather than risk a complete change of policy which might occur in two years time. I suggest that in these matters the House has not shown that consistency which would encourage him to believe that they would readily grant more money in two or three years time. On the contrary, my inclination is to suggest that the House will probably find some reasons for criticism that so much money has been spent and the national Exchequer so much depleted.

The Noble Lord wants a thoroughgoing reform of Post Office administration, and he thinks that public opinion is coming round to that point of view. I think he is living in a false paradise. I have seen no public expression of that opinion. May I put this question to him: is he now reflecting the views of his party or speaking for himself? If he is reflecting the views of his party it is somewhat surprising that the late Postmaster-General is never present in these Post Office Debates, I can understand his absence during his illness, and I would not say a word of criticism in that respect, but, if there is a party policy point of view to be expressed, he should be here to express it. The Noble Lord, presumably, was speaking for himself and, in the circumstances I suggest that it would be unwise for the House to put too much credence upon the Noble Lord's statements in regard to Post Office administration. I am certain that he was on very unsafe ground in suggesting that there have been millions of pounds lost and wasted in the Post Office owing to mismanagement at St. Martin's-le-Grand. That is a serious statement for an ex-Minister and one who has been in the responsible position of Assistant Postmaster-General to make. It does not need a change of Postmaster-General or the retention of a Postmaster-General to discover whether there is a wastage at St. Martin's-le-Grand.

My suggestion is that if there is a case against the Post Office administration, if there is a wastage of £44,000,000, the fact-should be tabled in the House, and we should know where the wastage has taken place. I would also suggest that the Postmaster-General has not been there sufficiently long to understand all the details of the administration, and that the Noble Lord himself, in his short period of office, could not have assimilated all that there was to learn. He must have a somewhat astigmatic view of expenditure to arrive at such a conclusion. Serious statements of that kind are made very lightly and without regard to their implications; and I am trying to meet a charge which I am perfectly certain is not justified by the facts and is not fair in its implications.

The Noble Lord can find no justification for his suggestion that the Post Office telephone system is so badly managed that it should be transferred to some other institution. The old national telephone service was discredited, absolutely and positively, in the public mind. It left its machinery in a hopeless state, its staff underpaid, depressed, and disgruntled. When the Post Office came in it took years to bring the telephone service to something like proper conditions; and then the War interrupted the work. If we were in America we should be declaring from the housetops that we were attempting in the face of superhuman difficulties to put our house in order. I suggest that, if the critics care to examine the Post Office telephone service from that point of view, they will find, not the need for criticism, and captious criticism at that, but some acknowledgment of the fact that we can do good work in this country under State administration. What is the good of going to Spain—building castles—to show how changes have taken place in regard to telephone density and so on? Comparison does not lie for a single moment, because the conditions are very different.

On the general question of development, it is not too much to say that we have done very well. It is admitted that development declined in 1930–31, but the rate of development was still 6 per cent., compared with only 65 per cent. in the United States and 2 per cent. in Germany. Each country has been hit by the industrial depression. It has been suggested to-day that there was tremendous financial collapse in the United States, and that that accounts to a very large extent for failure to expand during the past year. But has, there been no industrial depression in this country? Have not we experienced industrial collapse, and cannot that be held as a reason why we have not expanded at a greater rate? The falling off in this country in 1930 was only 15 per cent., compared with 75 per cent. in Germany and 85 per cent. in the United States.

Therefore, I am not very greatly influenced by the continued repetition of criticisms against the Post Office telephone service. That is not because I regard it as perfect or as sufficiently developed. On the contrary, I desire to see the Post Office develop the telephone system as extensively as possible. But when the question arises as to why the demand is not so keen as it might be, I naturally face the question of calls and the price of calls. The cost of calls is not the only factor in telephone development, though an important one. But telephoning is cheaper in London than in New York or other leading American towns for any number of calls from 250 to 5,000 in a year. Five thousand calls in a year in New York cost £56 6s. 8d.; in London the cost is £28 16s. 8d. Complaints are made about the quality of the service here. But similar complaints are made about the service in every country. Take the quotation read to us this morning by the noble Lord, in which he indicated the number of complaints reported in America. That report might have been made by a Conservative Postmaster-General. It is hardly conceivable that the Bell Company would report anything except what was an advantage to themselves.

Mr. O'CONNOR

As the Postmaster-General would.

Mr. BOWEN

That is the point that I put to the Noble Lord, but he did not take it. I put it to him that it is the Postmaster-General's job to show that the country is well served, and I think the Postmaster-General can do it. In the record that we had this morning not a word was said as to criticisms that could be urged against the American telephone service. There are many criticisms that could be urged. One London newspaper is constantly criticising our inland telephones, but it pays a high tribute to the telephone service that is linked up with foreign countries. Yet in an issue some time ago a contributor who had returned from New York wrote this: Now York will not stand comparison with London. Its telephones are the last word in antiquity and inconvenience. In these circumstances, I am not very much perturbed by criticisms of the telephone service of the type we have heard this morning. There is another point I would urge. A moment ago I suggested that the British Post Office was the best in the world. I suggest further that, because of the excellence of our postal service in this country, the telephone service is not needed to such an extent. Telephones are more necessary where there are great geographical difficulties, where towns are far apart and transport is difficult. But in this country we have keen transport services, both by road and rail, and when there is a postal service second to none the public utilise the three-halfpenny letter post more than the telephone. Those are considerations to be borne in mind.

2.0 p.m.

I come back to the Assistant Postmaster-General's statement and to the question whether the Post Office could not expand on the financial side and take account not only of the need for money on telephones, but link up the surpluses which have accrued from the postal service. The telegraphs have never had a surplus; they have always had a deficit. They have a deficit because of the heavy charges that they have carried since the work was transferred from the old and unsatisfactory service of the Sixties and Seventies. The Post Office is giving the closest possible attention to the telegraph service by complete reorganisation and a complete change of instruments, in order that the public may have a more up-to-date service. The telephone service has just been made to pay. The Assistant Postmaster-General said this morning that it was expected to be a revenue-producing department. The question is, whether in the circumstances the Postmaster-General could not take into account not only the one means of communication but other means also, and whether, if we have a good postal service which makes, a surplus and the public desires a telephone service of more utility, some of the postal surplus could not be transferred.

There are other considerations, and I mentioned some of them at the beginning of my remarks. There are the questions which relate to staffing conditions. There are telephonists doing nothing but night duty, whose conditions must be taken into account. There is need for reconsideration of the question of hours. I am sure the public will desire that the staff should have the best possible conditions in all grades. I hope, therefore, that the Postmaster-General can give an assurance that he is prepared to look into that question without delay. Finally, I suggest to the House that what we have to do about our telephone service is to say that it is a good telephone service, and that we cannot get a better one unless we are prepared to pay heavily for it. If the critics are not prepared to pay, they must not complain about the Post Office service and must not anticipate that if it were handed over to a public utility company or to a private company it would be any better. I am quite satisfied from what I know that the attention given to it by the electricians and the, engineers is of the highest quality. Those men, though they may be lowly paid, are highly skilled, and they do not spare themselves in giving of their best to the service.

Mr. O'CONNOR

I do not intend to speak at the inordinate length which has characterised most of the speeches made this morning, but there are one or two things which need to be said in answer to the attitude of smug and complacent satisfaction to which we are accustomed on the part of those who speak on behalf of the Post Office. The hon. Member for Crewe (Mr. Bowen) told us that he had been connected with the Post Office for, I think he said, 20 or 30 years.

Mr. BOWEN

All my life.

Mr. O'CONNOR

He need not have told us that because every phrase that he uttered was characterised by that kind of complacency which we are accustomed to find among those who have been associated with the Post Office for any period of time.

Mr. BOWEN rose—

Mr. O'CONNOR

The hon. Member has had over 40 minutes in which to express his views, and I do not propose to give way to him. Let us take some of the defences which he has put up against criticism of the Post Office. He asked why should we go to Spain for a comparison? Why, he asked, should we compare ourselves with any foreign country when the conditions here are entirely different? I recommend that defence to the Chancellor of the Exchequer or the Minister of Labour or any other Minister of the Crown when they attempt to compare figures as regards unemployment or trade, between this country and other countries. A public department ought not to have any fears or doubts as to its ability to stand comparison with any other country, and to tell us that no guidance is to be obtained from comparative figures with other countries simply shows no appreciation of the subject whatever. The hon. Member also used the familiar and easily refutable argument that we do not need the telephone so much here because our postal service is so good. I challenge (a) the statement that our postal service is good enough, and (b) the conclusion that if you have a good enough postal service you do not want a telephone service so much. If the hon. Member studies the comparative figures in this respect, he will find that whereas in the United States the number of telephone conversations is over 230 per head as against our 30, the number of pieces of first-class mail carried per head is 137 against our 131, while the number of telegrams is greater in a small degree than the number in this country. That shows that means of communication develop all round and that, even if there is a highly-satisfactory postal service, it does not follow that a good telegraphic and telephonic system is not needed to supplement that service.

The hon. Member said that we had a postal service in this country which was unequalled in the world. No Sunday deliveries! Half the number of outgoing and incoming posts which we had before the War! A telegraph service which does not operate at the very time when it is wanted—that is after seven o'clock at night and before eight o'clock in the morning. As to the postal service we have heard about Aberdeen. I was glad to hear that one could get a letter from London to Aberdeen in about the time that it would take a passenger to get there but I live 72 miles from London and I cannot get a letter from London by the first post in the morning unless it has been posted before half-past five o'clock on the previous evening. There is one post and telegraph office one mile away on the north side of where I live, and there is another three-quarters of a mile away on the south side of where I live and in neither of these can I post a letter on Sunday. I have to go five miles in order to post a letter on Sunday. When I went there neither of these post offices—Swerford and Hook Norton—had even a delivery from nine o'clock on Saturday morning, to nine o'clock on Monday morning, but, no doubt, owing to the fact that I was a Member of Parliament and could probably make a fuss about it here, I succeeded in getting a delivery on Saturday afternoon. In these circumstances it it perfectly fantastic to pretend that all is well with the Post Office or to suggest that there is any reason for the grinning optimism which is shown by the Post-Office in regard to the future. Upon what is that optimism based? According to the Assistant Postmaster-General it is based on the belief that trade is going to revive:— Hope springs eternal in the human breast. Every calculation of this Government appears to be based on the idea that trade is going to revive, or in other words that we are going to have a General Election, because there does not seem to me to be any other conceivable method by which we can bring about a revival of trade except the removal of this Government from office. We are told that telephonic development can be assisted by means of propaganda but the only kind of propaganda which will assist telephonic development is an improved telephone service. As long as you have high charges, long delays, greatly reduced postal services, all your propaganda will be in vain. And the worst form of propaganda is the 10,000 or more people who give up the telephone service every year. The Assistant Postmaster-General claimed that the Post Office had "attained" a growth in the telephone service of 110,000 per annum. But he did not say that the Post Office had lost 13,000 per annum on the rate of growth as compared with 1929. The rate was 123,000 under the preceding Administration, and it is 110,000 to-day—and then the hon. Gentleman speaks of having "attained" that rate. What he ought to have said was that they had suffered a loss of 13,000.

The Postmaster-General says that telephones are looked upon as a nuisance. Of course they are, but that is because of long delays, wrong numbers and high charges. He spoke also of our national conservatism as being a reason why we look on the telephone as a nuisance. I felt that that remark was an insult to a nation which has been a pioneer in flying and in other developments from one end of the world to the other. The real reason of course is entirely otherwise. The hon. Gentleman took some satisfaction from the fact that there were 536,000 resident subscribers to the telephone. That is eleven people, only, in each thousand of the population. Why, Hawaii and Iceland are vastly in front of us in telephone development! Take the figures in the case of Iceland which the Postmaster-General himself gave. There are 51 telephones per thousand there, against our 44, and in Hawaii there are 74 per thousand against our 44.

I have great sympathy with the Noble Lord the Member for Aldershot (Viscount Wolmer) whose speech was unduly prolonged by the interruptions from which he suffered and I agree with him that we shall get "no forrader" in this matter, until we treat the Post Office as what it is, namely, a great business—until we treat it as a public utility corporation according to business methods and along business lines. Why should we be content to remain the twelfth country in the world in this matter? Why should we suffer the stigma that London is 27th among the world's great cities in the proportion of telephones to its population? Why should we continue to tolerate the fact that it costs a subscriber who lives five miles from a rural exchange an average of £37 5s. per annum for his telephone user, as against £7 5s. 4d. in Canada, £17 12s. in Sweden, £9 5s. in Australia and £12 8s. 8d. in Denmark? How can we justify the figures given by the Postmaster-General on the 8th of May in regard to trunk calls? In the figures which I am about to give I am covering the different periods of time, one time being more expensive than another, and I find that a trunk call in Sweden costs from 1s. 2½d. to 9d.; in Germany it costs 1s. 8d., and in this country it costs from 5s. 6d. to 2s. 9d.—the minimum rate.

How can we justify the figures which have never been refuted, and which show that the American Bell system installation costs £45 per instrument, whereas under the great British system it costs at least £77 per instrument. Nobody would grudge this money, or the spending of large sums of money, if we were certain that it was going to be properly applied to the development of our telephone system, but what we do not want to see Is money being wasted on new buildings as it was in the case of the new Sheffield Exchange, where £17,000 was paid for a site in a main street when the exchange might equally well have been put in a side street. [HON. MEMBERS: "Why?"] This building is merely for the purpose of housing a piece of machinery and you do not want a site for it in a busy thoroughfare, in an extravagantly priced situation—especially if we are to have the land taxes of which we hear so much in these days. It is to house a piece of machinery, and not a terribly complex one at that, and where you get, as in Sheffield, a cost of £350,000 for the installation of an exchange, the result is that before you begin to work at all—

Mr. ATTLEE indicated dissent.

Mr. O'CONNOR

The Postmaster-General will no doubt be able to correct that, but I understood that the cost of installing the telephone exchange at Sheffield was £350,000, of which the buildings amounted to £119,000 and the site to £17,000, and that works out at about £39 a subscriber, before you begin to give the service at all. You can never get the efficiency or the cuts in rates that we want to see if you lay out money in that way. I usually keep my word with this House and do not speak at an inordinate length when I have begun by saying that I should not do so, and when I have had some caustic criticism to make of those who did otherwise. The Postmaster-General would do a real service to his time and country and to the pressing need of dealing with the unemployment situation if he would prepare the way for handing over this enterprise to some different kind of organisation. It is not that we, on this side, pit private enterprise as against the State. We suggest a compromise between the two, and that is the well tried public utility corporation, which is in operation in the Port of London, to which the Minister of Transport proposes to commit London's traffic, and which is adapted, and can be adapted in every way, to deal with the needs of a growing commercial organisation of this kind.

You have in the telegraph service perhaps £150,000,000 worth of capital, on which you have to base your charges. Does anybody believe that that is repre- sented by live assets? Of course not. Much of that has got to be cut out as dead wood. You have to get down to the real value of those assets, but the Treasury will never allow you to write that down, but will keep it as a book balance. If the Postmaster-General went to a public utility company, he would have to transfer his concern at its appropriate capital value, and in that way he would get all the water squeezed out of it straight away. You could then go on the market, and borrow in the open market, not in conflict with the Treasury, which is attempting to run conversion schemes that conflict with borrowing for the Post Office, but go on the market in the ordinary way, on the security of a developing undertaking, and still give to the Treasury an annuity to pay it off on account of its earnings. Until you get something of that kind, you will never get this business on a satisfactory footing, and I hope the right hon. Gentleman will go down to posterity as the right hon. Gentleman who prepared the way for one of the greatest reforms that any occupant of his high office has ever attempted.

Mr. ATTLEE

We have had an interesting Debate on this subject, and the hon. and learned Member for Central Nottingham (Mr. O'Connor) has made us one of his lively speeches, but I think it has not been sufficiently original. He largely depended on material culled from articles and speeches by the Noble Lord the Member for Aldershot (Viscount Wolmer), but he was not very successful in his selections. For instance, he took the case of the Sheffield exchange, and that is one of the worst bricks ever dropped by the right hon. Member for Aldershot, as he has admitted since, because the figures that the hon. and learned Member has given he gave as being the cost of building the exchange, but the exchange was only occupying one-sixth of that building, the rest of which was fully occupied for other purposes. If he had made rather more original research, I think the hon. and learned Member would have done better.

I rather doubted a number of the figures that he gave us, rather rapidly; I doubted their application. There was one, I noticed, which he used to pour scorn on the idea that we have a good Post Office, because, he said, the amount of first-class mail in America was the same as here. Surely the position is rather different, when you consider that the population of America is much greater than ours; and, therefore, the actual mail per head about one-half. Anyhow, I rather deprecate the constant interchange of criticism based at one time on percentages and at another time on absolutes. I do not think that is very helpful.

The other point that the hon. and learned Member had in common with the Noble Lord the Member for Aldershot was his complaint against Post Office complacency. It seems that if anybody ever says anything in favour of the Post Office, if anyone ever suggests that the Post Office could possibly do anything right, he is supposed to be complacent, optimistic, and so on. My hon. Friend the Member for West Willesden (Mr. Viant) took great pains to show, not that all was absolutely well with the Post Office, but that things do move. He was pointing out the various advances made in the Post Office, and he was not making a party comparison between the régime of the right hon. Member for South Croydon (Sir W. Mitchell-Thomson) and that of a Labour Minister; he was simply taking certain instances and showing that over a period of six years things had not stood still. He did not say the position which we have reached is absolute perfection—far from it—but merely that it was not fair to suggest, as some hon. and right hon. Members do, that there is no improvement. Indeed, it is absurd to say that there has been no progress made.

Those were the points which the hon. and learned Member for Central Nottingham had in common with the Noble Lord the Member for Aldershot, but the Noble Lord himself repeated very much the same speech which we have had rather often from him, and it always ends on the note that something is wrong with the system. It is a perfectly fair general position to take up, but the Noble Lord has never really indicated at all in any detail what is the organisation that he is proposing to take the place of the present system. I confess that I had hoped to find some proposals when I went to the Post Office, and I asked what the Noble Lord had prepared. He does not seem to have left anything behind him in the way of a scheme. I am quite prepared to accept the position that one should look at a Government Department and should not say, "This Department has been run in this way for many years and must always continue to do so." I think that one must go into a Department with a critical eye and a readiness to overhaul its machinery: One must say, "Is this the best possible line?" But I had hoped that the Noble Lord would have brought out more than general criticism. My complaint against him is that, time after time, he puts forward a number of criticisms, which are in effect not criticisms against the system at all, but are criticisms against the administration of which he was an ornament.

I am not out to criticise the right hon. Member for South Croydon and his administration, but what I complain about in the Noble Lord is that he, almost alone among ex-Ministers of the Crown, takes up the position that there is a separate entity, the Post Office, which is quite apart from the Postmaster-General. The burden of his complaint is that the Post Office does not do this or that. He seems to regard the Postmaster-General and himself as mere ornaments on the top of this machine, like mascots on the end of a motor-car, not concerned with the steering, or the routing, or driving, or anything of the sort. The Post Office, he says, ought to have done this or that, and he instanced the matter of dealing with architects, and so forth. He seemed to think that the Post Office somehow ought to have done something when town-planning Bills came along, but it is not the Post Office, it is the Postmaster-General who is responsible in these matters. I think it is as unfair to suggest that all sins of omission are due to some entity called the Post Office as to suggest that everything good that is done in the Post Office is done by some particular Postmaster-General.

The broad point has been put—I am leaving aside one or two minor points—that the Post Office is not sufficiently run from the business point of view. Such a point, however, requires rather more analysis than has been given to it. I want, for a moment, to compare the position of the postal service and the telephone service, because there is quite a difference between the two. The duty of the Post Office is to provide a cheap, efficient, ubiquitous service, and every person can avail himself or herself of that service by merely going to a Post Office or a post-box to post a letter. The telephone service is on rather a different principle. It is a service which requires of the citizen that he takes some personal action in order to join that service, when, in payment for a certain sum of money, he is given certain services. Whereas any one of us can take advantage of all the facilities of the Post Office to the full, the telephone only gives its fullest utility to any individual citizen when the greatest possible number of potential subscribers has been linked up. That is the reason why it appears to me that there is a duty on the Post Office and on the Postmaster-General of the day to do all that is possible to extend the range of subscribers.

As to the amount of money for which we are asking, some are inclined to say that we are asking for too little. The amount of money that you are prepared to put into capital expenditure must be conditioned by the extent of your equipment and staff. At the present moment, owing to the policy of the last six years—and I do not quarrel with it for a moment—there has been a steady anticipation of demand, and we now have a very large amount of spare plant which we can use. The essential business need of the telephone service now is to secure a greater intake of subscribers so as to get full economic advantage out of the capital expenditure which took place under the ægis of the noble Lord and of previous holders of my office. We have put forward in this Bill proposals under which, proceeding on conditions as they are, we shall spend this money in three years. If we are successful in accelerating the rate of in take and increasing the user of the telephone, we can come back to this House again. As it is, there have been hon. Members who criticise us for not spending enough, and, had I put forward what claimed to be a final figure, I should have had right hon. and hon. Members opposite wanting to know what its basis was. We must proceed to some extent experimentally. I do not quarrel in the least with the policy of anticipating demands by capital expenditure before it is actually needed, but I do say that we have been behind-hand in organising the selling end of this business.

I agree with the Noble Lord that the Post Office is a business, but where I disagree with him is in thinking that the Postmaster-General for the time being has not any power to reform, improve and organise that business. The Noble Lord implied that during all his time there he could not get his views accepted. I think it can be done without change of system. He said that you could not get business opinion to bear on the Post Office without a change of system. I think that it is possible. I have been in consultation with, and have been advised by, eminent experts on advertising—very distinguished men, who are always ready to give their advice, and I should like here to thank them for it. They are perfectly willing to advise us about the best methods to develop that side of the business. It is quite possible, if it is necessary, to get outside experts into the service to organise any particular side of the business, and if I find it necessary I shall not hesitate to get someone from outside. At the present moment, I believe that this business side does need more working; but I also believe that it can be worked under our existing Post Office organisation.

I am proposing, as I have stated in this House, to go in for a very considerable campaign of advertising. I shall take advice, from the best advertisers I can, as to the best methods. I cannot lay down those methods at the present moment, but we want to use the most up-to-date and modern methods. This advertising campaign will be closely connected with our campaign of sales. I think that we do require to increase our selling organisation. We are proposing to do so. I consider that it is quite possible that the methods of canvassing as well as advertising want to be overhauled and extended. We are going into this whole question of salesmanship in all its bearings.

Sir D. NEWTON

What is the right hon. Gentleman going to advertise? Is it the telephone service, or the present facilities of the Post Office, or what particular line?

Mr. ATTLEE

I am speaking of the telephone service, with a view to getting new subscribers and an increased user. The hon. and learned Member for Nottingham (Mr. O'Connor) was perfectly right when he said that if you want to get new business you must supply a good article. We believe that we are already supplying a good service. We have not got a complacent smile; we do not think that things cannot be better. As a matter of fact, they are being bettered all the time. But we have to work within the actual conditions of our own country. For instance, an interesting suggestion has been made by the hon. Baronet the Member for Cambridge (Sir D. Newton). He wanted, I gather, to enlist the services of private individuals in local services. In this country you meet with enormous objections. As the hon. Baronet knows, the power of local authorities is very great. We have to work under conditions in which we have to obtain wayleaves, and we are constantly coming up against the æsthetics of the rural authority. I have a case before me now, in which a local authority is objecting to one of the poles we have set up, because it spoils the view of the village. Then, again, we have to provide in this country, considerably more than in most countries, regulations with regard to safety. In the Wild West you can do things with wires and so forth which you cannot do in an enormously organised country like ours, where local residents will not stand it for a moment. I am sure the Noble Lord will bear me out in this. A very large number of complaints are made when a new service is started as, for instance, a telephone call-box. You consult a local authority as to the best place—they very likely ask for the box—you put it down, and immediately get a series of complaints from people all round that it is in the wrong place. After all, you must not assume that all our customers are sweetly reasonable. The Noble Lord is always assuming that you can do in this country exactly the same things as they do in, say, Sweden, or the wilds of Canada. You cannot, mostly because of the activities of people like the hon. Baronet.

I quite agree that what you want is a good service. I frankly adroit that there are some things that need alteration in our service. There are a certain number of minor charges, that are more irritating than valuable, which might be swept away. I am inquiring into a number at the present time. There is the question of removal fees; for instance I think that the conditions attaching to a removal of a telephone from one address to another are too rigid; you have to give notice on quarter day and so forth. I hope to change that; it is one of those rigid things which are unnecessary.

Take another case; if a person goes out and expects a call, and asks the exchange to put the call on to another number, the charge is 2s. 6d. I think that is unnecessary, and I propose to alter it. These are a number of instances where one wants a business eye put on to the service. I am not in the least attacking the Post Office system—very far from it—but there are points at which the business view does clash with the rigid Civil Service view that you must charge what the service costs you. There are a number of these points which I am studying, but I have to work out the cost and perhaps to get approval for them. There is the case, again, of the seasonal user, and the question whether he should pay full rates. It is from this angle of the service that we can do a good deal to popularise it.

As to any very large reduction of fees, which has been put forward by some hon. Members, that is really a broad matter of policy. Do we consider that the telephone service should be run as a business that should earn a profit, or should it be subsidised from the general Post Office revenue? We feel that wherever we get a profit, we should pass it on in the shape of lower charges and advantages to the consumer. We have an unremunerative fringe in the rural fringe, and I do not think that even if we adopted all the hon. Baronet's proposals that that fringe would be other than unre-munerative. As a matter of fact, although Members say that people are thirsting for the telephone, when we put in rural telephones we do not find that they take as much advantage of them as they should. Even when a country subscriber has paid for a telephone, his user is apt to be comparatively low. It is largely a matter of habit. Until you have had a telephone some time, you do not use it on a number of occasions when you might have used it.

I want to create a telephone habit throughout the country, and my quarrel with the Noble Lord is that, while he is an enthusiastic believer in the extension of the telephone system in this country, the way he puts his case is all the time militating against it. What he calls complacency on my part is not called so in business circles; there it is called reasonable confidence and a spirit of optimism. It is also called having a good conceit of oneself. If I err, I am erring in good company. In a speech the other day at Manchester by the Prince of Wales on the subject of British trade, there were two points that struck me. First, he said we were too modest and always decrying our own wares.

Viscount WOLMER

Was he speaking about the Postmaster-General in the Socialist party?

Mr. ATTLEE

He was speaking of the very people who are held up to us by the Noble Lord as examples to follow, that is, the business men. He was dealing with the faults of business men. The other thing which the Prince of Wales emphasised was the need for up-to-date selling. In the Department we are going to try up-to-date selling, and we ask all Members to aid us in stimulating the telephone spirit in this country, and in trying to push the business. I shall be interested to see the Noble Lord's plan. If he will only produce the detailed plan showing how he thinks this service should be run, we shall be glad to criticise him and help him in his scheme in our turn. I am prepared to consider any suggestions that any Members of the House will bring to me as to how we can make this service more efficient and useful to the public, but at the same time, I decline to stand here in a white sheet and apologise for the service or for the Post Office. The Post Office is a great service. It has done a great service to this country, and it has a record, due perhaps to our optimism during these very difficult days, which will stand comparison with any other business in this country.

Dr. MORRIS-JONES

It has no competitor.

Mr. ATTLEE

The hon. Member is, of course, wrong. From the point of view of getting someone to have a telephone, the telephone business is in competition with all other businesses which sell goods and make a demand on the money of the householder. So the hon. Gentleman is wrong in saying that that side of the Post Office business has not competitors in that sense.

Mr. LLEWELLYN-JONES

I would remind the House that this Bill is not confined to the telephone system. With one or two exceptions, hon. Members have addressed themselves almost entirely to this aspect of the Bill, which proposes to provide for the development of the postal, telegraphic and telephonic system. I think we can all agree that we have reason to be proud of the British Post Office. Those of us who can look back over half a century to the postal system in, the rural areas must realise that there has been an enormous improvement. Half a century ago no one would have imagined that we should have all the facilities which are now enjoyed in the rural districts; but in saying that I do not admit that we have a perfect system. There is still room for development in various directions, and I am rather disposed to think that in many rural areas facilities which were enjoyed before the war and were withdrawn during the war have not yet been restored.

A few months ago I drew the attention of the Postmaster-General to a complaint from a rural area in my constituency where there has been a certain amount of development. Before the war it had an afternoon delivery, and that enabled residents to reply to correspondence the same evening, and was greatly appreciated. That facility was withdrawn and, notwithstanding repeated appeals, it has not been restored; and what has occurred there is common to other parts of my constituency. I trust that in the development which is to be undertaken under this Bill attention will be paid to that aspect of the matter. Up to a year or two ago there was constant reference in business circles to the possibility of a restoration of the penny post. Most business people will agree that this is long overdue.

Mr. SPEAKER

The restoration of the penny post cannot be raised on this Bill.

Mr. LLEWELLYN-JONES

I suggest that it could be regarded as a development; but if you rule me out of order on that point I will pass on to another question, the parcel post facilities in rural districts. We have heard a great deal in recent months about agricultural markets, and I feel that the Post Office might lend a great deal of assistance in this matter. The difficulty is that the limit of the parcel post—

Mr. ATTLEE

On a point of Order. There is nothing in this Bill dealing with that question.

Mr. SPEAKER

I suggest to the hon. Member that it would be better for him to raise these points on the Post Office Vote.

Mr. LLEWELLYN-JONES

My point is that the development of the telephone service in the rural areas ought to be followed by a very large development of other postal services. If farmers are put in touch by telephone with traders in the towns it will be necessary to develop the facilities by which goods can be sent from the country into the towns or vice versa. I trust this matter will receive the consideration of the Postmaster-General. I will come more particularly to telephonic development in rural areas, and on that subject I can speak with a fairly wide and long experience of a county which is partly agricultural and partly industrial. So far as the industrial parts of the county are concerned, there has undoubtedly been an enormous development in telephone facilities in the last few years, but in the rural districts the charges made by the Post Office are in many cases prohibitive. A case was brought to my attention within the last few days. It concerns a small hamlet on the borders of my constituency and that of my hon. Friend the Member for Denbigh (Dr. Morris-Jones). The name of the hamlet is Rhydtalog. It is a place which came in for a certain amount of publicity a few years ago when a Communist leader, Mr. Pollock, was kidnapped in Liverpool and taken there because it was believed that, once he was there, it would be impossible for him to get away. The conditions there are typical of those in many hamlets in various parts of the country. There are a certain number of houses in the village itself and a fair number of small farms surrounding it. It is three to four miles from the nearest Post Office. A letter which I received from a resident there states: There is no telephone service, the nearest telephone, either public or private, being some three miles away. The seriousness of this will be very apparent in the case of sickness or accident. To my personal knowledge within the last two years three lives could possibly have been saved, one an accident case attended with fatal results, had there been any reasonable facilities for obtaining immediate medical help. No doctor within four miles; the district nurse a similar distance away. I myself applied for an installation, but the rent was too prohibitive, namely, £25 per annum, exclusive of calls. That is a case which is typical, I am certain, of hundreds of others all over the country. It is obviously impossible for a small inn-keeper, a small tradesman or a small farmer to ask for a telephone installation which involves such a large outlay. The Post Office authorities ought to consider whether it is not possible to erect a telephone call box there. It might not be used very largely in the first instance, but as years went on the residents would find the advantage of the telephone, and it would be an inducement to them to ask for it to be installed in their own houses.

Another point in connection with telephone facilities in North Wales is that there are certain areas where the exchange is open only between certain hours—from 7 or half-past 8 in the morning until 7 o'clock at night. There is quite a long list of them in the telephone directory, and many of those places are very remote from any other exchange. One can well imagine the difficulty in the case of a call for a doctor or an urgent business message when it is discovered that at 7 or 7.30 o'clock the telephone office is closed. It must cause a great deal of inconvenience. I trust that the Postmaster-General, in dealing with facilities in rural areas, will take into consideration at the earliest possible moment the case of the 30 exchanges in North Wales, and see whether arrangements cannot be made for them to be open day and night.

The Postmaster-General has referred to the fact that in making arrangements for telephone boxes the Post Office seeks the advice and the suggestions of the local authorities. I am sure that a good deal more might be done in this direction, not merely in the urban districts, but also in the rural parishes. The parish councils are also very interested in this matter, and if the Post Office could get the minor local authorities to become interested in the installation of telephones in their area—the representatives of the Post Office might meet them—they would not only be able to suggest the best places for telephone boxes, but it might have a very great influence in inducing people to become subscribers in that area. I think that the question ought to be dealt with upon lines as broad as the Liberal party desire. I am pleased to notice that the Postmaster-General has adopted to a large extent the proposals of the Liberal party on this question, and I trust that he will press forward with this policy.

Mr. ATTLEE

We have now had a long discussion on this Bill, and I hope that we shall bring the Debate to a conclusion as early as possible.

3.0 p.m.

Major LLEWELLIN

I represent a constituency which is expanding very fast, and there are two particular cases which I want to bring forward. I hope that in one of these cases at any rate some of this money will be spent there. The Postmaster-General has told us that he is in favour of the policy of anticipating demands in various centres, and I want to bring before his notice the case of Southall, which is rapidly expanding into two separate districts, one South of the Great Western Railway and the other towards the Uxbridge Road. At the present time the Crown Post Office is situated in a position which does not adequately serve either of those centres. I notice that the Postmaster-General is going in for an advertising campaign, and I hope that he will follow that up with a salesmanship campaign and provide facilities in the part of the district I have mentioned where they are most needed. I hope the case of Southall will have his personal attention. I would like to know whether another Crown Post Office cannot be placed in that district in order to give the facilities which are being demanded.

I wish to call attention to the inadequate facilities which are provided in regard to the posting of letters in the districts that I have mentioned. The inconvenience I refer to would not exist but for the fact that the Post Office has a monopoly in this matter. If you post a letter to Eastcote and you did not put on the address "near Ruislip or Pinner," the letter takes two days to reach its destination. It is rather remarkable when we hear that a letter may be posted in London and reach Aberdeen in one day that it takes two days to deliver a letter at a place which is only 12 miles distant from London, and that seems to me to depreciate rather what the Postmaster-General has said to-day. I hope the Postmaster-General will look into the state of things in this postal area, and make arrangements by which, in the circumstances I have mentioned, letters will not take two days before they reach their destination. It is upon matters like this that the Postmaster-General can do a lot to meet the demands of the public, and make the Post Office service more popular than it is at the present time.

Mr. WALLACE

I would like to say that I welcome the statement made by my hon. Friend the Postmaster-General this afternoon. It was a more encouraging statement than that which we received on a former occasion. I observed, however, that, while he was speaking of certain improvements which he hopes to effect, he said that they would be made "if he got approval." I should like to ask, from whom he is to get that approval? I put it in that way because the Noble Lord the Member for Aldershot (Viscount Wolmer) has time and again accused the Postmaster-General of being little more than an agent of the Treasury. I remember that on the last occasion the Postmaster-General said that, if he wanted more money for development, he believed that he would get it from the Treasury. On that occasion, however, he referred to the Government, and the impression that I formed was that it would not be the Postmaster-General who would get the money for his schemes, but that he would get the money for schemes approved by the Government. The Noble Lord has told the House on many occasions that the Post Office in relation to the Treasury was nothing more than an agent. I was glad to hear the Postmaster-General to-day challenge the Noble Lord to produce his scheme in detail.

Much has been said about the development of the telephone system. My hon. Friend the Member for Crewe (Mr. Bowen) did not say that comparisons with other countries were entirely useless, but that such comparisons could be very misleading, and that their importance could be over-emphasised. With that view I agree. It seems to me that the great need, if the telephone system is be be developed, is that it should be made cheap. I know dozens of people who would have the telephone in their houses if it did not cost so much. I think that is at the bottom of the trouble, I want to emphasise a point that was made by by hon. Friend the Member for Crewe and by the Postmaster-General, and emphasised by other Members, that the Post Office business must be taken as a whole. I see that the Chancellor of the Exchequer anticipates receiving something like £12,000,000 from the Post Office. I should like to suggest that a sounder policy would be that, instead of the whole of that money flowing to the Chancellor of the Exchequer, some of it should flow back to the Post Office for development and, if necessary, for cheapening the cost of the telephone.

This Bill is for the development of the postal, telegraphic and telephonic systems, but in all the discussions this afternoon very little has been said about the essential factor in all development, that is to say, the good will of the staff who work these systems. The hon. and learned Member for Central Nottingham (Mr. O'Connor) suggested that the Assistant Postmaster-General was levelling an insult at other public servants, such as those in the Air Force, because of certain criticisms and statements that he made. The impression that I formed from the speech of the hon. and learned Member was that everything that the Post Office attempts to do is bad, and I say to the hon. and learned Member that that is an insult against the Post Office staff. I am not going to say that they are perfect, but they have been quoted very often as examples to other employers, and I would remind the House that, at a lime when the revenue of the Post Office is increasing, when the output per head is increasing, when the services are being extended, the reward of the staff is a reduction of wages. The Noble Lord, the Member for Aldershot, talks about paying the engineers more, and about paying the members of the staff more, but the Postmaster-General in the late Government, and the Assistant Postmaster-General, sought to reduce the basic wages of the staff, and that is too often the reward that the Post Office staff get for their good will towards the development of the service. I am still not satisfied that the Postmaster-General has the freedom to initiate improvements that he ought to have. I hope the Noble Lord, the Member for Aldershot, is going to accept the challenge and produce a detailed scheme. I welcome the Postmaster-General's promise to consider that scheme and, at the same time, his statement that he is ready to receive suggestions from any quarter.

I still think the Post Office is not yet getting a fair field in which to develop its services. I think the Treasury crabs the development of the Post Office. The very fact that so much of its revenue flows to the Exchequer is proof. I could tell the House of case after case where the Treasury has imposed cruel conditions upon individual members of the staff, and the Noble Lord knows this—men whose posts have been abolished in the villages because motor services have been introduced, their homes broken up, sent away for miles, and what has been their reward? In effect, they have been told almost that they are better off because they have been sent to a place where their rent has been doubled. That is the sort of thing we get in the Post Office, and we are told the Treasury is responsible for it. That is in connection with the development of the Post Office transport system. It is true that the parcel carrying trade of the Post Office could be developed enormously with the development of the Post Office motor transport system, but not if the staff are going to be treated unfairly.

I hope the Postmaster-General will have the courage to call on the staff to develop the service and that he will not be afraid of spending money in rewarding the servants who develop the service. I have never yet heard the Noble Lord say specifically that he had improved the wage bill in order to develop the service. I do not know of a single instance in his administration when he increased the wage bill voluntarily. I know he tried to reduce wages. I will say this for the present administration, that they at least show some signs that they realise that improved service from those em- ployed by the Post Office entitles them to increased remuneration and I hope, in that connection, the Postmaster-General will set a very good example.

Commander SOUTHBY

There are two points that I should like to bring to the attention of the Postmaster-General. I represent a constituency in which there is very rapid development in housing, and inconvenience is often coused to those who live in such an area by reason of the fact that there is no telegraph office near at hand. A resident may receive a telegram with a pre-paid reply form. To make use of it may entail a walk of a mile or two, perhaps in inclement weather. He can telephone the reply but in that case he is unable to get the benefit of the pre-payment. Would the hon. Gentleman use part of this money in increased facilities for telegraph offices in rapidly growing districts and, in districts where it is not possible at once to build an office, could he make some arrangements whereby subscribers will be allowed to use the pre-paid telegraph form over the telephone if they send it in and it is cancelled in the usual way?

My other point is this. Here we are voting £32,000,000 for the development of telegraph and telephone facilities. Might I ask him to look into the question of telephone and telegraphic communication between ship and shore. The charge for wireless telegrams is abnormally high—10½d. a word from a ship 50 miles from the coast. Large numbers of people travel who never travelled before, and they would use these facilities if the rate could be brought down to something commensurate with the rates in operation for ordinary inland telegrams. I understand there are some ships with which telephone communication can be established, but there again the rates are so abnormally high that it takes an American millionaire to pay for a call. Could the right hon. Gentleman go into the case with the shipping and wireless telegraph companies and see if he could not bring down the rates of wireless communication to something that is sensible? Tenpence halfpenny a word is a perfectly absurd rate for a telegram from ship to shore, where there is very little machinery needed, no land line or cable to be maintained, and practically no overhead charges. The other point is to see if we cannot develop the telephone system between ship and shore. It would be useful in cases of emergency and would certainly be a great convenience to members of the travelling public and be taken advantage of by a good many people who were afloat.

Question put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the Whole House for Monday next.—[Mr. Attlee.]