POST OFFICE AND TELEGRAPH (MONEY) BILL. (Hansard, 9 June 1931)

§ THE CHANCELLOR OF THE DUCHY OF LANCASTER (LORD PONSONBY OF SHULBREDE)
My Lords, this is a small Bill to provide further money for the postal, telegraphic and telephonic systems. As your Lordships know, the capital for developing the telephone system is provided by advances made by the National Debt Commissioners and repaid to them by means of annuities charged on the Post Office vote. The last of these Acts was passed in 1928, when capital to the extent of £27,50,000 was issued. This sum is almost exhausted, only £650,000 remaining, and the cost of the programme for the current financial year is estimated at about £11,000,000. The amount expended in the year ending March 31, 1931, was £10,835,000. This Bill authorises the issue of £32,000,000 and of that sum about £29,000,000 will be devoted to the telephone service and the balance to the postal and telegraph services. This sum will meet capital requirements up to March 31, 1934. This does not preclude the Postmaster-General coming_ to Parliament for a further grant should the development be more rapid.
Perhaps, if your Lordships will allow me, I might say a word or two with regard to telephone development. During the last three years the telephone service has shown a net growth of 351,000 stations for telephones. Last year's net increase, despite widespread industrial depression, was over 100,000, and that is taking into account a certain amount of loss from business alterations, economies, etc.—what are known as, cessations. The total number of stations in the system on March 31 was 1,982,171, and it is anticipated that the two millionth telephone will be installed during the current month. Great progress has continued to be made in the matter of establishing public call offices. At the end of March of this year the number of call offices throughout the country was 34,618, representing an in- 46 crease of 10,564 during the last three years. The increase during the last year was 3,527, including 1,740 new call offices in rural areas. Among the number were 2,215 new kiosks, 540 of which were in rural areas. The total number of kiosks (open day and night and on Sundays) is now 10,255, including 1,268 in rural areas. This particular development is a success and is very popular. There has been a considerable progress in linking up rural railway stations with the public telephone system, the number of stations connected at March 31 last being 1,974. This figure represents a growth of 120 per cent. during the last three years.
There has been a continuation of the policy of carrying the telephone into rural areas, and that is further illustrated by the fact that the number of rural exchanges opened since 1922 is 1,590. At present a substantial portion of the annual cost of rural exchanges is borne not by the subscribers who directly benefit but by the general body of telephone users. But further encouragement is going to be given to subscribers in rural areas by the normal tariffs which were introduced on January 1, 1931, in place of the higher tariff of £8 per annum previously required for a circuit to a rural exchange with from eight to fourteen subscribers. Thousands of existing subscribers benefited from this concession.
I will say a word or two about foreign telephone development. During the last few years great strides have been made in the development of the overseas telephone services. In March, 1925, communication by telephone was possible with only four overseas countries. Now this number has been increased to thirty-eight. During the year ended March 31, 1931, the number of local calls was 1,371,000,000, and the number of inland trunk calls was 122,000,000. I only give these figures very cursorily to show your Lordships that every attention is being paid to the continued development of the telephone services, and the Postmaster-General, while defending himself from criticisms in another place on the Second Reading of this indicated that he intended to take every advantage of the new developments of advertising in order further to advertise the telephone system, and to pay very special 47 attention to the alteration, where necessary, of regulations which in any way embarrassed the quick development of the service. I beg to move that this Bill be read a second time.

§ LORD BANBURY OF SOUTHAM
My Lords, I think I understood the noble Lord to say that the £32,000,000 might be sufficient for three years, and that after that it might be necessary to spend more money. The £32,000,000 will have to be borrowed, and there is a provision in the Bill that the Treasury may for this purpose borrow money by the issue of Exchequer bonds, etc. I suppose they will not be able to borrow at much under 4 per cent., even if they get it at that, and I should like to know, irrespective of these figures as to the number of calls, which probably includes wrong calls, what prospect there is of the interest being paid by telephone subscribers, and what prospect there is of a sinking fund being created which will within a given time pay off the £32,000,000. We must not forget that our financial position at the present moment is extremely critical, and although it might be wise to go into speculative matters and endeavour by advertising to create a demand for telephones, we ought to consider whether we have money to spare for that purpose and whether it would not be better to save a little money and not spend it at the present moment. If the noble Lord can assure me that the increase in revenue will be sufficient to pay the interest and create a sinking fund, I shall have nothing much to say, but unless he can give that assurance I must liken the Bill to the rake's progress, which ends in disaster.

§ LORD DANESFORT
I should like to support what has been said by my noble friend. I hope the noble Lord who moved the Second Reading will be able to give us some reasonable evidence that the expenditure of this enormous sum of money will prove remunerative. I think there is special reason for asking at the present moment for such an assurance, because we all know that millions of public money are to-day being spent on absolutely unremunerative investments. I go round the country and see millions being spent upon roads and footpaths which are absolutely useless. I have made protests to the county councils, and 48 they say that their surveyors recommend them. I suppose the experience of other noble Lords is the same as mine, that millions are being spent not only uselessly but mischievously upon roads. I will not go into the mischievous abuse of the "dole," but it is within everyone's knowledge that we ought not to spend one farthing of public money unless we are able to see not only advantage to the public but that the expenditure will be remunerative. I hope the noble Lord will be able to give us some reassurance upon the remunerative nature of this expenditure.

§ LORD PONSONBY OF SHULBREDE
I think I can give the two noble Lords that assurance. It is a highly remunerative expenditure. It always makes a profit for us after paying interest and depreciation, and it was, I think, very much pressed on the present Government in another place, that the greatest possible efforts should be made in developing the telephone services. Complaint was made that we were not up to the mark reached by other countries, and the Government was very strongly urged to spend money in this way, knowing that it brought in a good return and there was no loss to the Exchequer in the total result. Therefore I was rather surnrised that this measure should be criticised in that way, but, having received this assurance, I hope your Lordships will allow the Second Reading to be passed.