CABLE AND WIRELESS BILL

HC Deb 21 May 1946 vol 423 cc201-88

Order for Second Reading read.

3.41 P.m.,

The Chancellor of the Exchequer (Mr. Dalton)

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

Yesterday it was coal; today it is cables. The Socialist advance, therefore, continues. But I believe that this stage is not controversial. I understand that the Opposition do not intend to divide against the Bill tonight. I naturally welcome that approach to the Measure, and I hope that what I shall say will not provoke disagreement. This is not only a Measure of Socialist advance; it is also a practical Measure of united Empire policy. On this matter we and the Dominion Governments are at one, as I shall indicate later.

This Bill nationalises Cable and Wireless, Limited, and transfers from private to public control a great network of Imperial telecommunications. The House may like to have a brief picture of the physical assets that are affected by the transfer. The assets owned by Cable and Wireless include 155,000 nautical miles of submarine cable, five cable ships, five wireless stations in the United Kingdom, and some 200 offices and cable and wireless stations widely scattered over a large number of countries, 40 of these being in different parts of the British Commonwealth and Empire. The company also operates some 140 wireless circuits. This short list illustrates the importance of the company's activities from the Imperial as well as from our own domestic point of view. Hence the importance of this Measure. The White Paper which was issued some time ago gives a brief account of the past history of events Paragraphs 2 to 9 of the White Paper briefly summarise the past history of the organisation of the external telecommunications services of the British Commonwealth from 1928—I propose to indicate in a moment what happened in that year—until the most recent conference on the matter, the Commonwealth Telecommunications Conference of 1945.

The organisation that was created in 1928 as a result of the Imperial Cable and Wireless Conference was operated on what might be called semi public utility lines. Examples of this character of its organisation were that two of the directors of the operating company were to be appointed by His Majesty's Government; and the company was required to consult an advisory committee, the Imperial Communications Advisory Committee, on questions of policy; and there was financial provision whereby 50 per cent. of any net revenue which the company made in excess of a certain standard was specifically to be used for the reduction of rates, or for such other purposes as the Advisory Committee might recommend. We were already, therefore, out of what I might call pure and undiluted private enterprise even in 1928. Ten years later, in 1938, there occurred a change in regard to the beam wireless telegraph stations, which had been previously owned by the General Post Office. This was not a Socialist advance, but a retreat. The Government of the day disposed of those public assets, those valuable and potentially important assets; but in exchange the Government of the day acquired from Cable and Wireless 2,600,000 shares out of the total of 30,000,000 £1 shares held by the company. So much for that event in 1938, opposed by the Labour Party at that time.

I proceed to the developments of more recent years. I shall not go into great detail at this stage, but it is true to say—and I say this in no controversial spirit: it is a mere statement of facts—that in more recent years there has been an increasing dissatisfaction in the Dominions with this set-up. They have not liked it. It has become increasingly unpopular. There may have been personal as well as institutional reasons. I do not want to go into that. But the thing has not worked well. There has been friction. The Dominions have not felt they were getting reasonable consideration, and the view has more and more gained ground in the Empire—I am not talking now of opinion in this Island—that we cannot carry on with this very important Imperial telecommunications service being operated by a company which is responsible to private shareholders. There has been, on the one hand, a general wish for closer coordination between the various parts of the Empire in this matter; and, secondly, there has been an increasing conviction in different parts of the Empire that this coordination of the Empire cable and wireless services should be on the basis of public ownership.

This process and trend of thought culminated and crystallised in the last couple of years, and during the Coalition Government, as the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) will remember, there was a good deal of coming and going, and consultation and so on. Finally, while the Coalition Government were still in office, in the early part of 1945, certain proposals, which had been devised by a committee on which the various Dominion Governments were represented, were referred by the Coalition Government as a basis for discussion to a Commonwealth conference. This met last summer—in fact, just after the change of Government. One of the first duties I had to perform in the office I now hold was to attend a luncheon, a very agreeable function, attended by a number of very agreeable people.

Sir Wavell Wakefield (St. Marylebone)

Agreeable austerity?

Mr. Dalton

Relatively agreeable. This luncheon was held for the purpose of welcoming 'the various people from the various parts of the Empire who were attending the conference and taking part in the discussions. I remember saying then, that I had not had time to read the report rendered to this conference, but that I had heard a rumour that it was somewhat Socialist in character, and that I would wish to assure-the conference that His Majesty's new Government in the United Kingdom, which had been in Office only a day or two, would not be biased against it on that account. I here only make the point in passing. It would be very wrong to disclose to the House any of the discussions to which the right hon. Gentleman the Member for Aldershot and I were parties during the Coalition Government, but I think an outside observer would draw the conclusion, that if the Coalition Government thought that this report should be referred as a basis for discussion, including, as it did, a proposal to nationalise these services, then, at any rate, the Coalition Government did not feel passionately hostile to it. If they had they would have preferred other arrangements. I am looking forward to an unopposed Second Reading of the Bill, and I am sure we shall get it. I would have the right hon. Gentleman recall, as I am sure he does, that there was not that united, powerful, hostile feeling in the Coalition Government against this kind of advance

Mr. Beverley Baxter (Wood Green)

If this pact of silence between the Chancellor and Members of the Coalition Government is to persist, and the House is merely to be told that the Empire delegates entered into discussions, no one being told the reason for this Debate, what is Parliament to do? Is Parliament simply to accept this mysterious silence?

Mr. Dalton

There will be no curtain of silence drawn over what the hon. Member is anxious to know. The only point where we exercise a certain reserve, is in regard to the confidential discussions which took place in the late Coalition Government. The proposals are all described in the White Paper, and I will expound the case for the Bill in a moment. All I say, from outside observation, is that the Coalition Government have shown no hostility to this line of action, otherwise they would not have referred the proposals as a basis of discussion for the Conference which met last summer. With regard to that Conference, some organs of the Press got it wrong. As the hon. Member opposite who is a distinguished contributor to a Sunday paper in which Lord Beaver brook has an interest referred to this, I wish to emphasise that all Dominion Governments have accepted these recommendations. That ought to go into next Sunday's paper as a correction.

Mr. Derek Walker-Smith (Hertford)

The right hon Gentleman has done me the honour to refer to me. May I ask him if he will supply to the House the order of events, so that it may be clear whether any initial action was taken by a Government other than the Socialist Government of Australia?

Mr. Dalton

It will all come out. There. is nothing to be concealed. I am moving an amendment to the statement in the "Sunday Express."I say that all the Dominion Governments, including Canada, South Africa, Australia, New Zealand, Southern Rhodesia and the Government of India have accepted these recommendations. They are all lined up together, and those whom this bond of Empire has united, let no Conservatives seek to tear asunder. We are very alive to this threat to Empire preference from the other side of the House.

I now come to what is in the Bill. I am afraid there is a little financial complication, which the right hon. Gentleman will understand better than anyone, but I will try to explain it in simple terms. The so-called operating company —Cable and Wireless Ltd.—that we are taking over, as distinct from the holding company, was created in 1929 to hold and operate all the communications assets of a number of companies, which are set out in detail in the. Schedule to the Bill, together with certain Government cables. It was to operate also the beam wireless stations owned by the Post Office, which in 1938 passed into the possession of Cable and Wireless Ltd. The nine companies named in the First Schedule of the Bill, which may be called the old companies, transferred their communications assets to this operating company in 1928, and as a result they own all the shares in the operating company, except those which were acquired by the Government in exchange for the surrender of the beam wireless stations. The Government own 8.67 per cent., and the other companies, in aggregate, 91.33 per cent. So much for the operating company. When I first studied this subject I was in confusion about the operating company and the holding company, and anyone who has not looked into this matter closely, may easily fall into this trap, if not on guard. In addition to the operating company, there is Cable and Wireless (Holding) Company. We are not taking that over, although the character of its holdings will change. This company was created in 1929, and it owns practically all the shares of the old companies. The shares in the holding company are owned by the public.

The change we are proposing to make is that the shares of the operating company should now pass into the ownership of the Government. We are taking over the operating company. There will be issued Government stock in exchange, together with interest on the compensation during any period that may elapse between the appointed day defined in the Bill for making transfer, and the actual date of issue of compensation stock. The operating company will therefore pass into the control of His Majesty's Government, and the old companies will get Government stock in exchange for their shares. The holding company will not be taken over. The change is made by the transfer of the operating company's shares, rather than by the transfer of its assets. This seems to us to be the most convenient procedure. The procedure varies from one act of nationalisation to another. In this case, it is more convenient to take over the shares than the assets. The issue capital of the company is 30 million shares of £1 each. If the Government own the company, they will own the whole communications undertaking, and in addition certain investments consisting mainly of liquid reserves. There is no need in this case to pick and choose which part of the concern we want. We take all there is; it is a comprehensive transfer, and we are paying a good price. We are making the compensation payments as in other cases, for example in the case of the Bank of England Act and the Coal Bill, by giving Government stock rather than cash to those who are entitled to it.

Mr. E. P. Smith (Ashford)

Frozen Government stock?

Mr. Dalton

No, Sir, stock which is not inalienable. It is different from the Coal Bill, but it would be out of Order to discuss that. I am satisfied that in each case the Government have made the right decision. In this case there is no need for inalienability. We were equally right however to make the provision in the other case, and that shows how open-minded we are in these matters.

With regard to assessment of compensation, that may be fixed either by agreement between the parties, or, in default, by arbitration. It may save trouble if we have agreement, but the Company has so far shown no great keenness to come to an agreement with the Government. Perhaps they are waiting to see.what the result of tonight's vote will be. I must, therefore, count on the possibility of arbitration, and we have made provision for that in the Bill. If arbitration is necessary, we have made provision for setting up a tribunal, and the tribunal is instructed to base compensation on the net maintainable revenue of the undertaking. This.again follows the precedent of the Coal Bill.

In assessing the net maintainable revenue, the tribunal is to leave out of account the effect on the future revenue of the concern, of both this Bill and the Bermuda Agreement. Both of these are to be excluded from consideration when the compensation is being determined. Cable and Wireless have made no secret of the fact that they do not like the Bermuda Agreement, which deals with rates, and they have been conducting propaganda against it, with the shareholders' money. The Bermuda Agreement will affect the operating company's revenue, but by exactly how much is a matter which can only be shown when we get further on and see what the expansion of business and communication work generally is likely to be in the next few years. The Bermuda Agreement was entered into by His Majesty's Governments—I say His Majesty's Governments because, here again, the Empire is united. His Majesty's Governments of the United Kingdom and the Dominions entered into this Agreement after we, in this country, had announced our intention to take over this concern; and, therefore, it is only fair that the effect of the Bermuda Agreement should be left out of account by the tribunal. On the other hand, the Company itself intended, even before the Bermuda Conference was held, to make some changes in its tariffs. It realised that some changes would be necessary. If it had not made any changes in its tariffs, its traffic might have declined, because it was keeping its charges too high, and, therefore, damping down business. The arbitration tribunal is entitled to take such possibilities as that into account. I do not think that there will be any dispute that that is a fair basis for arbitration.

As to the future organisation that we contemplate, there are two broad alternatives under public ownership. One is direct operation by the General Post Office; the other is operation by a public Board; and both of these alternatives had their supporters. The Government have deliberately not, as yet, reached a decision between these alternatives. We shall do so. There is nothing in the Bill about it. The Bill is only a provision for transfer. This matter can be looked at—there are arguments on both sides—and my own opinion is not made up as between direct operation by the Post Office or by a public Board. The Government will examine all this, and they will consult with the various interests concerned including the Union of Post Office Workers and the Postal Engineering Union.

Mr. Rhys Davies (Westhoughton)

The right hon. Gentleman is talking about the transfer of the Cable and Wireless private business to the State. Is it possible for him at this stage to say something about what the conditions of the employees of this company will be when the transfer takes effect?

Mr. Dalton

Certainly. I am very anxious to make that clear. As between these two broad alternatives, the Government are anxious to consult all those who have an informed opinion about it, and then to take a decision, one way or the other, at no distant date. But there is no need to take this decision before passing this Bill, which merely provides for the transfer to public ownership of Cable and Wireless shares. There is nothing in this Bill to prejudge the issue, one way or the other, as between direct Post Office operations, and operations by a public board. The Government will welcome discussions and suggestions on it, at a later date, before we reach our final decision. Whatever the decision is on this major point as between Post Office and public boards, there will have to be an interim period between the appointed date and the date on which the decision can be put into effect, and the new scheme can be got into working order. During this interim period, it is undesirable that the existing directors should continue. They would not like to do so, and it would not be fair to ask them to do so; and, therefore, we must have a new temporary board which will be appointed by the Government. The Government will then be the shareholders, and we shall appoint a small board to carry on in the place of the present board who under Clause 3 (1) of the Bill are required to vacate their office on the appointed day, until we get to the definite new stage.

With regard to the position of the staff, about which my hon. Friend opposite asked me, I am anxious to make a statement, because there has been a bit of propaganda done by those persons who are about to vacate their office on the appointed day. I say quite emphatically that the existing contracts of service of the employees will not be disturbed by the change of ownership. I am not speaking of the members of the board. The employees will not be disturbed; they will continue as now. [An HON. MEMBER: "No improvement? "] Cable and Wireless had plenty of time to make any improvement that might be thought necessary. They will continue as now, on transfer. Moreover, it is the Government's intention, when they become the owners, that any changes in the conditions of employment shall be made only after full consultation with the representative staff associations, and that there shall be appropriate machinery for consultation between the management and the staff on all matters of mutual interest. I hope that that will be regarded as a satisfactory undertaking.

With regard to the Bermuda Agreement, I think that it is necessary to add a little to what I have already said about it. In the propaganda which they have been carrying on—as they were quite entitled to—Cable and Wireless have been alleging that the Empire is being sacrificed to foreign interests by the Bermuda Agreement, on the grounds that the Bermuda Agreement commits the Government to make rate reductions greater than those which the company itself would have made had they remained in control. The criticism launched against the Bermuda Agreement by Cable and Wireless ignores the fact that, but for the Agreement, American companies would have conducted a rate war, which they have already started. There has already been a very considerable rate war and, in face of that, Cable and Wireless would have been compelled either to reduce their rates in step with the American companies, or else they would have lost a large amount of business to the American companies. They could not just have stood by. The tide was rising. Further than that, the Bermuda reductions were all agreed. These reductions can be defended on their merits. They are a further step towards cheap services for the benefit of trade, the Press, and communications generally.

I suggest that cheap communications, particularly between different parts of the Empire, are most necessary, and that we should do what we can to bring them to the lowest level of prices that is feasible. I must say that the resistance of the company to price reductions seems to me to illustrate the restrictive outlook which we often find in private monopolies, in contrast to the policy of expansion which marks enlightened public enterprise. [Interruption.] The telephone service is a very good service, and, as patriotic Britishers, we ought to be proud of it. It is a much better service than a lot of the telephone services in foreign countries. Still, on the subject of rates under the Bermuda Agreement, as far as the British Commonweath is concerned rates within it were reduced in 1938 to Is. 3d. a word.

Mr. Manningham-Buller (Daventry)

By the company?

Mr. Dalton

By the company, but that is a long time ago Time marches on and we must march with it. It is natural that the general reduction of rates should be in relation to the foreign rates generally Here we return to Imperial Preference. The Bermuda rates still maintain the margin of Imperial Preference. The Bermuda ceiling is to be Is. 6d. a word compared with the present Commonwealth ceiling of Is. 3d. There is Imperial Preference in the rate differentiation, whereas the company had in mind—and they admit that they had it in mind—changes which would involve the eventual abolition of Imperial Preference altogether. I hope the Opposition, therefore, will rally for once to the support of the Government in support of Imperial Preference—unlike what they did the other night on the Finance Bill. It is a feature of the scheme that Imperial Preference remains. The Commonwealth aspect of this new scheme is very important. Some of the Commonwealth Governments indicated quite clearly that they would not continue to support the present set up and that they would have withdrawn their confidence from it. They have demanded that a change shall be made.

Moreover since 1928, when this Cable and Wireless Company was created, many technical changes have occurred which affect the position today. In 1928 it was assumed that direct wireless circuits would not he opened in any way in competition with the Company's system. In 1928 that might be assumed, but the war compelled the opening of such systems. Therefore they are subject to competition, although not with undertakings in this country, because there is nobody else to compete with them here, but in the world as a whole they are subject to certain competitive interests. So the position is that the old argument no longer applies, and what we were seeking to do at the Bermuda Conference was to seek an Anglo-American Agreement, as in so many fields, which would give us a practical working compromise between the American preference for wireless working and our own insistence on a balanced wireless and cable system. We think we have done it, and it is clear that neither the Dominions nor India will.accept any reversion to the original form of organisation. If this Bill were thrown out the thing would not stop there, but the Dominions would take their own actions and set up their own organisations under public ownership, with the advantages of a common organisation of telecommunications such as is being set up in this Bill.

The Commonwealth Governments represented at the Commonwealth Conference in 1945 all accepted the recommendations of that Conference. Some of them are already taking action to carry them out, and we have reason to think that before long all will do so particularly when we have taken the necessary steps in this matter. The Australian Government already contemplate legislation on this subject on similar lines to ourselves. The Government of India have given notice to the Indian Company that they are going to exercise their option to purchase in January, 1947. The New Zealand Government do not need further legislation, because telecommunications there have been a public service for some time. [Interruption.] There is no need for the hon. and learned Member for Daventry (Mr. Manningham-Buller) to show his dissent. He asks what about Canada. I cannot tell him when the Canadians are going to introduce a Bill, but, as I have said, the Canadian Government like other Empire Governments have accepted the recommendations.

Mr. Manningham-Buller

The right hon. Gentleman has given a list of the steps taken by the different Dominions and that is why, having referred to Australia and India, I was asking him if he would say what was the position with regard to telecommunications in Canada and South Africa.

Mr. Dalton

What I have said is that both have indicated acceptance of the recommendations, and there is no use in the Opposition trying to run away from that. As to the dates when they will severally introduce their Measures I really cannot say. We shall see in due course, but the lion. Gentleman ought not to throw doubt on the bona fides of the Dominion Governments. They have said that they accept the recommendations. I have given all the information that I have, and the fact that they have accepted is the important point. There can be little doubt —and I know that the Opposition do not like it—that they are in favour of this Socialist Measure. I am sorry for the Opposition, but these are the hard facts of life and we must face the facts of life. These are, therefore, the elements in the background of this matter. I repeat if we do not proceed along these lines there would be a general breakup of the whole of Imperial unity on the matter.

I should like to draw the attention of the House to paragraph 10 of the White Paper where certain recommendations are laid down, which I think are of great importance to the future of the British Commonwealth. The recommendations are as follows: A Commonwealth Telecommunication Board should be established in place of the Commonwealth Communications Council, with functions mainly advisory in character, but substantially wider than those of the Commonwealth Communications Council, covering all the Commonwealth telecommunication organisations, and including "— and here are the very important items on its agenda— The formation of a joint telecommunication policy, including rates; the coordination and development of the wireless and cable systems of the Commonwealth; the coordination with the appropriate authorities of telecommunication matters affecting the defence of the Commonwealth; the coordination and conduct of research and "— this is I think considered to be very important— negotiations with foreign telecommunication interests if requested to undertake these by the Commonwealth Governments. Lastly, the Conference recommended a system of pooling revenue, details of which would be worked out by the Board. I think that is an extremely promising step forward in Empire cooperation. I am sure right hon. Gentlemen opposite agree with me. it is a kind of regular association of the various Governments of the Empire, pooling their ideas and exchanging their views as well as conducting research and so on which, I am sure, will be very valuable in the years and days to come. This is the sort of arrangement to which this Bill naturally leads up, but without the Bill this cannot even begin to occur. Therefore, I ask the House to accept my Motion "That this Bill be now read a Second time," on the grounds that this Bill is a very useful step forward along the road of Empire cooperation, which is desired not only by enlightened opinion in this country but also in all other parts of the Empire, and out of it, indeed, greater things may grow.

4.18 p.m.

Mr. Oliver Lyttelton (Aldershot)

I think we have been unfortunate to find the Chancellor of the Exchequer in rather bad form this afternoon. He has made some amusing references to private enterprise and various other things with which I shall deal later on. He has also indulged in a little amusing talk about rate reductions in relation to the Post Office, to which also I shall have to refer in passing. I do not think that the Chancellor will demur if I say that I think no substantial reason, other than that of securing Dominion support, has been advanced in favour of this scheme. I do not want to be misunderstood. That is a very powerful reason. In these discussions the matter of maintaining intact the Imperial network of communications, that is to say, both cables and wireless, is of dominant importance, and for the promotion of a lively and expanding trade between the countries of the Empire a completely integrated system of communications is a most desirable object. So I think we on this side of the House should have no objections to any argument which advances the cause of Imperial unity in economic matters. We approach this question of public ownership from that point of view. In anything that we say we shall bear that in mind, but, having said that, I think it is our duty to point out the defects of any proposals in a scheme, whether or not that scheme has been accepted as inescapable by the Governments concerned, or whether, as I rather suspect, the scheme has been imposed on the signatories oWing to the need for agreement. It is our duty in this House to bring out these points, and I shall have something to say later about the jumbled and ineffective scheme which has emerged from Lord Reith's negotiations.

The fact that Cable and Wireless enjoy a semi-monopolistic position makes us less sympathetic, on this side of the House, to any claims that they may advance. I would remind the House that Cable and Wireless was created not from a monopolistic idea, or for monopoly's sake, but for a very particular reason. It was that in the opinion of the Government of the day it was desirable to keep the cable network alive, at a time when the competition of beam wireless seemed likely to put the cable companies out of business, or else involve them in crippling commercial losses. I do not think there is any controversy or disagreement in any part of the House that the decision to place the two forms of communication under single management, under one company, was sound and right.

Mr. Benson (Chesterfield)

So you handed Government property over to a monopoly?

Mr. Lyttelton

It was considered desirable that these two means of communication should be put under a single management. It was thought that the two would reinforce one another. There were some at that time who thought that no great harm would be done if beam wireless were allowed to drive out the old form of communication. That was a wrong point of view, as was proved during the war, when the great bulk of our military and political messages were sent by cable. The Chancellor will remember that. The reasons were, first, security and, second, regularity. There were times, during the war, when beam wireless faded out altogether. Moreover, the ease with which the enemy can pick up wireless messages needs no emphasis. Cable messages can probably never be tapped, although that is not to be stated too absolutely. It is, however, much easier to pick up wireless messages. It is also significant that research into cable communications which has been conducted by Cable and Wireless Ltd. has made it much less certain that cables are uncompetitive, commercially, as compared with beam wireless.

Mr. John Edwards (Blackburn)

Could the right hon. Gentleman give one example of technical development for which Cable and Wireless, Limited, has been responsible during the last 15 years?

Mr. Lyttelton

I cannot do that at the moment, but I have general knowledge of great developments in the use of cables which have been promoted by Cable and Wireless, Limited.

Mr. Cobb (Elland)

Could the right hon. Gentleman say where is that company's research organisation?

Mr. Lyttelton

No, I will not do that. The facts are not in dispute.

Mr. William Williams (Heston and Isleworth)

Can the right hon. Gentleman say why Cable and Wireless, Limited, took over the beam service in 1928, if it was a dearer proposition than the cable service?

Mr. Lyttelton

The hon. Gentleman has entirely misunderstood the argument. The argument was that beam wireless might drive out Cable and Wireless, and that that was thought to be undesirable for national reasons. I can supply the hon. Member for Blackburn (Mr. Edwards) with the information he wants if he insists, but I can say now that research into the use of cables, in which Cable and Wireless played a notable part, has made it less certain that beam wireless would drive out cables. The Americans are pursuing the same line of research; they now attach much more importance to cable communication than they did during the war, and are not convinced that there is no place for the old, as well as the new method.

The Chancellor referred, in passing, to the fact that Cable and Wireless, Limited, was a semi-public utility. I think it right to make that point because, frankly, I do not think that in either attacking or defending Cable and Wireless as such, the matter of private enterprise comes up one way or the other. The Chancellor enumerated some peculiar conditions under which the company worked. He did not actually give the final point of detail, which is that their dividends are limited to 4 per cent., and that on any surplus earned above that rate 50 per cent. goes to reduction of rates and 50 per cent. for the general purposes of the country. I think it is notable, also, that neither the Chancellor's speech, nor the White Paper, charged the company with inefficiency. It would have been very difficult for the Government to have laid such charges. They would have given more justification for the action they are taking if they had been able to do so, but the fact is that the services the company rendered to the Empire during the war are too fresh in our minds and that the remarks made by the Dominions Secretary a short time ago—if I have them with me—

Mr. Dalton

They were made after dinner.

Mr. Lyttelton

That is an extraordinary intervention. I always imagined that statements made by Ministers after dinner were to be regarded as just as important as statements made by them at any other time.

Mr. Dalton

I only wanted to identify the occasion. As the right hon. Gentleman did not seem to have the note about it. I was trying to help his memory. The occasion was an after-dinner speech.

Mr. Lyttelton

The Chancellor is now trying to escape from a suggestion which, to ordinary people's minds, conveys something quite different. Whether it was at a free luncheon or a post-dinner occasion I do not know, but I would like to point out that the Dominions Secretary said: I think the people who have worked behind the scenes operating these immense services during the war should have this tribute of my appreciation. I am glad that that was said when the Chancellor was making attacks on the management of the company, indulging in some light cavalry charges upon them, and was permitting himself some very sneering references. Those who would like to look up the official minutes of the Communications Conference, in 1945, will find that tributes—I imagine before-dinner tributes—were paid to the efficiency of the company by India, South Africa, Australia, Canada and New Zealand. So, there was no charge of inefficiency laid, either in the White Paper, or by the Chancellor today, against the company. With regard to the decision to acquire the shares and put forward this Bill, it seems extraordinary that the question of how the company is to operate should not have been determined before the assets were acquired. I listened to the Chancellor with astonishment when he came to that point. As a rule, and in common sense, those who are thinking of buying an undertaking or a company begin by considering how it would be managed if they were to acquire it, how its business fits in with the other businesses in which the buyer is engaged, what the saving in overhead expenses will be, if any, and so forth. If I have understood the Chancellor aright these matters are not yet determined. I suppose that with a song in his heart he has put forward this streamlined Bill, and when he has finished singing, I imagine he will turn to thinking of what to do with the assets he has acquired.

I do not think this is at all the way in which legislation should be presented to this House, and I do not think the House is being fairly treated in this matter. If we are to form a proper view of the value of the asset we are asked to acquire we are entitled to much more information upon how it is to be managed and what its relations to the Post Office are going to be. The Chancellor airily waves that aside and says, "Let us acquire an undertaking in a few Clauses and then work out what we are going to do with it afterwards."This is quite unfair because the way in which it is going to be managed, the organisation to be set up and the interlocking of these services one with the other are vital to the assets we are asked to buy.

Let me admit that I find it very distasteful to have to say on an Imperial matter that I think the scheme will prove entirely unworkable in its present form—as far as that is discernible—and will certainly have to be altered if it is put to the test of actual operation. I fear that these alterations will cause a great deal of subsequent discussion in the Imperial family. I have great admiration for Lord Reith and have seen some of his public services at close hand when we Were colleagues in the Government, but I cannot extend that admiration to the negotiations he conducted on this occasion. He was given the task by the Coalition Government, and I think the Chancellor was almost departing from his usual fairness when he implied that we were bound, if not to support Lord Reith's scheme, at any rate not to go against it. The position is that the Coalition Government sent Lord Reith on an Empire mission to find out whether an efficient scheme could be promoted which had the full support of the Dominion Governments. I do not underrate the difficulties of his task, but he cannot himself be satisfied with a scheme which has such obvious disadvantages and which represents a slavish surrender to immediate expediency and agreement at the expense, as I think, of future peace and harmony in the working of the Company.

I think that when Lord Reith went round the world he immediately formed the opinion—perhaps he started out with it—that nothing but public ownership would satisfy the Dominion Governments. There was some cause for thinking that. The protagonists of such a system at the time were three gentlemen, Sir Campbell Stuart, until 1945 Chairman of the Commonwealth Communications Council, Sir Gurunath Bewoor, at that time Secretary to the Government of India Posts and Air Department in India, and Mr. McVey, Director of Posts and Telegraphs in Australia Lord Reith may have thought that he would have the services of these gentlemen at his disposal to help in the running of a public company. In fact, Sir Campbell Stuart has now left the communications business for the boards of one or two important companies, Sir Gurunath Bewoor has gone, I believe, to the Tata Iron and Steel Company, and Mr. McVey has retired from the public service to take up work with the Standard Telephone Company of America. It would appear from the subsequent actions of these protagonists of public ownership that their objections to privately owned companies were not so obdurate or deep-seated as to be unalterable.

I turn now to the arrangement under which these assets, when acquired, are to be managed. I am mindful of your recent Ruling, Mr. Speaker, that it is permissible to discuss only the financial matters raised with regard to the overriding authority, and I propose to deal only in general terms with other aspects of the position. The overriding authority, in its present shape, is given the task, first, of redistributing the revenues of the company, and I must say quite frankly that in its present shape it is one of the most inept pieces of administrative machinery which His Majesty's Government have yet devised, though they have already earned for themselves an unenviable reputation for ineptitude in these matters. The phraseology is, as usual. comfortably vague, and is couched in that flatulent official English which is designed, it would appear, to conceal rather than disclose the meaning.

As I understand it—and the Chancellor will correct me if I am wrong—the overriding authority is to be charged with the task of collecting all the revenues of all the Empire companies and then redistributing them by agreement with the partner Government. I can think of no arrangement likely to lead to greater friction and legitimate grievance than that. What would the shareholders think in an ordinary company, working under the system which the Chancellor does not like, if some of them, in the same class of shareholding, were to receive more of the revenues and be charged with less of the expenses than others? It is common sense that such an arrangement must lead to the greatest friction. The provisions are entirely vague, and "will have to be worked out by the Board ", which I believe is the phrase used in the White Paper. It is impossible to work among such a widely scattered and diverse body as this will be a system by which the various shareholders are not going to receive pro rata proportion of the expenses and profit, if any. After reading the White Paper I gather that members of the overriding authority are not to be resident at the headquarters of the company but will be scattered all over the world, and I should like to ask the Government if it is a fact that any member has the right of referring any matter to a partner Government. If that is so—and I am assured that it is—it means that any member of the Board or central overriding authority can exercise a power of veto over the day to day business of the company. I should have thought that His Majesty's Government had had enough experience of the difficulties of vetoes without wishing to create a new one of their own. Perhaps the Financial, Secretary, when he replies, will give a specific answer to the question whether that is contemplated under the overriding authority.

How are the continual deadlocks which must arise out of this system to be resolved? Perhaps His Majesty's Government ingenuously expect to find a chairman whose personality will, with a wave of the wand, dissolve these very obdurate and deep-seated difficulties and defects. So touching a faith have the Government so far displayed in the House of Lords that I imagine they expect to find a peer —probably not of their own political complexion—who, by sending telegrams, will be able to resolve these difficulties quite easily. All I can say is that if such a peer exists, it is high time he was put in complete control of all our national affairs because his qualifications are obviously superhuman. It would be interesting to know what remuneration is to be carried by this person, and judging by the qualities which he must have I imagine it would be at least five times the salary ordinarily accorded to a member of His Majesty's Government.

The next subject, and one upon which the Chancellor hardly touched at all, is that of the foreign assets at present held by the company. I think that is perhaps the most important point. Other schemes of nationalisation raise this particular issue in different forms. The moment the State owns an industry or a company which has international connections it is quite obvious that ordinary negotiations are lifted out of the sphere of the industry concerned into that of international politics.

The affairs of the single industry may become, indeed will become, a counter in this game. At the best, the change of ownership of the shares of the company will bring nearer the day when the foreign concessions may have to be re-discussed. At the worst, some Government in whose territory we now have concessions may wish to follow the example of His Majesty's Government and take over these communications and make them wholly Government-owned without any foreign participation. We must have some assurances—and absolutely none have been given by the Chancellor—that His Majesty's Government intend to defend these concessions to the last. Our anxiety on this point is very natural when we consider our recent experience of the actions of His Majesty's Government in places like Egypt. The Chancellor never mentioned this matter of foreign concessions, but it is a very vital one.

It would be invidious to specify any particular countries but there are certain nodal points in the system of Empire communications in foreign countries which are of the greatest possible commercial, strategic and political importance to the Empire as a whole. If there were not British companies, operating at these nodal points, a large measure of military and political secrecy would disappear, and for political and strategical messages we should have to rely entirely on the good will of the foreign Governments concerned. It is, therefore, in our opinion extremely maladroit, to put it no higher, to raise this particular issue at this particular time. and from the political and military point of view it would be a very grave matter if it turned out that part of the Imperial communications, the necessary links in the chain, had to be transferred to foreign Governments as a result of this change of ownership. I must give a very significant fact. The foreign assets held in countries using other than sterling, by Cables and Wireless, Ltd., exceed, if we exclude Great Britain, the foreign assets they hold overseas elsewhere, and the total revenue follows the position of the assets. The total revenue in hard currencies other than sterling, exceeds the earnings in sterling overseas. I am excluding Great Britain for the moment. If the foreign concessions are endangered as the result of this, we shall be losing a valuable source of foreign exchange. It is not the first time the Government have shown complete disregard for the necessity of building up rather than pulling down our invisible exports. We are on that road again.

I must here mention that the Chancellor poked some fun at the company and said they had a great resistance to reducing rates and compared them with the Post Office. It apparently escaped the Chancellor's attention, though it certainly has not escaped that of the Revenue, that the Post Office charges have been raised at a time when the company's general rates were going down. If this is an argument—

Mr. Dalton

I did not institute a comparison with the Post Office. The right hon. Member for West Bristol (Mr. Stanley) raised the subject of telephones. The comparison was from that side of the House, not from me.

Mr. Lyttelton

The right hon. Gentleman either raised the instance, or suppressed it, but as a general sneer against private enterprise it appears to be a very peculiar argument to compare them with public enterprises in this matter. It is common knowledge that Post Office charges have gone up, while the charges of this company have gone down.

Mr. Cobb

What about the American telegraph companies?

Mr. Lyttelton

American sates have been higher than those in this country, but they give a rather better service. [An HON. MEMBER: "They have not been bombed."] It has always been the case that the American services have been much better. As we have been told, it is uncertain whether the Government intend to operate the concession they have acquired through the Post Office, or by setting up another national board. I hope if they do buy the assets that they will manage them through the Post Office because I think it will be cheaper. I do not think public ownership is going to make the company more efficient, but I rather deprecate the setting up of more and more public boards, however agreeable they may be to Government supporters, and to others, through the directorship, and so forth that are going round. It is a very agreeable form of State patronage, but all the same I deprecate setting up boards and getting into more and more overhead expenses when it is quite unnecessary.

The Post Office in their relations with the Dominions have little difficulty over matters like postal rates and if the Government have the courage of their convictions, and have talked themselves into the feeling that the Post Office is highly efficient, they had better follow it through, and let the Post Office take the whole thing over and make the usual loss which this type of State enterprise will certainly make. I think that would be a much better way and, as far as the overriding authority is concerned, I hope the Government will look very closely into it

The Chancellor also made some reference to the Bermuda Agreement and, if I understood him right, he talked about a rate war, but he did not mention —I think I am correct in this matter—that these concessions to foreign countries were terminable six months after the end of the war. One would have thought that even Government officials would have had a certain negotiating position and would not have reached an arrangement, giving foreign countries the benefit of £1,500,000 in round figures instead of the £260,000 which accrues to public and Empire countries. In any commercial negotiations of this nature conducted by civil servants who are subjected to all kinds of political pressure, the result is almost invariably a very bad commercial bargain. It has happened in this case

The Chancellor has yet to give a real assurance about the staff I am sorry to see that the hon. Member who asked,a question about the staff is not in his place. The implication in the Chancellor's statement about this was that they were going to be better off, or just as well off, under public ownership as under private ownership. They have, as a matter of fact, been paid very much higher than the Post Office officials oWing to their share in the profits, which is the system adopted by the company. But the Bermuda Agreement has already knocked these profits sideways, and the general assurance that their staff contracts are to be continued will not be at all satisfactory to the staff. What they want to know is whether the weekly pay packet is going to be the same under public ownership as it was under private ownership, and that will involve the Government saying that the special ballast which they throw overboard in the course of negotiations with the Americans or others, is not going to be thrown over at the expense of the staff. When the Financial Secretary to the Treasury replies, I hope he will address himself to this point because the assurances given by the Chancellor—if he will permit me to say so—will not reassure the staff in any way. The Bermuda Agreement has probably put the company "Into the red "for some time—in the financial sense of the term—and the staff want to know whether the Government are going to stand between them and this fall in profits and the fall in the weekly wage packet which will result.

I sum up by saying that I think it is shown that no other scheme than public ownership is acceptable to the Dominion Governments concerned. I think it could have been otherwise, but I accept that fact now. We shall not vote against the Second Reading of the Bill. The issues involved in the matter of Imperial economic union are too great. We shall endeavour while the Measure is passing through the House to suggest important modifications, and we urge the Government to pay attention to the criticisms which we have advanced about the method of the overriding authority, the redistribution of the revenue, and various other administrative matters, and we hope that the Dominion Governments will not take it in bad part if we have pointed out quite clearly where in our opinion the defects lie.

The three main points on the administration are: first, the matter of the foreign concessions received by the company; secondly, the very imperfect definition of the functions and scope of the overriding authority—much further discussion is needed on that; lastly—although this is largely a domestic matter—we call into question the desirability of setting up another national board, rather than proceeding by the method of the Post Office taking over the whole affair. The present scheme appears to be designed to increase the overhead expenditure, and to ignore altogether from the outset the idea of the coordination of the means of communication, because both overseas telephony and certain cable connections with the Continent are left in Post Office hands, and if you have a public board, you will not have the complete coordination of communications which is one of the reasons advanced for this Bill. So, I ask the Government to look into that matter, and I hope that their bias will be against creating another board with important overhead expenses and more billets, even if those billets should turn out one day to be filled by their own supporters.

Mr. Beverley Baxter

Before my right hon. Friend sits down, may I ask if he is convinced that the Dominion Governments really want this, or whether it came on an initiative by the Australian Government and that the others would have been quite willing to enter into another arrangement while maintaining the private status of this company? I regret very much that the Opposition will not divide against this Bill—

Mr. Deputy - Speaker (Mr. Hubert Beaumont)

The hon. Member rose to ask a question; he is now making a speech.

Mr. Baxter

I am sorry, Mr. Deputy-Speaker, I will put my question: Is my right hon. Friend aware that Empire unity is too solidly built to break over a telegraph wire?

Mr. Lyttelton

My hon. Friend is asking a hypothetical question which I think I answered in the course of my speech. My own opinion is that things might have been differently arranged, but we have to face the fact that, at the present time, public ownership is the only means by which the Dominions will carry this out. I do not think that the matter has been adroitly negotiated, or that it might not have been different, but the fact remains. There it is, and it has to be faced.

4.54 P.m.

Mr. David Eccles (Chippenham)

I find this a most fascinating Bill. The Bill and the White Paper, the Bermuda Agreement, raise within their compass some of the thorniest of modern problems, and I want to deal with four of them one by one. First, there is this recurring headache caused by the impact of scientific discovery and technical development upon the value of assets which it renders obsolete and good for nothing but to be scrapped. Here we are discussing the competition between submarine cables and wireless telegraphy, and who knows when we may have to reckon with the jet aircraft, or even the rocket, as a means of delivering letters, documents and pictures to far distant parts of the world? The race is on, and the prize will go to the country which most encourages and most successfully carries through research and development.

Those considerations lead me at once to the great. question mark: What is the right kind of industrial organisation to handle a service of this kind, which has to promote research and development to the full and also has to guarantee that no part of the communications system could suddenly collapse through the destructive results of uncoordinated competition? Then there is the strategic aspect, mentioned by my right hon. Friend. Exactly to what extent does the military security of the British Commonwealth and Empire depend upon an exclusive communications system? And inside that system is there an overwhelming case for the cables against wireless? If it were true, and I do not think it is any longer, that cables could not stand up commercially to wireless, then we ought to maintain the cables like we maintain battleships, and we ought to pay their cost in time of peace by the taxpayers' money, while we were developing wireless and any other competitor in the field of commercial communications to the full.

There is another race besides this race between scientific discoveries, a race in ideas. There is a race between the ideas which underlie Christian democracy and those horrible propositions which threaten to engulf civilisation once for all. No one who cares for the British way of life could over-estimate the value of cheap and swift communications in spreading our news, our thoughts, and our ideals. I do not think any price would be too high to pay for unity of moral outlook among all peoples, and I do not see any instrument more necessary to securing that unity than a really efficient communications system.

Finally, there is the fact that this Bill brings us right up against a major change in the relations between the British Empire and Commonwealth and the United States. I propose to address the last part of my speech to that problem. I want to take first the competition between cables, wireless and aircraft. I do not know whether hon. Members do as I do on a Sunday evening. I very often enjoy listening to the "Scrap Book" programme of the B.B.C. A week or two back that programme recalled the year 1901, and one of the incidents described was the first transmission of wireless signals across the Atlantic from Cornwall to Newfoundland, where Marconi was sitting anxiously at his little reception set. This Bill is the direct descendant of that experiment. In the nineteenth century British engineers were ahead in the development of the cables. From 1900 onwards Marconi—his mother was British—with the aid of his British colleagues, and much encouraged by the Post Office, also led the way in the development of wireless telegraphy. This British company, with Marconi at its head, finally opened the beam service in a commercial stage in 1927 when direct circuits between here and Australia, here and South Africa, here and Canada, and between here and India were set up. When that happened the American engineers prophesied failure. They were certain the service could not pay, but within one year the cable companies were knocking at the doors of the British Government and of the Dominion Governments and saying that something had to be done or the cables, that were so necessary on military grounds, would be commercially ruined. The Governments concerned shared that apprehension and the cable and wireless merger was the result.

I take a somewhat different view from that of my right hon. Friend from this point of the history onwards. I say that from the day when that merger was formed the technical leadership in wireless telegraphy and later in cables passed to the United States, where private enterprise, private companies competing with one another, took up our inventions and developed them with such vigour that when 1939 came there were no less than 80 direct wireless circuits between the United States and countries in Europe, Asia and South America. What had the merger done in those 10 years? They had not added one single wireless circuit to the Imperial system. We still had the circuits from here to the three Dominions and from here to India, there was also a circuit from Montreal to Melbourne, but there was no circuit from here to New Zealand, none from Australia to New Zealand, none from Australia to South Africa, and worst of all, there was no single Dominion which had direct wireless communication with India. There is a very striking contrast between the development of private enterprise working through competing companies in the United States, and the lack of progress under a private monopoly in this country.

As happens in the industrial world, and as has been mentioned by my right hon. Friend, when a new invention overtakes some old method, after a little while something happens which gives the old method a new lease of life. That is just what is happening with the cables, and this new invention, which centres round the 'auto-repeater, which will be paid out with the cable on to the bed of the ocean and there it will boost the messages along, will change the position of cables and wireless once again. But, be it noted, the Americans are ahead of us in the development of the auto-repeater, and perhaps we are now entering an era when there will be a true marriage between cables and wireless, when the transmitting and receiving at the terminals will be done by wireless and the messages will pass between the terminals through these cables with their auto-repeaters, thus cutting out all the fading which has been mentioned as being associated with beam wireless. I do 'not know how these developments will go; I do not know whether the rocket will be a competitor, and I do not suppose that any hon. Member would venture on a speculation of that kind, but I think I should carry the House with me if I said that what we all want is that these technical developments, whatever they may be, should be pressed ahead irrespective of the possible effect on the value of existing assets in some other line of the communications business.

May I return to the cables and wireless merger, because it was formed, if my memory serves me aright, precisely to coordinate progress between the different forms of telecommunications, between cables and wireless, and that progress did not happen. Therefore I must go on to ask why it did not happen, because if it is true, and I think it is, that inherent in monopoly is an inability to push forward technical development, it is something very serious. If that is inherent in monopoly, what guarantee have we that by exchanging a private monopoly or quasi-monopoly for a public monopoly we shall get rid of the faults which were manifest in the cables and wireless merger? [An HON. MEMBER: Back to the Post Office."] Well, I do not know. I would put it this way. It looks to me, in the old phrase, as if we are moving out of the frying pan into the fire. It is a very real and burning question. We shall meet it next week in the debate on iron and steel. We shall meet it again when we come to discuss the Government's proposals for gas and electricity. Are we right to prefer a public monopoly structure to a private monopoly structure? Sometime or other this great question will have to be thrashed out by this House on its merits.

I, like my right hon. Friend, am certain of one thing: that the actual structure proposed in this Bill—I am thinking particularly of the overriding authority—is bound to be so cumbrous, so lethargic and so incompetent that the advocates of Socialism will not have a chance to prove their own theories. As my right hon. Friend the Member for Aldershot (Mr. Lyttelton) pointed out, perhaps it is too late now to go back to private competing companies, to break the thing up and have cables on one side and wireless on the other under Government supervision, but as the Bill stands now the Government can be charged with a lack of rudimentary commonsense in the selection of the instrument they have chosen to carry through the conduct of this public service. Perhaps I might go a little further in this direction and make the supposition—I know it is a very wild supposition—that the Government should not have consulted one noble brain but should somehow have devised a really sensible scheme of public monopoly. But even if they did, would they have got rid of the faults that are manifest in the private monopoly?

I know what hon. Gentlemen opposite will, say. We heard their arguments on the Coal Bill, and they will repeat their slogan—it is nothing more than a slogan —that there is a superior virtue in State management because the profit motive is no longer there. That just is not true. As we look at the Bills and listen to speeches of Ministers opposite, we see that the profit motive is still there in their nationalised projects. They still have to cover their costs, and if they have to cover their costs they must pay attention to their losses. That means that this State enterprise will have to defend its profit and loss account before a much more critical body of shareholders than the private monopoly had to meet. It will have to come before this House. Hon. Members are professional experts in criticism and their probings, if successful in shoWing up waste or loss, may upset the Minister. How then is he positive that an organisation of this kind, working under that kind of supervision, will be flexible and will run the risks which it is necessary to run to maintain the rate of progress which even the private monopoly could not achieve? I think it is still less likely. The private monopoly was protected because it did not have to fear competitors; the public monopoly starts with that advantage—or disadvantage—and goes on to be afraid of Parliament. Taking these two things together, the chances of technical progress seem to me to be nil, especially when one remembers what Treasury control can do to damp down enthusiasm and the spending of money for which no certain results are to be seen at the time it is spent.

In these monopolies stability instead of progress is bound to become the guiding star, and that is exactly what we do not want in a business where technical development is rapidly changing. There is another reason why stability overcomes progress. It is because, when a business gets so big, promotion has to go by seniority and not by merit. Those directing the affair cannot know the qualities, they do not even know the names, of most of their servants. How then are they to pick out the young man who has something remarkable in him? They cannot do it, and he has to rise step by step as he does in the Civil Service.

I have made it my business to talk to some of the young engineers in the communications business. They tell me that they cannot get on quickly enough—the good ones. They are very despondent about their chance of getting on more quickly when the business goes into public ownership. I do not think for a moment that technical men cannot give their best to any form of organisation be it public ownership or private monopoly. Of course they can, if they are given the chance. It would be absurd to suggest that Post Office engineers are idle or second-rate just because they are employed in the Post Office. What matters is whether that type of organisation really can give the rising young man his chance. We have seen examples already which show that it is most unlikely to do so. When I look at the structure proposed in the Bill I am afraid that the handicap is too heavy to be surmounted.

To show what we expect of these technical men, let me try to describe the sort of communications service that the Empire needs. Any citizen in the United States can telephone to any other citizen at any minute of the day and get through at once. It is broadly true to say that he can also telephone to any other citizen North or South of him in the Continent of,America. The subjects of His Majesty the King are scattered all round the globe. If they are to have a communications service equal to that of America we have to grasp and conquer technical telecommunication problems of far greater magnitude. British engineers can do it. They led the way in the 19th century with cables, in the first quarter of this century with wireless, and in the last six or seven years with radar. If they are given a chance they can do it. The real question is, Will they have that chance under the proposed monopoly structure? Only time will show, but I am sorry to say that I am pessimistic about it.

I come to my final remarks, which are concerned with the Bermuda Conference and the relations between this country and the United States. I know that I see this matter rather differently from some of my hon. Friends, but I think we differ only on the surface. I have read in the Press some bitter criticisms of the Bermuda Agreement. It was said that His Majesty's Government had given away far too much of our prospective dollar earnings and had acceded to the American demand to keep open wireless circuits between certain places in the Commonwealth and Empire, and the United States, although an agreement to the contrary had been made during the war, and although the necessities of the war have passed. In short, it is said that weak, if not disgraceful, concessions were made at Bermuda, as one of the conditions of the American loan. I do not defend the Bermuda Agreement in detail, but I do defend it in principle, and I must give the House the best reasons I can. The criticisms of the Bermuda Agreement really amount to saying that the high policy, strategy and unity of the British Commonwealth and Empire demand that telecommunications between the Commonwealth and the outside world should be vested, at any price in Anglo-American friendship, in a chain of Empire monopolies, in spite of the two important points that the Empire system was found wanting in the war and that the maximum development of communications is a basic factor in spreading the ideals of democracy.

The survival of the British Commonwealth and Empire depends upon the faith of the Anglo-American peoples in the ideals of democracy. No man is right to put obstacles in the way of the propaganda of that faith. Therefore, the Bermuda Agreement forces us to ask the essential question whether war between us and the United States is now a possibility or not. If it is, it is of course right to prevent any encroachment on the exclusive system of communications inside the Empire and between the Empire and the rest of the world; but if the day has come when war is ruled out between the United States and ourselves, we ought to sit down and work out the practical consequences of that great change in our policy. We ought to sit down with the Americans and work out an area of free speech and expanding prosperity so wide and so powerful that the United Nations could rest upon that special relationship while the building up of the world society is going forward.

In my judgment, there is no survival for the British Commonwealth and Empire except upon the basis that we and the Americans never go any more into conferences thinking, "Well, the time may come when we shall have to fight each other."It is a case of pooling everything now, or losing out by ourselves. This is my answer to the argument about the loss of foreign exchange. If the productive resources of the British Commonwealth and Empire and of the United States were to be developed by parallel policies of expansion, who can doubt that such an enormous increase would occur in the traffic passing over the lines of communication in the dollar and sterling areas that any loss we might suffer by some reduction in the exclusive character of the Imperial system would be more than made up by the gain in the absolute size of our share in the world's traffic in words and ideas?

I am convinced that Anglo-American cooperation alone will bring us the volume of international trade which is necessary if we are to survive as an Empire. My regret about the Bill is that the Government have, as usual, lost a fine opportunity to set up a great instrument of peace and progress. They have botched the business, as usual, by incompetent planning and by their failure to rise above the most obvious defects of the economic system which they so loudly proclaim they, have left behind. I would break up the merger into competing companies under Government supervision. But I agree that it may be too late to do that now. Therefore let us put it all under the Post Office. What has happened is that a fine opportunity has been lost. I resume my seat, as Walter Pater said, Saddened by the shadow of the great things from which we shrink.

5.19 p.m.

Mr. John Edwards (Blackburn)

It is a great pleasure to follow the hon. Member for Chippenham (Mr. Eccles). Many of us who sit here find ourselves in agreement with a great deal of what he has to say. I want to consider some of the issues which are involved in these matters. It must have been clear to everybody that the Dominions could not continue, and would not continue, to be satisfied with any arrangement less than an equal part- nership in Empire telecommunications. I think it was "The Economist "which, when this matter was first announced, said: By an odd sport, Imperial policy has produced nationalisation on the side. It is clear from what the right hon. Member for Aldershot (Mr. Lyttelton) said that his conception of Commonwealth cooperation presupposes domination by Britain, and certainly no notion of equal partnership seems yet to have been embodied in his ideology. If that is not his view, it is very difficult to interpret his words. Moreover, the right hon. Gentleman was less than fair to Lord Reith. The right hon. Gentleman was a member of the Government that sent Lord Reith on a mission with, if not precise instructions, at any rate the job of endeavouring to secure an agreed scheme. Lord Reith succeeded in producing an agreed scheme.

Mr. Lyttelton

The hon. Member is making rather large draughts on his imagination.

Mr. Edwards

The voice was the voice of the right hon. Member for Aldershot, but the words were the words of the chairman of the board of Cable and Wireless, who, naturally, is a little peeved because one of his directors resigned to go to do a job for the Government, the result of which has been a decision to take over the shares of Cable and Wireless, Limited. It is also clear that the Dominions would not wish to give up the direct wireless telegraph circuits which, quite necessarily, they opened during the war, and it is equally clear that the company would not be prepared to acquiesce in the Dominions continuing to operate these circuits.

It is, I think, also certain that the Bermuda Agreement—with which Cable and Wireless do not agree and in the implementation of which Cable and Wireless have shown not the slightest disposition to cooperate—could not be implemented without the Bill which is now before the House. There is need for quick action. With every month that passes we lose time and opportunities. That is why I believe the Government are right in introducing this Bill now, leaving to he settled later the precise form of organisation. It will not be until Cable and Wireless pass from private ownership to public ownership that we shall be able to have any implementation of the Bermuda Agreement, and even though the precise form of management of telecommunications may not be settled, as soon as Cable and Wireless pass into public hands there can be, at any rate, the maximum of informal cooperation.

The right hon. Member for Aldershot said that no substantial reasons had-been advanced for this Measure, apart from the point about Commonwealth cooperation. I wish to advance one reason which the Chancellor did not put forward. I should be the last person to deny the very great contribution made by Cable and Wireless to the war effort, or to seek to diminish in any way the high appreciation which everyone ought to have for the loyal and conscientious work of the staff of the company, but I do say that Cable and Wireless have been behind in planned development and research. I asked the right hon. Gentleman to give a single example of a contribution made by Cable and Wireless during the last.15 years. My hon. Friend the Member for Elland (Mr. Cobb) asked for some indication of the scale of research, but the right hon. Gentleman said that he did not know the facts. That was an extraordinary admission for him to make. Even if he did not know the facts, the Benches opposite are littered with flowers, which have at one time and another adorned St. Martin's-le-Grand. The right hon. Gentleman might very well have asked one of them for information. The truth is that Cable and Wireless have done no research work. They have more cable length than anyone else. One would have expected that they would have pioneered in the field of submarine repeaters. As far as I know, they have not a single submarine repeater in operation, whereas the British Post Office have worked hard on submarine repeater matters, and, although they have relatively short cables, they have already one submarine repeater in operation. As late as 1930, Cable and Wireless could still claim to be in competition with the Post Office in technical matters. In March, 1930, there was a Debate in the House on the question whether international telephones ought to go over to Cable and Wireless or not. It was then decided that they should not. The technical views then advanced by Cable and Wireless have since been disproved, and what people then said was impossible for the Post Office engineers to do, they have, in fact, been able to achieve.

I want now to turn to what seems to me to be the most important single thing that will have to be done when the State acquires Cable and Wireless. The really important thing is that there should be complete integration of telephony and telegraphy. Unless that is achieved by the Government, we shall, I believe, tall short of what is really desirable. As long ago as 1927, the Lever Committee on the Inland Telegraph Service said that they thought the possibility of a complete fusion of telegraph, cable, wireless and telephone services might with advantage be explored. The Bridgeman Committee, reporting on the Post Office as a whole in 1932, said that, with progress in the technique of transmissions, the distinction between oral and verbal transmission had become artificial. What was true of the internal telegraph and telephone systems in 1932 is now, without any kind of doubt, true about international telephones and international telegraphs. The important thing for us all to appreciate is that the whole trend of telegraphic development is to follow telephone development. The modern technique in radio enables facilities to be given from the same transmitter for either telephony or multi-channel telegraphy. It is, I think, quite hopeless to contemplate the right kind of future for telecommunications except on the assumption that these two services are technically one.

That is why I urge upon the Chancellor and the Government that they should look most carefully into how best to integrate these two services. At the present time, the Post Office have the whole of the international telephones working from this country, they have the Continental cables, they have some Continental wireless telegraphy, they have the ship-to-shore service, they have a number of trans-Atlantic telegraph circuits opened during the war. It is of the utmost importance that this big block should be brought right in and unified with the block of work which the Government are now acquiring under the terms of this Bill. Finally, I hold that this unification is desirable not only on the technical grounds I have explained, but equally on strategic grounds. The change of ownership which we are asked to make in this Bill must only be the first step, a thorough tidying up of our telecommunications in order that we may have, throughout the Commonwealth as a whole, a unified service, which will effectively serve all our purposes in the years that lie ahead.

5.30 p.m.

Mr. Derek Walker-Smith (Hertford)

It is not often that I take my text from the Lord President of the Council. I see, however, that he was reported as saying in Washington the other day in regard to the food situation, speaking with his customary elegance of diction and keen sensitivity of perception, that it "didn't smell good "To him. I adopt those words in regard to this Bill; it does not smell good to me. I want for a few minutes to give the House my reasons for so thinking. It is not because I, or indeed anybody on this side of the House necessarily regards the present setup of communications as being perfect. It is commonly urged by advocates of State monopoly that those who oppose their designs are content with things as they are, and are opponents of progress. But this is by no means so. We are believers in progress; but we do not identify all change and movement with progress, because it may equally well be movement of a retrogressive sort. It seems to me that the Government in regard to this scheme have had recourse to that false syllogism to which we are becoming accustomed—something must be done; this is something; therefore, it is right to do it.

I am not competent to enter into discussion as to whether Cable and Wireless, Limited, have, or have not, made the proper advance that they should have made in regard to research. That is a technical matter on which I would not presume to speak. But, if they have not made the proper advance in regard to research, surely the reason is that put forward by my hon. Friend the Member for Chippenham (Mr. Eccles). It is because we have retreated from that individual enterprise which fosters the spirit of research and inquiry, and have set up a private monopoly. It is true that the spirit of monopoly is incompatible with the spirit of inquiry and research; but the cure for that is not to create a State monopoly out of a private quasi monopoly. In that case our last state will be worse than our first. In my view, we shall not get the research, which may or may not have been lacking in Cable and Wireless, Limited, by setting up this series of State monopolies. Apart from the question of research, it does not appear that in the ordinary conduct of business there is any charge of inefficiency brought against this concern. So far the experience of this Parliament seems to show that there are two reasons for socialising an industry. Efficient industries are socialised in the hope that, in spite of the principle of State monopoly, they may continue to be, at any rate, reasonably efficient; and inefficient industries are socialised because then there will be no adverse standard of comparison when they are inefficient as State monopolies. But there seems to be no charge of inefficiency in this case, either in the White Paper or in the speech of the Chancellor of the Exchequer. Indeed, I think the record of this concern clearly proves the contrary. In the testing time of the six years of war, they have been able to achieve expansion where the Post Office—a State monopoly concern in this country—has imposed restriction, and where the Post Office has had to increase charges, Cable and Wireless Ltd have been able to reduce their rates. On the ground of efficiency, that seems to be a sufficient recommendation.

For the reasons which prompt this action, we have, it appears, to go to paragraph 7 of the White Paper where two reasons are given arising out of the deliberations of the Commonwealth Communications Council of 1944. The White Paper says, with a studied vagueness of language which would almost serve as a model for the speeches of the right hon. Gentleman the Chancellor of the Exchequer: The Council felt it was essential that the Dominions and India should have a greater share in the administration of the Commonwealth telecommunications system, with a view to its development as a whole on both the cable and the wireless sides. Moreover, they considered that a company largely commercial in structure, with obligations to private shareholders, might not be in a position to provide a service fully to satisfy public needs and strategic requirements. The words "commercial in structure "are not, perhaps. a particularly happy expression of what was acknowledged by the 1938 White Paper to be a [...] public utility. But still more unhappy is the suggestion that it might not be in a position to satisfy "public needs and strategic requirements."It may be that if those words had been set down in 1939 we would have heeded them and felt some apprehension. But to record that doubt on the morrow of the great service that this concern has admittedly rendered in the dark and difficult days of war, is, to put it mildly, a piece of most peculiar timing.

There should be a greater share for the Dominions. I support that and would like to see the Dominions having a greater share in the system of Imperial communications. But it does not follow from this, that we need set up a system of State monopolies in order to provide that greater share. Surely, it would have been possible—and I have no doubt that suggestions were put forward to that end—to achieve a greater degree of Commonwealth participation both in the profits and administration of Imperial communications, without resorting to a system of State monopoly. I would like to see them have a larger share, but I would like to see them have a larger share of a larger cake. If this scheme goes through, the most they are likely to get is a larger share of the smaller cake that will result from the introduction of these principles. It will be smaller, because if there is one thing less efficient than one State monopoly, it is a series of loosely linked State monopolies with a Board with ill-defined powers set above them. The Chancellor referred with pride—and this struck me as being almost the oddest thing about a most peculiar speech—to this Board which is described as having functions mainly advisory in character, but substantially wider than those of the Commonwealth Communications Council. If power is to be given—and it will be —to this Board, whose functions are, nevertheless, defined as being "mainly advisory in character," we are being asked to commit the greatest administrative error which it is possible to commit: to give power without responsibility. I shudder to think of the future of this concern if that structure remains as adumbrated in this White Paper. But though it seems to me that failure stares this concern in the face, it is apparent that the Government could not bear the suspense of even the slenderest possible chance of success. Consequently they have taken steps to exclude that by the concessions they have given to the United States of America. The position in regard to the United States of America is re- ferred to in the White Paper where, in paragraph 6, it is stated: Such circuits were opened between the United States and some of the Dominions, India and some Colonies, on the understanding that their operation was limited to the duration of the war and six months thereafter. That seems to be quite a clear statement. But on the last page of the White Paper, in paragraph 17, we have these words: The Agreement includes a statement of the principles to be adopted in determining whether a direct wireless telegraph circuit should be established between two countries, the intention being that this statement should he presented for consideration at the next International Telegraph Conference. Broadly, the proposal is that such circuits should be opened when justified by traffic or service needs.… That is a vague description of the principle of yielding to the United States of America their right to have direct circuits for inter-Imperial communications. No wonder the Chairman of the Federal Communications Commission said it was one conference where the concessions were all one way, as the United States had virtually nothing to offer or trade with.

My hon. Friend the Member for Chippenham has spoken eloquently on cooperation between the United States and the Commonwealth. I second that. In a modest way I have had some experience of Anglo-American cooperation, having served with Americans for 12 months in the late war. One thing I discovered about them was that they are not particularly impressed by such quixotic actions as this. They rather take the view that people who do business on that footing are people who are losing grip and are less worthy of cooperation. Though I second the policy of cooperation referred to by my hon. Friend, I cannot agree that this "selling out "Is the right way of achieving it.

I wish to refer to the most important aspect which was dealt with by my right hon. Friend, and—most extraordinarily—totally omitted by the right hon. Gentleman the Chancellor of the Exchequer, though he found time to include many less relevant and many less important matters. I refer to the foreign concessions. It is surely clear that the introduction of the principle of nationalisation within the Empire is likely to result in nationalisation in foreign countries; and who can wonder at those countries where this company holds concessions, which have been of immense strategic value to us in war, if they are not willing to give to a foreign State concern, in their country, concessions which they would give to a private company? I imagine that there is no great secret about where these communications lie. If the principle of State monopoly was to commend itself, for instance, to Egypt, which must obviously lie along our line of communications, or to the Islands off West Africa, or to Portugal, we have only to consider in regard to the strategy of the late war what might be the effects if we lost our concessions and the security of our Imperial communications which was afforded by these foreign concessions. It is most regrettable that the Chancellor has not addressed himself to that aspect. I hope we shall hear the hon. Gentleman upon it later.

By the action we are taking we are placing in jeopardy the security of our communications in war. I can put it no lower than that. I believe that by this action the Government are weakening our Imperial unity and our strategical position in the event of war. We are invited by the Chancellor of the Exchequer to say that these things are worth while because of the advance that is to be made in Imperial unity. I was glad to find him attaching this importance, even at this late stage, to the question of Imperial unity. But I cannot agree with his premise, when he invites us on this side of the House to say in regard to the enterprise which has served us well in the past: I could not love thee, dear, so much, Loved I not Empire more. I do not agree with the antithesis he places before the House. I do not believe that in the long run Empire relations will be improved by the setting up of this machinery, because if this machinery works as badly as we anticipate and fear, what reason is there to suppose that close cooperation in a failure will cement Imperial relations? It would not be in accordance with the usual experience of mankind if that were so. I believe that reproach and recrimination are more likely to follow the frustrations and failures which will be borne of this scheme. I turn to the criticisms which the right hon. Gentleman made of myself. He gave me no notice that he intended to refer to my writings.

Mr. Cobb

Why should he?

Mr. Walker-Smith

I should hardly have expected such a question, even from the hon. Gentleman. The reason, I should have thought, was clear. If notice had been given I would have been in a position to refresh my memory by looking up exactly what I did say. [Laughter.] When the right hon. Gentleman, who speaks a great deal, and the hon. Gentleman who speaks less and perhaps even less to the point, are able to carry in their heads every word of the speeches they utter, I will be able to recite to the House every word that I write. My recollection of what I said is this. I said that it should be made clear whether Canada and South Africa had expressed any preference for this scheme; but the right hon. Gentleman has still not addressed himself to that question. He says that they are all lined up in agreement now. Of course they are. I do not think that is very unlikely. If this Government, who are mainly interested, make no stand, if they give no lead, how can we be surprised that the Governments of Canada and South Africa make no stand either? That is not the point with which I was dealing. The point is that these countries expressed no preference for this thing I will give way to the right hon. Gentleman at once if he will get up and assure us that they expressed a preference at or about the same time that the question was originally raised by the Socialist Government of Australia.

Mr. Dalton

I tried to make it clear. If I failed I will try once more. This Committee, which was meeting at the time when the change of Government took place in this country, contained representatives of all the Dominions, including Canada and South Africa. This Committee made a unanimous report, signed by the representatives of all the Dominions, including Canada and South Africa, in favour of the public ownership of telecommunications. This report was duly transmitted to the several Dominion Governments whose representatives had signed it and all the Dominions, without exception, have said that they accept and agree with the proposal. No other scheme was presented by the Committee, on which they were all represented. The Committee unanimously recommended this, and the Dominion Governments have unanimously accepted the recommendation.

Mr. Walker-Smith

Surely, it is the fact that the Chancellor has referred to earlier expressions of dissatisfaction, coming from the Dominions, with the existing state of affairs. Surely, it is a fact that these expressions of dissatisfaction came primarily from one Dominion, that being the Dominion which already held 51 per cent. of the shares of Amalgamated Wireless (Australasia), Limited, with the result that there was already a partial State monopoly in the Dominion referred to.

I still say it does not seem to me to be proven that there was any unanimous expression of desire for this system on the part of the Dominions at the relevant time when these matters were first brought forward. I am, of course, prepared to take it from the Chancellor that now they are all lined up if I may say so, "lined up "Is an appropriately regimental and totalitarian expression. Be that as it may, in my view there was not, and there has not been shown to be, any unanimous and spontaneous desire on the part of all the Dominions for this thing. If this scheme works badly, which I am afraid it will, the effect on imperial relations will be to deteriorate and not to improve. We shall find this new imperialism of the right hon. Gentleman is merely old socialism. I believe that communications should be the cement of Empire. We have moved very far from the days when Burke regarded communications as one of the limitations on the idea of Empire— Months pass and seas roll between the order and the execution; We have left all that behind. Our communications, if properly handled, should be a part of the unifying structure of Empire. I believe these ties are likely to be unravelled instead of knit more closely by this scheme. When I visualise this scheme in its setting of all that has happened in the last few weeks and months in regard to the Empire at the hands of this Government, I am reluctantly reminded of that passage in the same speech of Burke's when he said: A great Empire and little minds go ill together. There is a limited view on the part of this Government, and of its supporters, of the potentialities of Empire. We are confronted from day to day here with the results of the workings of this limited mentality; but, for all that, I myself place my faith in the Empire which I hope they will serve better in the future than they are doing now.

5.53 P.m.

Mr. William Williams (Heston and Isleworth)

I could almost imagine from the manner in which the hon. Member for Hertford (Mr. Walker-Smith) spoke, that he was feeling very bitter about this Bill. Unfortunately so far as I can see, he has not produced a single argument in opposition to its provisions. He has rambled all over the place, but has not given one concrete argument against it. I must apologize to the hon. Member for the fact that I have not had the privilege of reading his articles. I am, therefore, in what is perhaps the happy position of neither having to quote them nor to unquote them. The association which I have had with the Post Office for nearly 30 years, particularly with the telecommunications side, and my more recent associations with the Union of Post Office Workers, who are responsible for the grades who have been working both the inland telegraphs and foreign telegraphs, makes me welcome this Bill. I welcome it because it seems to be an indication on the part of two Governments—I say this advisedly—on the part of the Coalition Government as well as the present Government, that they want to try to unify telecommunications between the Empire countries.

I was rather surprised to learn from the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) that there was some doubt in his mind about how far the Coalition Government had gone on this issue. I leave that matter between him and his conscience. I think that is the best place to leave it. My information, which ranges over the past 18 months or two years, was very much in the direction that the Coalition Government were pretty well committed to this. The Labour Government, so far as the decision is concerned, are simply reconciling themselves to the major decision made by the Coalition Government, and perhaps following it up a little in certain directions. Whether that be right or wrong—and only the Front Opposition Bench might be able to resolve that matter—I think I am in the right direction when I make the suggestion that the Coalition Government knew all about the need for this Bill. I believe that it is going to cement the relationship between the mother country and the other countries of the Empire. Telegraphs, wireless telegraphy, cables, wireless telephony, and other forms of communication are making this world a very small place. It is in the interests of all that we should understand each other, in regard to these facilities. I believe that the provisions of this Bill will, in due course, increase the efficiency of overseas telecommunications. I say that with no intention of casting any aspersions whatever, either on the Post Office side of overseas telecommunication, or on the cable and wireless side of that service.

I shall deal later with some of the insinuations made by hon. Members opposite in regard to efficiency. Some hon. Members suggested that there was no charge against the efficiency of the staff of Cable and Wireless. Nobody has suggested they were inefficient. I go further, and say there was no charge of inefficiency against the Post Office staff in 1928, when a successful beam service was transferred to a dying cable company. There was no suggestion of inefficiency. The decision was apparently made on the ground of public policy, and not on the question of the efficiency of the organisation or of the staff. So far as that point of criticism is concerned, I do not think there is anything in it.

I believe that this Bill will do something of very great importance. It will intensify research in the field of overseas telecommunications The resources of the respective Governments, and of the board, will enable a great deal of headway to be made in telecommunication research. I wish I had the imagination of my hon. Friend the Member for Chippenham (Mr. Eccles). I am afraid I have not sufficient of the Jules Verne in my composition to be able to follow him the whole of the way he went this afternoon. But I thoroughly enjoyed the fantasies of his speech and also some of the very practical suggestions which he made. Had he been present now, I might even have submitted for his consideration, that not only in the field of telecommunications but in the field of postal communications, we might find it quicker, as he more or less suggested himself, to send a letter by rocket than to send a telegram by cable.

Scientific development is going on in many directions and we cannot raise that as an argument for standing still. We cannot stand still and hope that somebody will produce certain inventions to make all these common everyday things unnecessary in our lives. I suggest for the consideration of the House that the great tragedy of telecommunications has been the nasty habit of Governments in the past of chopping and changing their policy on communications. Always, there has been this chopping and changing. First, we had private enterprise and private ownership; then State control; then partial State control and partial private enterprise, and now we come to this hybrid arrangement in Cable and Wireless, which is neither one thing nor the other. I subscribe to the view of the right hon. Gentleman the Member for Bromley (Mr. Macmillan) that the hybrid things are good neither for man nor beast, and I think that the sooner we come down on one side or the other the better.

That leads me to say a word as to what is happening in regard to the Board. Who is to take over this industry and work it? In my opinion, and I say it without any hesitation whatsoever, the Postmaster-General should take over this job. It should not be handed over to any more boards or any more public utility corporations, and, in this respect, at any rate, I am in agreement with the right hon. Member for Aldershot. I believe there is a very sound reason why the Postmaster-General should have the control and direction of this business. In the first place, I see no reason why we should differentiate between internal and external communications. I think it would be true to say that the Post Office, at present, is undertaking about 75 per cent. of the work of the cable companies in regard to accepting telegrams for foreign transmission, transmissions in this country and subsequent delivery in this country. In other words, the Postmaster-General, on behalf of the country and the nation, is now undertaking. I should imagine, roughly, about 75 per cent. of the overseas communications in so far as they affect the internal side here. Why cannot we adopt a system under which he should be responsible for the external side also? He is responsible for the external side of telecommunications in so far as Continental business is concerned. He works the communications to, the Continent, to Germany, France, Holland and Belgium. As a matter of fact, I can recall the great interest which I bad in working a circuit from Liverpool to Bremen, Hamburg, Paris and other Continental places, and still have to learn that the Postmaster-General and his staff did not do that job most efficiently. If I may say so in passing, I did my job very well.

I am perfectly satisfied that this business should come under the direction of the Post Office and the Postmaster-General, and, in this respect, I subscribe to, and commend to the Chancellor and the Financial Secretary, the closing words of the Parliamentary Secretary to the Ministry of Civil Aviation in concluding the Debate on the Civil Aviation Bill the other night. This is what he said: It is essential, in a Parliamentary democracy, that there should be these reserve powers for the Minister, in his dealings with public corporations. If they did not exist, these corporations will be far less responsible than private enterprise."—[OFFICIAL REPORT 6th May, 1946: Vol. 422, C. 727.] I never thought that we should ever conceive anything less responsible than private enterprise, but, according to the Parliamentary Secretary, these public corporations, under these conditions are much less responsible than that.

I would like to make some observations in regard to some of the very sweeping assertions that are being made in the public Press, inspired, I think, by the vested interests concerned. I like other hon. Members of this House, have had a lot of pamphlets and publications from vested interests on this subject, and I have taken the trouble to read some of the very sweeping assertions made. Some of these have been repeated here today, without a single reason being given in support of them. Even the right hon. Gentleman the Member for Aldershot has repeated them, without any backing at all for them. I cannot deal with them all —there are 101 of them—but I take two or three. First: The scheme is inimical to the interests of the peoples of the Empire and of all classes of telecommunications users. It is impracticable and dangerous inasmuch as it touches upon cur foreign possessions. This has been repeated in this House today. It is very natural for Cable and Wireless to take up a very selfish point of view in regard to this transfer. Perhaps it would be too much for us to expect them to appreciate that they only form part of the Empire communications—a very important part, but, nevertheless, a part—and we here today have to consider the whole of our communications and not just part of them. In my judgment, if we are to accept the condemnation and the assertions made by hon. Members on the other side this afternoon, we must come to one of two conclusions—either, that those who have studied the problem are ignorant of the facts of the case, or that they are knoWingly and wilfully damaging the interests of the Empire and the interest of the service.

Who are these people who have given this matter all this consideration? Let us forget the Socialist Government. Obviously, they are suspect. It was the National Government that authorized it and which had been giving serious consideration to it, for the best part of two years during the war and long before peace was thought of. Then we had Lord Reith, and I have never heard anybody suggest to us that he was a good Socialist. The Noble Lord may be, but I have never heard anybody suggest it. He conducted a tour of inquiry on behalf of the Government in India and elsewhere, and he felt so much about it that he even resigned his directorship of Cable and Wireless to do this. I do not want to be nasty here, but I hope that there is not another plum coming his way, instead of that.

The first people to discuss this matter were the Governments of Australia, New Zealand, India and Canada. I have always assumed that hon. Members on the other side regarded them as most reasonable, responsible and intelligent people, who were part of a great Empire and who would not do anything inimical to the interests of the Empire. I do not want to go any further on that. I could, it necessary, quote that very moderate newspaper, "The Times,"To which the right hon. Member for Bromley referred last night, all in the direction of proving that these very reasonable men, these very patriotic men, these very considerate people, came to the right decision in the interest of the Empire and in the interest of the peoples of the Empire. I am afraid I have not time to deal with apprehensions regarding the powers of the new Commonwealth telecommunications. But I would like to ask the Minister who is to reply to give the House some informa- tion; to move the curtain aside a little bit; for my edification, if not for that of hon. Members on the other side, as to the degree of control and power which is to be vested in and exercised by the new board. It is very important that we should have some idea about this if the Minister can possibly give it without breaking the Secrecy Act. The company maintain that nowhere have they been charged with inefficiency or lack of enterprise. That has been done here this afternoon. May I pay a tribute, from my personal knowledge of them, to the people who have been working Cable and Wireless, not only during the war, but before the war? They are a fine lot of people and a fine staff. There is not a better staff in the country dealing with telecommunications. I pay them that tribute even though I come from the rival organisation, the Post Office.

There is another point to which the Chancellor might listen and on which I agree with the right hon. Gentleman the Member for Aldershot. The people employed by Cable and Wireless are better paid than the people in the Post Office doing the same kind of work. I suggest that the Chancellor should bear that fact in mind and take it back with him for further consideration. There is no question here, as far as I can see, of a charge of inefficiency against either the organisation or the staff. The only purpose of this Bill is to coordinate and unify all the services and make them more effective and comprehensive. According to hon. Members opposite, the company say that the Post Office are not reducing their inland charges, although they are reducing their charges on telegrams. The right hon. Gentleman the Member for Aldershot spoke that way this afternoon. Before I deal with that charge, it would be interesting—although, perhaps, impertinent of me—to ask who raised the charges on inland telegrams, and what were the reasons given for so doing. Those of us who have been trying to follow recent history know, of course, that the charges were raised by the Chamberlain Government in 1940, for the purpose of augmenting wartime income.

Mr. Lyttelton

May I ask the hon. Member whether the charges have been reduced by the Socialist Government during peacetime?

Mr. Williams

In answering that question, it might not be a bad thing to ask the right hon. Gentleman another question. If the alternative had been to reduce the postal, telegraph and telephone rates and to leave the Income Tax at 10s. in the £ and the Excess Profits Tax at what it was before, would the right lion. Gentleman care to tell me where Ms choice would be?

Mr. Lyttelton

The hon. Gentleman is making the point that public ownership of industry is to be regarded as a means of raising revenue. I do not agree with him?

Mr. Williams

Would the right hon. Gentleman care to answer the point I put to him?

Mr. Lyttelton

I am sorry, but I could not.

Mr. Williams

I am sorry you do not take up the challenge. As far as I am concerned, I should like to see the Post Office able to use all its profits in the development of its own work and services, on research departments and in reducing the rates to the people. I would like to think that the telegraph service of this country was available to every man, woman and child, if necessary, irrespective of income, and that the charges should be as low as possible. But you cannot have it both ways; you cannot have it off your tax and off your rates at the same time. As far as I am concerned, I am perfectly happy to take it off the rates and to let the Chancellor took elsewhere for his taxation.

Mr. Speaker

I do not know whether, in his repeated use of the word "you,"The hon. Member is addressing his remarks to me, or to hon. Members opposite.

Mr. Williams

I offer my very humble apologies to you, Mr. Speaker. You, with all due respect, would be the last person in the House to whom I would wish to refer in this way. "You," on this occasion, referred to hon. and right hon. Gentlemen opposite. I believe that this Bill is likely to consolidate the position within the Empire, and that when it comes into operation, it will give an overall improved efficiency. Finally, I believe that the research undertaken under the provisions of the Bill will make a great difference in international telecommunications, not only of the Empire, but of the world.

6.18 p.m.

Mr. Beverley Baxter (Wood Green)

The hon. Member for Heston and Isleworth (Mr. W. Williams) always addresses the House with such kindliness and good humour that one is inclined to congratulate him rather than to say—as I have now to say—how much his speech has encouraged us on this side of the House in our amicable opposition, because I still do not understand why we are not going to divide on this Bill tonight.

Mr. Dalton

The hon. Gentleman can divide.

Mr. Baxter

The Chancellor of the Exchequer has been good enough to suggest that I should divide, but that is rather an insular operation. If I can get two or three more to make sufficient noise, I shall, with Mr. Speaker's permission, divide. The hon. Member added to our doubts and disbelief when he said that this new great venture should be put under the Postmaster-General. We have already seen the telephone system and some of us have even tried to use it from time to time. Some of us have even sent telegrams to people in this country and have arrived before the telegram. It is now proposed to put Empire communications under the Post Office as well. I do not know whether the hon. Gentleman has ever been in New York where all these things are under private enterprise and where, when one arrives at a hotel, messengers come with telegraph forms, and every facility is offered. They do business there because they are privately owned. If I may have the Chancellor's attention for just a moment—

Mr. Dalton

Certainly.

Mr. Baxter

The Chancellor is always the most courteous of Ministers. We welcome the Chancellor today in his new role of Empire champion. Today he has stood for the Empire against the Conservative Party, and for the unity and unification of the unbroken front of the Empire. I hope that when the Americans collect their charge for the loan we shall find the Chancellor standing there in the same mood as he is today. Are we going to hear, "Hands off Imperial preference," or are we going to hear in that suave, charming way of his that it will all come right in the end? The Chancellor is having a most profound effect on the stimulation of private invest- ment and on shares everywhere. He is the greatest "bull "The world has seen outside of Spain for a long time. All this "Ferdinand of the Front Bench "has to do is to make a speech, and the shares go up. Since the White Paper was published on the Cable and Wireless Bill, the shares of Western Union have shot up. They are competitors of Cable and Wireless, Limited, and now they see that it is to come under State control there is more whisky being drunk in Western Union offices in New York tonight than has been drunk there for a long time. This is great news for them.

When the Chancellor was outlining this streamlined Bill today it was a relief to find that it was not in the mandate. At last we had some nationalisation Measure which had not been in the mandate. But the Chancellor did infer that there were many things to be said against the Cable and Wireless Company. He did not particularly want to say them. They had been said at the telegraphic conference, but he was not going to spill the beans. In fact, he was not going to spill any beans anywhere if he could get out of it, and I do not blame him. But I wonder that he did not, out of the essential fairness and decency that are part of his character, pay to Cable and Wireless the tribute that is due to it. According to the inference of the Government, and the Chancellor particularly, Cable and Wireless is basically inefficient. Yet it has held its own in opposition to the privately owned streamlined cable companies of the United States. If the running of traffic and the keeping down of cost is the yardstick of measurement, why has nobody on the opposite side of the House said today that Cable and Wireless, in open competition, brought down the Press rate within the Empire to the lowest charge ever made in cable communications —a penny a word—and why have they.not referred to the congratulations that went to the company in 194o from the Government and the Ministry of Information? It was the former Minister of Information who told me about it.

I know the effect all over the Empire of that wonderful achievement. Yet here we have the Government talking as if they had just discovered American unity and American communications for the first time. Sir Edward Wilshaw and his staff have had far less than fairness done to them in this Debate. It has been ungracious of the Chancellor not to give a fair picture. There have been several references today to my hon. Friend the Member for Hertford (Mr. Walker-Smith), who writes in the "Sunday Express."I myself have been known to write articles for publication.

Mr. Dalton

I have read some of them.

Mr. Baxter

I also write a weekly cable for American and Canadian consumption. I do business as a writer with Cable and Wireless. It is important that my contributions should be despatched quickly and they are, therefore, cabled. I can telephone any time of the day or night and ask for a messenger, and a messenger arrives at my house. They are courteous and efficient, and it is all done at this penny a word rate. I do not know if the Postmaster-General has become the great high connoisseur of all forms of communication in the air, on the ground and beneath the water Can I telephone the Post Office and ask them to send a messenger because I want to send a cable? We only get that service from private enterprise or semi-private enterprise, such as Cable and Wireless. I do not intend to stress the point of foreign stations beyond saying—and this is a most serious point to which the Government should give their attention—that some of our Empire circuits run through foreign countries. That has all been established today. If, unhappily, a war should come again our circuits will run through neutral countries. The maintenance of a State owned belligerent station might well be construed as a breach of neutrality. This will not be so with a private company. I think the Government ought to give consideration to that fact.

I wish to conclude with two points. In his candour today the Chancellor gave us to infer that the Empire and the Governments of the Dominions, in one of those spontaneous movements which sometimes come from peoples spiritually allied with each other, have said with one voice, "Let us have a Government-controlled cable and wireless service." Out it came, across the Pacific, from the Mediterranean and from everywhere. Sometimes we must not be blamed in this House if we listen very carefully to the phraseology that is used. The other day we had the unfortunate example of the statement about Egypt when we were told that the Dominions had all agreed, whereas they had all been informed. I wonder if the Canadian Government asked for what this Bill provides. I wonder if South Africa asked for it, or whether they said, "Here are the socialistic Governments of the Empire all trying to build up State control," and agreed rather than asked for it. At any rate, I suggest that those Members opposite, who, a little belatedly, are finding their enthusiasm for the Empire—because for years in this House their party was a "little England party "—are possibly looking upon Empire unity as rather too easy a thing which can be maintained merely by a system of cables and beam services. It is much more elusive than that, and, because it' is much more elusive, it is much more enduring.

Finally, I believe that, although the company may be mechanically efficient, from a salesmanship standpoint, it will be deplorable and it will become sluggish. Another thing which I must view with very serious alarm is the groWing centralisation of authority, the spread of Government patronage, the power of awarding contracts, the killing of initiative and the paralysis which will spread across the country until all adventure, imagination and thought are confined within this half square mile which centres on Whitehall. For that reason I once more express my regret, first, that the Chancellor did not pay to Cable and Wireless the tribute that was due to them, and secondly, that the Conservative Opposition should not divide against this Bill. I think they should, because this is one of the 39 steps to perdition which the Government are taking. I think the Conservative Opposition should oppose them at every step, because this Government, even when they are Right, are wrong.

6.30 p.m.

Mr. Skeffington (Lewisham, West)

I am sure the hon. Gentleman the Member for Wood Green (Mr. Beverley Baxter) will forgive me if I do not follow him in the very gloomy thoughts which he has just uttered, and if I do not discuss Empire subjects with which he has just dealt. I would make one passing remark on what he has said in connection with the very valuable reduction of Press rates made by the company to 1d. a word, in 1940. I understood that when beam wireless was introduced it was claimed by the engineers and those connected with it that it would have been feasible to have used beam wireless for inter-Empire communication at Id. a word all over the Empire, and that was one of the reasons why the Government at that time decided there should be the merger between beam and cable. If my information is wrong, no doubt the hon. Gentleman will correct me, but it does not necessarily follow, therefore, that under the new scheme we may not be able to have a service which operates quite as efficiently, and certainly quite as cheaply.

Before I raise one or two specific points may I say that in general, in considering the steps which His Majesty's Government propose to take, I have discovered very little opposition to the proposals? There seems to be a groWing belief that where we are providing a community service there is a great deal to be said for having it organised and controlled by a public body responsible to the whole community. If that is true within the confines of a State, I see no reason why it should be less true within the Empire. In this case, where we have the agreement, whether hon. Gentlemen opposite like it or not, of the partners in the Commonwealth, it does seem that the general principles upon which this Measure is founded are overwhelmingly reasonable. I was very glad to hear in the Chancellor's opening speech that he proposes the fullest possible consultation with the various trade unions. He mentioned one or two, and I understand there are others such as the Association of Scientific Workers and I was surprised to find that the National Union of Distributive and Allied Workers have a large membership. I think this aspect is of the utmost importance, because in a service like cable and wireless one of the major factors of success is the operation of the service. When taking over various industries there are assets like machinery; when taking over the coal mines there is the coal itself and the ancillary manufactures. In this instance, apart from the actual instruments of transmission, the quality and success of the service can only depend upon the operators themselves.

I thought there was some point in what was said by the hon. Member for Wood Green in one respect. Perhaps we have been less than generous so far as the whole organisation of Cable and Wireless, Limited, is concerned during the war, particularly in regard to the staff. They have provided, as everybody in a position to know testifies, unrivalled service during the war. Many of them have worked for continuous periods of seven days; as a matter of fact, I understand that oWing to staff shortages they are still continuing to do so. They have lost their normal holidays, and they have lost their Sundays and week ends. They have made an invaluable contribution during the war and in this very difficult phase through which we are passing. Therefore, I hope the Chancellor will see that, in all aspects of policy where they can make a contribution, the appropriate elements of the staff are consulted. There is a little uncertainty in their minds—I speak as one who has some constituents engaged in this service—in regard to a phrase used by the Chancellor this afternoon. They remember that in the previous merger in 1928, a phrase was used to the effect that their conditions should be no worse than they were previously. In fact, that has tended to a levelling down rather than a levelling up in the peculiar wage structure of this industry where, in addition to the normal rates, there is a large share of profits. It is important that the financial implications of the scheme should be mentioned, so far as is possible, at this stage. I refer particularly to paragraph 10 (V) on page 6 of the White Paper which mentions the pooling of revenue within the countries participating and goes on to say: The essential feature would be that the Commonwealth organisations would pay their net revenues from overseas telecommunications services into a Central Fund to be administered by the Board. From this Fund would he met the expenses of the Board and, in certain circumstances, a contribution to the upkeep of the cable system. We find that as a result of the Bermuda Agreement it has been estimated that £2,000,000 has been already knocked off the revenue of Cable and Wireless. In the wage structure of this service profits are very important, because I understand the basic rates of pay are still what they were in 1939; staff pension rates are still calculated. upon prewar conditions. Therefore, I think some assurance might well be given to the staff in relation to this aspect of their future terms of employment.

A little has been said about the nature of the Board itself. I regret that I do not necessarily share the view expressed by an hon. Member on this side of the House, that this new enterprise could best be administered by the Post Office. I have the highest admiration for the Post Office and the conduct of the service which it already administers. Incidentally, when the hon. Member for Hertford (Mr. Walker-Smith) talks about research being absent from monopoly, I only hope that, if he has not already done so, he will go to see the Post Office establishment at Dollis Hill, where standards are not behind those of any country in the world. Nevertheless, it does seem to me that there might be some advantage in concentrating this new venture in an entirely new organisation. However, I am not certain that the Post Office is not already too large. One of our troubles in modern large scale industrial and commercial development is to find the right size of enterprise. If a thing gets too large nobody is really in charge, and no one has an overall picture of what is being done. It is necessary to find the optimum size for each enterprise. One has seen examples during the war where, for instance, the Ministry of Supply became too large. It may be that the new board would be by far the best method of administering this service. I think we must commiserate with the Opposition today, because it seems to me they have neither the courage to wound the Chancellor, nor the heart to come out and give him support in this issue. They are in a very difficult position. Therefore, I conclude by commiserating with them and congratulating the Government on their commonsense action in relation to this Bill.

6.39 p.m.

Mr. Harry Wallace (Walthamstow, East)

I am afraid I cannot agree with my hon. Friend the Member for West Lewisham (Mr. Skeffington) that the Post Office may be too large to take over this industry and administer it efficiently. If my hon. Friend fears the Post Office is too large, I direct his attention to what happened in the development of wireless telephony after the wireless cable section was removed. Later Cable and Wireless, Limited, attempted to secure control of wireless telephony in the same way that it secured control of wireless and cables. This is not the occasion, I think, to repeat what was said in 1928 about the way in which cable wireless was appropriated to this private monopoly. Today, hon. Members on the opposite benches have criticised monopolies. They find that monopolies stifle enterprise. I understand they will not oppose this Bill. The suggestion I would make to them is not to favour a State monopoly which would not be open to public criticism. My suggestion is that Cable and Wireless should go to the Post Office for the reason that it would be open to the direct criticism of this House; which, I think, is very valuable. Moreover, I think this House should have full and free opportunity to express its views about the charges that will be made. There have been occasions when in connection with telegraphs and the telephone and postal services, criticism in the House of Commons, and the responsibility of the Minister to the House, have been of advantage to the public. I favour forms of public ownership and administration.

The hon. Member for Wood Green (Mr. Baxter) is opposed to the Bill. He found comfort in what was done in America; for example, that a telegraph boy would meet one in an hotel and supply a telegraph form. But the hon. Gentleman has only to go to St. Pancras Station or Paddington Station to find a telegraph boy who would hand him a telegraph form. I do not see that he was answering the case made by the right hon. Gentleman the Chancellor of the Exchequer. The Chancellor emphasised that it is only on the basis of public ownership that agreement can be reached with the Dominions. I myself find it worthy of note that agreement within the Commonwealth is to be reached only on the basis of public ownership. I think that hon. Members opposite have to realise that public opinion changes. I do not share their fear that, when this Commonwealth organisation is set up, because this service will be a State-owned service, this country may run the risk of war, or of offending neutral countries, who might not like a State service, or who thought it would deny them some advantage. If there should be another war, will there be any neutrals?

On the other hand, I feel that the coordination of the Commonwealth services should make it easier to bring about a coordination of world services. If we have faith in the United Nations cooperation, then I think that in the sphere of communications that we may get a real world institution serving the world. If hon. Members opposite are correct, as I think they are, in saying that means of communications can be a method of cementing friendship and understanding, then, I think, they ought to welcome this proposal. They ought to welcome the opportunity which will come tomorrow to bring about this world coordination of communications and a better understanding among all nations. It may be suggested that this is idealistic, but I would rather face the world with that hope today than talk in this House about strategic advantages, and war.

I want to express some measure of regret that the Government have not yet made up their mind to hand this service back to the Postmaster-General. I share the view of the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) about the Post Office. I think he was right. I think the hon. Member for Chippenham (Mr. Eccles) was right. I think the service should be developed under the Postmaster-General. Wireless telephony was developed under the Postmaster-General, and I am quite certain that if Cables and Wireless went back to the Postmaster-General it would still advance. I will not now go into the point about charges. It is a fact that the Chancellor of the Exchequer in 1940 emphasised that Post Office charges were being increased—not to benefit the Post Office or the Post Office staff, but to supplement wartime income. I do not think that should be held against the Post Office.

I conclude by saying that I welcome the decision that this service should come under public ownership. I hope the Government will hand it back to the Postmaster-General. I believe that will be in the best interests of the public. I am satisfied that if hon. Members opposite, as my hon. Friend the Member for Heston and Isleworth (Mr. Williams) said, do not want public service to be a means of securing surpluses and profits, but want these—and from 1912 to 1940 no less than £200 million was taken from the Post Office—turned back into the development of a better and a cheaper service, then this service should go to the Post Office. Press telegrams enjoy a special rate in this country. Football "Tote "promoters get a special rate in this country. The Post Office could use its surplus to give special rates to the ordinary working folk of this country, for example, as I said the other week, to provide telephones for the working mothers who need them.

6.47 p.m.

Mr. William Shepherd (Bucklow)

We have listened today to a most remarkable speech from the Chancellor of the Exchequer in his attempt to commend this Bill to the House. I confess that I do not find his speech very convincing on the economic side, any more than I feel that his devotion to the cause of Empire came from the depth of his heart. I can well understand that the Chancellor takes this opportunity to shelter behind and support his case on the grounds of Empire, because this, if the Government's activities are any criterion, may be the last opportunity he may have so to do. He may be justified, therefore, today in trying to commend this Bill to us on the grounds that the Empire supports his policy. I want to ask the Chancellor of the Exchequer whether the Empire countries specifically asked for this form of public ownership, whether they initiated the idea from which this Bill springs. We have had no clear statement. Several interruptions were made, and the Chancellor of the Exchequer has not yet told us whether, in fact, the Empire countries sought this Bill in this form. I hope that when the Financial Secretary to the Treasury replies, he will give us a clear indication whether that is or is not the truth.

We have listened today to a good deal of talk about efficiency. I am sorry to say that most of the critics of the alleged inefficiency of the Cable and Wireless Company have been people who have been connected with the Post Office. It is a very remarkable thing that most of the people who today have criticised Cable and Wireless are individuals who in the past, have been connected with the Post Office.

Mr. H. Wallace

Will the hon. Gentleman name one of the individuals connected with the Post Office who has criticised Cable and Wireless?

Mr. Shepherd

Several hon. Members have indicated their connection with the Post Office in the speeches which they have made. So far as the real test is concerned, surely the user aspect is of some importance. I have used commercially Cable and Wireless and the British Post Office. Surely, the views of users are of some consequence, even under a regime such as this. I suggest to the House that the conduct of Cable and Wireless has been animated by a desire to serve the user to a far greater extent than has that of the Post Office. It is a fact which few will deny.

When the Chancellor introduced the Bill, he said that he did not know how this business was to be conducted. We have had no conception whether it is to be one of the public utility boards, whether it is to go to the Postmaster-General, or whether we shall see some new variations of these public utility corporations which have grown very much in the affections of hon. Members opposite. Whatever is the form of control, we shall probably see the Government trotting out a few more of their performing Peers at handsome salaries, to conduct this organisation in the alleged interests of the community. The Chancellor did not point out the loss of revenue in which he is involving this country, or the loss of foreign revenue as a result of the Bermuda Agreement. It is estimated that we shall lose £2,250,000 as the result of this rapid reduction in the rates. Who are to be the chief gainers as a result of this loss? Those who will gain are the American public. In other words, the British Socialist Government are inflicting a financial loss upon the British public, in order that they may bring financial gain to American capitalists and business men. It does not sound to me to be very good business, and a little more strength on the part of the Government might have succeeded in achieving a much better rate than that. Perhaps the Financial Secretary will draw the veil a little as to the form it is proposed for this organisation.

I suggest that no form of State monopoly, however it is disguised by fancy names, and however respectable it is apparently made by the allocation of a suitable quota of Peers, is the best way of conducting a business of this kind. Whatever devices we seek to impose and to whatever extent we may go in imitating the structure of a business run under commercial or semi-commercial management, we shall never succeed. Once one gives an organisation all the trimmings of a Government Department, it soon develops the outlook and complex of a Government-run organisation. It is impossible, after a short time, to get away from that form of organisation. If it has been an organisation of private enterprise origin, it may run in a commercial way for a few years and have regard to service, but gradually the bureaucratic process will assert itself, and then the organisation will have little regard for the user or consumer. The Government proposal is wholly unsound. Cable and Wireless, limited, has been an organisation which has served the public well. This new idea will result in a considerable loss of revenue, and, what is more important, it will result in a Toss of overseas revenue. It will establish a bureaucratic organisation in which the interest of the consumer or user will be lost, and it will not give us the service which was given by Cable and Wireless, Limited. Therefore, I regret that it is impossible for me to support the Bill as introduced today.

6.56 p.m.

Mr. Cobb (Elland)

We who are interested in telecommunications are, perhaps, an esoteric body. Those of us on this side of the House welcome this Bill with the same enthusiasm as that larger body of Members connected with the coalmining industry welcomed the Coal Bill which was passed last night. Those of us who can survey in our minds the progress of telecommunications in this country realise that this step was inevitable. My mind goes back to those radio telecommunication visionaries, who found themselves, many years ago, faced with technical advances in America, with the Alexanderson alternator on the one hand, and the Poulsen Arc on the other hand. Our engineers developed a most ingenious and extraordinary alternative known as the timed spark system. This was to form a chain of stations which were conceived as being necessary to girdle the British Empire with a rapid means of radio communication. Almost as soon as the first station was erected at Caernarvon, it was already obsolete because of the advent of the three electrode valve. This instrument which has created such vast machinery for the benefit of the human race, was also the original development of a British scientist. It would be appropriate in this Debate to pay tribute, not only to Professor Fleming who was the inventor of this piece of apparatus, but also to the engineers of the organisations who made beam radio possible. I have in mind Franklin of Marconi's who, with Tom Eckersley of the same company, made beam radio possible, and put it in the hands of people who erected a chain of stations, and for the first time made rapid and cheap methods of Imperial radio communication possible.

That leads me to the point which was made by the right hon. Member for Aldershot (Mr. Lyttelton), that no criticism can be levelled against the efficiency of Cable and Wireless. I should like to say one word in connection with research. Research is the mainspring of progress and efficiency. I do not know where this great company had its research organisation, but I do know that this country is vitally in need of more telecommunication research, and that the research station of the Post Office is an oasis in what is almost a desert as regards research in telecommunication. Even when we come to Dollis Hill, we have only 150 qualified research people, as against 3,000 in the American Telephone and Telegraph Company. It was only a short while ago that I asked the Postmaster-General whether he could not see his way to increasing this small band of research people at least to 1,000. I know of no other organisation in this country that is doing adequate research on telecommunication.

The hon. Member for Chippenham (Mr. Eccles) said he would like to see telecommunication used for more rapid and better communications between the peoples of the British Empire and of America. I agree with much of what he said, but one thing, which I think we have to face up to on this question of research, is that much of the research in this country—and the hon. Member for Chippenham touched upon this—in telecommunication has ceased during recent years, and we have tended, more and more, to buy our research in America, Anglocise it and then sell it to the British Post Office. The right hon. Gentleman the Member for Aldershot knows more about this than I do. He has quite close connections with America, and he probably knows what I mean. If you are going to continue to allow companies in this country to be taken over by foreign companies, and many of the companies in telecommunication in this country are foreign owned, and take their orders, like the right hon. Gentleman the Member for Aldershot, from America, then we have to face what this means. If a company is taken over by a foreign concern, it tends to stop doing research in this country. When that has gone on for a few years, we have to consider the national consequences of the process.

It may be, if the hon. Member for Chippenham is right, that we can so tie ourselves to America that it will not matter if research stops in this country and is centred in America. On the other hand, are we sure that we can be content, from a national point of view, to see telecommunication, to a considerable extent on the manufacturing and research sides, coming under foreign domination; and are we satisfied to see, as a result, research stopping in this country and being carried out in America? Are we satisfied that British companies, with British capital, can face the competition of those who can buy their research in America at less than 20s. in the £ I feel that the Government ought to investigate this situation in telecommunication research to see what are the logical consequences, and whether we ought not to do something about this; or are we content to carry on in getting our research in this great industry done for us in America? I am not at all sure that we ought not to take some action in this matter.

The second point to which I would like the Chancellor to give consideration is that of ownership. I know that he has said that he is going to do so. I searched through the White Paper to see if there was any indication of what we were going to do with this company when we have taken it over. It led us up to where we could view the panorama of possibility but left us guessing about the valley beneath. I was very glad that the Chancellor was able to tell us today that the decision as to how this enterprise is to be run in the future has not yet been taken. I would like to add my support to those who have spoken in favour of the Post Office. It seems important from the point of view of efficient organisation, there should be no other decision. Any one who runs cables has to have a fleet of cable ships. Are we going to have two fleets of cable ships, one on the Cable and Wireless side and one on the Post Office side? Obviously, it would be far more efficient if we had one fleet. I was going to say, "Are we to have two research organisations?" but Cable and Wireless have not got one. Are we to start a new research organisation? If so, where are we to get the space and the people? Would it not be much better to let Dollis Hill do the whole of telecommunication research? It seems that this is a very good reason, if there is no other for putting all telecommunications under the Post Office. Let us remember —I am sure the Chancellor knows this only too well but I would like to remind the House—that the Post Office already handles all the internal telephone and telegraph traffic in this country, and all the external telephone traffic.

When I pick up a telephone today to speak to the "Queen Mary,"I speak entirely over a Post Office circuit. If I pick up a telephone to speak by radio telephone to New York, I speak over a Post Office circuit until I get to the reception end in America. When I want to speak to any one by radio-telephone out of this country, I speak over a Post Office circuit. Cable and Wireless, with their associated Dominion and Indian companies, handle all the external telegraph traffic, whether by cable or wireless. Do not let us fall into the mistake of thinking that telegram and telephone are separate things. They are both telecommunications. We want to be in the position, in the future, of using a circuit alternatively or simultaneously, possibly, for telegraph or telephone traffic. When we come to cables, already we see the possibility of having transAtlantic telephone cables. Recent developments in the art of radio have shown that it is possible to make valves with a life of 25 years, and this opens up the possibility of having a transAtlantic cable circuit for telephones. It seems that this would be far better handled if it were put in the hands of the Post Office, which has such a vast fund of experience and skill in this type of enterprise. I hope that the Chancellor, and the Government, when they take this decision, are going to put themselves in the hands of the Post Office and not leave it to these hybrid organisations.

7.7 p.m.

Sir Ralph Glyn (Abingdon)

I want to ask what are the arrangements to be in regard to research. I agree with almost every word spoken by the hon. Gentleman the Member for Elland (Mr. Cobb), and I would ask the Chancellor of the Exchequer to bear in mind that during the war we trained a very large number of men in the Navy, Army and Air Force for this work, and it is exceedingly hard to find positions for them to fill. Some of these men have done, under Sir Charles Ellis and other scientists, the most wonderful research, and I feel that this service should come under the Post Office. I think that it will lead to confusion, especially on the scientific research side, if it does not; and I can see no reason why it should not come under the Post Office. Whether it is a fact that Cable and Wireless have no research section, I am not in a position to say, but I should be surprised if they have not anything of the sort. But it is of the utmost importance that we should encourage our young people in research, and not but, brains that are in America. There is no reason for us to do that, because in the whole history of telecommunications and radio, the British have nothing of which to be ashamed; they have led the world in all these matters. If I may be forgiven for making a personal statement, I looked up the Debate that took place, in another place, about 60 years ago, when my grandfather happened to be Postmaster-General, and a great many of the things that have been said today were said then, and he had a great struggle to take over certain things which were then in the hands of individuals. There was considerable doubt whether they would ever be brought to fruition.

I have in my possession a section of the first cable laid across the Atlantic. When that was done a great deal of scepticism was displayed as to whether the pressure of the Atlantic would not be too much for anything made by man. There were many doubtful promises, but I am certain that it succeeded because of encouragement given to young men with go-ahead ideas. That is something which we shall lose in nationalisation unless encouragement is given to young people. I want to emphasise what I have said before in this House and which has been constantly proved in two wars. The greatest inventions that go towards the destruction or the benefit of mankind have been made by people under 23. That is an astonishing fact but true, the reason being that the instinct and genius of the human brain come out more easily before that brain is clouded by old gentlemen. repressing it. The danger attached to nationalisation is that, in an organisation of the State, there shall not be a safety valve for young men and young women and their ideas.

I believe that the story is not generally known of the telecommunication experiments of the 1914–18 war, when we had our first direction sets. I happened to be connected with that, and it was Lord Kitchener who decided that it should be tried. We set up two stations, and there was a distinguished Cornishman, whom hon. Members connected with the Post Office will remember, who took part in the experiment. In 1915 we set up the first direction wireless station and I was detailed with other officers to go with him. I always remember going across to France and the excitement we were in. The first night we tried it on the triangulation basis, and the Germans were good enough to give their location and their call sign. There we had the complete order of battle for the German army, which nobody imagined was possible. I was satisfied and went down to St. Omer to see the head of the intelligence section at two o'clock in the morning. I got him out of bed, but I was told it was impossible and was kicked out Next day we were discouraged but not dismayed, and as a result of our effort it was possible to confirm the location of these units. Afterwards, the system was adopted by the Admiralty for use against German submarines in the North Sea. All this was due entirely to a young Cornishman who afterwards lost his life and who, having worked with Marconi at Poldhu, had been encouraged and not discouraged.

I do not know whether, in the White Paper or in the Bill, any consideration is given to the subject of the protection of the interests of young engineers who are working in Cable and Wireless, Limited. There is no mention of that in the Bill, but it is of the utmost importance that their future should be safeguarded. It is important, too, that we should not assume that it is only in the United Kingdom that people are interested in this. If it is to be a real Imperial communication, we should encourage those in the Dominions and the Colonies and see to it that in many of the out stations, where the personnel have a lonely time, the engineers should be encouraged to put their brains to work and should be given every opportunity to develop their ideas in spite of their isolated position.

I am afraid I cannot agree with some of the criticism expressed by the hon. Member for Bucklow (Mr. W. Shepherd). I am afraid hon. Members will have to take a totally different view. We are at the parting of the ways and, for better or worse, we are entering on a new experiment. I do not think it is right to cast any reflection or abuse on those coming forward to make these schemes successful whether they are Members of another place or have no connection with Parliament or the peerage, because the first duty of an Englishman at this time is to come forward and use whatever power and capacity he has for the benefit of this country and of the Empire. If we do not do that, we do not deserve to get through this difficult period.

Finally, there is one word I should like to say with regard to the enormous amount of material purchased by the taxpayers and now in storage. A great deal of this material is delicate material, and some of it is secret. There are various reasons, no doubt, why some of it should not be disclosed at the present moment, but I would ask that in setting up this new organisation there should be distinct contact between the Army, Navy and Air Force and the management of this concern, which, as I say, I hope will be under the Post Office. I am convinced that it is essential to take stock of the various things that are in store, and also to encourage outside firms who may be capable of doing work for the new Board, because there is no doubt we cannot afford to be without the brains of anyone. There are many firms in this country, well known to Members of the House, which have spent large sums on research work and experiment, and they have made a great contribution in this class of work for the Admiralty, the War Office and the Air Ministry. Whatever may be our relations with the United States—and I for one believe it is not worth considering in the future much that matters unless we are interested in the United States—there must be a complete understanding, frankness and interchange, but it has to be interchange as between equals. We have to do all in our power to encourage research in this country, and encourage young boys at school and at the university to come forward with their ideas so that we can help them. It is one of the signs of modern education that we have to bestir the mini of youth, which has to be in tune with new ideas, because there is the whole of the ether to be explored.

7.16 p.m.

Mr. Maningham-Buller (Daventry)

Part of the Debate today has been taken up by discussion as to whether these services which are now run by Cable and Wireless, Limited, should, in future, be operated by the Post Office or by a board. The Chancellor of the Exchequer told us that the Government had not made up their mind upon that issue. I think that that was an astonishing admission for him to make—an admission that he was taking over this concern without having the least idea of and without having taken any decision on how to run it in the future. I do not propose to take up any time this evening in arguing the pros and cons of that matter. I daresay that the Chancellor has got some assistance from hearing the views expressed by those from the benches behind him, and it was no doubt as interesting for him to hear those views as it was to hear those of the Liberal Party, which this afternoon have been so liberal in their expressions. I myself do not propose to express any view on the matter, but it does seem to me that if the Government are going to run the cable services and some of the external wireless services in this country under one concern there is an argument for bringing the radio telephone circuits under the same concern even though the Government may have to place letters and parcels under separate management.

Those who have listened to this Debate today cannot fail to appreciate the far-reaching consequences of this small Bill, the main purpose of which is the acquisition of the share capital, and the bringing into public ownership, of Cable and Wireless, Limited. I am glad that so many tributes have come from all sides of the House to the manner in which those engaged in the company have carried on throughout the war. I think it is unfortunate that the Chancellor, in his opening observations, should have omitted to pay any such tribute. Indeed, in part of his remarks he appeared to cast something approaching an innuendo upon some of those concerned with the company. The only criticism of the company, so far as I can recollect, was with regard to research. I understand that the company, although I am not here to defend it, has for a long time been a pioneer in the field of automatic regeneration.

I want to say a few words with regard to the terms of acquisition under the Bill. I he amount may be agreed but the Chancellor said that the company were not shoWing any keenness to come to an agreement. I suppose that that means that he is not being very generous in his offer because, usually, if a reasonable offer is made to people who know that they must sell, there is no reluctance. But if the offer is a miserable or poor one, I can quite understand that there would be no keenness to accept it, and, therefore, I do not think the right hon. Gentleman has any legitimate ground for complaint under that head.

Mr. Dalton

I was not complaining.

Mr. Manningham-Buller

Then I do not understand the point of the right hon. Gentleman's observation. The tribunal has to determine agreement on the basis of sale by a willing vendor to a willing purchaser, and the money is to be paid by the issue of stock, such stock as is, in the opinion of the Treasury, of value equal to the amount of compensation. The Second Schedule to the Bill states that the stock will bear such rate of interest, and be subject to such terms of redemption, as the Treasury may determine. Obviously, a considerable interval may elapse before the assessment of compensation, and the issue of stock. I do not object to the Treasury having discretion in that matter, provided that what is meant—and I think it is—is that at the date of issue, the stock, so far as it can he determined, is of a real value, not of a nominal value, equal to the amount assessed by way of compensation. I hope the Financial Secretary will make that absolutely clear. I think that is what is intended, but it is not absolutely patent from the Bill.

There is one further matter I would like to refer to before I go on to some general observations, and that is with regard to the staff. My hon. Friend the Member for Abingdon (Sir R. Glyn) has just made an earnest plea on behalf of the skilled young technicians in the company's service. I confess that if I were in their position I should not feel particularly relieved from anxiety by the Chancellor's statement with regard to their future. I understand that terms and conditions of service are higher in Cable and Wireless, Limited, than in the Post Office in many respects, sometimes for doing similar work. What is to happen? Can an undertaking be given that these people will continue to be employed at their present rates of remuneration? Will they continue to be offered the same advantages of pension or will they, after a short time, and after full consultation with the interests involved, be told that they must come down to Post Office rates or go out of Government employ?

Important though the question of pay and compensation is, there are far more important consequences of this Bill, and to judge from the White Paper and from what the Chancellor has said, one would think that some of them have had very cursory examination and consideration. I know that the word "nationalisation" brings a great deal of joy to Socialist hearts, and such a measure of delirium to Members opposite as sometimes to make them deaf to all reason. This is the first time, and I hope it will be the last, on which this Government are seeking to nationalise an industry whose chief business lies outside the shores of these islands. Not only for financial, but for strategic considerations, do the Government's proposals merit the most serious consideration.

Usually, one or two alternative arguments are put forward for nationalisation. The first is that the industry is ripe for it. That argument has not been put forward today, and does not appear in the White Paper. The second is that the industry concerned is in such a state of chaos, oWing to there being a mass of small operators, as in the case of the road transport industry, that the only way to bring it to that order which planners delight in, to others discomfort, is to nationalise it. That argument again does not apply in this case. If neither argument applies, the Chancellor usually holds up the pamphlet like the one I have in my hand and says, "We have a mandate."I have looked through this document and on this occasion, even if the right hon. Gentleman wished, he could not use that argument. The Government have no mandate from the electorate for this Measure, although I appreciate that that should not deter them, with their vast and docile majority. That does not prevent them from gambling with the nation's food supply, from evacuating Egypt or, apparently, interfering with the arteries of the Empire. With no mandate it is even more incumbent on the Government to put forward cogent and compelling reasons for their actions. The shape and construction of Cable and Wireless was conceived by the Imperial Wireless and Cable Conference of 1928. In 1938 it was reorganised. The White Paper says: The Commonwealth Governments in general reaffirmed- their policy of according their support and cooperation. Thus, one can say that almost to the outbreak of war this semipublic utility company had the blessing of all the members of the Commonwealth. The Chancellor said that some of the Commonwealth members will not now go on with the present set-up, that they may have personal, as well as institutional, reasons. I am sorry he introduced the question of personal reasons, but the argument, if it is put on that ground, is surely a bad one, because it would mean that the Prime Minister would have to change the whole constitution of the country if he wanted to get rid of one member of the Government. What has happened since 1938 which has made this fundamental change in the present organisation essential? I know that it was said by the Commonwealth Communications Council in 1944; and by the Coalition Government, that there was a case for it. The Council, in 1945, unanimously agreed that it was essential.

I appreciate that great weight must be paid to that, but what the White Paper does not tell us is what is the case for the change. The right bon. Gentleman has been silent on that issue today. All the White Paper says is that it is necessary for the desired strengthening and better ordering of the Commonwealth telecommunications system and that the main object is to secure the development of the system as a whole and avoid the artificial routing of traffic to which the divergence of cable and wireless interests naturally tends. It is singularly silent—and so was the right hon. Gentleman—as to the reasons why the adoption of the recommendation of the 1945 conference will lead to those desired results. A divergence of cable and wireless interests may tend to artificial routing. Everyone can see that, but under the Cable and Wireless, Limited, at the present time are they not to a large extent united and was not that the whole basis and reason for the organisation that began in 1928? Frankly, on reading these documents, and after hearing all the Chancellor has said, it seems tome that the possibilities of a divergence are far greater under the recommendations adopted by the Government, part of which this Bill is intended to fulfil.

The first recommendation is that the private shareholders' interests in the overseas telecommunications services should be eliminated. Is it really suggested that that private shareholder interest has prevented proper development of the service during wartime? After all, there was not a great deal of opportunity for doing much after the reorganisation of 1938, before war broke out. What, then has been the cause for this fundamental change? My right hon. Friend has pointed out the interesting contrast between the fact that this company introduced its Empire rate in 1938, and maintained it throughout the war, whereas in the case of the Post Office there were rising charges. The Chancellor said in his speech that he was glad to keep a foreign rate of 1s. 6d, a word, which is only a ceiling, against the Empire rate of 1s. 3d. a word, and he sought to contend that that was some form of Imperial preference. I must admit that I do not follow his argument at all. People in the U.S.A. who want to communicate with Palestine, for instance, are not going to be tempted to send their message to Canada first in order to get the advantage of this 1s. 3d. inter-Empire rate, and I fail to see how the argument used by the Chancellor has any bearing on this matter at all. What the Chancellor did not tell us, and what I understand to be the case, is that the company itself put forward to his Government a scheme for reducing the world rate to the level of the Empire rate by a gradual process which would modify the shock, and that the Government rejected that scheme.

The second recommendation is that the respective Governments should acquire the interests of the company in Dominion and Indian companies. The White Paper says that Cable and Wireless regard these holdings as investments, and do not use them to try to alter the policy of those companies, so that I am at a loss to appreciate what really is the reason for the recommendation unless it be just that the Dominions, or certain of them, want to hold and to have more control over the finances of those companies in the Dominions. Does the ownership of these investments by Cable and Wireless lead to divergence of cable and wireless traffic and artificial routing? The Government are pledged now to part with those assets —on what terms we are not told—but one thing is certain and that is that parting with them must mean a loss of revenue to the company which will, of course, become a Government owned company and may become, and I think will become, a burden upon the taxpayer.

It has been pointed out already that this White Paper, and indeed the speech of the right hon. Gentleman, were both silent with regard to the foreign concessions. Before this Bill becomes law we should be told what effect it will have upon the foreign concessions now owned by the Cable and Wireless which have been built up over more than 70 years. In many foreign lands they have the right to open offices for the acceptance and delivery of telegrams. Is it suggested that if these services are put under the Post Office in this country, the British Government will be able to run a British post office in some foreign country, or it may be several of them, for the acceptance and delivery of telegrams on this service? In addition there are the concessions for landing and working cables, and sometimes wireless stations. Has any inquiry or investigation been made into the position with regard to those concessions? Are they just as secure if they are in the hands of the Government as they would be if they were retained by a company which would be subject to the laws of the foreign country so far as its stations there are concerned? What is going to happen, for instance, with regard to a cable route that does not lie between two parts of the Empire, like that from the United States down to South America? Is that still going to be secure, and is it going to be run by the Britian Government? Surely these questions must have been given some consideration?

As I say, there is not a word in the White Paper about them. I ask whether the Government have received assurances that they can go on working. It is one thing for a company to hold a concession and run it; that has no politi- cal implications. But the holding of a concession by a foreign government may have. We have been reminded that important cable routes go through foreign countries. Those who have been to the Middle East recently must be aware of the upward surge of nationalism Nationalisation is a catching disease, and other countries may become infected. They may say that all telecommunications within their boundaries should be nationalised, and if that takes place, it seems to me that these proposals, instead of bringing about unity between cables and wireless and the unity of operation of our Imperial communications, would lead to their disruption and disunity.

I really think we ought to be told a good deal more about this, and that we should be shown how the desired strengthening and better ordering of the Commonwealth telecommunications system —I quote from the White Paper—will or will not be achieved in respect of these foreign concessions. Again, if we lose those concessions, it means a tremendous loss of income and of assets to the company. One hon. Member pointed out that the revenue from foreign countries and the assets in foreign countries are greater than those in the case of the Dominions. I should have thought that the right hon. Gentleman would have been concerned with obtaining a certain amount of foreign currency. Loss of those Dominion assets must mean, as I see it, a great loss of revenue for the company and may well place a heavy burden on the new shareholders, the British taxpaying public. Not one word has been said today about this aspect—about what sort of burden may fall on the taxpayers' shoulders. Not one word has been said about how this communications system will affect our communications with our Colonies. How will nationalisation affect that?

The right hon. Gentleman and some other speakers have said a little about the Bermuda Agreement. It has been pointed out by an hon. Member behind me that those direct circuits were only to last for the duration of the war and six months thereafter. They have been continued, we are told, because some of the Dominions want it, but will not their continued operation lead to some divergence of cable and wireless interests? What we have really to make up our minds about is to what extent it is necessary to maintain a cable service throughout the world in the future. That was one of the chief grounds for the original formation of the company and its reorganisation, and I should have thought that after all that has taken place during the war it would have been most unwise of us or for the Dominions to do anything at all to prejudice the security of those communications.

To go back to the Bermuda Agreement, the Government, it is true—it is admitted by Clause 5 of the Bill—have agreed to a considerable reduction of rates. The result will be that, in addition to the loss of revenue the company is going to face, it is going to face also increased competition from the direct routes which are now open. The loss on the present traffic has been estimated at £2,500,000, more than double the standard net revenue. The right hon. Gentleman said it was not possible on the present figures to say much about the future, but on the prewar figures I am told the advantage of those reductions would go to the extent of £1,500,000 to the U.S.A. and foreign territories, £260,000 to the people of the British Empire, and £9,000 to the benefit of the Press. I do suggest that that really does not sound as if it is a very attractive bargain or a very attractive agreement, or in the interests really of the British Empire. I am all in favour of Anglo-American cooperation but it does seem to me that sometimes one can in an agreement of that sort give away too much.

What is meant by the third recommendation in the White Paper that the new type of organisation should, if possible, be uniform between all Commonwealth countries? Does that mean that we are to have throughout the Empire, the same type of company running similar services, with all the shares government-owned; or does that mean a company running some services and the Post Office of that country running the others? I listened with interest to what the right hon. Gentleman had to say about the Dominions being unanimous in their agreement at the 1945 Conference Of course, one can agree. The arguments may be strong, and persuasion may or may not be great, but once one has reached agreement, there it is. But an agreement may lead to active or non- active cooperation, and I would now like to make clear the question I put to the right hon. Gentleman when he was detailing what was happening in Australia and elsewhere, with regard to Canada. I would like to ask him if he can say whether Canada and South Africa have agreed to set up in those Dominions a government-owned company to run services of this character and whether any steps have been taken to that end?

If although they have agreed to this document they are not going to set up any such company, the prospect of uniformity of organisation throughout the Empire recedes into the background, and then we shall not get what has been held out to us by the Chancellor. Surely the important thing is, not the constitution of the company, not whether its shares shall be owned by governments, but that a common and united policy should be followed. We have no guarantee that uniformity of constitution will lead to uniformity of action. I suppose that the new board is intended to achieve this. I do not propose to discuss that now because I doubt whether I should be in Order if I did, but I doubt very much whether that board can—if I may use the expression—deliver the goods.

I want to touch on a few more matters. It is of some concern to the British people to know what the income of this company is going to be in the future. We are told that the net revenue from the Dominion companies will go to the Board, and that from the net revenue—which is the Socialist synonym for the word "profits" —of the Dominion companies, after payment of the Board's expenses, in certain circumstances a contribution will be made to the maintenance of the cable system which we shall continue to own and shall have to continue to keep up. We do not know what those circumstances are. We are not told on what basis the net revenue will be calculated. With a loss of income from the Dominions and India, with, in my view, a very likely loss of the foreign concessions and assets, with the cost of maintaining the cables and with the new rate reduction following upon the Bermuda Agreement, with some Empire Governments increasing their tolls I think the British people will find this nationalisation project as disastrous as the others.

I confess that on strategic as well as financial grounds, I was sorely tempted to vote against the Bill. But I am, as.I think every one on this side of the House must be, tremendously impressed by the fact that there has been up to now, the agreement of all the Dominions at the 1945 Conference. I for one, would not like to take any action which might lead to a disagreement within the Empire, and for that reason I do not, and those on this side of the House, or the majority of those on this side, do not intend to record our votes on the Second Reading of this Measure. But I hope that the right hon. Gentleman later, and the hon. Gentleman who is to reply this evening, will deal with the points I have made. I hope that the questions that have been raised from this side of the House will be most carefully considered, not only by this Government but also by the Governments of the Dominions. It may be that, on further consideration and further reflection, the same course may not be followed, in the light of observations that the Dominions may make, when we come to the later stages of the Bill.

7.50 p.m.

Mr. Viant (Willesden, West)

I have noticed during the Debate a considerable amount of unanimity in regard to the purpose that this Bill sets forth. The Bermuda Conference has been mentioned repeatedly, and I feel that a number of the speakers referred to the Conference as though the representatives there had taken a rather parochial view of this subject. I do not think that can be said. I think those who were at the Conference appreciated the fact that by sheer necessity we, as a Commonwealth, are compelled to draw closer together. And in the circumstances with which the world is confronted today, there is nothing that renders that coming together more possible than communications. The term "nationalisation" has been used during the Debate. I feel that we ought to speak today from the point of view of internationalisation, as far as communications are concerned. Communications are more likely than anything else to bring the nations closer together, and if this Bill enables the Commonwealth to be knitted more closely together, it will be a step in the direction of bringing in other nations with us, especially in view of the fact that America is prepared to cooperate with us in this scheme. No one can say at present whether cables and the beam wireless are the last word in communications, and I feel that we have arrived at a stage where we should have no duplication in regard to these services There may he room for research but, in regard to the communications themselves, they ought, in every sense of the word, to be unified.

That brings me to the main point I want to make. I rather regretted hearing from the Chancellor of the Exchequer that the Government had not made up their minds as to whether the communications were to be run by a board or would become again a department of the Post Office. I was in this House when wireless and cables were handed over to a private company—a step I deplored at the time. I am very pleased that they are coming back again, and will be taken over by the Government, but I hope that the Government will allow them to become a department of the Post Office. We ought not to allow a service of this kind to pass to a board. This House ought to be able to criticise or discuss the services, and there should be a Minister in this House responsible to the House for all transactions connected with the wireless and cable service. There is no room for duplication, and I hope that the Government will make up their minds, here and now, that this should become, as it was before, a department of the Post Office.

That brings me to my next point. The hon. Member for Abingdon (Sir R. Glyn) in a very friendly speech raised the point whether young men would be given an opportunity of alloWing their initiative to express itself in the department running these services. I admit that the Post Office has been lacking in that respect, but not quite as badly as some hon. Members have endeavoured to make out. There is ample room for improvement, but the Post Office has one of the finest research establishments in the country, and I believe has some of the finest young men as scientists and engineers in that department. I am convinced, as a result of my experience, that there is ample scope in the research establishment of the Post Office for the younger men in the scientific and engineering world to give of their best in that department. With a sympathetic head, and with a sympathetic board, they could be given every facility and every opportunity for giving of their best to the State. Secondly, we must pay due regard to the part the Post Office played when the wireless beam was first introduced into this country. Great experiments were carried out under the aegis of the Post Office in 1923 and 1924, which ultimately brought us to the stage where it became a commercial proposition. Do not let us decry the good work done by the Post Office, but let us praise them for what they have done, and, in so doing, we shall encourage them to do better in the future. I repeat my appeal to the Chancellor of the Exchequer that he should persuade his colleagues in the Cabinet to make up their minds to allow this service again to become a part of the Post Office, and, furthermore, to give all the encouragement they can to the best men of science and engineering in the department at this moment.

7.59 P.m.

The Financial Secretary to the Treasury (Mr. Glenvil Hall)

I think it will be generally agreed in every part of the House that this has been a rather peculiar Debate. The speeches, particularly those from the other side, have been of a kind difficult to answer. Members would begin by agreeing that this Measure is essential, and then go on to indicate that they did not know why it was being introduced. The hon. and learned Member for Daventry (Mr. Manningham-Buller) said that we ought to be told a good deal more about it than the Chancellor and the Bill and the White Paper tell us. I can only suggest that he should see the leaders of his own party who, indeed, know all about it, and if there had not been a change of Government one of them would most likely have been introducing a similar, or practically a similar Measure from this Box at some time during this Session.

We have to look at the Bill now before the House in the light of the facts which have preceded it. The object of this Bill is to transfer the ownership of the remaining 27,400,000 shares in Cable and Wireless from the present private stockholders to the Treasury. That is being done, as the White Paper indicates, because over a period of 18 years, conference has followed conference, until at the last of these, in 1945, the Dominions, and ourselves, came to certain conclusions. It is true that Lord Reith visited the Dominions and India at the instigation of the Coalition Government, and that the discussions he had then led to the calling of that Conference and possibly affected its conclusions. This Bill implements the decisions unanimously reached at that Conference. That, quite frankly—and the Chancellor himself has indicated more than once this afternoon—is the reply to the query put to me by the hon. and learned Member for Daventry on whether all the Governments have accepted the proposals put forward in the White Paper. The short answer is, as stated in the White Paper, that all of them have unanimously accepted the conclusions of the Conference of 1945.

Mr. Manningham-Buller

I am afraid the hon. Gentleman cannot have heard me correctly. because I myself used the expression that they had unanimously agreed at the 1945 Conference. The question I put to him was this, and it is this question that I should like him to answer: Have Canada and South Africa undertaken to create companies with all the stock Government-owned, to run the same services as are to be run by Cable and Wireless in this country?

Mr. Glenvil Hall

The White Paper makes it perfectly clear. It says—and I think the hon. and learned Gentleman himself read out the passage as to what the agreement was—that they did unanimously agree to the terms laid down. Implicit in those terms is that each of the Dominions should pass legislation implementing the decisions reached. So far as this House is concerned, what we are here doing today in this Bill is to take the first essential step towards implementing, for our part, the findings of that Conference by taking over the shares of the operating company.

A great deal of play has been made, particularly by speakers on the other side of the House today, with the fact that the Chancellor of the Exchequer in his opening speech indicated that he was not, at this stage, able to say what form the new organisation would take, and that the discussion this afternoon would undoubtedly help both himself and the Government to make up their minds. I see nothing wrong in that It may well be that it would have been better to wait and not take over the shares, until the Government were ready to put through the larger Measure setting up the organisation which is to take the place of the present Cable and Wireless opera- ting company, but the House knows that the reason why this Bill has to be put through now, is because it is essential, in the light of the decisions come to at Bermuda, that the Government should take immediate control of the shares They are taking over the shares at this juncture in order that they may implement the rates that were agreed at that Conference. There is nothing sinister or secretive or underhand about it. It is as plain as the nose on one's face and I should have thought that hon. and right hon. Gentlemen opposite would have realised it, since some of them, at any rate—like the right hon. Member for Aldershot (Mr. Lyttelton)—were probably in on the negotiations and discussions which took place last year which have led up inevitably to what we are doing now. This is not a piece of Socialism; it is not included in "Let us Face the Future."It is true that in intent it is Socialistic, and we make no apology for that, but any Government, whatever its complexion, would in the same circumstances have had to introduce the Bill which we are dealing with tonight.

The right hon. Member for Aldershot put one or two questions to me and, although I do not want to speak at length, I would like to answer the main queries put by him, in which there is substance. He implied that although the Coalition Government had sent Lord Reith on his mission to the Dominions, India and Southern Rhodesia, they did not like the result. That, quite frankly, is rather strange, because if the Coalition Government, when Lord Reith returned and made his report, had felt that they could not accept the recommendations he had to make, why did that same Govern rent refer the report which Lord Reith did present, as a basis for discussion at the July Conference? If the Government of that period felt that what Lord Reith had to report to it and the recommendations he had to make were so out at elbows, as it were, with their own views on this matter, why did they refer what he had to say as the basis for the discussions which took place between the representatives of all the Dominions at the Conference held in July? I think we are entitled to assume that the Government felt that there was something in the views which Lord Reith expressed, particularly as his recommendations marched with those of previous Conferences. His recommendations were the inevitable consequence of what had gone before. The Government accepted them as such in all good faith, and passed them on for discussion at the July Conference.

The right hon. Gentleman also asked for further information about the proposed Commonwealth Telecommunications Board. It is true that the chairman is obliged to refer to the Government any matter of policy upon which there may not be unanimity, but I think the right hon. Gentleman will agree, and the House certainly will when we come to consider the matter further, that it is a great step forward that the board will cover the operating bodies in the Dominions and in India as well as in the United Kingdom. That means, that you can get what perhaps you did not always get before, uniformity of policy, in these matters. This, for the future will, in our view, be a great advance.

The right hon. Gentleman put certain questions about the staff. The staff are not mentioned in the Bill or in the White Paper, but it is true that my right hon Friend referred to them in his speech. He did so because stories have been put about —one can perhaps trace some of them to their source—that the staff will find themselves in jeopardy when the operating company comes under the control and ownership of the Government. It was therefore, only right for my right hon. Friend to give them an assurance that their contracts and terms of service would continue under the Government just as they would have continued had they remained in the service of the old operating company. As to the war bonus, it is true that, during the war, the Cable and Wireless operating company did give its employees a war bonus. It is also true that it was undoubtedly worth having because during the war, revenues went up. Because of that there may be a fear, now that the war is over and a change of ownership is taking place, that those employees will suffer in consequence. The question I would put to the right hon. Gentleman is: Would the staff have continued to enjoy a high war bonus whatever had happened after the war, supposing that they had remained employees of the old Cable arid Wireless? Surely the bonus depended upon the earnings and the profits of the company. If those were the terms under which the bonus was given, obviously those terms will continue. It is impossible in a Debate of this kind for my right hon. Friend to give any assurances beyond this, that the House can assume it is the desire of the Government that the terms of service of those employed by Cable and Wireless should not be worsened because of the change of ownership. I would like to feel that, as the years go on, their terms of service will if anything be improved, as a result of change of ownership.

I was asked by the hon. and learned Member for Daventry and the right hon. Member for Aldershot to say something about foreign concessions. Both of them remarked that the Chancellor of the Exchequer had said nothing about foreign concessions. I must say I am sorry neither of them took the hint and likewise kept silent. When this matter was discussed before the General Election, hon. and right hon. Gentlemen of the Party opposite agreed that nationalisation of Cable and Wireless was essential, and inevitable in the light of the views expressed by certain of the Dominions. It is a view now unanimously held by the Dominions.

Mr. Lyttelton

The Financial Secretary to the Treasury is very courteous, as always, but I must say that he has gone too far in saying that the Coalition Government—the "Caretaker Government "If you like—accepted the principle of national ownership. They certainly were not committed to any such thing. I am sure that the Financial Secretary would not wish to give a wrong impression on the matter, which was referred to a Conference as a basis for discussion. We were in no way committed.

Mr. Glenvil Hall

I think I am entitled to say that the Government did believe that something had to be done in the way of taking greater control than had been exercised up to then in this matter. Some Government control had existed since 1928. We are not here dealing with a private company in the strict sense of the term. The organisation was under some Government control and had been so since 1928. I think I am right in saying that the Government of which the right hon. Gentleman was a distinguished Member, whilst not perhaps coming down completely in favour of nationalisation in this matter, were definitely biased in that direction, feeling that, in the circumstances—the Dominions were interested in it as well as ourselves—it was possibly the only way out and that it should be taken as a basis for the discussions which took place at the Conference last July.

If that was so, we are entitled to assume that any difficulties—if there are any—associated with foreign concessions must have been present in the minds of the right hon. Gentleman and his colleagues when the discussion took place. I say no more, except that, prior to 1928, as perhaps the right hon. Gentleman and the hon. and learned Member for Daventry may remember, the Post Office did operate Imperial Cables and that for this purpose they depended upon a certain number of foreign concessions. Those were arranged without difficulties. Nor did difficulties arise at any stage during the time that those concessions were held. It was never suggested that this would entitle the Government to open post offices abroad, nor did any of the fears which the right hon. Gentleman voiced during his speech materialise.

Mr. "Lyttelton

I am sorry to interrupt the Financial Secretary again. I must put it on record that the Coalition Government were not committed to the nationalisation of Cable and Wireless The Financial Secretary, having withdrawn his first categorical statement to that effect, then proceeded by a series of agreeably expressed circumlocutions to say the same thing again. I really do not want him to get away with it. I want to make the matter quite clear. I cannot prevent the Financial Secretary from making any assumptions he likes, but when he says in this matter, "I am entitled to assume,"I must say that he is not entitled so to assume.

Mr. Glenvil Hall

We must leave it there. Perhaps the right hon. Gentleman will allow me to say that one of the troubles in our Debate today is that although this is a Measure to nationalise Cable and Wireless there has been no fight in the Opposition at all. Frankly, that fact has made the Debate rather boring. I would have loved to see hon. and right hon. Gentlemen opposite getting really excited about it. But the right hon. Gentleman knows as well as I do that it is impossible for them to get excited about this matter, because, as I said earlier, the chances are that had there not been a change of Government, a Member of his party would have stood where I am standing now, and have introduced this self-same Measure. Although the right hon. Gentleman might not believe that Cable and Wireless ought to be nationalised, I can assure him that what I have stated, even by way of circumlocution, is much nearer the truth than the view which he is trying to put over to the House. I think the right hon. Gentleman would find that there were Members of his own party in the Government at that time who were in favour of the course that we are now taking.

Mr. Lyttelton

The hon. Gentleman is saying the same thing again. All right. Go ahead.

Mr. Glenvil Hall

Now perhaps I might devote a few moments to the Bermuda Agreement. The right hon. Gentleman dealt with it, and so did speakers on both sides of the House. The hon. and learned Member for Daventry also had something to say on that theme. I do not want again to assume something which they did not say, but I think I am correct when I say that what they did indicate was that the United States had got all they wanted, and that this country had made a very bad bargain at Bermuda. I do not think I am misinterpreting what was said.

Mr. Lyttelton

The United States. Not us.

Mr. Glenvil Hall

I think I can leave the United States to look after itself.

Mr. Mitchison (Kettering)

On a point of Order. Cannot the occupants of the Front Benches make their gags a little louder, so that we can add our voices to the mutual applause?

Mr. Glenvil Hall

Whether speakers or writers in the United States said it or not, it is clear that hon. Members opposite have said it this afternoon, either by implication or in direct language. It is our view, which I think is borne out by the White Paper, that whether the Americans said it or not, they did not get all that they wanted. The discussions were between the Dominions, the United States and ourselves, and each had its own point of view. Quite naturally, the decision that was arrived at was, on the whole, a compromise. Although the United States had a distinct and definite point of view, which they pressed, and although certain of the Dominions also had a definite point of view, which they too pressed very hard, the United Kingdom did carry a great deal of its own point of view in the agreement that was finally arrived at. We secured acceptance by all those present of the principle that cables and wireless should run side by side and that certain direct wireless routes should be closed down. In other directions also we found that our point of view was accepted by the others. I do not want now to deal at length with the Bermuda Agreement, and perhaps I should be out of Order if I did so, but those who read it will find that a great deal of the point of view put forward by the United Kingdom delegation was accepted by the Dominions and by the United States.

The hon. and learned Member for Daventry raised the question of the compensation payments which appear in the Bill. The compensation laid down, which I gather is acceptable generally to the House, because little or nothing has been said about it this afternoon, follows the scheme laid down in the Coal Bill, except that the stock is not inalienable. Compensation is to he paid in Government stock, which will be saleable immediately the individual to whom it is due gets it. There is that difference from the method employed under the Coal Bill, for the very simple reason that under the Coal Bill we are paying money over to the companies and in this case we are to hand the stock directly to the stockholders to whom it should go. The hon. and learned Gentleman may take it as definite that, although there will be some delay between the appointed day, when the assets are taken over, and the day when the compensation in actual stock is paid to the shareholder, the value of the stock when it is actually paid to the recipient will be such as will reflect the capital value of his compensation in Government stock on the day when he receives the payment; in other words, although compensation will be fixed and the amount will be fixed, when the recipient receives it the amount he will get will depend upon the value of Government stocks on that day and the rates of interest applicable at that time. The formula in the Bill is in the same words as that in Clause 21 (3) of the Coal Bill before it was amended and accepted by the House.

I think I have covered most of the points that were made in the course of the Debate. I would like to say how much I appreciated the speeches made by some of my hon. Friends on the Benches behind me, some of whom have had many years in the Post Office or telegraph service. They speak with authority on these matters. I am sure that today is a red letter day for them. They will not forget the handing over of the beam wireless system to Cable and Wireless in 1938. To many of them it was a black day in this country's history when that occurred. Therefore, they must see in the change which is taking place and the possible return—I say no more than that —to the Post Office of the beam system an act of justice, somewhat delayed, but yet sure and certain.

Mr. Lyttelton

Are we to take it from the hon. Gentleman's remarks that this is to be transferred to the Post Office? I thought that was a question about which the Chancellor had not yet made up his mind.

Mr. Glenvil Hall

I did not say that it was to be returned to the Post Office, but simply that it might possibly go to the Post Office. Before I conclude, I would like to say how very much my right hon. Friend the Chancellor agreed with the speech of the hon. Gentleman the Member for Abingdon (Sir R. Glyn). It will, of course, be the Government's intention, when this service is taken over, to see that youth gets its chance, and that young engineers and scientific and research workers of every kind are given their opportunity. The Post Office have a very fine research station and have done extremely valuable work in that direction. I see no reason to fear that, because the Government are taking over Cable and Wireless, that this research work should not continue. I commend the Bill to the House. In Committee there will be ample opportunity to deal with the Clauses one by one, and it may be that certain Amendments may be necessary, but it is our view that, at this juncture, it is essential that the nation should take over these shares, both because until we have control of them, we cannot implement the Bermuda Agreement, and because it is the desire of the Dominions an of India to have a closer arrange ment than at present on telecommunications. This Bill is the first step by the United Kingdom towards implementing that desire.

Mr. Robens (Wansbeck)

May I point out to my hon. Friend a matter of great importance to members of my union who are employed by Cable and Wireless? He indicated that the staff would be safeguarded. The chairman of the company sent out a cable to all classes of the staff indicating that there was no Clause in the Bill dealing with this matter, but that the Minister would give an assurance, and he said that he did not think that would be reassuring. Will the Financial Secretary say that that remark by the chairman is absolutely unfounded?

Mr. Glenvil Hall

The Chancellor gave that assurance, and I think that the House generally accepted it. It my hon. Friend desires me to repeat it, I most certainly do. The last thing this Government desire is to see those employed in any industry or service taken over by the State suffering in consequence. Any statement made to the contrary outside this House by any individual, whatever position he may occupy, can certainly be discounted in the light of the known desire of the Government to see that those who work in any particular industry or service shall have their position safeguarded.

Question put, and agreed to.

Bill accordingly read a Second time.

Bill committed to a Select Committee of six Members, four to be nominated by the House and two by the Committee of Selection; All Petitions against the Bill presented at any time not later than five clear days after the making of this Order, to be referred to the Committee, Petitions against the Bill may be deposited in the Committee and Private Bill Office, provided that such Petitions shall have been prepared and signed in conformity with the Rules and Orders of this House relating to Petitions against Private Bills; Petitioners praying to be heard by themselves, their counsel or agents, to be heard against the Bill, and counsel or agents heard in support of the Bill; Committee to have power to report from clay to day the Minutes of the Evidence taken before them; Three to be the quorum.—[Mr. Dalton.]