HL Deb 01 February 1961 vol 228 cc181-202

LORD CROOK rose to call attention to the White Paper (Cmnd. 973) on Post Office Capital Expenditure, 1960–61, with particular reference to the telephone service; and to move for Papers. The noble Lord said: My Lords, every year when I go to New York on the United Nations assignment I know that I shall have one experience that repeats itself: I shall be reminded of the efficiency of the British Postal service. One recent Monday evening when I was in New York I talked on the telephone to a friend, and he promised that he would post that evening to me at my hotel in Manhattan, three miles away, documents which I wanted on Wednesday morning. I was not a bit surprised when I did not get them on Wednesday morning, though he posted them on Monday; nor would any American have been surprised, because they know how bad their Post Office service is. One knows why they have sent so many people over here to find out why we do things so much better. Incidentally, I did receive at the breakfast table that Wednesday morning a letter posted by one of your Lordships here in Westminster at 7.15 on Monday night. And that is a common experience, except when the weather is very bad.

But Americans, who know that their postal service is bad, never hesitate to rub into Englishmen, when they have been across here, how much our telephone service lags behind theirs. They believe that, however bad their postal service may be, theirs is the best telephone service in the world. They compare their telephone service with ours, to the detriment, they think, of a nationalised service as against private enterprise. But the truth, known to any Britisher, is that that has nothing to do with it at all. It is for that reason that I have put this Motion on the Order Paper to-day. The average Englishman who knows anything of our telephone service knows very well that it is making great profits; profits which in fact pay for the losses incurred in other spheres of the Post Office service, profits which could be greater and greater every year if it were not for the deadly hand of Treasury control, which over the years has limited the ability to expand.

I put this Motion on the Order Paper many months ago. I refer to that period of time deliberately, to make clear to your Lordships that the Motion was on the Order Paper prior to any Memorandum about the organisation of the Post Office services, so far as their general financing is concerned, and to any legislation which has resulted. I do not desire to get the lines crossed. I do not propose, merely because time has passed, to seek to introduce into the more limited field on which this debate was originally intended should take place anything that would take the place of the debate which ought properly to be held when the Bill comes from another place for consideration by your Lordships' House. But the existence of the Bill and its implications perhaps make it the more important that some of the things I wanted to say should be said before the Bill reaches your Lordships' House.

It will be useless for the Post Office to be given a new status in this country if the big profit-making telephone service is to continue to be one of those things affected by the constantly changing minds of successive Chancellors of the Exchequer. Because we have in the British telephone service a magnificent staff capable of doing not only the many fine things they have done but also very much more in the interests of this country, always provided they are given the opportunity. Moreover, in some of the great productive organisations we have firms who are capable of producing everything that is wanted for the British telephone service, and of exporting many instruments to other countries, to the great benefit of our balance of payments, provided that they receive from the Government of this country enough encouragement to stable production.

I am satisfied that in men, materials and methods this country has nothing to fear from competition anywhere in the world. The only trouble that the British telephone service has is in the top control flowing from the Treasury. I cannot understand why some Americans try to compare a system of control which comes from private enterprise and one which comes from the heavy hand of the Treasury. Had this great profit-making, valuable and efficient telephone service been in the possession of private capital, private capital would have seen itself making £22 million profit a year. Let us ask ourselves what they would have done with it. They would have gone out for more and more business: they would have invested more and more money; and if they felt at any time that they should have more money immediately available in order to expand, they would have gone out and obtained on the open market, on the evidence of their efficiency, existing profits and their great and obvious potentialities, all the capital they wanted.

What is more, they would have used their public relations staff to go out and explain to the public the benefits of the telephone service, to encourage those who had telephones to use them more and those who had no telephones to come in and have this new service available to them. But, of course, the only use which the Post Office telephone service has been able to find for their effective public relations staff is to send them out to members of the public to explain why they cannot have a telephone, why they must put up with joint telephone use, why this efficiency does not exist and how that inefficiency can be explained by something beyond their control. They have to go and express regret to people like that, at any given period of time in the future, the dials they have promised will in fact appear on my telephone, after all these years. They are always apologising, not for their inability to do something, but for the inability imposed upon them by the nature of the control to which the Post Office has had to become accustomed over recent years.

You may say that that is merely making general statements, and what in fact am I able to say has really happened? Let me take the provision of new telephones. Let us look at the year 1947, a year only 18 months removed from the end of hostilities. In 1947 it was necessary to get back into civilian employment people capable of doing important jobs that were needed in bringing the telephone service up to date; it was a period of time in which industry, which had tooled itself and planned all its production in respect of war, had to turn round and change its tooling and often to change the place in which it was producing, because strategically they had to move trained people coming out of the Forces to try to get back into the way of doing their civilian job. In 1947 my noble friends who sit in front of me on these Benches were able to secure that no fewer than 381,821 new telephones were installed in this country. By 1953 the annual figure was down to 210,745, and by 1958 it had reached the new all-time low of 135,272. These figures are not mine, but are taken from Post Office publications. So they were down in 1958 to one-third of the figure for 1947.

Meanwhile, what have the Post Office done to explain this state of affairs. I invite your Lordships again to look at the documents that they have issued up to quite recent months. What they have done is to try to issue statements which do not disclose the facts. I could hardly believe my eyes when I opened the Annual Report of the Postmaster General in November last, when it was in the Printed Paper Office. I quote from Cmnd. 1206, paragraph 31, where, referring to the figure of telephones put in during the preceding months, it says: This is more than 50 per cent, higher than in the preceding year. It was, my Lords, because, 324,000 in the year of course, is 50 per cent, more than 206,000. But perhaps the Postmaster General was being rather mild and modest in his phrasing, for he could have written it another way and claimed that the figure was more than twice that of 1958. He would still have been right, because the 1958 figure was only 135,000. Or he could have phrased it yet another way: he could have expressed the regret of the Government that the figure of 324,000 last year was still so much less than the immediate post-war 1947 figure of 381,821. There is no need for a speaker to comment on a set of figures like that; the deplorable facts speak for themselves. If you like to take them and turn them into averages, you can say that in the past three years the average number of new telephones has been running at 220,961. Yet in the first three difficult years immediately following the end of hostilities the figure could be so high as 327,402.

I do not want to confine myself to a reliance upon one set of facts or statistics. I have referred to new telephones given to members of the public. Let us look at them the other way round, at the number of exchange connections—and again these are official figures of the Postmaster General. In 1947 it was found possible to provide 304,552. Never in the years that have passed since has it been possible to equal that figure. In 1958 it was as low as 25,884—that is a drop from 304,000 to 25,000. Again, if you go on averages for three years the same deplorable position is shown. Why do I suggest a three-year period? Because the Postmaster General, speaking in the other place, said that a three-year average is the essential one on which to base consideration, and the White Paper of 1955 says that a three-year averaging is indispensable for the economic development of the telephone service. In the last three years the telephone service has, on the average, put in 103,417 new exchange connections, which is very much below the 304,000 achieved in the first twelve months completed after the war.

The truth is that the economic development referred to in the White Paper, planned over the three-year period, has been made impossible by the actions of the Treasury. There must have been, one would think, some heartburning and troubles and discussions between Postmasters General and other members of the Cabinet, because the Postmaster General has never hesitated to let the other place know that he never knows himself what he is getting for the current year (much less three years ahead) until that year is either on top of him or some months of it have passed. The final allocation of capital investment for 1960–61 was not settled until October, 1960, one month before the Postmaster General was due to present his Annual Report to Parliament. That is no way to run any service, and certainly not a great telephone service that should be expanded.

I want to say that my criticism is mild compared with anything that can be culled from authoritative statements from people whose views count. I will quote one, in particular: I am quite certain…that one cannot run a business like the Post Office, or any big business, on a year to year basis. It is physically impossible to do so. There must be a set programme, and one cannot turn that programme on and off as though it were a tap. The business will not be efficient if one does. That statement was made by the present Minister of Transport, Mr. Marples, when he was the Postmaster General of this country on May 15, 1959, when he complained to the House that, even at that date, he did not firmly know the amount either for his current year or for the next. A steady figure, and if possible an increasing figure each year, is highly essential in the interests of the telephone service.

I would say that there are visible to me at least six main grounds for that. There is, first of all, the necessity of giving a guarantee to the electrical telephonic and electronic production firms as to the production that they can plan in the three years ahead. That, in turn, leads to the second point; that is to say, the knowledge of what employment or unemployment there will be in the country in that industry. It also enables them to know what their staple home market is, which gives them the opportunity of planning their production for the important export market in the knowledge of how much of their overheads they can rely upon from the home programme. I would call the fourth a steady research programme. The fifth is a planned staffing policy for the Post Office, and I would call the sixth steady and increasing progress with mechanisation (the first stage of which, at least, is dialling).

I should like to dwell for a minute or two on those points and ask your Lordships' kindly attention to them. As to the first three points, the firms within the Telecommunications Engineering and Manufacturing Association must be able to have this steady planned production. At its best the home market is a small basis for the exporter. The firms manage to send 40 per cent. of their production abroad, and exports are now running at £25 million per annum. The telecommunications industry, in other words, has an excellent contribution to make to the balance of payments and to the employment position in this country.

The research programme is closely related to that and to the growth of electronics in the world of the telephone. Electronics are beginning to be the threat or promise of most industries. They are the coming thing in telephones. Unless we speed up, we are going to lose this great market for Britain. The Dollis Hill Experimental Establishment of the Post Office—which I know some of your Lordships and some Members of another place have visited and admired from time to time, with its excellent staff doing a fine job of work—have been working on this problem. But have they been allowed to get ahead fast enough, and have they been given enough opportunity and money to get on with the research? I understand they are disappointed that the new electronic exchange at Highgate Wood, as to which work has been in hand, I believe, since as long ago as 1956, is still in a working model stage at Dollis Hill.

I was shocked to see in what I am told is the leading journal, British Communications and Electronics, an article describing the exchange as it now is as merely a "hotch-potch of ideas" with something being done by each of the big five manufacturers making equipment for the Post Office, and by the Post Office itself. This article, which was written long before Christmas', said that it was likely to be uneconomical in its present form, and is unlikely even to become a standard system.

I refer to the fact that the article was written long before Christmas, because I imagine that those who wrote it, and the engineers at Dollis Hill, must have been as surprised as I believe the rest of the world was when, early this year, the Bell Telephone Company announced, not that they had completed electronic telephones as an experiment but that they had put into exchange customer service, at Morris, Illinois, the first electronic exchange in the world. They claim that they will be able to offer the world a production model by the middle of 1964; and unless we can do the same, our hopes of getting into the expanding telephone market and the creation of new telephones in the world will be absolutely nil, because the electronic telephone has advantages completely beyond anything of those we know at the moment. New services can be added; frequently used numbers can be obtained by dialling two digits only on this new installation; incoming calls can be automatically transferred to other people's numbers elsewhere; talks between three parties become ordinary, and the machines will even automatically correct their own faults.

This situation would not matter a bit if we had not in this country people capable of doing these things: but in the engineers in the postal telephone service at Dollis Hill, and throughout the country, and in the production experts of the five great firms in T.E.M.A., we have people who can compete, and in my view do better than anyone else in the world, on these matters. That is one of the reasons why I want to press that we must get on with some of the improvements that other people have and we have not. In large American and Canadian installations, for instance, in firms or hotels, it is not necessary to wait for the internal switchboard operator to get you a number. You can dial an additional figure and obtain outside calls, with automatic notation. I wonder how many offices have that system in this country.

More important still, perhaps, is the new development, just introduced (I believe at the moment in only one organisation in New York), by which a distant caller can dial right through to a person or department on the extension inside any big organisation. To any of your Lordships who has been interested in the new system of charging by time, which is to become general in this country, with the difficulty that it must cause to great business organisations, the importance of the ability to dial the number of a firm and, by following that number with one letter and one figure, to obtain the exact extension that we want, cutting out that time lag for which one would otherwise be charged, must be seen to be very important. I hope that the Minister will be able to tell us that the research which is going on covers this field, so that when we get on to timed-unit basis of charging we may at least have this method to help us appreciate the new system.

My fifth point concerns the need for planned staffing. I do not want to occupy your Lordships' time going over every one of these matters in detail. I hope that other noble Lords who follow may have something to say about the difficulty the Post Office must have in planned staffing, because it does not know for three years ahead what its own commitments are. The only thing I would say, in passing, is to pay a tribute to the Post Office for its excellent relationships with its telephone engineering service, the way it carries out its obligations to industrial relations, and the way it has operated the Whitley system efficiently inside Her Majesty's Civil Service.

My sixth point is the need for a speedup in the installation of items like dial telephones. Here the admission in the Annual Report of the Postmaster General, published in November last, is quite astonishing in its candour. I cannot resist reading to your Lordships from it. Referring to mechanisation he says: Although it has proceeded steadily since the end of the First World War "— the First World War, mark you!—it has barely kept pace with the growth of the telephone system. Indeed the number of telephonists now in post is almost as great as it has ever been. That is a marvellous admission for a Postmaster General in charge of a telephone service, who has been busy telling gatherings of businessmen and another place that it is fast becoming the best.

Here, I suppose, I ought to declare my own interest, because I have had a telephone on the Wallington Exchange in Surrey for no less than 33 years. It has been getting progressively worse over the years. It became so grossly overloaded that everybody in the district went to the very charming young Member of Parliament who, until recently, held a post in the present Government, and made representations which were successful—so successful that they came down to Wallington and pushed the exchange over a bit and put in another new manual exchange called "Franklyn". They told us that was "our lot", and that they would see whether, in five or six years time, we might be mechanised. Wallington is exactly 12½ miles from this House; I have lived there all that time, and if that is the best service I can get what are they getting in the Highlands of Scotland?

The truth is, of course, that we are behind nearly every country in the world in this matter and on telephone development. We have 14.5 telephones per 100 of the population in this country, compared to 38 in the U.S.A. and 34 in Sweden. We have never ranked better than ninth in this international table, and we have been kept from being tenth only because the Argentine was there. In this country, as The Times pointed out in one of its principal articles recently, the percentage growth is "lower than in fifteen of the world's most highly industrial countries". The world average to expansion is at the rate of 8 per cent. The Times pointed out that our growth, taken at its best, on a two-year average was never more than 2.3 per cent., whereas it exceeded 10 per cent. even in Italy, Spain, Japan and Germany.

All those other countries lead, too in Subscriber Trunk Dialling. We did not inaugurate it in this country until we had it at Bristol, in December, 1958. And what an instant success it was! I believe the calls that took place, calls that could be dialled on "Trunks", rose by no less than 45 per cent. in the first nine months. I should be glad to know from the Minister, if possible, when he replies whether that is true and whether that kind of improvement has been kept up in respect of the others opened. I do not know how many other S.T.D. exchanges have been opened. We were promised by the Minister that 45 would be opened by last December and that another 45 were in hand ready to be opened this year. I have seen a limited list of about eleven towns that have gone on to Subscriber Trunk Dialling, but I have not seen any more.

So far as the White Paper which I am bringing to your Lordships' attention is concerned, it appears to suggest that Subscriber Trunk Dialling will be held by 25 per cent. of subscribers by March, 1962, and probably 50 per cent. by March, 1964. The Minister may be able to tell us that. I have no doubt, of course, that ours will be the best system in the world, I have that trust and faith in all that I have seen and known in the telephone service. But I want to know when the whole of this country's phones will be on dial and when they will be on Subscriber Trunk Dialling.

So far as I know from what the Minister has said, I should theoretically be capable of dialling any one of my friends anywhere in Europe by the end of this year. The only thing wrong is that I shall not have a dial. The White Paper, Cmnd. 463, says that the progress on Subscriber Trunk Dialling will depend on the amount of capital investment that can be released. It is on that question of the amount of release that I hope some other noble Lords will have something to say. I would only comment that the telephone service has suffered more than any other organisation from restriction. That that is so is clear, not from any wild statement of any one person or myself, but from the 1960 Economic Survey, which any of your Lordships can see in the Library.

May I begin to sum up what I have been trying to say? We must get out of the complex of thinking that the telephone service is a spender and understand that it is an earner. It earns money in industry internally in the country, and earns money in respect of exports. It provides stability of employment for people, and expands employment in the way the present Government have told us they intend. But the huge service which the telephone service already gives could be expanded, and if the public were enabled to use the telephone more that could bring about a better life for them and a life that would give more opportunities of employment. The telephone service in this country has not been given its chance. And in my submission to your Lordships, it must be given its chance. The million people who are now on shared lines must be given an opportunity of going on to individual lines if they wish. Steps must be taken to see that there is an increase in the number of calls per instrument. In that connection, too, we are the lowest country. Sales push can only follow, however, on a clearer position on the release of capital investment.

We are capable of creating the greatest telephone service in the world, both on the manufacturing side and in the Post Office engineering field. With others of your Lordships, I have seen and experienced something of the great jobs of work that have been done. Some of us saw the Atlantic cables, the first telephonic cable to be laid in the Atlantic, made here by a great engineering firm, Dollis Hill Engineers, put across the Atlantic and staggering the whole of the telephonic world over there. I have talked over it, and I only wish that the calls I receive locally were as clear as I can get over that cable.

I have talked in Canada to my friends in Parliament in Ottawa about the forthcoming great link across the world, the imaginative link on which the Commonwealth Conference decided. I understand from my friends in Montreal—and the Minister knows better than I, and can tell us—that in the past week British firms have been successful in getting an £18 million contract for the Pacific cable to run from Canada to Australia and New Zealand. I think we should congratulate everybody concerned. I should like to know what is the date for completion. Is it 1963? I understand that the transatlantic aeronautic control cable is under way and the first link of 24 channels to Iceland is likely to be completed this year. The Minister may be able to tell us something about that. I gave the Minister, knowing his preoccupation with things like the size of bottles of milk and bottles of beer, some long notice to enable him to inform the House on this and other points.

Perhaps he could say something of the experiments on using motor car radiotelephone exchanges for communication with trains, which was of some small academic interest originally to people like myself. I think it gets a new interest this week from the statement once again that America is going to beat us on aircraft. I understand that the first aircraft carrying telephonic communication with the ground will be available to people in America in July this year. If it is true that we are going to be beaten in that field, it may be a very serious reflection on B.O.A.C. and B.E.A. and others. The same is true of ships, although I believe that the Post Office is going to some trouble to improve the position. Then there is the new V.H.F. radio-telephone apparatus at Land's End, and I understand that it was to be installed at North Foreland and Anglesey radio stations. I do not know whether the Minister can tell us anything about that.

I may have drawn too many facts to your Lordships' attention in too short a period of time. I know that your Lordships do not like anyone's voice to continue unduly, and I share that general view when I am sitting down instead of standing. I have said some of these things because over a long period of time many of my friends connected with the telephonic communications industry, and my friends in the Post Office engineering service, have felt that it was time something was done to make it clear that this is not just a question of people occasionally grumbling that they could not get a right number, or that they were waiting for a telephone, but that there was a very real story to be told. I conclude therefore, in moving this Motion, by saying to your Lordships that if everything I have said appears to be critical, you will see, I hope, that it has been criticism, not of fine people doing a good job of work but only of the pace at which they have been allowed to progress. Because I am conscious that we have the people to do the job; we have the means to hand, and if only we will produce the money and the policy for progress, that progress we can have. My Lords, I beg to move for Papers.

3.10 p.m.


My Lords, the House will be indebted to the noble Lord, Lord Crook, for giving us this opportunity of discussing the telephone service, which I suppose most of us, despite the noble Lord's depressing statistics, use almost daily. Sometimes we feel somewhat frustrated when we get the wrong number twice running, as hap- pened to me recently, and are told afterwards in an accusing voice that we have twice wrongly asked for the number that we have given. But, by and large, the operators are always courteous and polite. With very few exceptions that has been my experience. The noble Lord has told us some most depressing facts, and I hope that the noble Lord who is to reply will be able to reassure us that some of his gloomy forecasts are, perhaps, over-pessimistic.

I intervene in this debate purely as a subscriber and user of the telephone, and not as one who knows much about the technical side of it. I do know, however, that great achievements have been made in the technical development of telephone equipment. I have seen some of the new exchanges. I am sure they are extremely intricate. They illustrate that, as has been pointed out by the noble Lord, the equipment can be made in this country. I think, however, that the private trunk dialling and all these other dialling systems can be over-complicated, and I hope that there will always be available an operator to assist elderly people and those who have not very good eyesight and who may make mistakes when they have to dial about eight or nine different numbers, as I understand it may be necessary to do when the S.T.D. is generally in operation. I hope that these operators will be of a high calibre, because they will usually have to function only when some difficulty has been experienced by the user of the telephone.

Those of us who live further into the country than the noble Lord—he is really, if I may say so, almost a suburbanite, although he still has no dial—often find that it takes a long time to get the operator; we dial "O" or "100", as the case may be, and sometimes have to wait four or five minutes before the operator answers. 'This is most frustrating, especially if there is an emergency or any other difficulty of that kind. I know that this is not the fault of anybody in particular; it is just that the exchanges are overloaded. I suppose this is because people are being connected to exchanges which have not the positions for the requisite number of operators; thus more people are trying to get the operator than there are operators to handle the incoming calls.

The only other question I should like to mention is that of rural telephone call boxes, which have increased in numbers in recent years, but unfortunately only rather slowly. In fact, in the last twelve months or so there has, I would suggest, been a step backwards in this field, in that the Post Office have abandoned the scheme they had in conjunction with the local authority associations for the allocation of telephone boxes in sparsely populated rural areas, and it is now most difficult to get a telephone box installed in some of the smaller villages. I understand that part of the reason for this is that these boxes are uneconomic—they do not pay. That may be so. But the people who live in these remote areas need to use the telephone sometimes just as urgently as those of us who live in less remote areas and who are fortunate enough to have a telephone. I hope that Her Majesty's Government will be able to help in the installation of telephone boxes in areas where their use is likely to be uneconomic for the simple reason that the number of people using them will possibly not be great at any one period.

I have wondered whether there is not some possibility of putting in call boxes of a less expensive type than we seem to have in this country and which seem quite often to get broken, being damaged by people who, I suppose, may have had a little too much conviviality during the evening or, on occasion, through hooliganism. I wonder if the noble Lord could say whether there is any possibility of introducing boxes of the type now being installed by the motoring organisations, smaller boxes with a less intricate mechanism, so that they may be installed more cheaply on the sides of buildings and such places and used by the public where larger and more expensive installations are not needed. My Lords, I think I have covered the points I wanted to make. I am grateful for the opportunity of bringing to your Lordships' notice the subscribers' complaints.

3.18 p.m.


My Lords, I do not want to detain your Lordships long, but I think that anybody who has ever been involved in the Post Office never quite feels that he has completely left it. I know that the noble Earls, Lord Listowel and Lord Attlee, will agree with me there. Certainly I was pleased to hear the noble Lord, Lord Crook, at least have a good word for our postal system. It is a system of which we ought to be extremely proud, and the more we hear about it the prouder we must be of the men who work throughout the country, day by day, every day of the year, no matter what the weather. We take far too little notice of them, and pay to them far too little of the thanks that is their due.

I only wish that, instead of giving half a minute to something of which this country should be proud, the noble Lord had not spent the other thirty-five minutes of his speech in digging into every possible deficiency in our telephone system. It is extremely easy to criticise. But to my mind the story of the telephone service over the last ten years or so is one of steady, sound development. I stress the word "steady" because, as the noble Lord, Lord Crook, said, it is no use trying with a great organisation like this to go ahead in leaps and bounds and then to stop. There must be a steady planning of the labour system and of the factories.

The noble Lord complained that our system is not so good as is the system in America. I think all of us must agree that there is a great deal of truth in that. But let us consider the circumstances. Most of us who have been to America on the whole tend to telephone from one large city to another. We do not often test the system by telephoning from a small village community where it does not pay to have a telephone system, but where the system is run as a social service, to another community of the same character. When the comparison is made on that basis I do not think the American system will be found to be startlingly better than ours.

Then again, there is no doubt that if our exchanges were staffed more generously than they are, the service would be better. There would be less of this waiting while one dials "O"—I believe now it is "100". I wonder whether in making these comparisons we compare other factors. There is a great difference in the cost of our service as compared with that in America. I have not the figures in my head, although I kept in close touch some years ago when I was connected with the Post Office; but there is a fantastic difference between the rental charges paid in this country and what is paid in America. In fact, in this country the highest charge that can be made for a telephone call from Penzance to John o'Groats or the Shetlands is 3s. 9d., whereas across the Atlantic the cost can go up to 25s., 30s., and even more, per three minutes.

We have also to face the fact that we in this country are not as telephone-minded as are the Americans. It may be said that we should send salesmen round to encourage people to use the telephone, and a great deal of that is being done now. But there may be a dear old lady who wants, and rightly wants, a telephone in her house, either to make one or two calls a week for shopping or possibly for emergency use, to get hold of a doctor. She just does not make great use of the telephone. We have a great number of such subscribers, and that is a very important factor in the economics of our telephone system, because no telephone installation will itself pay for the capital charges it represents. That happens only when a telephone is widely used.

The noble Lord complained of the rate at which telephones have lately been installed. He took interesting dates, starting from 1947 and coming up to date; and he complained of the fact that during the first two or three years—say between 1947 and 1950—installations where made much more quickly than from 1950 onwards. But there is a very easy and obvious explanation for that. Putting a telephone into a house is not only a question of putting the instrument there and connecting it up to something already existing. There is the question of the exchange equipment and the underground cable from the subscriber to the exchange. After the war, when hundreds of thousands of military and defence lines were being abandoned, there was an immense reserve of both exchange equipment and cable for use, and connecting up was perfectly easy.

The time came, however, when all that was used up. It was a decision with which I myself was very often faced. I was told I could get an extra 100,000 or 200,000 lines connected if I would refrain from attending to the basic equip- ment of the telephone system—the laying of new cables, possibly taking a year or two, or building new exchanges, possibly taking three or four years. Any responsible Postmaster General had to take the decision that he must keep the basic equipment going, because once an exchange is full up it is a matter of years before it can properly be replaced. I wanted to mention these points only because I think the noble Lord has been a little unfair to the system that is worked with immense devotion by a magnificent body of men—magnificent from top to bottom.

I am particularly pleased to read in this White Paper that we have before us of the progress of mechanisation, doing away with manual exchanges. One would wish that those could all go rather more quickly than within ten years, although I myself must confess I rather regretted having the manual exchange removed in our village. It was so convenient that it did not matter if one did not know the numbers of one's neighbours; and if you rang when a friend was out to dinner the exchange would tell you where he was dining. One has really personal service. But we all realise that those exchanges must go. I do not, however, think they are entitled to first priority, because it is in the towns that we are suffering from shortage of staff, and manual exchanges are, on the whole, in rural areas where there is not so much of a staff problem.

Trunk dialling is coming in at a rapid pace now. We were right to say at the beginning that we should go for operator trunk dialling, which meant that the subscriber asked his operator for his number, and the operator dialled straight into the house at the other end, but clearly the next stage is for the subscriber to do the dialling. I was glad that the noble Lord mentioned the question of electronic exchanges—a matter which was of great interest to me at one time. Quite a bit of research work was started a few years ago, and I rather gather it has now reached the point where there is an electronic exchange working, I think at Skyport, London Airport, in addition to the Highgate Wood exchange. I gather that the Highgate Wood experimental exchange was made of a size suitable for from 500 to 600 subscribers, which is almost precisely the size of the electronic exchange that the Americans are themselves operating in the United States. So if I am right in what I am saying, the noble Lord will be glad to hear that we are not behind them in our development of the electronic exchanges.

Finally, perhaps I could ask the noble Lord who is to reply for Her Majesty's Government whether he could tell us a little more of the story of what Transatlantic developments are taking place. I know we have the one cable going, and I believe another is in process of being laid, but I think there are quite a number of new developments there, and I am sure it would interest us all if the noble Lord could tell us about them. But, in the main, if I may, I would very humbly give a word of congratulation to Her Majesty's Government for the steady progress that they are making. I do not in the least deny some of the deficiencies of which the noble Lord, Lord Crook, spoke, but I believe the Post Office have gone far further to correct those deficiencies and to make progress on the development of the telephone service than perhaps the noble Lord thinks.

3.28 p.m.


My Lords, I believe we are indebted to my noble friend Lord Crook for the full statement he has made. I was, at first, a little hesitant at taking part in this debate because I was Postmaster General 30 years ago and I felt I might be rather out of date. However, I took up the Hansard Report of the debate of last Wednesday in another place and I found that every single point that came up I could parallel in my own experience. Nothing seemed in the least changed. The complaints and everything else were just the same, and so I felt emboldened to make a few remarks.

I recall very well the time when I was at the Post Office. It was a time of very serious unemployment, and one of the problems was to develop the telephone service. I was given that job and I got an outside business expert to look into the whole subject. He made an extremely valuable report which came to my desk the day I left office. That report was faithfully implemented by the late Sir Kingsley Wood, but the com- plaints which we had then were just the same as we have had today. The Treasury always regarded the Post Office as a milch cow and milked it with very great regularity; and they did not feed the cow very much. The cow could have produced much more had it been properly fed.

There, we had always the old controversy about whether the Post Office was a business or a service. It is part of both. But some people said it was a business and we ought to have treated it as a business. I remember very well a friend of mine, then Sir Archibald Sinclair, who complained to me that we did not run it as a business. I said. "My dear Archie, if we ran telephones as a business I would cut off all the telephones north of the Highlands line because none of them pays". That brought him up with rather a start. The fact is, of course, that the service in all the remoter areas of the country is really paid for by great conurbations: the London area, the Midlands area, Manchester and so forth. From that point of view we cannot treat it just as a business. On the other hand, the Treasury always have a curious attitude—one probably inherited from Mr. Gladstone—that all expenditure is ipso facto bad, and while a private company can rejoice in having a capital of £10 million, which means that it owes £10 million to individuals, in the case of the Post Office it is not capital; it is a debt, a deadly burden. Therefore you could never get the Treasury to realise that it was worth while putting capital expenditure into the Post Office. I notice that there is to be some rebuilding and I hope that with that rebuilding some of the Gladstonian ghosts will be exorcised—got rid of, anyway. But I do think that that attitude hangs on, and I must say that I rather regret it.

Some figures I saw in connection with this debate referred to telephone progress. I recall that at that time, 30 years ago, we actually started advertising, which was regarded as a very dangerous and wrong thing to do. It was one of my few achievements that I managed to extract a sum for advertising from Mr. Philip Snowden in the summer of 1931. It had a most admirable result. As was pointed out by a Press magnate, there is a dose link between advertising and editorial colleagues, and whereas he had heard of faults, we had wonderful stories of how someone was on a voyage at sea and was actually caught by the diligence of the Post Office. That is all to the good. We should advertise. I found when I first went into the Post Office that there was a great reluctance to "push" the telephone, perhaps due to the over-conscientiousness of the head of that Department. When I told him that he was selling a certain commodity, distant speech, and that he was in competition with a man who sold a Hoover, he said, "Perhaps it is better for a man to have a Hoover than distant speech". I said, "That is an admirable social sentiment but it is not exactly business". I added, "Your job is to 'push' the telephone".

It is quite clear, when one looks at these figures, that there has been a failure to catch up with the numbers of people who are waiting for a telephone, and that there has not been enough capital put into the business. I entirely agree with my noble friend Lord Crook and the noble Earl, Lord De La Warr, that it is a splendid service, extremely efficient; but it cannot make bricks without straw, and it has not had enough straw. I hope there is a sign now of change. I am bound to say that I thought as long as 30 years ago that we had released the Post Office from the bondage of the Treasury. Certainly something of the sort was put; forward by the Bridgeman Committee which followed shortly after I left the Post Office, and I thought we had freed it. I am afraid that I have not followed it as closely as I might have during recent years. Although it was my first business as head of an administrative Department, the years that have passed between have taken away the "first fine careless rapture," owing to my being beset with many other troubles of one kind and another.

I think now that we ought to be able to find capital. If we had put some of the money that has gone into television into our telephones we should beat the Americans hands down. But there is a lack of discrimination in the allocation of our technical resources, and year by year the Minister has never known where he stood. I have seen that with successive Postmasters General. How can they plan, how can they deal with the future business of the telephone, when they do not know how much they are going to get from year to year? I do not entirely agree with the noble Earl, Lord De La Warr, that there has been steady progress. As I look at the figures I think that the progress has been very unsteady. With steady progress one would have seen certainly, if not a rising expenditure, at least a level one. You find that over the years it is up and down, up and down, and it is quite clear that there has not been long-term planning.

I should like to say one word with regard to the comparison with the United States of America. It is fair to say that it is the goodness of our mail services that prevents us from imitating the Americans. That is more polite than referring to the extreme badness of the American mail service. It is also true to say that while the services in all the great cities of America are good, I was always told—and I believe it is true today—that there is an uneconomic fringe. In our services we have the Post Office system, which does not depend solely on whether some part of the service is profit making but on giving an adequate service to all the people; and the method by which we pay the same for a letter to go to the next street as for one to go to Caithness is a very good example of that Post Office principle as against the principle of profit-making. I am sure it is time that these facts were ventilated, and I hope that they will be read, marked and learned by the Chancellor of the Exchequer.