§ Order for Second Reading read.
§ Motion made, and Question proposed, "That the Bill be now read a Second time."
Sir EVELYN CECILWhen the Post Office Estimates were being discussed I had not the opportunity of referring to the question of telephone administration or the work of the Committee of which I had the honour to be Chairman. Although, after the discussions that have taken place, I certainly do not intend to make precisely the sort of speech I might have made in an earlier Debate, yet I notice that there are two or three points which are somewhat fresh and which were not mentioned, and to them I wish to refer now. In the first place, I wish to note the different spirit which has now come over the telephone scene, to a great extent. There is much less acute mistrust on the side of the public, and there is less official dogmatism on the side of the Post Office. The Post Office seems 140 now to appreciate that it was not established to rule the public, but rather to be its servant. I want to congratulate my right hon. Friend the Postmaster-General on this change of spirit. It is not a little due to his judicious administration, and perhaps the effect of the Telephone Committee's Report has been to get both sides to realise better the difficulties that face the one and the other, and that it has; in consequence combined both sides into striving for a better telephone administration. There is a perceptible improvement in telephone operating. Speaking from personal experience, when telephoning from this House, I find that the time occupied is certainly less; there is more prompt answering and more prompt operation generally. I believe the public hold the same view as regards the operation of the system as a whole.
The Postmaster-General has taken serious note of most of the recommendations made by the Telephone Committee. He realises there should be a more commercial system of management, and he has already, on the first of the present month, put into operation a tariff of lower rates, which I believe is largely due to the recommendations of the Committee. He has foreshadowed lower rates for residences, and he is occupying himself with the subject of rural development, which is one of immense importance, and upon which this country has a good deal to learn. We can learn a good deal from various places, and not least from Ontario in Canada, from which I have received a very interesting pamphlet on rural development there, which I shall be glad to place at the disposal of the right hon. Gentleman. He is also engaged in providing for more trunk lines, for which this sum of money is largely asked, and I am certain that is one of the developments which will produce more rapid telephone communication and make telephone communication more popular. He is establishing more exchanges, which is also the outcome of the Telephone Committee's inquiry, and he is directing his attention to automatic exchanges with a circumspection which is justified by the opinions of scientific experts, although I believe that, provided the capital expenditure on automatic exchanges does not prove too prodigious, they should be a valuable asset in improving the communications of the country and cheapening operation.
141 I believe that extensions of the system, under commercial management and run with common sense, will ultimately pay. It is necessary to make a certain amount of experimental advance; it is not all in a day one can achieve much real development, or still less do so with a certainty that it will pay. But we have before us the example of the Bell Telephone Company, in Canada, paying 8 per cent., and the American Telephone and Telegraph Company, in the United States, which pays 9 per cent. dividends, and from that it does not appear as though in those countries there was any serious danger of running rural development at a loss. There is no reason why we here should not follow in their footsteps. We may congratulate the Government on the advance we are making, and I should like to congratulate the Committee on the unusually large number of their recommendations which the Government is adopting. Indeed, it is not so much a question of how many of their recommendations are being adopted, as of how few are being turned down. The Postmaster-General might usefully review the general working of the changes and bring up a comparison of the results obtained when the next Post Office Estimates come before the House.
I pass to points which I do not think have been very fully brought out or discussed. One is the question of accounts. A good deal was said about keeping the accounts in a more commercial way and under a more special supervision and examination. I am not quite sure how far steps have been taken in that direction. There is no doubt, so far as the Committee's examination of the accounts was concerned, that the present reductions in telephone rates do not absorb the whole saving, and, if that be so, I should like either now or at some subsequent time to hear from the Postmaster-General how he proposes to deal with this subject and whether he is hopeful of applying the money that can be saved to granting further reductions of telephone rates. There is another recommendation to which all the members of the Committee attach considerable importance, and that is the separation of the telephone and telegraph service from the mails. I am not clear that that has been perfectly understood by either the Post Office or the public. There are three paragraphs 142 in the Report which especially deal with it, and require to be read carefully in order that their object may be fully appreciated. These are paragraphs 4, 5 and 6. In some quarters it has been gathered that the Committee desire, in the separation of the mails from the electrical services, to put up a whole new set of buildings for each branch and employ an entire new staff for each branch. It is objected that this will evolve considerable expenditure rather than achieve economy and efficiency. If these paragraphs are carefully read, it will be seen that is not accurately the recommendation of the Committee. The Committee do not contemplate entirely new buildings. It is quite practicable to use the same building with different Departments in it. They do not contemplate having entirely new staffs running right through the two branches, but rather that at the head of the Post Office there should be expert directors-general for each Department. This is important. Similarly at the other end of the scale we should be able to appoint, in smaller places where there was not much business, the same official to look after the letters and supervise the electrical services. Therefore there is not the expenditure involved which some critics seem to believe, and the reason why the Committee' advocated this recommendation was because of a study made of the working of this system in Scandinavian countries and elsewhere—for instance, Canada and the United States. There is no question that it has worked for efficiency, in a general way, in Sweden, Norway and Denmark. Of course, where you have separate telephone services by companies distinct from the Post Office, as in Canada and in the United States, it goes without saying that the system there seems to work very well, and the secret of it largely is that you have a director-general who is thoroughly conversant with the technical side of the question, as well as its being a commercial management. I cannot but believe, after sifting a great deal of evidence in connection with those countries, that that system is the better system of the two—better than keeping them under one common Secretary of the Post Office. Our system has grown up here rather by chance than otherwise, as is noted in one of the paragraphs of the Report, but it stands to reason that all 143 these countries would not tell you quite candidly that theirs is the better system unless they had been satisfied after considerable experience that that was really true.
I know my right hon. Friend will probably tell me that what I am saying is all correct, but that it is quite a different story now that he cannot start ab initio. You cannot plaster on to our present system, he will say, this alleged better system of the Scandinavian countries. My reply is that I am sure his permanent officials so advise him, because permanent officials have a way of giving advice of this kind very frequently. They are used to the old practice, they believe it works well enough for their purposes, and they do not readily admit that they know of anything better. I recall, on that subject, the experience of Lord Buxton when he was Postmaster-General —I think it was in 1907—and that he overruled a decision of his predecessor, who was the present Lord Derby, and of the permanent officials, in establishing the Canadian magazine post. That arrangement was exceedingly beneficial for establishing closer links with the Empire, particularly with Canada, bearing in mind its close proximity to the United States, and I should like here again to express my praise of the action which Lord Buxton then took, for it was a courageous one, and one in opposition to some of his best advisers. I should rather like to throw out these facts for the consideration of my right hon. Friend.
I said he would tell me they cannot do it because they are not starting ab initio, and my further answer to that argument would be that I should like to direct his attention to the experience of Italy. I happened to be in Italy in connection with the International Railway Congress a month or two ago, and I had an opportunity of seeing the Minister of Posts and Telegraphs, and also another Minister, and I asked the former very particularly about the alterations which have been recently made in Italy in connection with the administration on these points. In the years 1919 and 1920 new laws were passed which established a Director-General for Posts and another Director-General for the electric services, that is to say, telegraphs and telephones. Both 144 these Directors-General are under the Minister of Posts, and both are heads who have a great deal of independent authority so far as their Departments are concerned, and are working on the lines precisely, so far as I could learn, of the Scandinavian countries, so that there is a case where there is no starting ab initio, and yet this arrangement has been introduced. The present Minister, Signor Fulci, said he was very satisfied with it. He said further that in a new reform which he was preparing regarding the personnel he was maintaining the separation of the telegraphs and telephones from the mails, and he was convinced he was right.
That is not all. I also called upon the present Minister of Public Works and Railways, Signor Riccio, and he, I found, was former Minister of Posts and Telegraphs from 1914 to 1916, in part of the very critical time of the War. He frankly said that he had turned down, like my right hon. Friend, the separation of posts from the electric services when in office, but that since he had seen it working he had changed his mind, and he said that I might say so in public. I wish to call my right hon. Friend's very special attention to the experience of Italy in this regard. It is, I can assure him, not an uneconomical arrangement, but quite the contrary. High technical knowledge is applied directly and not tortuously under it, and there is therefore a saving of money and of energy. I inquired of one or two representatives of the genera public in Italy who were large telephone users what they thought since the change had taken place, and one of them writes to me: "Personally, I am greatly in favour of it; it helps to speed up the work." So I cannot but say that I trust my right hon. Friend will not finally make up his mind to go on with the old method of administration without giving much more examination to what goes on abroad. He has all the channels of information, and perhaps more than those that I have, I do not think I need lengthen this discussion, in view of what has been said in previous Debates, but I will conclude by once more congratulating the right hon. Gentleman on the large number of recommendations of the Committee which he has adopted and begging him to keep his mind still open before finally deciding 145 that our researches cannot bear even better fruit.
§ Captain MOREINGI want to support what my right hon. Friend the Member for the Aston Division (Sir. E. Cecil) said in regard to the separation of the postal and telegraphic and telephonic business of the Post Office. I think the Members of the Committee were most struck by the fact that in the very large business that the telephone department now represents there was no such thing as a general manager of the service. In fact, it appeared to be almost impossible to place the responsibility for any particular part of the service on any particular person, and I cannot think that that fact will recommend itself in this House. When you have a large service with large sums of money involved, a service which is of vital interest to the commercial community in this country, and, in fact, to the every-day life of this country, I think the time has come when this somewhat anomalous organisation which exists at present, and which appears to have been built up in order to fit in with the pre-existing organisation of the Post Office, should be put upon a more business-like footing. Apparently, it is designed in order to preserve intact the functions of the various surveyors of the Post Office in the various districts, and I think I am correct in saying that the only part of the Kingdom in which there is an official responsible for the telephone service is in London, where there is a special Controller-General. The Committee did not propose, and never thought to propose, a system of re-organisation which would entail increased expenditure or an increased number of officials. It merely asked that the existing system, the existing staff, should be re-organised, so as to place a definite responsible head over the whole of the telegraph and telephone service.
That was the sum total of our proposal. I must say I was rather surprised by one answer given in reply to a question by a member of the Select Committee. I am quoting from memory. The question was as to whether the arrangements at the Post Office had been much altered in recent years, and the reply was that a more perfect system could not be conceived. I think that is 146 hardly the way in which a Department should approach a question like this. We took over the telephones a year or two before the War. Admittedly during the War it was impossible to see a real organisation and development of the telephone service, but I do ask the Postmaster-General to consider a little more carefully, and away from the official atmosphere of the Post Office, whether or not it would be possible to re-organise, on a much more efficient basis, the administration of the telephone service. There is one other point which, as a Member of the Committee, was forced upon me, and that was that under official control it was almost impossible to devise a system of rates or of charges which is readily adaptable to commercial needs. Unfortunately, the Department seems to have to decide everything by their rules and regulations, and I would ask my right hon. Friend to consider whether it would not be possible even now to devise a somewhat more elastic system of charges, which would lead to the development of telephones in this country, and especially in the rural areas.
§ 9.0 p.m.
Mr. FOOTThe Postmaster-General, when this matter was discussed in Committee a week or two ago, spoke of the rather extraordinary progress which had been made in recent months in the rural telephone service. I do not know if the Postmaster-General has any figures available, but I should be glad to know if the progress made in the installation of rural telephones has been well maintained since the month of April; and, further, whether he would inform the House what steps are being taken by the Post Office to familiarise people in the country districts with the additional advantages that were announced by him when he introduced his Post Office statement. Speaking a week or two ago in Committee, he stated that everything would be dons on his part to bring home to the people in the countryside, not only the ordinary advantages of the telephone, but the advantages of the party-line system, and it would be of some interest if we could learn what actual steps are being taken in that direction. I believe that if there can be a substantial improvement upon that line, and if those who live in distant parts of the country, not merely in villages, but in farmhouses which are miles away 147 from villages, could be linked up with the telephone system, it would be one of the biggest strides that could be taken to assist people in rural areas, and the popularising of the telephone in that way-would not only be a great social amenity, but of commercial advantage.
Sir EVAN JONESI should like to join with my right hon. Friend the Member for Aston (Sir E. Cecil) in congratulating the Postmaster-General upon the extent to which he has already gone in regard to the recommendations of the Committee on Telephones, and I should also like to endorse the view which has been expressed on the subject of the separation of the telegraphs and telephones from the mails. My right hon. Friend has brought forward cogent reasons, which weighed very definitely with the Committee in arriving at the decision to which they came, and I would add my request to the Postmaster-General not to cast aside the suggestion of the Committee in that respect. The Committee had on it some men who are accustomed to the management of large business concerns in this country, and I think they felt very genuinely and very strongly that there is something lacking in the present system. There is another point I would like to mention, and that is on the question of the money which is being asked for in this Bill. We all welcome the fact that in this Bill there is very considerable evidence that the Post Office is arriving at a state where it combines vision for the development of the future with, perhaps, what has been in the past too much routine of a Departmental nature. So far as that is concerned, I think everyone would like to give the Postmaster-General and his very able administrative staff all the support and assistance which the endorsement of their views enables us to do.
There is, however, one matter to which I should like to draw attention. A very large amount of money has been asked for. Fifteen millions for development purposes is a very considerable sum. No one will begrudge the money if it results in a cheapening of the service to the public, but I do not think we have very strong grounds for believing, or hoping, that the best will be made of the expenditure of this money. What has happened? A very great deal has been made 148 of the fact that the Postmaster-General has been able, by what has been described as administrative efficiency, and the cutting down of expenditure, this year to reduce the telephone charges. We are thankful for small mercies, and for a reduction in the telephone charges. But according to the evidence brought before the Select Committee, that reduction ought to have been at least 2½ times what it is. That is perfectly clear on the figures given to this House by the Postmaster-General himself, and on the direct evidence given by his own officials to the Select Committee.
The Postmaster-General told us that out of an estimated surplus of £9,300,000 for 1922–23 on the commercial accounts, he proposed to devote something like £840,000 to the reduction of the charges on the telephone system. The Select Committee indicated the possibility of a considerably greater saving than that in addition to the automatic saving that would come about by the automatic reduction in the payment of bonuses on wages, etc. The Secretary of the Post Office, in his evidence before the Committee, admitted that the whole deficiency which resulted in the increase of charges last year, or the year before, when the charges were put up was accounted for by the bonus paid to the staff. The amount of the deficiency was £4,250,000. The additional expenditure attributed to the payment of bonus was £4.500 000, so that the whole deficiency which was the direct cause of the increase in the charges made at that time, was more than accounted for by that one particular item of increase in expenditure.
We were further told that this year the bonus would be automatically reduced. We were given figures which showed that the reduction of the bonus would be equal to £190,000 on every five points of the fall in the cost of living. We were further told that for this year's Estimate the cost of living had been estimated at an index figure of 100 as compared with an index figure of 140 last year. Five points divided into 40 gives us the result of eight, and if you multiply £190,000 by eight you get £1, 520,000, which should represent the automatic reduction due to the bonus alone. The Postmaster-General reduced the charges by an amount equal 149 to £840,000, and he obtained a saving of £1,520,000 by the automatic reduction of the bonus! In addition to that there was a further sum of something like £350,000— arrived at from the figures of the Postmaster-General himself in the Estimates— this £350,000 being saving on the cost of material. In addition to that the Postmaster-General has told the House that he had accepted the recommendations of the Committee by which it was proposed to transfer to capital account the cost of the overhead charges on capital work which had previously been paid out of revenue. This alone amounted to £580,000. Here you have automatic reductions equal to something over £2,000,000, not due in any way to the reduction of expenditure, or to savings obtained by increased efficiency, nor to savings which have been obtained by the curtailment of services—and there has been considerable curtailment of services —but which, without counting those savings at all, show an automatic reduction of over £2,000,000. The Postmaster-General has given reduced telephone charges amounting to £840,000.
All this seems to indicate that there is a hidden reserve of a considerable amount somewhere which might be devoted to development purposes and might reduce the amount of money for which this Bill asks. This ought to have been applied to reducing the telephone charges by at least double what has been done. I think the House ought to be aware of the fact that when asking for these 15 millions for increased development purposes the Post Office have in the form of a hidden reserve a very considerable sum of money which might be utilised for this purpose. We welcome development, and I do not wish anything I say to be regarded as opposing the Bill, but there must be some justification in the results to be obtained from this expenditure. Unless the public obtain value by better services and reduced charges, then the justification for this increased expenditure does not exist. I simply wish to point out the methods hitherto adopted by which this year the telephone charges have not been reduced to the extent to which they should have been reduced, and trust it will be a warning for the future that if this money is approved and granted by the House there will be more careful administration.
§ Mr. REMERI should like to emphasise the words which have fallen from my hon. Friend as to the necessity of separating the telegraphs from the mails. I have more or less expressed my views on that subject previously, and on one particular occasion I moved an Amendment to the Address which resulted in the formation of the Select Committee over which my right hon. Friend presided. My particular view is this: that the way to get the telegraphs and the mails properly and effectively managed is to take the telegraphs and the telephones out of the hands of the Government altogether and put them back again under private enterprise. It is only, I believe, by that method that we can obtain and keep an efficient telegraph and telephone service,. I should like to ask my right hon. Friend if he will take care to see that the money which is expended under this Bill is spent in employing British workmen. There is a tendency on the part of Post Office officials to think that British workmen mannot manufacture certain articles. A great deal of silk is used in the manufacture of telephones and telegraphs. The Post Office officials state that the manufacturers in Macclesfield are not capable of manufacturing silk suitable for that purpose, but I am informed that that is quite an inaccurate statement, and I hope that when the money we are voting comes to be expended the right hon. Gentleman will see that British manufacturers are given a fair chance of supplying the silk and other materials which will be required. The officials of the Post Office are very liable to run down the class of materials supplied by the manufacturers of this country. I hope my right hon. Friend will not turn the idea of trying to find some scheme whereby telephones and telegraphs can be put under private enterprise, because I am sure that this can be arranged.
Mr. DEPUTY-SPEAKERThis Bill is to provide money for the development of telegraphs and telephones by the Government, and not under private enterprise.
§ Mr. REMERI was trying to show that all the money need not be spent by the Government if they would put some part of this undertaking under private enterprise. I hope that any enterprise which is undertaken by the Government will be on the lines of making a more efficient 151 service instead of the kind of service which has been so severely criticised by the public in the past.
Mr. ROYCEI hope the Postmaster-General will use all the influence and power he possesses to endeavour to induce railway companies at all rural and country stations of any special importance to connect up their stations with the telephone system of this country. At the present moment there is a great amount of dissatisfaction amongst farmers and others in this connection, because railways generally refuse to connect their stations with the telephone system, and this delays very considerably such matters as the unloading of trucks. Under the ordinary system when goods arrive at a station or empties come for the farmers the usual practice is to send out a note to the farmers by the evening post, and this reaches the farmer the next morning after his horses have gone out on other work on the farm, and consequently there is a delay of two days.
Representations have been made to the railway companies to induce them to instal telephones at their stations, and in one instance the reply received was that the farmers could have the telephone installed at the station if they would go to the expense of placing it there. I do not know what steps the Postmaster-General can take to induce railway companies to do this by offering them any special facilities, but I know this is a matter of very great importance to the farming community, and I hope that some steps will be taken with regard to this question. It has been said that one means of bringing the railway companies to their bearings in connection with this matter would be to block their Bills in this House. I do not know whether that would be effective or not, but I am afraid some such steps will have to be taken to get them to come into line with the farming community.
Sir F. BANBURYThe hon. Member who has just sat down has taken the opportunity afforded by this Bill, which is one to provide money to extend the telephone system, to enter a protest against what I presume he would call the misconduct of the railway companies in not providing, free of charge, telephonic communication between a railway station and the farmers within the area of that 152 station. From the point of view of the taxpayer I am rather inclined to think that possibly it would be better that the railway companies or the shareholders should provide the farmer with telephonic communication apparently for nothing. The hon. Gentleman opposite seems to imagine that the railway companies seem to exist in order to provide the people who sent him to this House with telephonic facilities for nothing, but that is quite a mistake. The railway companies exist to give travelling facilities for the people of this country, and I venture to say that no country in the world has ever been served in such a first-class manner as this country has by the railway companies.
Mr. DEPUTY-SPEAKERI allowed the hon. Member for the Boston Division (Mr. Royce) to raise this point because I understood his argument was that some part of this money was to be spent to link up the railway stations with the telephone system, but I must point out to the right hon. Baronet that the general merits of the railway system are not now under discussion.
Sir F. BANBURYI should not have referred to this subject but for the allusion made by the last speaker to railway companies, and as he was allowed to do this without being called to order, I thought it might be permissible for me to reply to his statement. However, I do not wish to pursue that point any further, beyond saying that I cannot understand how he makes out a loss of two days in regard to the unloading of trucks and the removal of empties. The hon. Member stated that the notice was sent out by the evening post and that when it arrived the horses were out on other work and consequently there was a delay of two days. It seems to me that the hon. Gentleman's arithmetic is very little better than his argument: on this point.
Mr. ROYCEThe right hon. Gentleman forgets that the day on which the notice is now posted would enable the railway company by telephone to communicate with the farmers.
Sir F. BANBURYIf the telephone was used on the day on which the notice was posted, and the horses had gone out, it would, at any rate, be useless for that day. With regard to the question of further money for the telephone, I wish 153 to say that I am in no way desirous of offering any opposition to the proposal to borrow this £15,000,000 for the development of the telephone system. I do not object to that expenditure, because I believe that the money expended will be more or less remunerative. I should like to call the attention of the House to certain figures which happened to come before me this very afternoon. I have not got the actual amount of the figures, but they were submitted to the Post Office, and are correct. They show that in the year 1920–1921 the loss on the telephone service was over £4,000,000, and on the telegraph service over £3,000,000. I forget the actual amounts over those two sums, but the loss on the two services amounted to over £7,000,000. That is a very large sum, and it is advisable that the House should let the Postmaster-General know that in any efforts he may make to secure economy and the more efficient working of the service he will have their unswerving support. I am not in any way making an attack on the administration of the Post Office. They have been face to face with a very great deal of difficulty, as is well known, and the right hon. Gentleman himself has only been Postmaster-General for, comparatively speaking, a 6hort time—I think about two years—
Sir F. BANBURYA short time. Therefore it was impossible for him to prevent all the—I do not quite know what word to use—shall I say, mismanagement which arose owing to the War, due to circumstances over which perhaps the then Postmaster-General had not much control. I hope the Postmaster-General will see that it is quite impossible that we should continue carrying on these two services at a loss of over £7,000,000 a year. When it is remembered that in private hands the telegraph and telephone both paid their way, I do not think it is out of place for a representative of the taxpayers to point to the very great losses which have taken place during the past year.
The POSTMASTER-GENERAL (Mr. Kellaway)The discussion has covered a very considerable ground, and I hope the House will feel it is of advantage that I should reply, after having had the oppor- 154 tunity of hearing the contributions to the Debate which hon. Members desired to make. There are one or two small points that I will endeavour to dispose of before I come to the larger questions. There was the difference of opinion between my right hon. Friend the Member for the City of London (Sir F. Banbury) and the hon. Member for Boston (Mr. Royce) as to the relative merits of the railway companies and the Post Office. Just for once, I think, the right hon. Member for the City of London lapsed from accuracy. He did not quite get hold of the criticism which the hon. Member for Boston was endeavouring to make.
Sir F. BANBURYI have now been given the actual figures of the losses to which I referred just now. The deficit was £4,450,000.
Mr. KELLAWAYI was aware of that, but it was not on that point that the criticism was made. It was in regard to-the railway companies that the criticism was made by the hon. Member for Boston. It is undoubtedly the fact that some of the railway companies, not having the-advantage of that drive and enterprise which the right hon. Member for the City of London contributes to any undertaking; with which he is associated, do take rather a slow view, and a narrow view, with regard to the advantage of having a telephone box on the station premises. We have given instructions to all our surveyors and district managers throughout the country to press the stationmasters or the proper officials of the railway companies in the districts to agree to the presence of telephone boxes on the-stations. While some of them are prepared to do that, they are not prepared to have an extension from the telephone box to some official in the station who can answer a call when it is put through. Without that connection the telephone box is obviously useless for the purposes of the agriculturalist. I should be glad if the right hon. Member for the City of London would use his very great influence to get others in equal authority and position in the railway world to show the same enterprise and interest as he has displayed in this matter. I am sorry I cannot give the hon. Member for Bodmin (Mr. Foot) the figures for which he asks. If he puts a question on the Order Paper, I will see that the information is provided.
155 When I moved the Financial Resolution, some reflection was made on the character of the tests which were applied in order to get the average time necessary in an acknowledgment of a telephone call from an exchange. I want to make it clear that these tests were made without the knowledge of the operators, and that the period covered was between 8 o'clock in the morning and 8 o'clock at night. The tests were taken over a great number of instances, and I am satisfied that they fairly represent what is the practice throughout the country. I gave the average time as being six seconds, from the time that the receiver was taken off the instrument to the receipt by the caller of an acknowledgment from the exchange. The figures were interesting, and perhaps the House will allow me to give them. The average in the Aberdeen district was only four seconds. Why Aberdeen should be so much better than anywhere else I do not know, but my knowledge of that town is limited. The time in Birmingham was 5.2 seconds; Edinburgh, 4.1; Glasgow, 5.3; Liverpool, 6.0; Manchester, 6.4; and London, 6.1. So that Scotland appears to beat England in every one of these instances. The tests were taken over a great number of examples, and they do fairly represent what is the average practice throughout the country.
I also undertook, when I spoke on the discussion last time, to deal with a point raised by the hon. Member for North Camberwell (Mr. Ammon), in regard to a temporary telephone line that was laid along the Caledonian Canal between Inverness and Fort William. With that anxiety to protect the public interest which the hon. Member always displays, he wanted to be assured that we were not going to scrap this telephone line and bring it up to London to use it for the decoration of the General Post Office. I am glad to tell the hon. Member that instructions have recently been given to the Secretary in Edinburgh that if he can obtain 20 additional subscribers, we will afford trunk facilities. I hope they will be able to find that number of additional subscribers, but if they cannot it is quite clear that there is not a demand such as will justify us in embarking on the very large expenditure which the maintenance and working of this line will involve.
156 I think those are all the points raised to which I promised to reply when the Second Reading of the Bill was before the House. I come to the point raised by the Chairman of the Select Committee, the right hon. Member for the Aston Division (Sir E. Cecil). Since compliments are rather the order of the day in regard to the telephone service, perhaps he will allow me to reciprocate the kindly spirit he has displayed in his reference to the work of the Post Office since I have been Postmaster-General. I did find the Report of the Select Committee of great advantage in coming to a decision on a number of problems on which my mind had not been made up. As the right hon. Gentleman has acknowledged, the majority of the recommendations made by that Committee have been carried out, if not precisely in the form recommended by the Committee, at least the spirit of them has been applied. There is one, however, I was not prepared to carry out, and that, naturally, is the one which the Select Committee regard as the ark of the covenant—
Mr. KELLAWAY—and the satisfaction that the Committee feel at my having adopted the great majority of their recommendations is tinged with melancholy because I have not been prepared to adopt their recommendation of the complete separation of the telephones and telegraphs from the mails of this country. I have listened to all that has been said to-night, with all the eloquence and knowledge that my right hon. Friend brought to bear on the subject, and I am bound to say it leaves me cold. It is all very well to tell me of what is being done in Norway, Sweden and Denmark, and about what Italy is going to do. We are not dealing with those countries. We are dealing with a highly industrialised country and with a system that has grown up and has become interlocked for some years. The arguments drawn from those rural districts must not be pressed too far when dealing with the sort of problems we have to deal with in London, Edinburgh, Birmingham and Glasgow or any other great city.
Mr. KELLAWAYI shall have something to say about Home presently. You must not try to draw argument from countries where the systems have always been separate and apply them to countries where the systems have grown into one another. This is the state of things you would have if we were to apply this recommendation to this country. You would have separate staffs under separate supervision dealing with work now common to the Post Office. If you went into a fairly large office to send a telegram, you might see a girl behind the counter doing nothing, because it was her business to look after postal work, for which at the time there was no urgency, and she would be unable to deal with your urgent telegram because she was on the other side of the service. It really would not work. We have now 1,500 offices, up and down the country, with a common staff, able to deal with telegrams and with postal matters, and to attempt to separate these and, in a comparatively small office, have one staff to deal only with telegrams and not allowed to touch stamps, while there will be another staff to deal with letters and not allowed to touch telegrams, to have that sort of thing would result in making the service hopelessly expensive and, I believe, inefficient as well. My right hon. Friend is very proud of Rome. I hope that hon. Members, who heard my right hon. Friend holding up to me the example of Italy as a place where lately they have adopted the separation of the posts and telegraphs, will listen to what I read in to-day's "Morning Post." It was under the head "Rome," 2nd July, and it said:
The Report of the Committee appointed to deal with the Budget of Posts and Telegraphs has now been laid before the Chamber. The deficit for 1920–21, the Report says, was 471,000,000 lira. For 1921–22 it was over 500,000,000 lira, and it is estimated that the deficit for the current year will be the same sum.We make our post office pay. We are making our telephone service pay, and my right hon. Friend must excuse me if I decline to be moved to adopt a system which has produced financial results of that kind. I have to make my system pay and we have succeeded, but I must not 158 be asked to adopt a system with regard to which we find to-day the financial result has been a loss of 500,000,000 lira. I do not close my mind to any proposal that may be made by any responsible body of men for an improvement in the organisation of the telephone service, but I think the improvements which have so far been effected far outweigh any technical advantages that might accrue from complete separation. I have been asked as to the control of the joint service. The Controller of the Telephone and Telegraph service will in future be an official who has been trained in the National Telephone Company. He is one of the ablest men we have on the telephone side. He will control the telephone and telegraph service to a large extent.
Mr. KELLAWAYMy hon. Friend the Member for Pembroke (Sir Evan Jones) quoted a great number of figures in order to prove that instead of the reductions I have made I ought to have made reductions two and a half times as great. I am sorry to say I cannot follow his argument. I wish I had that "hidden reserve" to which he referred. No one has a greater interest than I have in securing very substantial reductions, but I think I went as far in the direction of reducing charges as it was possible to go. I very nearly divided up the melon to the last pip, and if any criticism is to be made it should be that I have gone too far. Let us first see what will be the result of the reductions. If possible, I would only be too glad to go further. My right hon. Friend and those who supported him said, "We have showed you a sum of £400,000 or £500,000 in your accounts which you might have used for the reduction of charges." But I have used that sum. I had already adopted that course. There is a difference between us as to the method of accounting which has to be borne in mind, but really the only amount remaining in dispute was a sum of £200,000 in the Special Depreciation Account. With regard to that, I am taking the advice of one of the most eminent accountants in the City, and if he says I can use that for revenue purposes without jeopardising the safety of my accounts, I shall be very glad to do it. But unless I can get that assurance I am not prepared to do it. 159 That is all that remains of the "hidden reserve" which my hon. Friends, in their eloquence, have put at from £500,000 to £600,000
Mr. KELLAWAYThat is reflected in the accounts for this year which I laid before the House. If my hon. Friend or anybody else can show me that "hidden reserve" of £500,000 or £600,000, I can assure them that the public will very soon get the benefit of it.
I conclude what I have to say on this by emphasising what was said by my right hon. Friend the Member for the City of London (Sir F. Banbury). The first interest of the telephone service is its solvency, and I cannot be a party to these methods of improving the apparent position by cutting down the amount which should be allowed for depreciation. That is the short road to bankruptcy. I would rather err on the side of making too large an allowance than of not making a sufficient allowance. My hon. Friend the Member for Macclesfield (Mr. Remer) wanted an assurance that the telephone department would employ British workmen. I think that the arrangements we have in the Post Office do secure that, even where there is a certain financial loss involved by placing the contracts in this country, they are placed in this country; but we cannot undertake that no work shall be placed outside this country. The amount of money spent outside this country by the Post Office is very small indeed. It is a very tiny percentage of our expenditure. But there are certain things which cannot be got here. I regret it, and I have used the whole of my influence, and the influence of the Post Office Advisory Council has been used, to try to get provision made in this country for producing those things which at present cannot be obtained here.
§ Mr. REMERWill the right hon. Gentleman look very carefully into the silk question? I am quite sure that the trade can supply all the requirements of the Post Office in that respect, and they are now working short time.
Mr. KELLAWAYI will certainly look into that. I remember discussing it some 160 time ago, when it was raised by my hon. Friend. The only other observation that I need make is to refer to what several speakers have called the change of spirit in the Post Office. It was emphasised by my right hon. Friend who opened the discussion. He was good enough to some extent to attribute that change in spirit to the change in the Postmaster-General. I think he is wrong there. It is not that. Two things have been chiefly responsible for it. The first is the appointment of a body of business men to advise the Postmaster-General, at whose meetings permanent officials are present; and the second is the fact that we have periodical meetings of the heads of the great Departments in the Post Office. Those two changes in administration have undoubtedly brought about a change of spirit on the part of the Post Office, and have explained, to some extent at any rate, the much more friendly attitude which the public now display towards the Post Office than they were displaying some time ago.
Sir E. CECILI did not want to make any comparison between my right hon. Friend and his predecessor.
Mr. KELLAWAYI am sure that that was the last thing my right hon. Friend would desire to do. I assure the House that, in agreeing to this provision of £15,000,000 of capital for the development of the telephone service, the money is being put into a concern which has improved and is improving, but which I agree ought to be a great deal better. There is every indication that, if the House continues to provide, as in the past, capital for this Service, we shall be within a measurable distance of removing from this country what I regard as the discredit of its present telephone position. The improvement during the past year has been marked, and, if the House continues to show its confidence in the administration of the Service, I think we can promise greater improvements rapidly in the future.
Mr. AMMONThere are two points which I should like to ask the right hon. Gentleman to be good enough to make clear to me, as I had not the advantage of hearing the whole of his speech. I understand that he proposes to appoint a Controller of Telegraphs and Telephones. | Does that mean a new appointment, or a 161 consolidation of these two Services under one Controller? There has always been a Controller of Telegraphs, and I should like to know what it really amounts to. The other point is with regard to the cable line between Aberdeen and Fort William. I was able to supply the right hon. Gentleman—although it was not necessary, because he knew the figures already—with the numbers of subscribers demanded and of those who have already intimated their willingness to use this cable, the latter being a very large percentage of the number required. I hope the right hon. Gentleman will not be in too great a hurry to close down before he gets the other 20 that he considers requisite for the continued maintenance of this cable.
Mr. KELLAWAYI think it is only an additional 20 that we are asking for, and I certainly do not want to close it down. As to the position of the Controller of Telegraphs and Telephones, it is more in the nature; of a closer definition and enlargement of the duties which have been carried out by Mr. Dalzell. It does not mean the appointment of a new officer, because he is already in our service but we shall then have a man at the head of that branch of the Service who can be held immediately responsible in regard to the whole administration.
§ Question put, and agreed to.
§ Bill read a Second time, and committed to a Standing Committee.