Sitting of 13 June 1952

Preamble
The House met at Eleven o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  PORT OF LONDON BILL [Lords]
  Read the Third time, and passed, with an Amendment.
  SCOTTISH MUTUAL ASSURANCE SOCIETY BILL
  Read the Third time, and passed.
ORDERS OF THE DAY

  POST OFFICE AND TELEGRAPH [MONEY]
  Resolution reported,
  That, for the purposes of any Act of the present Session to provide for raising further money for the development of the postal, telegraphic and telephonic systems and of any other business of the Post Office, and for the repayment to the Post Office Fund of money applied thereout for such development, it is expedient—

  (i) to authorise the issue out of the Consolidated Fund of such sums, not exceeding in the whole seventy-five million pounds, as may be required for the purposes of such development or of such repayment as aforesaid;

  (ii) to authorise the Treasury to borrow by means of terminable annuities for the purpose of providing money for sums so authorised to be issued, or for repaying to the Consolidated Fund all or any part of the sums so issued, and to authorise payment into the Exchequer of any sums so borrowed;

  (iii) to provide for the payment of such terminable annuities out of moneys provided by Parliament for the service of the Post Office, or, if those moneys are insufficient, out of the Consolidated Fund.

  Resolution agreed to.

  POST OFFICE AND TELEGRAPH (MONEY) BILL
  Considered in Committee.
  [Colonel Sir CHARLES MACANDREW in the Chair]

  POST OFFICE AND TELEGRAPH (MONEY) BILL

    Clause 1.—(GRANT FOR DEVELOPMENT OF POSTAL, TELEGRAPHIC AND TELEPHONIC SYSTEMS AND OTHER POST OFFICE BUSINESS.)
    11.5 a.m.
    Mr. C. R. Hobson: I beg to move, in page 1, line 10, to leave out "seventy-five," and to insert" fifty."
    The effect of this Amendment is to reduce the capital expenditure on telephones, telegraphs and postal services by £25 million. That may seem rather a strange Amendment, but I hasten to assure the Committee that it has been put down after very careful consideration; and even bearing in mind the fact that the total capital development required to wipe out the waiting list for telephones is something in the regior of £300 million.
    The main reason for putting down this Amendment is because we feel there is in this capital expenditure far too great a sum which could be attributed to defence funds. It is difficult to ascertain from the Assistant Postmaster-General the total amount of the capital expenditure in the Post Office which will be for defence. Speaking in the Second Reading debate the hon. Gentleman said:
    "It is estimated that for the next three years one-third of the total Post Office capital expenditure will come on the defence programme."—[OFFICIAL REPORT, 31st March, 1952; Vol. 498, c. 1192.]
    That, if my arithmetic is correct, is £25 million in the two years.
    That categorical statement by the Assistant Postmaster-General does not coincide with what was said by the Chancellor of the Exchequer in a general statement in answer to a Question by the hon. Member for Kidderminster (Mr. Nabarro), when he pointed out that the Government had laid down a maximum for investment by the nationalised industries. It is true that the Post Office is the oldest nationalised industry, but what we are concerned about is actually knowing what is to be the capital investment programme of the Post Office.
    As the Opposition we have to deal with the general statement made by the

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    Assistant Postmaster-General on Second Reading and the figure quoted in the Financial Memorandum. The figure of £75 million in the Financial Memorandum is for telephone, telegraph and postal services. I imagine that there will be very little capital expenditure on postal services. According to the information we have been given, there is to be very little on telephones, because we have had a statement by the hon. Gentleman that, for instance, there will be no new telephone exchanges.
    According to the statement by the Assistant Postmaster-General, one-third of this sum is for defence purposes. I can well understand the hon. Gentleman saying that expenditure on defence in the Post Office has been carried out by the previous Socialist Administrations. That is a fair point to make. We have no objection to that. Let me clear the air at the outset by saying that I do not want it to be thought that we are against expenditure on defence in the Post Office. We are not opposed to that in any shape or form.
    We know that as a result of the aggravation of the international situation there is an urgent need for expenditure on Post Office work in connection with defence for which this Bill will give authority. We are aware that the cost of defence is increasing rapidly. There have been recent wage increases, and all the time an increase is taking place in the cost of living which will cause further demands for wage increases.
    We know that there is a lot of extra work on hand, but we have not been informed about the details. This is regrettable. The Assistant Postmaster-General is largely responsible. He has failed to take into his confidence the former Postmaster-General, my right hon. Friend the Member for Caerphilly (Mr. Ness Edwards), about the amount of work being done on defence. It has been traditional in the Post Office to have a friendly association between the two parties. We were frank in telling the former Assistant Postmaster-General, the hon. Member for Westbury (Sir R. Grimston), about developments which were taking place in the Post Office. We informed him and some of his more senior colleagues precisely what was happening about defence matters in the Department.
    Since the hon. Gentleman the Member for Hornsey (Mr. Gammans) has been
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    Assistant Postmaster-General we have known nothing—no more than the ordinary public, in addition to the knowledge we gained when we were in the Department. That is regrettable. There are no politics in this matter. This is merely a common interest in the work of a Department of which we on this side of the Committee are intensely proud.
    That is one of the reasons why we had to put down an Amendment such as this. We want to know on what the money is to be spent. We assume that one-third of this £75 million is to be spent largely for the protection of the trunk network, diversions, the wiring up of anti-aircraft sites and probably for certain tunnels required for defence purposes. That is what we assume.
    While we appreciate the necessity for this work, we are anxious to know what part of it can be brought back into the Post Office network when the emergency is over. In view of the high rates of interest on borrowed money at the moment, it might be wise to reduce this amount. When we note that the purpose of this Bill is to provide money for telephone, telegraph and postal development, and are then informed that one-third of it is to be spent on defence, we realise that the money will not be spent as it should be.
    We think that the cost of the defence programme as it affects the Post Office should be borne on the Defence Votes. That is why we move this Amendment to reduce the sum from £75 million to £50 million. We shall be interested to hear what the Assistant Postmaster-General has to say.
    11.15 a.m.
    Mr. I. Mikardo: As my hon. Friend the Member for Keighley (Mr. Hobson) has said, the services supplied by the Post Office, and not least the telephone service, are extremely important; indeed, they form a vital part of our defence system. Clearly, nobody would begrudge whatever expenditure is thought to be necessary to make that vital part of our defence system effective. It is clear that in the defence of these islands the maintenance of effective and rapid communication is of the highest importance. A large part of the means of communication is provided by the Post Office.

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    I join with my hon. Friend in saying that nobody would in the least begrudge expenditure incurred to that end and nobody would wish so to diminish that expenditure as to interfere with the efficiency of the services which are to be provided for it. Thus, there is no dispute —I do not anticipate that there will be any dispute—about the merits of the expenditure under discussion. What we are discussing is how that expenditure should be shown, on what Votes it should be borne and what is the best way of making known to the country the size of the expenditure.
    It might at first be thought that there might be a security element in this question and that there might be some reason for disguising from some potential enemy, or indeed from other parties, how much was being spent for defence purposes. I should have thought that the comprehensiveness and, so to speak, the anonymity of the services provided by the Post Office was such that nobody would get any information out of a mere figure showing that £x million were being expended for defence purposes on the Post Office.
    This is one part of a much wider problem. I hope that I shall not be out of order if I suggest that the Post Office is not the only field in which expenditure is made for de facto defence purposes without that fact being apparent from the accounts laid before us. The railways are another example. Considerable expenditure is incurred on railways and on other forms of transport which——
    The Chairman: Order. I think that this point could be made on the new Clause which deals with the commercial account.
    Mr. Mikardo: I am much obliged. Of course, I defer to that Ruling.
    The general point which I was seeking to make was that we should know with regard to the accounts of the Post Office, and indeed the accounts of other public services, what part is for normal commercial service in maintaining the civil life and the ordinary civil occupations of the country, and what part is extraordinary expenditure, whether capital or revenue, designed for purely specialist defence purposes.
    As I understand, my hon. Friend the Member for Keighley said he desired to
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    seek some clarification upon this issue. We have had very considerable divisions of opinion both in the House and in the country about a question which clearly has agitated the mind of the Chancellor of the Exchequer to no inconsiderable extent—the proportion of the national income which should be devoted to defence purposes; and the relative burdens of defence and non-defence demands upon our national economy which we should seek to bear. In attempting to answer that sort of question, and in attempting to evaluate the effect of these considerations upon our national economy, we would all wish to be guided by having complete information on which to base our decision.
    It is, unfortunately, the case that some of that information is disguised or hidden. I do not mean deliberately, but inadvertently, because of the traditional way in which the practice of the matter has been allowed to grow up. Some of this information is hidden from us because the purposes of some expenditure of some Departments are not clearly stated, and therefore, are not manifest to us when we are considering the various Votes which come before us.
    I would therefore support the view expressed by my hon. Friend in moving this Amendment that we really ought to have some clarification on this point. No one would ask the Assistant Postmaster-General for any information which he and his colleagues think it inexpedient to give in the interests of national security, but there must be some information which he could give to the Committee and which can be given through that variant of the usual channels which my hon. Friend described, and which, without disclosing anything which ought not to be disclosed, might clarify the minds of hon. Members on both" sides of the Committee when they come to deal with very intricate considerations affecting our national income.
    On these grounds, I hope that the Assistant Postmaster-General will give the most careful and sympathetic consideration to the contention put forward by my hon. Friend.
    Mr. W. R. Williams: In supporting this Amendment, I feel in a rather paradoxical position. I certainly do not want the Vote of the Post Office reduced from £75 million to £50 million

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    in order to do the legitimate work of the Post Office, and I am hoping later, if I am able to catch your eye, Sir Charles, to support that argument.
    What I am concerned with is the principle which is brought out in this Amendment, which is that the Post Office, in regard to this question of one-third of its expenditure being related to defence, is being saddled with a responsibility which seems to me to be proper to the Service Departments themselves. It has been a complaint among people working in the Post Office for whom I can speak from long experience, that, for long enough, they have felt that they have been imposed upon by Government Departments in so far as, while they are willing co-ordinators and co-operators with the Service Departments, they are having to bear the burden of public criticism in regard to finance, much of which has not been spent upon legitimate normal Post Office work.
    I feel, therefore, that my hon. Friend has done a service to this Committee by putting forward this Amendment, if only to try once again to clear the situation in regard to this question of expense in the Post Office in so far as it relates to other Government Departments, and, in this case, of course, by and large, it is the Service Departments.
    I think we all know which of the Services are getting the bulk of the money, and I agree with my hon. Friend. I am surprised that the Assistant Postmaster-General is breaking down the friendliness with the Opposition so far as the Post Office is concerned. In my experience, there has been a good deal of liaison and co-ordination between the two sides of this industry, the welfare and development of which is a matter, not only for the Government, but for the Opposition and, indeed, for the country as a whole.
    I have always believed in, and have advocated, very close co-operation between all Government Departments, and I have done so because I am of the opinion that it helps to prevent unnecessary duplication of work, and, in many cases, it prevents inconvenience to members of the public, and above all, perhaps, it has been conducive to a higher degree of efficiency in Government Departments.
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    From my own knowledge and observation the Post Office have always been very willing co-operators with other Service Departments. Indeed, I am not too sure that they have not been imposed upon because of their willingness to cooperate, and that exacting demands have not been made by Government Departments upon the Post Office, which has had to change its normal functions in many cases to meet the whims, fancies and desires of Government Departments.
    I want to make it quite clear that I am not denying the Post Office the opportunity to assist in the defence programme. In my opinion, no other establishment in this country can be more usefully employed in the overall defence programme as far as the electronics side of the Post Office is concerned, because of the peculiar efficiency and knowledge of its people.
    I remember that, when I joined the Forces at the end of 1914, the first thing that struck me when I went into the Royal Engineers, or the Royal Corps of Signals as it is now called, was the complete inefficiency of the signalling system of the Army in those days. I had never seen such a chaotic form of telecommunication in my life. It was primitive in the extreme. I remember that Post Office telegraphists who were capable of sending and receiving telegrams at 30 words a minute had to conform to regulations then in operation in the Service requiring them to send at 12 words a minute, and, after every word, to depress the key in acknowledgement of receipt of the signal.
    All that was changed when the Post Office was asked to undertake a complete revision of the signalling services in all the Services in the 1914–18 war. Every reasonable person will agree that, had it been left to the Services themselves to continue with a telecommunication system that was so inefficient, the success of the war itself would have been endangered.
    I want to impress again upon the Assistant Postmaster-General the fact that my opposition is not to the assistance which can be given by the Post Office. My quarrel is that the Post Office has to accept financial responsibility for commitments which do not properly come within its normal functions, and I therefore hope that the hon. Gentleman will

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    tell us that that aspect of the matter will be considered by himself, by the Postmaster-General and by the Government.
    The time has come when the Post Office should be estimating only for its normal work. Goodness knows, it has enough to do if it only estimates for the work which the Post Office wants to do in connection with normal Post Office services. I am supporting the Amendment on the basic principle that this expenditure should be carried on the Votes of the Services themselves.
    Later, I hope to be able to prove that £75 million is quite inadequate for what I regard as being the legitimate development of Post Office functions in the near future.
    11.30 a.m.
    Mr. R. T. Paget: It is very important that we should realise what an enormous part communications, and particularly telephonic communications and communications of a type that the Post Office is so well equipped to provide, do play and should play in any defence programme. I do not think that the danger of airborne invasion is immediate, but it may be at any time. The whole purpose of that type of invasion is to cripple one's communications. But it fails if the communications can be kept open and it may very well be that one would need alternative communications, separate telephone wires to all important areas and posts. This may require a tremendous amount of duplication.
    As the defence of Britain plan develops the requirements for Post Office service, which will be quite unnecessary without that defence of Britain programme, will expand. It seems very important, therefore, that we should start off as we intend to go on and see that this defence expenditure is kept entirely separate from the normal Post Office expenditure.
    I can never understand why the Post Office cannot be treated as any other nationalised industry, that is to say, that its functions should be to provide a service to the community at cost and to do so in the most efficient manner. After all, in a broad sense, the Post Office is part of transport. It is through its services that we transport our letters, yet the Post Office is expected to provide a large surplus to the general tax fund whereas a protest is raised if any contribution
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    from that fund is asked for on behalf of the railways or any other means of communication which may be less efficient from a revenue earning point of view, but which is, none the less, important to the general system of this country.
    Why cannot we stop treating the Post Office as a means of raising revenue? The Post Office is quite capable of providing the funds for its capital development out of its revenue if that revenue is not pinched for the general tax fund. That seems to me an altogether unreasonable way of running this particular nationalised industry. It is the sort of thing that has grown up within our Constitution, and to some extent it has involved over many years a reluctance on the part of the party opposite to see a nationalised concern succeed, and even greater reluctance to see it highly profitable. Therefore, this most profitable venture of the community——
    The Chairman: The hon. and learned Gentleman is getting a little beyond leaving out "seventy-five" and inserting "fifty."
    Mr. Paget: With great respect, Sir Charles, this is, after all, a request to raise capital money—£75 million. I am saying that they need not raise as much as £75 million if they raise the revenue they earn for their capital investment and if that revenue which they earn is not taken away from them for what I would respectfully submit are quite illegitimate purposes. I should have thought that was a relevant argument.
    The Chairman: I should have thought that it would have been more relevant on the Second Reading of the Bill.
    Mr. Paget: With great respect, Sir Charles, on the Second Reading of the Bill one may apply any argument to anything that arises out of it. On the Committee stage, I venture to say that we may apply arguments to the particular point raised by the Amendment, and the particular point raised by this Amendment is an excessive authorisation of rights to raise capital.
    The argument applied to that particular point is that the Post Office ought not to require this power and that it is unnecessary if it uses its own revenue. I respectfully submit it would have been

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    relevant in a Second Reading debate because it applied to this very point and for no other reason, because that is the point to which it will apply in Second Reading. It is spotlighted in this particular Amendment, and I respectfully suggest that this is the very point where we can relevantly discuss whether it is right for the Post Office to raise as much capital as this.
    Mr. J. E. S. Simon: Is the hon. and learned Gentleman really saying that the Post Office can raise sufficient capital for its needs out of current earnings this year?
    Mr. Paget: It could certainly have done that had the practice been to use it for these purposes. If it were a commercial concern, or if it were run like the mines or the railways or transport or steel, it would not have the slightest difficulty in raising this capital fund before August, or even tomorrow or now.
    Mr. Simon: Out of revenue?
    Mr. Paget: Certainly. It would be a perfectly normal way in which any of the other nationalised industries raise it or in which any ordinary person would raise it from the banks.
    Where a revenue of this sort is available it is perfectly easy to raise a relatively quite small amount of capital, because it is a relatively small amount of capital compared with the earnings, and the certain earnings, of this industry. There would be no problem at all in simply drawing cheques for any of this capital expenditure now, in August, or at any other time, if only this were treated as an organisation—call it anything you will—whose function is to provide the community with a service in the same way as the Coal Board provide us with coal and the Transport Board with transport. They provide us with these things at cost.
    The Coal Board has, in fact, provided us with coal at about half the price which our competitors abroad have had to pay over the last five years. That has been one of the reasons why our export drive has until relatively recently been highly successful, because co-operatively produced coal was available to exporters at about half the price paid by their competitors.
    The Chairman: Now the hon. and learned Gentleman really is going beyond the Amendment.
    Mr. Paget: I was merely taking it as an illustration to show how wrong it was, when fuel is provided at cost, that postal services which are equally necessary in the process of production should have a concealed tax put on them. This method of Post Office financing amounts to that. It amounts to a concealed tax imposed upon the whole of industry. Let us have it out in the open sunlight and have these accounts kept on a proper basis with the Post Office financing itself out of revenue just as other nationalised industries do and having its services available to the public at cost. That is the function of a nationalised industry and the sooner we get down to that businesslike principle the better for all concerned.
    The Assistant Postmaster-General (Mr. David Gammans): I should like to deal first with the personal point that was raised by the hon. Member for Keighley (Mr. Hobson) when he complained that since I have been Assistant Postmaster-General my personal relations with my predecessor the right hon. Gentleman the Member for Caerphilly (Mr. Ness Edwards) have left something to be desired. I am sorry that he feels that, because my personal regard for the right hon. Gentleman has always been high and continues to be so. Perhaps I may do now publicly what I did privately and thank him for helping me so much when I first took on this job. The hon. Member has suggested that we might have a closer liaison in future. I am certainly glad that that suggestion has been made and, as far as I am personally concerned, I am sure we can fix up satisfactory personal relations between us.
    Mr. Hobson: The hon. Gentleman will appreciate the fact that we have been given no information whatever since the hon. Gentleman took office about what capital expenditure was being spent by the Post Office on defence work and what was the nature of that work. We have had to find out what we could by Question and answer, and I think that is quite deplorable.
    Mr. Gammans: I should have thought that the hon. Member would have been the first to admit that a high proportion of that information for which he asks

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    is of a highly confidential nature and, from a constitutional point of view, I have to be careful what I reveal to anybody. Subject to that, there is nothing I would wish to hold back from the right hon. Gentleman the Member for Caerphilly and his colleagues. If the right hon. Gentleman wishes to establish closer relationship and liaison, I should be the first to welcome it.
    Mr. Harry Wallace: Is not that a reason for the interchange of information? The Opposition can be trusted with confidential matters, on which there are often talks through the usual channels and between the Prime Minister and the Leader of the Opposition.
    Mr. Gammans: I do not want to labour this point or to go into constitutional practice, but I hope the hon. Member knows that there is certain information in the hands of Ministers, especially today in a time of national danger and re-armament, which they do not and should not pass on to anybody. That is the only limitation in this direction which would affect the matter.
    The object of the Amendment, as the hon. Member for Keighley pointed out, is to give the Committee an opportunity to discuss the use to which this money is to be put and also, as the hon. Member said quite clearly, to draw attention to the fact that one-third of it is being used for defence purposes. I am glad the Opposition have put down this Amendment, because it gives us an opportunity, all too rare, of discussing Post Office affairs and also of explaining to the Committee exactly what all this means.
    I think the point the hon. Member raised is a very good one. He has said that one-third is being spent on defence and has asked why that amount cannot be separated. I will say straight away that I wish it could be separated. Nothing would give me greater pleasure, because I admit that, as the matter is set out at present, it can give a slightly distorted account of the amount of money which is being spent on the Post Office.
    11.45 a.m.
    If there were any means whereby a rigid line could be drawn between what we are spending on defence and on development generally, I should be the
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    first to welcome it, as I am sure the right hon. Gentleman the Member for Caerphilly would welcome it, too. Before I deal with that point, I must say that, supposing we could separate defence expenditure from ordinary civilian expenditure, unfortunately it would not help us very much in the amount of money we could spend on civilian needs.
    The reason is that the amount of money we can spend on civilian developments unfortunately is dictated not by the amount of money we put down on our Estimates or the amount the House of Commons is good enough to vote for us, but by the amount of money which the Treasury is prepared to allot for civilian development at the present time. I want to make that clear. The other difficulty in the way is that it is practically impossible in the developments we are now carrying out to differentiate between what is to be used for purely defence purposes and what is to be used for purely civilian purposes. One cannot keep the two things strictly separate.
    Mr. W. R. Williams: As far as the Post Office administration is concerned, there is no difficulty in apportioning in the returns what is allocated to various types of services and sections of the Post Office. Why cannot the hon. Gentleman do it in this case?
    Mr. Gammans: I was coming to that point. I was asked—and it was a good question—in connection with the money we are now spending primarily for defence purposes whether those works will ultimately have a civilian use. The answer is, yes. There is hardly anything that we are now doing for defence purposes which ultimately cannot be used for the ordinary peace-time use of the Post Office. I am very glad that that is so. The only thing I would make quite clear is that we should not necessarily be spending that money at the present time on these works. We should be doing the work in an entirely different order.
    I hope I have dealt with the main basis of this Amendment. I have every sympathy with those who would like to see the civilian programme increased. If hon. Members will recollect what I said on Second Reading of this Bill, the biggest headache which the Post Office

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    now has is the retarding of the telephone services. We are not spending any new money this year for new buildings for civilian use and there is a very real danger that we shall soon be running into quite a serious situation in connection with the telephone services, especially in some areas.
    Mr. Williams: What is the use of telling the Committee that?
    Mr. Gammans: I am replying to the points raised on this Amendment. I said on Second Reading, and I made it perfectly clear, that what this Government, or for that matter any Government, have to do is to balance the amount of money spent on defence needs with money spent on other needs.
    Mr. Leslie Hale: Is the hon. Gentleman telling us that the way the economic planning of the country is now conducted is to fix the defence figure first, then find out what is left, and afterwards find out if we can buy food, build houses, have telephones, and so on?
    Mr. Gammans: The hon. Gentleman knows as well as I do that that is a gross simplification. The position is that a certain amount of money is allotted for defence and many civilian needs have to take a second place. It is not only in the Post Office but on the railways, in the mines, and on every side of industrial life——
    Mr. Paget: The trouble is that it is in the unemployment queue.
    Mr. Gammans: —on every side in industrial life, whether the industry is in public or private hands, this is the case. I regret it, but I regret even more the necessity for it, because it shows the international situation which we and other countries have to face at the present time. Let me develop this telephone point, because I have every sympathy with what I think was in the mind of the hon. Gentleman in putting down this Amendment. Some exchanges are so full that no additional subscribers can be added. I think the hon. and learned Member for Northampton (Mr. Paget) represents an area which comes under that category.
    Mr. Paget: It certainly does.
    Mr. Gammans: I am sorry to hear it, but I want to make it quite clear that we cannot do anything about it in the near future. There is a demand today for half a million new subscribers. As I said on the Second Reading of this Bill, we do not expect during the present year to be able to deal with much more than one-fifth of that number. Whilst I have every sympathy with the spirit of the Amendment, I do not feel that reducing the amount of money we are allowed to spend from £75 million to £50 million will help. It is for that reason, having heard the explanation, that I hope the hon. Gentleman and his right hon. and hon. Friends will not want to press the Amendment.
    Mr. Ness Edwards: We have heard the explanation of the position by the Assistant Postmaster-General and it is an extremely disappointing reply to the excellent case put up by my hon. Friend. Let me say first, with regard to the pleasantry at the commencement of his speech, that I shall always be prepared to give any assistance I can in regard to the work of the Post Office. I shall always look with a kindly eye upon most things they do, but I must remind the hon. Gentleman that it has been the invariable practice, when money is concealed in Estimates—and that is what this amounts to—that the other side of the Committee is told why it has been done, the reasons for it, and the purposes on which it will be spent.
    In this case we have had no information from the hon. Gentleman, and we have only such knowledge as we have been able to assume from what we knew when we were in office. I hope he will be a little more forthcoming in future and that he will treat this side of the Committee with more respect than he has in the past. I say that kindly to him and without trying to be offensive.
    Now let me come to the argument of the debate. We should never have found from the documents that one-third of this money was really for Defence purposes and not for Post Office purposes. We should never have found out from any of the published documents, from any of the Estimates, from the Bill itself, unless the hon. Gentleman in the Second Reading debate had let it slip out. It was then that he told us that £25 million out of this £75 million was to be spent on

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    Defence purposes and not on Post Office purposes. His statement today has been rather a defence of spending money on the purposes for which it has been spent; it has been no defence for the Post Office carrying it.
    Mr. Gammans: I hoped I had made it clear. If not, let me try again to do so. Practically all this money which we are now spending for defence purposes, as the right hon. Gentleman says, has a civilian use and would have been spent in any case. But what is clear, as I tried to point out, is that had it not been for the national emergency we should not have spent it at this time or in this order.
    Mr. Ness Edwards: The hon. Gentleman should have a better memory. I am rather astonished at this statement, which he also made in reply to my hon. Friend. Has he forgotten the Second Reading debate? This is entirely contrary to what was said in that debate. This is the sort of thing that upsets us on this side of the Committee. The hon. Gentleman comes to the House one day and says, "Hardly any of this expenditure will be of any use for civilian purposes"—that is what he said on Second Reading—and he comes here today and tries to justify this on an entirely contrary view.
    Did the hon. Gentleman deceive us when he spoke in the Second Reading debate or is he deceiving us now? Let me be more particular about it. The hon. Gentleman said:
    "The chief point I want to make …is that the sum …is quite inadequate for the new developments which the Post Office would like to undertake, or even for us to be able to guarantee that we can maintain the service at present standards"—
    that is not quite the point—perhaps I shall come to it later in what I have to say.
    Mr. W. R. Williams: If my right hon. Friend will look higher up the page he will find that the hon. Gentleman said:
    "Some of this plant will be useful later for civilian purposes, but for the time being the money spent on defence purposes will be of very little use to the Post Office for ordinary civilian needs."—[OFFICIAL REPORT, 31st March, 1952; Vol. 498, c. 1192.]
    Mr. Ness Edwards: I am much obliged to my hon. Friend for reminding me. I have it here, but I could not put my finger on it for the moment. That is what the
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    hon. Gentleman said, and now apparently he says something entirely different. The hon. Gentleman knows that in carrying this £25 million on the Post Office Vote he is doing something that cannot be justified. That is what we are concerned about. That is why we want to reduce the sum to £50 million, because only £50 million of it is to be used for Post Office purposes. What has happened is that £75 million has been added on to the Post Office, and the Post Office, when it has to pay back this money with interest, will be showing a loss. Hon. Members opposite will sneer at that loss and the Chancellor will come along and tell the hon. Gentleman that he must push up the charges to the public and will distort the commercial and financial working of the Post Office.
    I know the hon. Gentleman does not like monopolies. This manipulation of accounts might go on in private monopolies, but it ought not to go on in public monopolies. This really is unpardonable, and the doctrinaire concern of the hon. Gentleman about monopolies is allowing him to stand by and see this great public monopoly denigrated, milked and twisted around, to the detriment of the Post Office. Hon. Gentlemen may smile, but if £25 million were pushed from one side of a private monopoly to another, no one would hear of it. Here we have the hon. Gentleman, who is concerned about public accountability, agreeing to this process. It is too bad.
    Let me come to one or two of the other points he made. The hon. Gentleman said that we cannot spend all the money we want to spend. That is what he said. Is it because the money is not available or because the materials are not available?
    12 noon.
    Mr. Gammans: The resources are not available.
    Mr. Ness Edwards: I am much obliged. The resources would not be available even if the Vote were larger. Am I to take it that the view of the Government now is that there can be no development of the Post Office because the resources are not available? I am quite prepared to accept that and to agree that the demand on the electronics industry—because he knows that most of this money is going to the electronics

    663
    industry—is so great that even if there were more money available it could not be spent at a greater rate than is proposed. I should like to have his assent to that proposition. Does he know the answer? Could more cable be bought? Is the cable there to be bought? Those are the sorts of questions to which I should like to have answers.
    Mr. Hale: And to which we are entitled to have answers.
    Mr. Ness Edwards: When I was at the Post Office I understood that cable could not be bought, and that the whole of the capacity of the electronics industry for the next five years was earmarked. As he knows, we wanted this job done in three years, but the best estimate we had was that it would take five years. The manufacturers told us that they could not supply us with the equipment. This is the electronics industry—the industry that is going to give us sponsored television stations. We wanted this in three years and we were told that we could not have it for five years, not because of lack of money but because of lack of materials. I should like to know whether that is still the case.
    In his reply to my hon. Friend, the Assistant Postmaster-General asserted that everything was all right because this money was going to be legitimately spent. We accept that. The purposes for which this £25 million is to be used are justifiable purposes. There is no dispute about that. The dispute is whether the Post Office should carry it. Why bury it in the Post Office Estimates? Why not stick it in the Education Estimates or put it in some other Estimates?
    This is expenditure which is mainly on account of the Air Ministry. Why should not it be put in the Air Ministry Vote, so that we do not distort the commercial accounts of the Post Office and deceive the country into believing that it is paying less than it actually is for rearmament? Has the hon. Gentleman so little concern for the Post Office as to allow it to be used in this way?
    If the hon. Gentleman replies, I can quite understand that he will probably say, "Oh, yes; but you did it. "But I can say, with far greater justification, that the few million pounds spent on
    664
    defence purposes while I was at the Post Office were spent on work that would ultimately be of great value to it. We were getting value for our money. It is no use saying that he cannot indicate how much of this money is being spent on work which the Post Office will not require. Why does he deceive the Committee in that way?—because he is deceiving the Committee.
    It is all very well to plead Cabinet secrets. He might make that plea to those who do not know the position, but it is no use making it to me, because I know the things on which this money is to be spent, and he knows the estimate of the Defence Committee as to the value of this. The hon. Gentleman is not treating this Committee with proper respect. I say that with all seriousness. He should have made a much more serious attempt to deal with this, and he and his chief ought to tell the Air Ministry and the Defence Committee that this is expenditure on defence purposes and it ought not to be carried on the Post Office Vote.
    That is our case, and unless we can have an assurance on this we shall divide the Committee, because not only is the hon. Gentleman concealing from us the amount of money which he carries in his Post Office Vote for non-Post Office purposes, but he is thereby distorting the accounts of the Post Office and, in my view, is not carrying out his duty as Assistant Postmaster-General. His first obligation is to protect the Post Office from being milked, and he is not doing that. If he is prepared to stand up to his colleagues in the Government, he will have the support of this side of the Committee. He will have public opinion on his side; he will have the Post Office on his side; he will have a very valuable body of officials on his side, and he will certainly grow in public estimation.
    Here is a great nationalised undertaking that is being treated exceptionally. The Government would not dream of treating the Coal Board like this—or would they? This is a most serious matter, and I shall ask my hon. Friends to divide on it unless we get a very satisfactory reply.
    Mr. Wallace: What I have to say will not take more than a few minutes. I am still quite unconvinced by what the Assistant Postmaster-General has said— that it would be impossible to meet responsible Members of the Opposition

    665
    and indicate to them what is the position in respect of this £25 million, and how it is to be expended. I reject entirely the view that sensible men could not come together and have a discussion which would be intelligible to both sides without revealing the A B C of an essential national defence service.
    Mr. Malcolm McCorquodale: Did not the hon. Gentleman hear his right hon. Friend say that he knew exactly how the money was being spent?
    Mr. Wallace: If I may say so, that strengthens the point I am making. My hon. Friend knows how it is being spent without being consulted. I am saying that the Assistant Postmaster-General should meet responsible Members of the Opposition and should indicate just what is the position. The hon. Gentleman and I could do that without his giving away the A B C of vital national defence expenditure. The Assistant Postmaster-General comes to this Committee and declares that he cannot, in confidence, tell responsible Members of the Opposition how this money is being spent. Nor does he tell the Committee. He is telling us, "You cannot know. "Yet we are asked to vote the money. It seems to me to be a peculiar and unacceptable situation.
    The Assistant Postmaster-General has made it quite clear that the Treasury would not permit the whole of the £75 million to be spent on the development of Post Office services. That is no criticism of him. Apparently the Treasury insist that one-third of this expenditure must be devoted to defence purposes. How long is the Treasury going to be permitted to exercise this control over the Post Office, which is designed to serve the community? I long for the day when we shall have a Postmaster-General who will have the courage to insist that he has more freedom to serve the Post Office and the public.
    Mr. Gammans: Does not the hon. Gentleman realise that the limitation on capital expenditure to which he is objecting applies equally to other industries, whether nationalised or private?
    Mr. Wallace: I am referring only to this Bill and this Post Office expenditure. Until we insist that the Postmaster-General presents to us—as he did up to 1917—his Annual Report, with a full
    666
    account of what has been done and what he hopes to do, so that we are given a reasonable opportunity to criticise and help this Department, we shall never have any real control over the Post Office and its services and accounts. This secrecy has been going on too long. I do not want to accuse the Administration of being against the presentation of this Report, but it is time that the House insisted that the Post Office present a Report as the other nationalised industries do.
    I want to emphasise another point. Why should this defence expenditure be placed solely upon the Post Office? Why not on other nationalised industries like gas, electricity and coal? They are all elements in any defence scheme. I do not think it is fair to put it on the Post Office. The Assistant Postmaster-General told us that he cannot give us any additional explanation about this £25 million. The Committee must face that. He has said that this expenditure will not be for civilian needs for the time being. I do not think that it will be of any or much use for civilian needs eventually. If it is, I hope he will tell us precisely what the public are eventually going to get out of this expenditure now described as defence expenditure.
    Mr. Ness Edwards: If my hon. Friend will allow me I should like to get this clearly on the record. In the debate on 31st March last, the Assistant Postmaster-General said:
    "Some of this plant will be useful later for civilian purposes, but for the time being the money spent on defence purposes will be of very little use to the Post Office for ordinary civilian needs."
    Does the hon. Member realise that what he has said today is a contradiction of what he said on Second Reading?
    Mr. Wallace: I am obliged to my right hon. Friend and I was just going to read that particular paragraph. I will go to the next paragraph in the same debate where the hon. Gentleman said:
    "The sum we are providing today and are likely to be able to spend in the foreseeable future is quite inadequate for the new developments which the Post Office would like to undertake."—[OFFICIAL REPORT, 31st March, 1952; Vol. 498; c. 1192.]
    The Post Office needs more capital. Let me give a homely illustration which will appeal to all Members. Half a million

    667
    people are waiting for telephones. Is it argued that the provision of telephones to these people is no contribution to defence? We all know from our experience in the last war how useful a residential telephone could be. So the Post Office has got to stagnate except for the one-fifth of these half a million subscribers who may get a telephone.
    I am not satisfied with the Assistant Postmaster-General's explanation. I do not want to go over the items that have been covered. I am not satisfied with this explanation. I think it is wrong to conceal defence expenditure in this way. I object doubly to the selection of the Post Office as a Cinderella for the Treasury and the Service Departments. Why should this concealment not be put somewhere else if it must be done; and if the Treasury say that the public cannot have more than £25 million or more than £50 million for development let us put it into the Bill and tell the public. I have no doubt that the Assistant Postmaster-General would be compelled to come to the House and ask for another £50 million.
    I do not like this method. I criticised it on Second Reading, and I have listened carefully to what the Assistant Postmaster-General has said. I am sorry that I cannot accept the position. I think he ought to give us more details if we are not to press this Amendment. It is up to him to do so, and if he says he will not or cannot give the Committee more details, then it is for the Committee to take action, and we should insist on telling a higher authority that we are not going to accept this concealment of defence expenditure in this way.
    12.15 p.m.
    Mr. William Shepherd: Among those interested in the Post Office there is a wide measure of agreement that the present method of trading organisations leaves something to be desired, and I am very hopeful that before long we shall have an inquiry into whether the Post Office cannot be constituted on the basis of a nationalised trading corporation rather than as it is at present, in the interests of Post Office development and particularly of those in the Post Office.
    The right hon. Gentleman the Member for Caerphilly (Mr. Ness Edwards), as he so often does, has generated a lot of
    668
    heat and has perhaps caused the Committee to take a view which is unreasonable. He complains about the alleged secrecy of my hon. Friend. Has he had a chance of reading what happened in the House in the years before the last war, when a very substantial amount of the defence expenditure was incurred with very much less public notice and Ministerial mention than is the case today? If he examines that situation in the years 1936, 1937 and 1938, and compares it with what is done today, he will find that my hon. Friend has been very forthcoming.
    Mr. Hobson: Where?
    Mr. Shepherd: I cannot remember the exact places.
    Mr. Hobson: The hon. Member has made a forthright statement and I think he owes it to the Committee to give us the exact details.
    Mr. Shepherd: I said that before the last war there was no public mention whatsoever in debates in the House of the purpose to which very considerable sums of money were devoted—particularly in 1936, 1937 and 1938—and that by comparison my hon. Friend is now very forthcoming.
    Mr. Hobson: But the Opposition, before the war, was informed. That is the difference. All we are asking is for the status quo ante.
    Mr. Shepherd: It may have been that there was some private information, but my hon. Friend, in his Second Reading speech, referred to the amount that was being spent, and I say that that is a distinct improvement on what applied before the war.
    I want to deal chiefly with the question whether it is right that this £25 million should be carried on the Post Office Vote rather than on the Vote of one of the defence Ministries. Let me say, first of all, that no one regrets more than I that we should have to spend so much on defence and should have to restrict so severely the amount of money available for civilian needs in the Post Office. The Post Office could make a great expansion at present if that were possible and it is to be regretted that, with one or two exceptions, we have to curtail our civilian expenditure.

    669
    The issue is: should this be carried on the Post Office Vote rather than on a Service Vote? There may be one or two reasons that perhaps have not yet emerged as to why this £25 million should be carried on the post Office Vote. In the first place, it is obvious that the Post Office is not a charitable organisation. Whether it is imposed upon may be the case sometimes but it is not a charitable organisation, as customers of the Post Office know. The Service Departments are customers of the Post Office for this equipment. They have to pay an amount in respect of it.
    Mr. Ness Edwards: Does the hon. Gentleman know what he is talking about? He does not know the use to which this equipment will be put. We are talking about this £25 million but he does not know what it is to be spent on. Before he continues to speak as he is doing he ought to assure himself, first of all, if there will be any return for the major portion of this expenditure.
    Mr. Shepherd: Of course there is a return for this expenditure. The Post Office would not undertake the work without some prospect of a return.
    Mr. Hale: But the stock will not be used for civilian purposes.
    Mr. Shepherd: My hon. Friend did not say that the stock was of no use for civilian purposes. What he said was that it would not be capable of being applied immediately to civilian purposes—[HON. MEMBERS: "No. "]— and that it would be of use ultimately for civilian purposes.
    Mr. W. R. Williams: He said that some of the plant will be useful later. We are assuming from that that some— possibly a large amount—will not be. All the hon. Gentleman said was that some will be useful later but very little will be useful now. So a large amount will never be of any use.
    Mr. Shepherd: If we could have the whole of this £25 million applied immediately for specific civilian purposes so far as the Post Office is concerned it would be of great advantage to the Post Office. I appreciate that, but we know that we could not get authority to spend that extra £25 million for civilian purposes immediately.
    670
    Surely the duty of the Post Office in those circumstances is so to use the Services' expenditure as to make it of the greatest ultimate use for civilian purposes. It may well be that in various ways we can devise expenditure and construction with a view to ultimate civilian use. This is very possible. Therefore, I suggest that what is now happening, although it is not the best thing that possibly could be—and I certainly should like to see this £25 million spent on the urgent need to provide more telephones —is, on the whole, the best way of tackling this problem.
    Mr. S. P. Viant: I agree with the argument that has been advanced by my hon. Friend the Member for Walthamstow, East (Mr. Wallace), that the accounts of the Post Office should be kept in a far different manner from that in which they are kept at present. They should be more akin to the accounts of ordinary commercial concerns. We have argued that in the House on a number of occasions.
    Today, we are discussing what may be called quite an innovation. We find the Post Office now being saddled with a capital expenditure of £25 million for which it will get no return whatever. My constituents are already complaining about the increased charges being made by the Post Office. This £25 million is not likely to be conducive to a reduction in the charges made by the Post Office.
    I am exceedingly jealous for the Post Office. At one time I occupied the position now occupied by the Assistant Postmaster-General. I have been a Member of the House a number of years, and I have never known as yet either a Postmaster-General or an Assistant Postmaster-General who has left that Department without having a very high regard for it. I regret this innovation whereby the Assistant Postmaster-General is unable to explain the reasons why this increased capital expenditure is required.
    Hitherto, the spokesman of the Post Office has been able to stand at that Box to say exactly what the capital was required for. Today, we have no reply to that question. But we do know that £25 million of capital is being asked for for a Department other than the Post Office. Well, if it is for defence purposes, let the £25 million be placed to the

    671
    account of the Ministry of Defence, or of the Air Ministry, or of whatever Department may be concerned. Let that Department bear the charge. Instead, the Post Office is being saddled with the charge.
    I take very strong exception to that method of procedure, and I think that the Committee should take strong exception to it. We are entitled to know, as the Post Office is a business concern, exactly how this charge is to be met. It should not be placed upon the Post Office. The Post Office should not be made responsible for paying the interest on this capital; it should, rightly, be borne by one of the Defence Departments. Were I there I should take strong exception to it myself. If this is being done at the request or the instruction of the Treasury I think that this Committee ought to take strong objection.
    Mr. Gammans: Let me deal, first, with the last point raised by the hon. Gentleman the Member for Willesden, West (Mr. Viant). I think he gave the Committee the impression that on the amount of money which is being spent this year on defence purposes the Service Departments pay no interest, and that, to that extent, the income, as apart from the capital, of the Post Office, is to be affected.
    I think there is another Amendment down about that, but I should like to satisfy the hon. Gentleman on that particular point. I think his memory has rather failed him on this, considering his association with the Post Office, because the truth is, of course, that a Service Department, or, indeed, any Government Department, has to pay rentals for the services which the Post Office renders to it in exactly the same way as the ordinary civilian customer has to do.
    Mr. Viant: That is not general throughout.
    Mr. Gammans: I can assure the hon. Gentleman that it is so.
    Mr. Viant: Unless a change has been made.
    Mr. Gammans: No, it has always been so.
    Mr. Ness Edwards: The Service Departments do not pay in cash. It is credited to the commercial account, as the hon. Gentleman knows.
    Mr. Gammans: When we are considering the commercial accounts of the Post Office we take credit for the services that are rendered to other Departments.
    The right hon. Gentleman engendered some indignation. I think it was slightly synthetic. I hope it was. He accused me of having distorted the accounts by not revealing what this money was for. I think his memory slips, too, because last year, when he was in charge of the Post Office, he spent between £9 million and £10 million on defence purposes, and I cannot find any trace of his ever having revealed it to the House of Commons.
    Mr. Ness Edwards: I am much obliged to the hon. Gentleman for giving way. He should have said that the people who were then in Opposition were completely informed. As he knows, it was secret military development, and information about it was given to the Opposition so that they would know what it was all about.
    Mr. Gammans: I have done better than that. I have revealed it to the Committee. [HON. MEMBERS:"NO."] I have revealed that £25 million is being devoted for defence purposes. The right hon. Gentleman spent between £9 million and £10 million and revealed it to nobody.
    Mr. Ness Edwards: I did.
    Mr. Gammans: I have been unable to find the slightest trace that the right hon. Gentleman revealed publicly the fact that he was spending anything at all on defence purposes. Further, some of the things on which he spent that money were far more easily separated into a defence category than it is possible to separate most of the things on which we are spending the money today.
    Mr. Ness Edwards: If the hon. Gentleman is making a charge, he must sustain it. I said to the Committee, when I spoke, that I spent a certain amount of money on these purposes. In those cases the expenditure was justifiable on Post Office grounds. We knew the amount

    673
    and the Opposition were informed precisely, so the hon. Member is making rather a false point.
    12.30 p.m.
    Mr. Gammans: No, I am not. I am saying that the difference between us is that the right hon. Gentleman has accused me of distorting the accounts, which is the last thing I want to do. I am revealing to the Committee that we are spending £25 million for defence purposes. The right hon. Gentleman spent about £9 million and did not reveal it to anybody. If it is a question of distorting the accounts, where is the distortion? If I were not limited by security reasons I could prove that some of the purposes for which the right hon. Gentleman rightly spent that money were purposes which can have very small application to civilian use if ever they have a civilian use at all.
    Let us get away from charges of distortion and "cooking" the accounts and that kind of thing, and try to deal with this matter entirely on its merits. I give the assurance to the right hon. Gentleman and to the Committee that if it is possible for us to differentiate in respect of this money between what is a genuine defence need and what ultimately may have some civilian use I shall do so; and what, is more, I shall be the very first to insist on that being done.
    I shall do it because it is sound accountancy and for the reason which the hon. Member for Willesden, West mentioned, which is true, that anyone who has had anything to do with the Post Office has gone away with a great admiration for it and a determination to stand up for it. [Interruption.] I might remind the right hon. Gentleman that the activities of the Post Office were nationalised by Conservative Governments.
    I give the Committee that assurance. I do not mind in the least whether the Opposition decide to divide on this Amendment, but if we are to divide let us know exactly what is the point at issue.
    My contention is that we should like to separate these requirements. I shall do so if I can, and I shall be the first to insist upon that being done if it is feasible. But the right hon. Gentleman knows more than anyone else how difficult it is to say, "That is a defence requirement "and "that is civilian." He found it impossible to do that only a year ago, and we are finding it equally difficult to do so today, but if it can be done it will be done.
    Mr. Hobson: We have heard the explanation of the Assistant Postmaster-General, and, frankly, we are not at all satisfied. In his explanations to the Committee the hon. Member is thoroughly disingenuous. The point which was first made was that we are asking the hon. Gentleman to tell us how this money is to be spent. We are asking that a procedure that was followed before the hon. Member came into office should be followed, and that we shall be reasonably informed. We are glad to have the assurance that the hon. Member is repenting and that there is to be a change in his attitude.
    It is correct, as the hon. Member said, that we carried defence expenditure on the capital Vote. I said so when I moved the Amendment. The reason we want the change and why we have moved this Amendment for a reduction from £75 million to £50 million is the continuous increase in expenditure which is now taking place. Because of that we think the time has come when this Bill should contain the exact figure of the amount which is to be spent for the normal needs of the Post Office, and that when extraneous expenditure is required for defence it should be carried on the defence Vote.
    For those reasons we are unable to withdraw the Amendment, and we shall divide the Committee.
    Question put, "That 'seventy-five' stand part of the Clause."
    The Committee divided: Ayes, 105; Noes, 74.

    Division No. 159.]

    AYES

    [12.35 p.m.

    Aitken, W. T.

    Beach, Maj. Hicks

    Boyd-Carpenter, J. A

    Allan, R. A. (Paddingion, S.)

    Bell, Ronald (Bucks, S.)

    Boyle, Sir Edward

    Alport, C. J. M.

    Bennett, F. M. (Reading, N.)

    Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)

    Amory, Heathcoat (Tiverton)

    Bennett, Sir Peter (Edgbaston)

    Bromley-Davenport, Lt. -Col. W. H.

    Ashton, H. (Chelmsford)

    Bishop, F. P.

    Brooke, Henry (Hampstead)

    Baxter, A. B.

    Black, C. W.

    Brooman-White, R. C.

    Beamish, Maj. Tufton

    Bossom, A. C.

    Buchan-Hepburn, Rt. Hon. P. G. T.

    Bullard, D. G.

    Harrison, Col. J. H. (Eye)

    Powell, J. Enoch

    Bullus, Wing Commander E. E.

    Harvey, Ian (Harrow, E.)

    Raikes, H. V.

    Butcher, H. W.

    Heath, Edward

    Robinson, Roland (Blackpool, S.)

    Channon, H.

    Hill, Dr. Charles (Luton)

    Robson-Brown, W.

    Clarke, Brig. Terence (Portsmouth, w.)

    Hinchingbrooke, Viscount

    Ryder, Capt. R. E. D.

    Cole, Norman

    Holland-Martin, C. J.

    Salter, Rt. Hon. Sir Arthur

    Colegate, W. A.

    Hudson, Sir Austin (Lewisham, N.)

    Scott-Miller, Cmdr R.

    Craddock, Beresford (Spelthorne)

    Hutchinson, Sir Geoffrey (Ilford, N.)

    Shepherd, William

    Crookshank, Capt. Rt. Hon. H. F. C.

    Johnson, Howard (Kemptown)

    Simon, J E. S. (Middlesbrough, W.)

    Crouch, R F.

    Lancaster, Col. C. G.

    Smithers, Peter (Winchester)

    Crowder, Sir John (Finchley)

    Legge-Bourke, Maj. E. A. H

    Smithers, Sir Waldron (Orpington)

    Cuthbert, W. N.

    Lindsay, Martin

    Spearman, A. C. M.

    Deedes, W. F.

    Low, A. R. W.

    Spens, Sir Patrick (Kensington, S.)

    Doughty, C. J. A.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Stanley, Capt. Hon. Richard

    Douglas-Hamilton, Lord Malcolm

    McAdden, S. J.

    Stuart, Rt. Hon. James (Moray)

    Drayson, G. B.

    McCorquodale, Rt. Hon. M. S.

    Thompson, Lt.-Cdr R. (Croydon, W.)

    Drewe, C

    Macdonald, Sir Peter (I. of Wight)

    Thornton-Kemsley, Col. C. N

    Duthie, W. S.

    MacLeod, Rt. Hon lain (Enfield, W.)

    Vaughan-Morgan. J K

    Elliot, Rt. Hon. W. E

    MacLeod, John (Ross and Cromarty)

    Vosper, D. F.

    Erroll, F. J.

    Macpherson, Maj. Niall (Dumfries)

    Wakefield, Edward (Derbyshire, W.)

    Fell, A.

    Markham, Major S. F.

    Ward, Hon. George (Worcester)

    Fleetwood-Hesketh, R. F.

    Mellor, Sir John

    Ward, Miss I. (Tynemouth)

    Fletcher-Cooke, C.

    Nicolson, Nigel (Bournemouth, E.)

    Webbe, Sir H. (London & Westminster)

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Nield, Basil (Chester)

    Wellwood, W.

    Galbraith, Cmdr. T. D. (Pollok)

    Oakshott, H. D.

    Williams, R. Dudley (Exeter)

    Gammans, L. D.

    O'Neill, Rt. Hon. Sir H. (Antrim, N.)

    Wilson, Geoffrey (Truro)

    George, Rt. Hon. Maj. G. Lloyd

    Partridge, E.

    Gough, C. F. H.

    Perkins, W. R. D.

    TELLERS FOR THE AYES:

    Grimston. Hon. John (St. Albans)

    Pitman, l. J.

    Major Conant and Mr. Studholme.

    NOES

    Albu, A. H.

    Greenwood, Anthony (Rossendale)

    Plummer, Sir Leslie

    Allen, Arthur (Bosworth)

    Hale, Leslie (Oldham, W.)

    Reid, Thomas (Swindon)

    Awbery, S. S.

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Simmons, C- J. (Brierley Hill)

    Ayles, W. H.

    Hastings, S.

    Smith, Norman (Nottingham, S.)

    Benn, Wedgwood

    Her bison, Miss M.

    Snow, J. W.

    Benson, G.

    Hobson, C. R.

    Stewart, Michael (Fulham, E.)

    Bing, G. H. C.

    Holman, P.

    Stross, Dr. Barnett

    Bottomley, Rt. Hon. A. G.

    Hudson, James (Ealing, N.)

    Taylor, Rt. Hon. Robert (Morpeth)

    Bowles, F. G.

    Irvine, A. J. (Edge Hill)

    Tomney, F.

    Brockway, A. F.

    Irving, W. J. (Wood Green)

    Viant, S. P.

    Broughton, Dr. A. D. D.

    Jeger, George (Goole)

    Wallace, H. W.

    Brown, Thomas (Ince)

    Johnson, James (Rugby)

    Weitzman, D.

    Butler, Herbert (Hackney, S.)

    Key, Rt. Hon. C. W.

    Wells, Percy (Faversham)

    Champion, A. J.

    King, Dr. H. M.

    White, Mrs. Eirene (E. Flint)

    Chapman, W. D.

    Lewis, Arthur

    Whiteley, Rt. Hon W

    Darling, George (Hillsborough)

    Lipton, Lt.-Col. M

    Wilkins, W. A.

    Davies, Ernest (Enfield, E.)

    MacColl, J. E.

    Willey, Frederick (Sunderland, N)

    de Freitas, Geoffrey

    McLeavy, F.

    Willey, Octavius (Cleveland)

    Doer, G.

    Mann, Mrs. Jean

    Williams, Ronald (Wigan)

    Ede, Rt. Hon. J. C

    Marquand, Rt. Hon. H. A

    Williams, W. R. (Droylsden)

    Edwards, John (Brighouse)

    Mikardo, Ian

    Winterbottom, Richard (Brightside)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Mitchison, G. R.

    Wyatt, W. L.

    Evans, Edward (Lowestoft)

    Moyle, A.

    Freeman, John (Watford)

    Orbach, M

    TELLERS FOR THE NOES:

    Gibson, C. W.

    Paget, R. T.

    Mr. Bowden and

    Gooch, E. G.

    Parker, J.

    Mr. Kenneth Robinson.

    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    12.45 p.m.
    Mr. Mikardo: I desire to refer to two points—one the general question of the level of capital expenditure envisaged in the Bill, and the other a point which was sought to be covered by the Amendment which, doubtless for excellent reasons, was not selected, namely, the extent to which the Postmaster-General is making provision for capital development for the maintenance and development of services which in this Bill, as in many others, are subject to Treasury control.
    On the first point, I think that, from all that has been said in the House from
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    time to time, nobody is under any illusion that there is a great stringency caused and many difficulties and hardships created, not merely for private persons, but for business enterprises as well, because of the shortages of capital development facilities in the Post Office.
    This applies, of course, particularly to the telephone service. From time to time, hon. Members on both sides of the House bring to the notice of the Postmaster-General cases in their constituencies where hardship is caused because of the inability of the Post Office to provide an adequate telephone service. Almost invariably the answer which the Postmaster-General or the Assistant Postmaster-General gives is, "We should very

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    much like to do this but we are short of lines or of other equipment or short of buildings for telephone exchanges. Present facilities are at full stretch; and we have not the allocation available to us to extend these facilities so as to make possible the provision of the facilities for which the Post Office is asked."
    Hon. Members have many representations on this matter from constituents, and I have not the least doubt that everyone of us thinks that the case of his constituency is worse than the case of the constituency of every other hon. Member. I wish to point out that the areas which have been hardest hit in this matter are the centres in which industry has been most rapidly developing during the past few years.
    These are not necessarily the same as the country's great industrial centres, because some of the great industrial cities are comparatively static in development and hence in the demand for telephones, as well as other facilities, in comparison with some lesser industrial centres which, although they are smaller both in size and in industrial activity, nevertheless are growing a great deal faster in industrial activity than the old-established great centres of British industry.
    This is precisely the case in my own constituency, where during the years since the war, largely because of the prosperity resulting from the industrial activity which arose under the wise leadership and beneficent provisions of a Government which hon. Gentlemen opposite so seriously condemn, there has been substantial industrial development, which in some cases has been unhappily limited, or at least hampered, by the inability of the Post Office because of shortage of capital equipment to provide suitable telephonic and other postal facilities; and there seems to be no great expectation that the situation is likely to be remedied in the near future.
    It seems to me that the provisions of the Clause which we are at present discussing hold out little or no hope for areas such as my constituency. At no time in the foreseeable future are the difficulties caused to commercial and industrial enterprises because of the inability of the Post Office to extend the telephonic facilities likely to be alleviated. It is a very grave problem indeed in an area like Reading and similar areas
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    which are, so to speak, industrially dynamic and where industry has been growing very fast. I have watched with interest, appreciation and great pleasure in my own constituency and the adjoining constituency of Reading North the extent to which the demands I have had for assistance in the provision of telephonic equipment——
    The Deputy-Chairman (Mr. Hopkin Morris): I do not think that the hon. Member can deal with the general administration of the Post Office under this Clause. He must confine himself to the capital expenditure involved in the Clause.
    Mr. Mikardo: I appreciate that, Mr. Hopkin Morris, but I suggest, with deference, that it is a small point of capital expenditure on which I am arguing. My point, if I may reiterate it, will, I think, show that I am confining myself, as I hope you will agree, strictly to the terms of the Clause.
    There is a great shortage of telephone equipment and the ability to make good that shortage is hampered by the difficulty which the Post Office has in providing new buildings and new lines, particularly new buildings for exchanges, which is due to the fact that the allocation of capital expenditure made under the general overall planning of capital expenditure by the Government is insufficient.
    I repeat that this is felt most stringently in areas of dynamic industrial development. I have with pleasure watched the rapid developments in some such areas, and I have seen the difficulties caused by insufficient provision of telephone equipment, happily due to industrial expansion. This expansion has belied the sometimes" expressed view that in the years since the war we have not had adequate industrial development.
    The Deputy-Chairman: By stretching the argument in that form the hon. Member could bring in almost anything relating to capital expenditure on the Clause. He may touch on these matters but he must not develop them.
    Mr. Mikardo: No hon. Member is more ready than I am to accept at once and without question the Rulings of the Chair, but, with great respect, Mr. Hopkin Morris, I believe I am confining myself rigidly to the subject matter of the Clause.

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    The question is how much money the Post Office has to build telephone exchanges, among other things. My view is that the Postmaster-General has not an adequate priority compared with other demands upon the nation's capital expenditure, and it follows from that that we shall continue to have a shortage of telephone equipment and facilities which will hamper the continued industrial development about which we are all anxious.
    However, in deference to what you have said, Mr. Hopkin Morris, I shall not pursue the point further. I feel that the Committee is adequately seized of it, and I am sure that other hon. Members will be able to give the Committee instances from their own constituencies in which similar conditions apply. I have in mind, for example, a company formed some three years ago which began to do a highly specialised piece of engineering work which, because of its highly specialised nature, was not readily available over a very large area, and the firm's products were very much in demand over a substantial area. But the firm could not always be available over that area because it had only a single telephone line.
    The telephone manager in Reading fully understood the position and showed the utmost sympathy but said that he just could not get the facilities with which to assist the firm and that there was no hope within the present capital programme of his getting the facilities as far forward as he could see. The capital programme which made that worthy gentleman so pessimistic about his prospects is enshrined in the Clause.
    My second point is that, in terms, the Postmaster-General in the Clause makes provisions subject to the control of the Treasury. Here we embark on a highly controversial matter which involves some difficult technical problems of interdepartmental relationships and of the general financial control over policy exercised by Her Majesty's Government. This involves, in a sense, the whole traditional machinery of financial relationships between the Treasury and the other Departments of State.
    On more than one occasion in recent years on Clauses similar to or worded identically with this Clause, hon. Members on both sides have expressed concern and doubt whether the arrangements
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    which we have now come to accept as traditional are necessarily best in the circumstances. When these arrangements first began to be put into effect, there was much logic in them. When public finance might not have been so meticulously and scrupulously conducted as it is at present, there was great need for one Department of State which had the full confidence of the Government to exercise general control over the expenditure of the remaining Departments. The whole of the machinery and organisation of Government has rapidly changed this century.
    The Deputy-Chairman: I do not know how wide the hon. Gentleman proposes to extend the debate, but he cannot review the whole constitution of the country on the Clause.
    Mr. Mikardo: I am not trying to review the whole constitution of the country, Mr. Hopkin Morris. I am merely drawing attention to the expression in the Clause:
    "…such sums …as may be required by the Postmaster-General, according to estimates approved by the Treasury …"
    If you like, Mr. Hopkin Morris, I will confine myself to discussing this in relation to the Post Office, but it would be unfair to the hon. Gentleman if I made him alone bear the burden of the problem, because it applies equally to every other Department of State.
    The Deputy-Chairman: The hon. Member's remarks must be limited to the Post Office alone.
    Mr. Mikardo: I will certainly limit my remarks to the Post Office, Mr. Hopkin Morris. The Postmaster-General has to get out estimates of capital expenditure. Nobody is better qualified to work out what money ought to be spent on capital expenditure by the General Post Office and in what form it shall be spent than the Postmaster-General. This raises the question as to the purpose of approval by the Treasury.
    The Treasury has not the admirable array of technical officers, universally acknowledged to be one of the best technical teams in the world, which is at the disposal of the Postmaster-GeneraL It is to be presumed that when the Postmaster-General directs his various technical departments to work out capital expenditure programmes he directs them

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    within certain limits to exercise economies, for in times of difficult economic conditions they must do without some of the things which they would normally like to have, and I feel sure that when the Postmaster-General gets his estimates he is satisfied that they represent a technically correct allocation of the resources at his disposal and a wise, carefully approved and economic expenditure of the money for which he asks.
    How on earth can the Treasury effectively check that? I have had something to do, not in the Post Office but in other spheres, with preparing estimates such as those which the hon. Gentleman's officers will prepare for his consideration. I know how much technical and organisational research has to go into the preparation of such estimates. I have no doubt that a great many manhours are devoted only to the preparation of such estimates by highly skilled people in the Post Office.
    1.0 p.m.
    What does the Treasury do when the Postmaster-General says, "Here is our figure of £29,733,465—so much for telephones, so much for postal services, so much for kiosks and pillar-boxes——
    Notice taken that 40 Members were not present;
    House counted, and 40 Members being present—
    Mr. Mikardo: If I may, without tedious repetition, I will briefly reiterate my last point in order to pick up the threads. I deliberately delayed for a few seconds from doing that in order not to inflict my views on the temporary migrant birds we have had with us in the last moment or two.
    Here, then, is an estimate prepared after grave consideration by a number of highly skilled people who have special knowledge which is probably not duplicated anywhere in the country. Along goes the Postmaster-General with his estimate. So much for new telephone exchanges, so much for pillar-boxes, so much for the repainting of telephone kiosks, so much for research into electronics, and this and that and the other— all carefully weighed and proved and assessed in the light of the materials available, the labour available and the technical skill available; all carefully
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    assessed in the light of the programme of research and development priorities.
    When he gets this document and it goes to the Treasury, what on earth can the Treasury possibly do with it? How on earth are they competent to say whether they approve or not? What they can say is, "We do not like your total of £29.7 million. You must cut it down to £21 million. "That is a bludgeoning and ham-handed way of going about the matter, but I am afraid that is what they do do. If they do that, would not it be so much more intelligent if they started off by saying, "Do not bring forward an estimate for more than £21 million, because we shall not approve it if you do. "Then the Postmaster-General can filter that information through to his departments in the preparing of their estimates and we could save a great deal of money and a great deal of skill.
    I know that in practice estimates and Treasury control of estimates work in both these ways, both from the start and ex post facto; but the principal control exercised in my experience, and I draw on my experience as a past member of the Select Committee on Estimates and the Select Committee on Public Accounts, is ex post facto control. No one would seriously disagree, and no one who believes as I do in overall economic planning would seriously disagree with that contention.
    We cannot allow spending Departments of the Government to spend money in the way they want, particularly in capital expenditure and particularly in expenditure involving the use of scarce labour and materials or resources for which we have to pay in foreign currency. That is a proposition which is indisputable. It is one thing for the Treasury to have the general oversight of allocations in this way, and it is another thing for them to barge about in the work of technical departments, after those departments have done a great deal of highly skilled work, and to come in like a bull in a china shop and say, "You have to cut that total, and that total and that total."
    Those people who have done the work have to do it all over again because they are told they have to have an overall shrinkage of 20 per cent. They have great difficulty in deciding how they shall make the saving directed by the Treasury; whether it shall be achieved

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    by abandoning a whole project altogether, and having only some of the projects, or whether they shall try to do the best they can within the Treasury directive with all the projects. I am bound to say—and this has been said in the House on a number of occasions about a large number of matters—that our experience in practice of this type of Treasury control over technical departments has not been very encouraging.
    The Treasury has an unfortunate habit of believing that when it moves figures from one piece of paper to another it has ipso facto moved men, bricks and steel from one place to another. A good deal of this so-called control exercised by the type of Treasury approval which is laid down in subsection (1) of Clause 1 of this Bill is paper control. I have seen many examples of highly skilled officers of Government Departments who felt greatly frustrated because they were faced with the job of interpreting simple sterling calculations into terms of men and materials; whereas what they wanted to do, and what they had probably done in the first place before the inexpert Treasury man came along, was to work out their demands properly in terms of men and materials and translate them into sterling.
    A plan which starts with the sterling figure is inevitably a plan which makes the sterling figure a sort of determinant of the use of physical resources, which is idiotic, because it results in all sorts of difficulties and complications and endless inefficiency. Either Treasury control is exercised with due knowledge of the organisational and technical problems involved, or it is not. If it is, that means the Treasury, within its departments, would duplicate the skill which the Post Office has in its departments. If that were so, it would be wasteful.
    The Assistant Postmaster-General will perhaps know better than anyone how great a shortage there is of the best people possessing that type of skill with which he has to work. If the Treasury, in order to check the work of his officers, were absorbing people with that skill merely to exercise a sterling control, it would be a wasteful business, and I would suggest to the hon. Gentleman, if that were the position, that he should go in for a sort of 20th Century rape of the Sabines, and
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    steal from the Treasury the technical people whom, having got them, he could put to a much better use than can the Treasury.
    If, on the other hand, it be not the case that the Treasury have people technically competent to check these estimates for the purpose of control, then of what use is their control anyway? This seems to be a problem which must be faced up to in relations between the Treasury and the spending Departments, above all in the field of capital development.
    I should have thought—and I put it no higher than this—that there was in present conditions room for some experimentation in this matter. It is true that the traditions of relationship between the Treasury and other Departments are old traditions. They had great validity when they were instituted. But even if the ultimate result of the interference were good, it would create some initial dislocation.
    Certainly, therefore, one would not want to pass some Act and overnight try to revolutionise the arrangements and do away with the type of control envisaged in this Clause. But I should have thought that there was room for trying out some new relationships and some new techniques of control. There is room for attempting to find whether some better way can be discovered in which the general desire which we all have for the Treasury to exercise broad control over capital expenditure could be reconciled with the desirability of not having accountants interfere with technicians.
    If we were to have some experiment, I should think that the Post Office would be the best of all Departments in which to try out a new technique. There are a number of reasons for that. It is a nationalised industry without the difficulties of relationship between the industry, the Minister and Parliament which exist in those industries where there is a public corporation standing between the industry and Parliament.
    The Post Office would be a good Department in which to try new techniques of relationship with the Treasury for the very reason that the Post Office has developed a high degree of technical competence in its research and development work. It is a Department which we could trust to try out

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    a new system without wanting to tie it to our apron strings for the whole time.
    One would have hoped that when the opportunity was taken to bring in this Bill there might have been consultations between the Postmaster-General and the Chancellor of the Exchequer to enable this development to take place without this type of direct Treasury control. Then we could have seen whether, in fact, we should gain some advantage from an extension of a new arrangement tried out in the Post Office to the other spending Departments of the Government, especially those dealing with highly technical matters.
    We regret that this expression:
    "…according to estimates approved by the Treasury…"
    has been left in the Bill. I hope that the Assistant Postmaster-General will take note of what I have said in an attempt to be constructive and helpful about a matter which is in a way a tribute to the Department which he administers. I hope that he will use some future occasion when he is introducing legislation upon these lines—if indeed it is he who introduces the next legislation for the Post Office—to discuss with his right hon. Friend the Chancellor whether we cannot do without the sort of expression which is in this Clause and to which I have taken exception.
    1.15 p.m.
    Mr. Barnett Janner: This Clause is important because we are, to a considerable extent, taking out of the hands of the Postmaster-General powers which he would be able to exercise to use moneys available to him. I am sure that he would like to use them for the benefit of subscribers and those who desire to have proper telephone arrangements.
    I represent a constituency which is extremely important from the point of view of production in the national interest. Leicester has for many centuries played a most important part in the commercial and industrial life of this country. It produces commodities which are essential to the community in the town, in the country and throughout the world. At present, it is contributing considerably towards the production of commodities which are essential for export purposes.
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    I give this introduction because, in circumstances of that kind, I am convinced that nobody in the Government or connected with the House of Commons would desire to place any impediment in the way of the prosperity of the industrial undertakings in that city or the necessary provisions for enabling that prosperity to continue and to advance. This is not a question of a dormitory town or a place in the country which has no special value so far as the general interests of the nation are concerned.
    I do not for a moment deprecate the districts which are not industrial in themselves, but it is most important today that in industrial areas we should have the fullest facilities not only for the factories to continue their work in an adequate manner but for the population to be adequately supplied with what is considered to be an absolute necessity for their life and their comfort so that they may be able to carry on their work in an efficient and proper manner.
    I put a Question to the Minister some time ago about the supply of telephones to those who had made application for them. I was given some astonishing figures. Many thousands of people in Leicester——
    Mr. Eric Fletcher: I put an exactly similar Question about the position in Islington.
    Mr. Janner: Islington has many virtues, but it would be improper for me to dwell at length upon the importance either of that constituency or of its Member.
    Mr. Mikardo: It has a better football club than Leicester.
    Mr. Janner: I should not say that it was a better football club—-perhaps it is a more fortunate club. We almost managed to succeed last season and I think we shall before very long. Provided that we do not have too much taxation imposed upon football, I have no doubt that we shall be at the top before very long. But that is beside the point, and I am sure that you, Sir Charles, will not permit me to enlarge upon it.
    When interrupted, generously and properly by my hon. Friend, I was saying that in Leicester we have this tremendous difficulty today, that thousands upon thousands of people are not obtaining proper facilities either for carrying on

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    their business or their domestic affairs, and that that is an act of frustration which not only interferes with the proper working of our very important factories, but also brings despair into the minds and hearts of a large number of the population.
    On housing, Leicester has a good reputation, and the only difficulties that have occurred have been when the Government have interfered with the progress which the council wants to make. The provision of houses to accommodate the workers has resulted in certain districts in Leicester being developed——
    The Chairman: The hon. Gentleman has already expressed his fear that he might incur my displeasure. He is beginning to do so now.
    Mr. Janner: Not your displeasure, I hope, Sir Charles. I appreciate your desire to keep the debate within the limits of the particular matter with which we are dealing, but it is rather material, as I will try to explain in a moment.
    We have a district—and on this point I have raised questions with the Assistant Postmaster-General—which is developing very rapidly and which is called Stockingfarm Estate. This estate contains some 3,000 people, including about 1,500 children, who are practically cut off from communication with the rest of the town as far as their needs are concerned, because there are no telephone kiosks in the place, quite apart from any question of telephones in the homes.
    These people are three-quarters of a mile away from the nearest telephone box, and, if a doctor is needed, if a fire occurs, if anybody is injured or if an emergency call has to be made, people have to go from this estate a distance of three-quarters of a mile before they can make contact with a doctor or contact any of the necessities which are required to meet the needs of an emergency.
    This is an extremely serious matter. Time after time I have pressed in this House that a telephone service should be provided, with at least one or two kiosks, so that these people may be able to have access to help in an emergency. It may be that, in a population of that size, a very grave emergency might occur, and it might even be a question of life or death, but it might also be something which is not quite as extreme as that.
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    This is of great importance to the industrial development of the town, because a workman from that estate might be required rapidly to deal with some intricate piece of machinery in one of the factories which may have gone wrong, and, at present, we just cannot get that person unless a taxi or some other conveyance is sent to fetch him. On the other hand, these people cannot get a taxi or even an ambulance to take a person who is seriously ill from that estate to a hospital or a doctor.
    I am not asking for a telephone in every house, although I am sure that the Assistant Postmaster-General would be delighted to be able to accede to such a request. There was a time when a considerable amount of advertising was devoted to calling upon people to have the telephone installed in their own homes, and pointing out the difference between the number of telephones in this country and the number in the United States and in other parts of the world. I am not asking for that; I appreciate that there are difficulties in the way.
    Today, it is not reasonable that the Assistant Postmaster-General, who, in his capacity as a Minister, has to deal with postal affairs, should have his hands tied in consequence of the fact that the money is not available for him to do what he would like to do. We want to help him so that when he goes to the Treasury, he will be able to put his foot down and say,"I am being tormented by hon. Members of the House of Commons and by the country, and you people at the Treasury must help me out of this situation. "In his heart of hearts, he knows that it would not be a question of torment that he would be considering, but purely a question of material assistance being given to him in consequence of the necessities that prevail in my constituency.
    What does the Minister have to do when Questions on this matter are put to him? I have told him, by means of Questions, what are the circumstances of this particular estate, and it is not only the case that this particular estate in Leicester is concerned. There are thousands upon thousands of other places which need telephones, and this is only one specific instance, clearly indicating how essential it is in that town for something to be done.

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    I have asked the hon. Gentleman what is the answer, and, in effect, I was told, "We are proposing to instal a new exchange at Belgrave, in May." Despite my own knowledge of the position, despite my despair at the knowledge that this situation prevails, despite the fact that my constituents are constantly asking be about this matter and begging me to do something, and in spite of my assurance to them of my belief that the Minister is sympathetic, he does not carry that sympathy sufficiently far to be able to make the Treasury do what he wants.
    What can one do in the circumstances? One has to wait in the hope that the promise that was made will be fulfilled. I do not say that it was an absolute undertaking or assurance, for it was couched in the language which is so familiar to the Minister himself, and which he can utilise to such advantage to cover up any tracks that may have to be covered up at a later stage. Certainly, both the House and myself came to the conclusion that he really meant to have that exchange ready in May, so that this position would be remedied.
    Therefore, I went back to my constituents and said to them, "There it is; there is a decent indication on the part of the Minister to do it, and he said that you shall have the new exchange in May." May comes——
    Hon. Members: It has gone.
    The Chairman: I must remind the hon. Gentleman that, if he continues in this tedious repetition, I shall have to ask him to resume his seat.
    Mr. Janner: I think that what I have said is absolutely pertinent to the point, and that——
    The Chairman: I did not say that it was not pertinent; I said that it was being repeated.
    1.30 p.m.
    Mr. Janner: Well, Sir Charles, it is——
    The Chairman: I said it must not be repeated.
    Mr. Janner: It is so necessary to repeat this so often——
    The Chairman: I am not going to have it repeated any more.
    Mr. Janner: I am sure you will realise my anxiety about it, Sir Charles, because I have asked the question so often. Not having been satisfied before, I wanted it to sink into the mind of the Minister. That is why I was constantly telling him in this speech, as before, what we want.
    Sir Sidney Marshall: Has the hon. Gentleman heard of M. Coué?
    Mr. Janner: If the Assistant Postmaster-General had heard of him, perhaps he would have seen him and found out what is happening. But I have no need of that. I have heard of him, and I appreciate the hon. Gentleman's point.
    I want the Minister to know why I am so anxious about this. I put the question to him in May, but what am I told now? In effect the Minister is saying, "I made a mistake, and it is impossible to do what I said I would do. You will now have to wait until the end of July. "I was not promised that the two kiosks to which he referred would be definitely installed at the end of July. Oh, no, I was only promised that they would be installed as soon as possible.
    The Chairman: I warned the hon. Gentleman, and I shall not tolerate any more about this. He will please resume his seat.
    Mr. Janner: With the greatest respect, Sir Charles, I have now come to the position which will prevail in July, and I want to know what is to happen then.
    The Chairman: I have come to my decision. The hon. Gentleman must resume his seat. Mr. W. R. Williams.
    Mr. W. R. Williams: I think it is indicative of the interest——
    Mr. Ness Edwards: On a point of order. May I, Sir Charles, with very great respect to you and to your knowledge of the Rules, point out that my hon. Friend was applying his argument to the purposes of this Clause? He was talking about capital expenditure. He was giving a chronological account of what was happening, and surely he should be allowed to finish his speech.
    The Chairman: I am here to carry out the spirit of the Rules, and in my opinion there was tedious repetition. I warned the hon. Gentleman, which I was entitled to do, and as he continued this repetition I asked him to resume his seat and called Mr. Williams.
    Mr. Ness Edwards: I tried to follow as closely as I could the way in which my hon. Friend was alleged to be infringing your Ruling, Sir Charles, and, quite frankly, and I say this with the utmost respect, I thought that the strain on your patience was to a certain extent over-ruling your judgment. I think that your Ruling is very hard and that, strictly speaking, my hon. Friend was in order.
    The Chairman: The right hon. Gentleman must not say that. It may be that I am a little more impatient than I am normally because I was up late last night, but I have given my Ruling, and I am sticking to it
    Mr. Ronald Williams: Further to that. point of Order. May I inquire, Sir Charles, whether your Ruling as to tedious repetition in this case means that my hon. Friend was deploying his argument in such a way that in your view he became guilty of tedious repetition, or does it mean that in putting the argument which he did he said something in relation to that argument in respect of other constituencies which would subsequently be regarded by you as tedious repetition?
    The Chairman: I think each case should be judged on its merits. I think it is possible to imagine tedious repetition in either of those circumstances.
    Mr. Janner: May I ask you, Sir Charles, to indicate in what respect, when a Member is trying to emphasise something of material importance to his constituency and to the country and is giving an illustration, he is guilty of tedious repetition? I was referring to something which was entirely different from what I had been referring to before, and I was trying to show at that stage that in spite of the repeated efforts I had made to get this matter dealt with we were now only dealing with what might happen in July on which I wanted an assurance from the Minister. With the greatest respect, Sir Charles, I would ask you to reconsider your decision, because I have some very
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    material matters to contribute after this point has been dealt with and I think I should be permitted to do so.
    The Chairman: I quite appreciate the point the hon. Gentleman was making, but I did warn him and he made no attempt to carry out my Ruling, and I am not going to have the matter discussed any further.
    Mr. W. R. Williams: As I was about to say before that interesting discussion took place, this debate seems to me indicative of the great interest which hon. Members on this side of the Committee, at any rate, are taking in the work of the Post Office. I thought that hon. Members opposite would have been equally interested in the work of the Post Office, but apparently I am to be disappointed in that.
    I have been struck by one or two important contributions that have been made by hon. Members on this side, and I want particularly to refer to the contribution made by my hon. Friend the Member for Reading, South (Mr. Mikardo). I feel quite sure that the administration and the workers in the Post Office will be interested in some of the suggestions he has advanced about the control of the Post Office. I know that for many years there has been a measure of Treasury control over the administration of the Post Office and many views have been expressed from time to time as to the amount of control they should have or whether there should be any control at all.
    My hon. Friend the Member for Reading, South suggested that it might be useful if an experiment were conducted in the Post Office to find out exactly what control, if any, should be exercised by the Treasury. There are quite a number of people who believe it would be in the interest of the efficiency, administration and organisation of the Post Office if what is termed the" dead hand of the Treasury" were removed from it. I do not want to pursue that line any further except to suggest——
    Mr. Ness Edwards: My hon. Friend would be quite in order.
    Mr. Williams: Yes, I know I should be in order, but I have several reasons for not doing so. I am satisfied that there is

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    something in the suggestion made by my hon. Friend the Member for Reading, South to which the Minister might find it useful to give further consideration. Even if he is not prepared to have an experiment on the lines suggested by my hon. Friend the time is ripe for a close study of the proposal in conjunction with the Treasury.
    I have listened to many debates on Post Office affairs in the House of Commons over the past 25 years. I have been disappointed in many statements that have been made from time to time by successive Postmasters-General. But I doubt whether, hitherto, I have been more disturbed than I am with the statement which the Assistant Postmaster-General made on Second Reading of this Bill. We are all disturbed at the lack of legitimate development in the Post Office and the lack foreshadowed in this Bill.
    I have never known a Minister come to this Chamber with such a strong case for more money for development of his Department and yet have to admit that he can do nothing. I should like to read one or two statements which the Assistant Postmaster-General has made, and, at the same time, to congratulate him upon making them openly in this Chamber. He was courageous in doing that. First, he said:
    "The chief point I want to make in this debate, compared with which everything else is secondary, is that the sum we are providing today and are likely to be able to spend in the foreseeable future is quite inadequate for the new developments which the Post Office would like to undertake,"—
    And he goes further than that—
    "or even for 'us to be able to guarantee that we can maintain the service at present standards."
    In other words, if the hon. Gentleman's statement is correct we can look forward to a serious deterioration in the standard of the services that the Post Office will provide to the British community in the next five years. These are very serious statements, but the hon. Gentleman made almost as serious a statement on the telephone side. He said:
    "However, it is on the telephone side that the restriction on capital development may have a devastating effect,"—
    He has been picking his adjectives with great force—
    "because what is done or not done now will affect the standard of service we can give
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    the public over the next four or five years."— [OFFICIAL REPORT, 31st March, 1952; Vol. 498, c. 1192–.]
    I suggest to the Assistant Postmaster-General that four or five years is a most conservative estimate and that the damage that is being done by this lack of development of Post Office services, especially on the engineering and telephone side, is almost irreparable and that it will take the best part of five, 10 and possibly 15 years to recover the position this country ought to be in from the point of view of those services.
    I congratulate the Minister upon the courage with which he has put these facts before us. When he comes to reply to this debate I should like him to tell us whether he was as courageous in the presence of the Chancellor of the Exchequer. It seems to me that on his own statement the hon. Gentleman has an absolute case for telling the Chancellor that by limiting the expenditure on the Post Office in all its branches to £50 million—as I believe it will be for purely Post Office purposes—he will cause irreparable damage to the only system of communications he has available at a time when national recovery is of paramount importance. I have said in this Chamber on more than one occasion that I regard the Post Office, in all its functions, as an integral part of industry.
    Mr. Paget: And of defence.
    Mr. Williams: Yes, and of defence. I suggest that an indifferent or imperfect telephone or telegraph service is as much sand in the wheels of progress and prosperity of this country in the economic and industrial field as if one refused to supply equipment for one of our great factories. The case put forward by the Assistant Postmaster-General is a weak one. I ask him to convey to the Chancellor from this Committee the feeling that we have reached a point in the lack of development in the Post Office which is not only in danger of seriously injuring the Post Office itself and the people who work there but of seriously injuring the economic and industrial position of this country. In other words, if he is not careful he will cut off his nose to spite his face.
    Mr. Gammans: Not my face.
    1.45 p.m.
    Mr. Williams: The Minister says it is not his face. [An HON. MEMBER: "He lost it long ago."] I never try to be rude in debate, but the hon. Gentleman is responsible for the Post Office, whether it involves his face or not, and in a year or two from now if he is still in office he will be carrying the blame for some of the things that are now happening in the Post Office.
    The hon. Gentleman had plenty of courage when he was in Opposition and he has since learned a lot more wisdom from the point of view of the Post Office. Therefore, I hope he will have the same courage to go to the Chancellor and say, "You have reached the limit and if you go beyond this limit you will endanger the stability of British industry and economy."
    I repeat that if we have an indifferent or imperfect telephone, telegraph and Post Office service we shall put as much sand in the wheels of progress and prosperity as if we were cutting off supplies of essential industrial equipment. It is very interesting to listen to hon. Members on both sides of the Committee speaking of the Post Office from the point of view of the correspondence that they receive from their constituents. My hon. Friend the Member for Leicester, North-West (Mr. Janner) spoke from that point of view. I am sorry if I have in any way helped to curtail the great case he was making on behalf of his constituents and I agree that the telephone to which he referred is important.
    Mr. Janner: It is not only important. I have attempted so often to have it installed there and been unable to do it that there is consternation in the town in consequence.
    Mr. Williams: I can understand my hon. Friend's feeling. If I were in the same position and had been treated so discourteously I should have felt quite "het-up. "But he cannot expect me to feel so "het-up" about his case as he does. I quite understand hon. Members feeling concerned about the telephone, but as an old telegraphist who used to take great pride in his work some years ago I feel concerned about the telegraph.
    There are great scientific developments in telegraphy and great possibilities on the telegraphic side of increasing the
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    efficiency of the service beyond anything that I can indicate at the moment. I want to know how far the limit of £50 million will affect the progress of automatic switching on the telegraphic side. I know that there is a good deal of work to be done and it is work which will be in the interests of the prosperity and recovery of this nation. However, I am afraid that with only £50 million available for all purposes the hon. Gentleman will not carry on with the greatest speed that interesting and important experiment.
    I was interested in what the hon. Gentleman said during the Second Reading debate on the subject of Post Office buildings:
    "On the postal side many of our buildings are out of date and grossly overcrowded."— [OFFICIAL REPORT, 31st March, 1952; Vol. 498, c. 1193.]
    That is an understatement. The bulk of sorting offices in some of the larger coastal areas are not fit to be called reasonable offices for people to work in.
    I have seen places where it is a wonder to me, with my knowledge of Post Office matters, how they get a clearance of their night mail despatches under the conditions in which they are working. There are offices in London which I have had the privilege of visiting which made me wonder how the staff are able to get through their work. The buildings have not been altered for 20, 25 and 30 years and yet they are called to stand up to the present day increase of traffic, to new services, and so on.
    If the Assistant Postmaster-General will give me his attention for a few more moments, I want to say something in connection with mail robberies. I shall be guarded in what I say because they are delicate matters and I do not want to say anything which might be unfortunate from any point of view. The Minister ought to be looking carefully into the question of new buildings in some towns from the point of view of security.
    I shall not say more than that, but if the Minister is wise he will read between the lines of what I am saying today with a view to starting an investigation to see how far he can afford, from the point of view of security, some of the buildings he has, and the primitive arrangements which have to be made in some of those

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    buildings to meet the day to day requirements of the service.
    Some of these post offices have been up for the best part of 50 years and how the staff have suffered them, I do not know. The late Sir Kingsley Wood decided to have brighter post offices but, characteristically, he decided that everybody must know about the improvements he was making. So he decided to make them in full public view and, for his purpose, he took the public counters. But Sir Kingsley Wood never looked behind the scenes in the Post Office. Had he done so, he would have required millions of pounds to make some of the present sorting offices decent for the people working there and bring them up to modern efficiency.
    I do not want to take the time of the Committee unduly—[HON. MEMBERS: "Go on."] My hon. Friends are very kind and I appreciate it but, as I said before, there are other reasons why I must try to bring my remarks to a close. However, I want first to deal with the public counters. We have heard a great deal about the telephone and a great deal about the postal side, but I want the hon. Gentleman to look at public counters.
    If there is one aspect of Post Office work which has increased owing to the demands made upon it by social legislation, it is the public counter. Practically nothing happened in this country now with which the Post Office clerk at the counter is not concerned. All sorts of conditions are imposed by all sorts of Ministries on the clerks at the counter. They are veritable encyclopaedias of knowledge, not only on matters affecting the Post Office, but on Government Departments as well, and they are expected to know all this.
    There is one point that has never had the attention that it deserves: the extension of some of those public counters to meet modern requirements. If hon. Members care to go to their own branch offices, they will bear out the truth of what I am saying. Often three, four and sometimes five people work in a room which is not conducive to efficiency and speedy working.
    Those are some of the problems I want to draw to the attention of the Committee and the Minister, and there is one more before I forget it—welfare accommodation
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    for the staff. We have heard so often from successive Postmasters-General, "We admit that in many offices the welfare accommodation is not good but the time is not quite opportune to put it right", and they have gone on from year to year without improvements or changes being made. There comes a limit to the patience of people who have to work in these offices, and I am satisfied that there is a case now for an urgent review of many of these welfare offices, retiring rooms and washing places in many post offices.
    Finally, there have been legitimate demands of a social character made by workers in the Post Office. For instance, postmen believe that they have a case for an increase in their holidays. Some of them have been working in the Post Office for the best part of 30 or 40 years and for a long time they have been looking forward to an increase in their holidays. Nothing has happened. I understand that a claim put forward recently has been rejected, ostensibly on the ground that we cannot afford to meet it.
    For all those reasons I sincerely hope that the Assistant Postmaster-General will go back to the Chancellor. He has a good case on his own statement. He has a still better case on the evidence which hon. Members have given him to day. If I were the hon. Gentleman, and if the Chancellor is not prepared to concede some more for the development of this essential service, I should be inclined to resign my post.
    I do not see how a Minister, after making the statement he made on the Second Reading, can come back to this Committee and say, "Despite all I know about the situation, I will still accept a fee. "I think the hon. Gentleman has a good case. I hope he has the courage which is in proportion to the case he has to put forward.
    Mr. Gammans: On the assumption that the Committee wants to get on with the business, perhaps I might reply at this stage.
    Mr. Bing: Would the hon. Gentleman excuse me if I interrupt for one moment? Does his reply at this stage mean that we shall not have any representative of the Treasury here to speak?
    Mr. Gammans: I am speaking on this Bill and I hope the hon. and learned Gentleman will be satisfied with what I have to say.
    Mr. Ness Edwards: After all, the name of the Financial Secretary to the Treasury appears on the Bill as well, and if the hon. Gentleman is standing between this Committee and the Treasury, he will have to take the bumping for it. I noticed that the Financial Secretary came in a few moments ago, but when he heard the voice of my hon. and learned Friend, he rushed out. I hope this will not be the final word to be said from the Government side on the Question that the Clause stand part of the Bill.
    Mr. Gammans: I am speaking at this moment not merely on behalf of the Post Office but on behalf of the Government. I hope I shall not be expected to enter into the controversy of whether Leicester is better than Islington, which was raised earlier this morning. If I must judge, I must adjudicate in favour of Islington for the good and sufficient reason that it is next door to Hornsey.
    2.0 p.m.
    Mr. Paget: This does seem to be a very important matter. Is that the way in which the Minister really discharges his duties?
    Mr. Gammans: The hon. Member for Reading, South (Mr. Mikardo) introduced this particular matter this morning, but he is not here. Having asked a lot of questions, he has now disappeared, and I must reply in his absence. I hope he will do me the honour of reading in HANSARD what I have to say.
    Lieut-Colonel Marcus Lipton: In defence of my hon. Friend the Member for Reading, South (Mr. Mikardo) I can say that had he known that the hon. Gentleman was going to attempt to wind up on this Clause, he would have made it his business to be here.
    Mr. Bing: On a point of order. Would it be possible for you, Mr. Hopkin Morris, to instruct those in charge that when the Minister gets up to speak the fact should be announced on the enunciator? We have noticed that that has not happened. That is no doubt why so few hon. Members on the opposite side are present
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    to hear the hon. Gentleman's speech. I am certain that if they had known he was speaking they would have been here.
    The Deputy-Chairman: That is not a point of order.
    Mr. Hobson: Is it to be assumed, when the House is in Committee and the Assistant Postmaster-General gets up to reply, that he is, of necessity, closing the debate?
    The Deputy-Chairman: At the moment the House is in Committee. That is not a point of order.
    Mr. Paget: Further to the point of order which was put to you and which seemed to me to be one of some importance, you are in control of this Committee and of its management, as Chairman, and we are asking that certain instructions should be given to those in charge of the enunciator.
    The Deputy-Chairman: The hon. and learned Member is mistaken as to the extent of my powers.
    Mr. Gammans: I hope that the hon. Gentleman who raised the point about the hon. Member for Reading, South will not take what I said too seriously. I imagine the hon. Member for Reading, South has gone out to lunch, and I envy him. I suggested that, as he was not here, I hoped that he would read what
    I said in HANSARD. I see that he is now present.
    Mr. Mikardo: I participated in the debate this morning and I was here from 11 o'clock to 1.25 p.m. Then I went out for lunch, but the moment I saw the hon. Gentleman's name appear on the indicator, I left my lunch and returned in order to hear him. I think he is being a little ungenerous.
    Mr. Gammans: I do not wish to be ungenerous. If the hon. Gentleman feels badly about what I said, I will willingly withdraw it. I feel it is a very small point.
    The hon. Member raised two points. The first was with regard to the inconvenience caused by the shortage of telephones. That was a point which was raised by other hon. Members, in particular the hon. Member for Leicester, North-West (Mr. Janner). The hon. Member for Reading, South made the point

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    that the telephone shortage was especially serious in areas which have been developed industrially in comparatively recent years. That is true. I do not wish to go over the ground which I covered in the Second Reading debate, but I would say, straight away—and the hon. Member for Droylsden (Mr. W. R. Williams) made it clear that I was being very frank—that we regard it as deplorable that it is not possible to go on with telephone development for civilian purposes on the scale which the occasion demands.
    As I told the House then and as I tell the Committee now, we are going to run into a very serious situation, not so much generally throughout the country as in particular areas. As I said earlier this morning, there are some areas where the telephone exchanges are completely filled and where it is not possible to put in any more telephones without building new exchanges, and no new exchanges are going to be started this year. That is the tragedy of the situation and I hope that the Committee will realise it and will have sympathy with me and the country in view of what that means.
    If only it were possible to fulfil these telephone demands, no one would be more pleased than I or anyone else holding my job. Incidentally, about half my correspondence would cease if I said I thought we could make serious inroads into the enormous back-log of arrears in the near future; but we are not going to be able to do that, and I thought I would not be frank if I did not reiterate it.
    I hope it is not necessary for me to explain once more, as I did on Second Reading, how it is that people in a particular area get a telephone more quickly than those in other areas. Hon. Gentlemen write to me and tell me that a particular applicant cannot get a telephone although he has been waiting for one for five years, while another applicant in a different area has had one after waiting only for three months. There is an explanation, but it is a technical one and I do not want to go over it again. Hon. Gentlemen will see it in the report of the Second Reading debate if they will do me the courtesy of reading it. It has nothing to do with finance, but there is a technical explanation. It is
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    dependent upon the way the telephones are developed.
    A very intriguing point was raised about Treasury control. I have a tremendous amount of sympathy with what has been said about that. I am sure there is not a single hon. or right hon. Gentleman who has occupied a Ministerial position who has not sympathy with what was said on this point. It is the dream of Ministers not to be subject to Treasury control; but the question was raised as to why the Post Office, in particular, had this Clause in this Bill. I think the hon. Member for Droylsden knows the answer; in fact he referred to it. It is the peculiar historical position of the Post Office. I do not want to go into that. Even if there were time to go into the question, it would not be appropriate on a Bill of this nature.
    As the Committee know, Her Majesty's mails have always been in a special category. If one regards the Post Office as a nationalised industry, it is the only industry which has direct representation in the House. Successive Governments have accepted the fact that it may be illogical—and I think that in many ways it is—but much of our political life is illogical, and whether or not this is the moment to change it, I do not know. I do not think there is much point in arguing it now. Certainly it would not arise in a Bill of this sort.
    Whether or not we argue the merits of Treasury control as applied to the Post Office it certainly has not much relevance in present economic and financial circumstances. Everybody is subject to Treasury control. It is not only the Post Office. All branches of industry—nationalised or private—the Post Office, the Coal Board, and the railways are all subject at this moment to the control of the Treasury in regard to capital expenditure. So are we all, as individuals. None of us can build a house at this moment, even if we have our own money to use. We have Treasury control over the way we spend our income. We cannot spend more than £25 if we go abroad for a holiday.
    The Deputy-Chairman: This discussion seems to be getting a little wider than the question of the Clause standing part of the Bill.
    Mr. Bing: On a point of order. I feel that the Committee as a whole ought to protect the Assistant Postmaster-General. It seems to me that he was trying to explain the otherwise unexplained absence of his colleague and to make some excuse for Treasury control. The fact that the argument does not appear to be particularly apposite is only what one would expect from the hon. Gentleman, but surely that is no reason for ruling him out of order?
    Mr. Gammans: I hope I have satisfied the hon. Gentleman on that point. I will leave it. I regret as much as any other hon. Member that we cannot spend more money on the development of the Post Office. I hope I shall not be accused— although I think I was accused by one hon. Member—of not pressing the Post Office case as strongly as I ought to do.
    That is a ridiculous charge to make against any Minister who wants to spend a little more money. But we have to realise that it is no good, on the one hand, saying: "I agree that we have to spend money on defence", and then turning round and saying" I object to the fact that the Vote of some particular department is cut for defence purposes". It is not as illogical as that. If hon. Members think that a sum of money ought to be spent by the Post Office for the development of civilian needs, they ought to have the honesty to say that they would do it at the expense of the defence programme.
    However, I think the whole argument is completely irrelevant. The Government—and not only this Government but previous Governments—were in the dilemma that they had to choose between whether they would allot capital for defence purposes or for civilian needs. There is no doubt that in the world in which we live today, with all its dangers, both this Government and the previous Government took, regretfully, the right but unpopular decision. That is the position which I should like the Committee to be quite clear about.
    There is no reluctance on the part of the Government to spend money on the civilian needs of the Post Office. There is certainly no hesitation whatsoever on the part of my noble Friend and myself to press the case for the Post Office. But we, like so many people in the
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    world, are victims of the age in which we live.
    Mr. Hale: I had the misfortune some weeks ago to spend a night in a well-known hotel in Manchester. On the Sunday morning I pushed the bell for two hours without a reply, and finally an elderly and unfriendly chambermaid arrived. I said, with my usual moderation of language, "The service here is not very good. "She replied, "Ain't it shockin'?" That is precisely what we have heard from the Assistant Postmaster-General—"Ain't it shockin'?" "Ain't it a blinkin' shame?" There was a time when there was in the House a David Hume who was prepared to stand up to the Treasury and criticise every item of expenditure approved by the House, even criticising the spending of half a crown if that half a crown were wrongfully spent.
    Now we have the pathetic, miserable and frightening spectacle of a Minister of the Crown getting up here and saying, "It is not my fault. I want to do it but the Treasury will not let me." He talks of the danger of some amorphous body of remote individuals who would appear to rule this House of Commons. The truth is that, as far as he is concerned, the Treasury is his right hon. Friend the Chancellor of the Exchequer, and the hon. Gentleman is out every weekend asking people to support the Chancellor of the Exchequer and saying, "This is our policy, and we are saving the £ and the country." The Assistant Postmaster-General comes here and says," It is not my fault, my noble Friend and Gentlemen are carrying on with the job. We are going to go on drawing the salary, we are going to continue to take the profits of the office, but we cannot do anything about it because the Chancellor will not let us."
    Let us have a look at the figures, because the position is really deplorable. The Assistant Postmaster-General asked us to read his speeches, which we have done. There is not so much in them. There is no information at the moment. The only thing on which I can congratulate him is that he manages to double the contrasting roles of two well-known characters in literature. When he talks to the Committee, as he tries to do to

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    support his own argument, about patronage, he reproduces the character of a Mr. Pecksniff completely, and then when he tries to be conciliatory he is Uriah Heep, with all the apologies, with all the mock humility and with all the motions, even in the very rubbing of hands. That is the spectacle we have had all day.
    2.15 p.m.
    What is the Clause which we are considering? It is a proposal that we should approve a sum of £75 million, of which £25 million is to be spent by somebody else, on something else, which is not identifiable and which might be anything. The hon. Gentleman cannot tell us very much about it, but it does involve something to do with defence. In the early stages of his speech on Second Reading, he said that the £25 million would not be for civilian use, but a little bit might be left over, though he could not tell us how much or when. Later on in his speech, he said,"There will be some left over, but I cannot particularise. It will be a bit more than I said earlier."Today it has gone up further. It is the only share with which the hon. Gentleman is connected that has gone up with such a boom as a result of defence expenditure.
    We are told that this House of Commons has got to accept that it cannot discuss defence. That is a remarkable change in attitude, because it is only a few months since the Prime Minister was most anxious to have a secret debate on defence and tell us everything; he was going to tell us the details of where the money was spent and how and why. It was only when we pointed out that that would involve a large number of elderly peers being released from a lunatic institution to listen to the information, and that there would be no guarantee what they would do with the information when they got it, that the proposal was abandoned.
    We are told that we cannot be informed of anything about that £25 million. In his speech on the Second Reading the Assistant Postmaster-General said that 92 per cent. was to be spent on telephonic communication. What I want to ask him is whether that is 92 per cent. of the £75 million or 92 per cent. of the £50 million. It would be rather surprising if 92 per cent. of the £25 million was to be spent on telephonic communications for defence, and if so, how and why? My right hon. Friend the Member
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    for Caerphilly (Mr. Ness Edwards), whose knowledge and capacity I do not doubt in this matter, guessed at once what it is all about, and I should have thought that it was not one of those secrets which would remain obscure to those who know about the Post Office.
    I am told that a great deal of money has been spent by the Post Office on the provision of controlled radio service in competition with private industry, and that that is where a great deal of the money goes. The Assistant Postmaster-General todays tells us that telephones are very important and, indeed, I think in the past he has called our attention to that on many occassions. In the days when he was in Opposition he was a constant critic of the efficiency of the Post Office. Indeed, that may be the explanation of how he got his present post, because it is rather remarkable how he ever got the post. I expect it was on the assumption by someone higher up that this constant critic of the Post Office might be the new and virile mind who could deal with these problems and give us something new.
    The hon. Gentleman has come to this Committee and made a deplorable series of observations in which he said, among other things, that the telephones were getting worse and were running down. At one stage he intervened in today's proceedings to say—and he was almost advertising self abasement as a virtue—that the telephone system had got into a frightful mess and we were reaching a crisis like the crisis we had about the dried eggs a few years ago. He added," I am not prepared to do anything about it. "Now he says" I would like to do something about it. I am really keen and would like to be an efficient Assistant Postmaster-General, but the Treasury will not let me."
    It really is a fantastic thing to say to this Committee, and it is a monstrous approach to come to this Committee and say," The Treasury have decided this, and so it is not worth while discussing it." It is a monstrous approach to come here and say," I am not prepared to give any information. I am not prepared to give any help. I am not prepared to say what we shall do, because somebody at the Treasury"—we do not know who —"has said it cannot be done."

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    We do not even know whether the hon. Gentleman sent a letter or a secretary to the Treasury, or whether he suggested to the Treasury that something ought to be done about this impending crisis in telephones or the economic breakdown that is coming in the telephone system. It seems he is content to allow this failure of a vital public service because of a Treasury ukase.
    There are a number of matters connected with this upon which at some time we shall have to have some information. I am surprised to learn that that 92 per cent. of the capital expenditure of £75 million or £50 million is on telephones alone; and there was another very surprising statement when the hon. Gentleman opened his speech in the Second Reading debate. He said that we had connected a lot of farmers in the. last year—under the Labour Government— and that we should not connect many more now. Some farmers live a mile and a half away from a telephone. In other words, the proposition the hon. Gentleman was—and is—laying down is that the greater the need the less urgent the service—the farther people are away from telephonic communications and the more necessary it is in the isolated communities to have some communications, the less chance they have of having them.
    I have never been completely satisfied on this question of the allocation of telephones, not even when my right hon. Friends were on the Treasury Bench. The Post Office were exceedingly coy as to how they spent the allocation on telephones or how they administered the telephones. One did not know, for instance, whether a bookmaker was or a clergyman was not on the telephone, though I remember that on one occasion we were told that both were to share a line.
    The Deputy-Chairman: The question of telephones comes up more properly on the Post Office Vote. Here we are dealing with an allocation of money.
    Mr. Hale: I am much obliged, Mr. Hopkin Morris. I was trying to make cut how this £46 million that is to be spent on telephones is to be spent. That seems a modest sum that we could discuss a little. All I am asking at the moment is
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    how much it is proposed to spend and how it is proposed to spend it. Before we pass this Clause, we are entitled to know what the hon. Gentleman is going to do with the £46 million, how it is to be allocated, how much goes to cables, how much goes to general construction, how much goes to the remuneration of the Assistant Postmaster-General, how much goes to the construction of new exchanges.
    In Oldham we have had a quite frightening thing. A senior official at the Post Office some months ago addressed the Rotary Club and assured us in Oldham that by now—by this very month of June, 1952—Oldham's needs would have been dealt with; that there would be no waiting list for telephones at all. My information is now that the telephone waiting list is bigger than it has ever been, and that things are getting worse every moment. All I am asking, therefore—and I am sure, Mr. Hopkins Morris, you will share my anxiety about this— is how much of this money is to be spent on new telephones.
    Lieut-Colonel Lipton: My hon. Friend has referred three times to £46 million. May I assure him that I have gone through all these figures with all the arithmetical accuracy of which I am capable and that the figure cannot be more than £44 million? I am sure he would not like to make an error of £2 million—or give £2 million away.
    Mr. Hale: I am very much obliged for my hon. and gallant Friend's assistance, and I do not think his mathematics are accurate. If his mathematics are accurate, then the Assistant Postmaster-General's figures were incorrect, because the Assistant Postmaster-General did say that 92 per cent. was to be allocated; and 92 per cent. of £50 million—I am giving the Assistant Postmaster-General the benefit of the doubt on the £25 million: a fairly generous gesture at this stage—92 per cent. of £50 million is £46 million. It may be that the Assistant Postmaster-General will think about this and say just how this comes about.
    Lieut-Colonel Lipton: I can explain.
    Mr. Hale: I should be very glad if my hon. and gallant Friend would.
    Lieut.-Colonel Lipton Lieut.-Colonel Lipton rose——
    The Deputy-Chairman: Order. I think that there must be a limit to this discussion.
    Mr. Ness Edwards: A limit?
    The Deputy-Chairman: We cannot discuss the provision of telephones in every division. Surely that is a matter to raise on the Post Office Vote. What this Bill is concerned with is a capital sum allocated for the purposes set out in the Clause.
    Mr. Ness Edwards: Further to that point of order. We are now debating on this Clause the spending of a capital sum. That capital sum is being spent on the provision of telephones. I should have thought that it would have been in order to discuss on this Clause the provision of telephones in any part of the country, and, with great respect, Mr. Hopkin Morris, I really cannot understand why it is that the laying of cables or the building of telephone exchanges in a particular place does not come within the purview of the spending of this capital sum.
    The Deputy-Chairman: Yes, it can be touched upon—the question of the money to be spent on telephones; but the provision of telephones throughout the country, surely, is a matter that should be raised on the Post Office Vote, and not on this Bill and the question of the allocation of a capital sum.
    Mr. Ness Edwards: After that, Mr. Hopkin Morris, we should like to know what is the degree of touchability in this matter. Although it may be relevant to the Post Office Vote, there is nothing in the rules of order which prevents its being discussed on this Bill, because this is a special provision for a special purpose.
    The Deputy-Chairman: I agree that it may be very difficult to draw the line, but the line, surely, must be drawn somewhere, otherwise we could discuss the whole administration of the Post Office on this Bill. [HON. MEMBERS:" Why not?"] I do not think that that is in order on this Bill.
    Mr. R. Williams: Do I understand, Mr. Hopkin Morris, your Ruling to go as far as this, that, notwithstanding the fact that the most ghastly results may
    710
    occur in industrial areas as a consequence of matters arising out of this Bill, we should not put forward arguments relating to the particular areas?
    For instance, in the very important industrial area of Wigan, certain results will follow as a consequence of the failure to provide proper telephonic communications, and that is a matter which my constituents feel very much concerned about, particularly when they are being asked by the Government to make great efforts to increase production. In those circumstances, surely, this is the opportunity to discuss this very matter, because this is the very Bill that will directly affect that issue.
    Mr. Paget: Further to that point of order. I was hoping, Mr. Hopkin Morris, to catch your eye later—I have been trying to do so—with regard to the position of Northampton. I have a whole bundle of correspondence here from the Post Office on precisely the question of the capital allocation for a telephone exchange in Northampton. It is the capital which we are being asked to vote, and if this is not the relevant moment to discuss on the Floor of this Chamber that capital allocation, which I have been discussing for years in correspondence, I respectfully say that I do not see what is. We are being asked to vote that very money.
    The Deputy-Chairman: That is perfectly true. We can discuss the capital allocation provided under this Bill, but in my view the proper time to raise the other matter is on the Post Office Vote.
    Mr. Paget: Which other matter?
    The Deputy-Chairman: The whole telephone question cannot be discussed. This is simply the question of capital expenditure to enable the telephones to be available, and this is the money for that.
    Mr. Bing: Further to that point of order. I think the Committee finds itself in this difficulty, that we are here discussing the allocation between areas. The Assistant Postmaster-General did give the Committee this assistance, that he said that if he had to judge between allocating capital expenditure to Islington or to Leicester he would choose Islington because it was nearer his own constituency.

    711
    That, at any rate, is a guide to the principle upon which the Government proceed.
    The Deputy-Chairman: Whatever be the principle upon which the Government proceed, I do not think that that would be relevant either to this Clause.
    Mr. E. Fletcher: May I put to you, Mr. Hopkin Morris, what I think is the major matter which exercises the minds of all hon. Members and affects the whole future discussion of this Clause. When the Assistant Postmaster-General was here, he dealt with the relative allocation of money as between Islington and Leicester. One of the matters I am very hopeful of having an opportunity of discussing, if I am in order—and, I submit with great respect, I shall be—is this. One of the difficulties in Islington and Stoke Newington is that we have a manual telephone exchange. I want to know if any of this money is to be allocated to making it automatic.
    2.30 p.m.
    The Deputy-Chairman: That is precisely the point I was making about the line that must be drawn as to what we can now discuss about matters to do with the Post Office. The hon. Member's point is not covered by what is intended under this Clause. This Clause deals with the allocation of capital.
    Mr. Wedgwood Benn: May I submit to you, Mr. Hopkin Morris, that this is the Clause on which we must discuss the provision for the telephone service, and that it would be wrong to discuss our present grievances on the Post Office Vote? There are two problems. There is the problem of those who have not a telephone, which we must debate when the question of the allocation of capital is before us, and the problem of those who have telephones, which we must raise on the Post Office Vote.
    We are not attempting to dispute the service provided to those who have a telephone, but the problems which arise out of the many cases which have come to the notice of all of us of those who have not got a telephone, and in respect of whom, when one writes, one receives the reply, not that the Post Office engineers are too busy, but that capital is not available.
    712
    I submit that we must raise these points on this Bill.
    The Deputy-Chairman: The rule laid down in regard to discussions such as the one on which we are now engaged is that the debate and speeches on the Bill should be confined to the Bill and should not be extended to criticism of the administration. What is really happening here is that the debate is being extended too far to deal with the provision of telephones in different areas. That is a question of administration which, in a debate on the question of capital expenditure, must not be pressed too far.
    Mr. Mikardo: But precisely the point made by most of my hon. Friends is that there is nothing wrong with the administration of the Post Office in connection with the provision of telephones, that they are competent, able and willing to provide telephones but are prevented from doing so by a shortage of capital allocation. Therefore, far from it being the case that the speeches which we have been making represent a criticism of the administration in terms of the Standing Order to which you have referred, Mr. Hopkin Morris, the opposite is the case. All we are saying is, let this very good administration not be inhibited by the restriction on capital expenditure laid down in Clause 1 of this Bill.
    Lieut-Colonel Lipton: May I make this further observation for your consideration, Mr. Hopkin Morris, on this point of order? It is that, no doubt for very good reasons, the Assistant Postmaster-General has presumably had to absent himself for a short while from our deliberations, but we are fortunate in having the Minister of State for Economic Affairs here.
    The Deputy-Chairman: We cannot extend a point of order to this sort of point.
    Mr. Ness Edwards: On a point of order. I should like your advice, Mr. Hopkin Morris, as to reporting Progress or seeking to adjourn the Committee, because yesterday we were promised by the Leader of the House that the B.B.C. Licence was to be available in the Vote Office today at 2.30. As you know, it is to be discussed next week. As it is a very important matter, I wonder whether you can give us any advice on

    713
    how to proceed to secure the redemption of this Government promise?
    The Deputy-Chairman: That does not fall within my jurisdiction.
    Mr. Hale: I am afraid that this long interruption makes it difficult for me to follow any connected line of reasoning. I do not wish to detain the Committee. Indeed I am anxious that we should dispose of this Bill as soon as possible. as I have down four Amendments to the Motor Vehicles (International Circulation) Bill, which I had hoped we should discuss today.
    I have had the opportunity of referring to precisely what the Assistant Postmaster-General said in the Second Reading debate. He said:
    "Of the £75 million provided for in the Bill it is estimated that £69 million, or 92 per cent., will be devoted to the telephone service,…"—[OFFICIAL REPORT, 31st March, 1952; Vol. 498. c. 1192.1
    If that be true he has told us what he intends to do with £23 of this £25 million. He is to spend it on telephones in connection with defence. Goodness knows why there should be all this reserve about saying that, and why it should be so frightening.
    He has not told us why the Defence Ministers do not pay for their own telephones and why the Post Office should bear the burden. We are told that the Post Office is already carrying a burden of £24 million on general services for the community. Now this successful nationalised industry is to have its profit-making capacity frustrated by the bearing of an additional service, by having to bear another £25 million in the current period of capital expenditure—a matter of nearly £50 million in all.
    The Assistant Postmaster-General has said that he did not quite know what it was for or, if he did, was not prepared to tell us. I am glad to see the Minister of State for Economic Affairs here. I assume that he is taking notes in the absence of the Assistant Postmaster-General. It is right that I should say to him that during his absence there have been, in the course of this debate, the most severe animadversions passed on the Treasury. The Assistant Postmaster-General has told us constantly that all this was not his wish, that he was passionately anxious to expand and
    714
    develop the postal services, that he knows there is a crisis coming in the telephone service, that things are getting worse and may get much worse. He said" My only excuse, the only plea and miseri-cordia I can put before the Committee is that the Treasury have been obdurate and obstinate, and will not do it." He has said that in his view the Treasury could not do it, but he has given no reason for saying that.
    I am sure that the Minister of State for Economic Affairs will wish to take an opportunity of saying why the Treasury have selected the postal service for this double burden. The first is the diminution in capital expenditure and investment by a very substantial sum, which will affect the telephone service all over the country. The second is that the Post Office should be made to carry a very substantial concealed burden for defence.
    When we talk about armaments generally, it has always been said of the U.S.S.R. that it is no use looking at their figures because they carry defence expenditure in the Commissariat for Heavy Industry, and there is no way of finding out what the figures are. We are told that the cause of peace and negotiation is frustrated because of the Soviet action in not declaring what they are spending on defence but concealing it under another heading.
    Why are we doing the same? Why are we following the Russian system? Why are we saying that £24 million is to be included in the Post Office figures and that no one is to know about it or what it is for? Many of us feel that we are taking in Europe a much larger measure of the defence burden than any other country. There is Belgium, for instance, with an expenditure of 4 per cent. of her income while ours is 13 or 14 per cent. or more. We are now told that in future we shall not even know what our defence expenditure is. We know it is a lot. but we shall not know how much.
    We are under a dictatorship. It is a dictatorship when a Minister says" I cannot tell you what it is for. I am not allowed to do so. The Treasury will not let me tell anything. I ask you to pass without comment or observation a vote of £24 million." That is very surprising.

    715
    My second point—I hope that the Minister of State for Economic Affairs is taking a note because there are certain matters of which he will not be aware because they are concerned with the Post Office—is that we are told that only 5 per cent. will be devoted to the postal service and 3 per cent, to the telegraph service. These seem surprisingly low figures and must mean that these services are being put at a great disadvantage. I should like the Committee to be told the normal proportion spent on postal services in the way of capital investment and the normal proportion spent on telegraphic services in previous votes, so that we can have a fair comparison when considering how it is intended the money shall be allocated.
    We come to the controversial observation of the Assistant Postmaster-General in the Second Reading debate, which has been slightly varied since. He said,
    "The chief point I want to make in this debate,"—
    The chief point, mark you—
    "compared with which everything else is secondary,"—
    Could anything be more emphatic than that?—
    "is that the sum we are providing today and are likely to be able to spend in the foreseeable future, is quite inadequate for the new developments which the Post Office would like to undertake, or even for us to be able to guarantee that we can maintain the service at present standards."—[OFFICIAL REPORT, 31st March, 1952; Vol. 498, c. 1192.]
    This is the clearest indication given by the Minister of the decision of Her Majesty's Government to cut down the social services generally. He says throughout that on the whole question of the administration of the social services we are going to impose a cut here and a cut there, and do it deliberately.
    The frightful thing is that today, in the course of this debate, the Assistant Postmaster-General has said that he is not prepared to tell us how even the £46 million left for the telephone service generally will be allocated or where it will be spent. In the great conurbations of Lancashire there is interest as to how this is spent, if it means the cutting down of services here, there and everywhere and the amalgamation of telephone exchanges, etc., which is going seriously to affect the system. We are entitled to
    716
    know if that is the intention. If it is not, why does the Minister use this outstanding phrase," totally inadequate"?
    There is one other point. I am a telephone holder in London. The charges for my telephone have gone up substantially over the last few months. Why is it necessary to ask for this money when the charges are being put up all the time? How much of this additional charge has been made available? To what extent are the subscribers themselves being called upon to share in the burden of capital investment? Where is the money going? Presumably it is going to supplement defence expenditure.
    Perhaps the Assistant Postmaster-General would tell us this, too: if we are having a £23 million capital investment expenditure on defence, what about the revenue? There will be no repayment, so we are getting another concealed burden on the Post Office. There will be the staffing of the lines. Someone has to be appointed to deal with these lines, and that will be a burden on the revenue.
    Then the Assistant Postmaster-General made some observations about the Post Office as an employer. I accept the truth that people who work for the Post Office usually work there for a long time, and I know that some of them work for very little money. There is no one worse paid in this country than the amateur assistant-postmistress in the small village shop who sometimes has to be up all night.
    The Deputy-Chairman: The hon. Member is going very much wider than the Motion, "That the Clause stand part of the Bill."
    2.45 p.m.
    Mr. Hale: I have been getting a little wider for some time, but may I put in two sentences which I suggest are relevant? If we are taking £50 million out of the Post Office fund, what is the effect going to be on those people who say," We are being pretty badly treated," and who want an increase? They will be told," We are losing £50 million at the moment; how can we pay you? The sum of £24 million is going on defence and £24 million on general services to the community. We cannot afford to pay." It is not postal services which are being paid for out of this wholly unauthorised, improper, utilisation of funds

    717
    which Parliament is being asked to vote for the Post Office.
    Have the Post Office any Parliamentary right to ask for a grant for the Post Office, which is expressed in the Bill as a grant to the Post Office, and ask the House to pass a Bill granting money to the Post Office, and then to tell us that, after all, the Post Office are not going to use it at all; it is going to the Ministry of Defence for their expenditure? Have they a right to do that? This seems to me to be a flagrant departure from our normal Parliamentary procedure and from the normal procedure of controls and checks upon our expenditure. When this expenditure comes before the Estimates Committee, will they be told that they cannot check on it at all because it is private?
    I never like to be discourteous to one of Her Majesty's Ministers, but when the Assistant Postmaster-General asks me for £50 million, I view the request with some dubiety at the opening moment. My initial approach is one of restraint and perhaps of some suspicion. It is like a chap who says," I do not want all the £50 million. I am having £25 million for a pal of mine who is going to spend
    it in any way he likes, and I have no control over him." I say that never before did Parliament see such a blatant request, put so blatantly, in the history of our financial control. We have got a whole battery of financial experts here.
    The Deputy-Chairman: I think that we had better confine ourselves to the Motion," That the Clause stand part of the Bill." and not let the debate go wider.
    Mr. Hale: I was hoping that we were going to have an adequate reply from somebody on the matters I have raised. I am sure the Minister of State will reply fully. At the moment he is modest and unassuming, with his little negative nod, but I am sure that the whole Committee will feel that it is the duty of the Minister to give us a full answer.
    Mr. Herbert Butcher (Lord Commissioner of the Treasury)Mr. Herbert Butcher (Lord Commissioner of the Treasury) rose in his place and claimed to move, "That the Question be now put."
    Question put, "That the Question be now put."
    The Committee divided: Ayes, 106; Noes, 66.

    Division No. 160.]

    AYES

    [2.49 p.m.

    Aitken, W. T.

    Erroll, F. J.

    Nicolson, Nigel (Bournemouth, E.)

    Allan, R. A. (Paddington, S.)

    Fell, A.

    Nield, Basil (Chester)

    Ashton, H. (Chelmsford)

    Fleetwood-Hesketh, R. F.

    Oakshott, H. D.

    Beach, Maj. Hicks

    Fletcher-Cooke, C.

    O'Neill, Rt. Hon. Sir H. (Antrim, N)

    Beamish, Maj. Tufton

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Partridge, E.

    Bell, Ronald (Bucks, S.)

    Galbraith, Cmdr. T. D. (Pollok)

    Perkins, W. R. D.

    Bennett, F. M. (Reading, N.)

    Gammans, L. D.

    Pitman, I. J.

    Bennett, Sir Peter (Edgbaston)

    George, Rt. Hon Maj. G. Lloyd

    Powell, J. Enoch

    Bishop, F. P.

    Gough, C. F. H.

    Raikes, H. V.

    Black, C. W.

    Gridley, Sir Arnold

    Robinson, Roland (Blackpool, S.)

    Bossom, A. C.

    Grimston, Hon. John (St. Albans)

    Robson-Brown, W.

    Boyd-Carpenter, J. A

    Harris, Reader (Heston)

    Ryder, Capt. R. E. D.

    Boyle, Sir Edward

    Harrison, Col. J. H. (Eye)

    Salter, Rt. Hon. Sir Arthur

    Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)

    Harvey, Ian (Harrow, E.)

    Scott-Miller, Cmdr. R.

    Heath, Edward

    Shepherd, William

    Bromley-Davenport, Lt.-Col. W. H.

    Hill, Dr. Charles (Luton)

    Simon, J. E. S. (Middlesbrough, W.)

    Brooke, Henry (Hampstead)

    Holland-Martin, C. J.

    Smithers, Peter (Winchester)

    Brooman-White, R. C.

    Horobin, I. M.

    Smithers, Sir Waldron (Orpington)

    Buchan-Hepburn, Rt. Hon. P. G. T.

    Hudson, Sir Austin (Lewisham, N.)

    Spearman, A. C. M.

    Bullard, D. G.

    Johnson, Howard (Kemptown)

    Spens, Sir Patrick (Kensington, S.)

    Bullus, Wing Commander E. E.

    Lancaster, Col. C. G.

    Stanley, Capt. Hon. Richard

    Butler, Rt. Hon. R. A. (Saffron Walden)

    Legge-Bourke, Maj. E. A. H.

    Stuart, Rt. Hon. James (Moray)

    Channon, H.

    Lindsay, Martin

    Studholme, H. G.

    Clarke, Brig. Terence (Portsmouth, W.)

    Low, A. R. W.

    Thompson, Lt.-Cdr. R. (Croydon, W.)

    Cole, Norman

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Thornton-Kemsley, Col. C. N.

    Colegate, W. A.

    McAdden, S. J.

    Vaughan-Morgan, J. K.

    Conant, Maj. R. J. E.

    McCorquodale, Rt. Hon. M. S.

    Vosper, D. F.

    Craddock, Beresford (Spelthorne)

    Macdonald, Sir Peter (I. of Wight)

    Wakefield, Edward (Derbyshire, W)

    Crookshank, Capt. Rt. Hon. H. F. C.

    Mackeson, Brig. H. R.

    Ward, Hon. George (Worcester)

    Crowder, Sir John (Finchley)

    McKie, J. H. (Galloway)

    Ward, Miss I. (Tynemouth)

    Cuthbert, W. N.

    MacLeod, Rt. Hon. Iain (Enfield, W.)

    Webbe, Sir H. (London & Westminster)

    Deedes, W. F.

    MacLeod, John (Ross and Cromarty)

    Wellwood, W.

    Doughty, C. J. A.

    Macpherson, Maj. Niall (Dumfries)

    Williams, R. Dudley (Exeter)

    Douglas-Hamilton, Lord Malcolm

    Markham, Major S. F.

    Drayson, G. B.

    Marlowe, A. A. H.

    TELLERS FOR THE AYES:

    Duthie, W. S.

    Marshall, Sir Sidney (Sutton)

    Mr. Butcher and Mr. Drewe.

    Elliot, Rt. Hon. W. E

    Mellor, Sir John

    NOES

    Albu, A. H.

    Foot, M. M

    Paget, R. T.

    Allen, Arthur (Bosworth)

    Freeman, John (Watford)

    Parker, J

    Ayles, W. H.

    Greenwood, Anthony (Rossendale)

    Plummer, Sir Leslie

    Baird, J.

    Hamilton, W. W.

    Silverman, Julius (Erdington)

    Bellenger, Rt. Hon. F. J.

    Hastings, S.

    Simmons, C. J. (Brierley Hill)

    Benn, Wedgwood

    Herbison, Miss M

    Smith, Norman (Nottingham, S.)

    Benson, G.

    Hobson, C. R.

    Snow, J. W.

    Bevan, Rt. Hon. A. (Ebbw Vale)

    Holman, P.

    Stewart, Michael (Fulham, E.)

    Bing, G. H. C.

    Hudson, James (Ealing, N.)

    Stross, Dr. Barnett

    Bottomley, Rt. Hon. A. G.

    Irvine, A. J. (Edge Hill)

    Taylor, Rt. Hon. Robert (Morpeth)

    Brockway, A. F.

    Johnson, James (Rugby)

    Turner-Samuels, M

    Broughton, Dr. A. D. D.

    Key, Rt. Hon. C. W.

    Viant, S. P

    Butler, Herbert (Hackney, S.)

    King, Dr. H. M.

    Wallace, H. W

    Champion, A. J.

    Lee, Frederick (Newton)

    White, Mrs. Eirene (E. Flint)

    Darling, George (Hillsborough)

    Lewis, Arthur

    Whiteley, Rt. Hon. W.

    Davies, Ernest (Enfield, E.)

    Lipton, Lt.-Col. M.

    Willey, Frederick (Sunderland, N.)

    de Freitas, Geoffrey

    MacColl, J. E.

    Willey, Octavius (Cleveland)

    Deer, G.

    Marquand, Rt. Hon. H. A

    Williams, Ronald (Wigan)

    Ede, Rt. Hon. J. C.

    Mikardo, Ian

    Williams, W. T. (Hammersmith)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Mitchison, G. R

    Winterbottom, Richard (Brightside)

    Edwards, W. J. (Stepney)

    Moyle, A.

    Evans, Albert (Islington, S.W.)

    Oswald, T.

    TELLERS FOR THE NOES:

    Evans, Edward (Lowestoft)

    Padley, W. E

    Mr. Wilkins and Mr. Crossland.

    Question put accordingly, and agreed to.

    Clause ordered to stand part of the Bill.

    Clause 2.—(CAPITAL EXPENDITURE FOR PURPOSES OF POST OFFICE SAVINGS BANK NOT TO BE PAID OUT OF POST OFFICE SAVINGS BANK FUND.)
    Motion made, and Question proposed," That the Clause stand part of the Bill."
    Lieut.-Colonel Lipton: There are one of two questions which I feel it my duty to put to the Assistant Postmaster-General. I am the more induced to do so because on Second Reading the hon. Gentleman had little or nothing to say about the Clause. His explanation of it was given in two sentences, and, as his remarks were so brief, I should like to refresh his memory by quoting them. He said:
    "Under Clause 2, the Post Office will be able to finance the capital cost of Savings Bank building in the same way as it finances other capital expenditure of the Post Office. This point has already been brought to the notice of the Public Accounts Committee, which have accepted the expansion recommended in the scope of the Post Office Money Bill."— [OFFICIAL REPORT. 31st March, 1952; Vol. 498, c. 1192.]
    That is all the hon. Gentleman said by way of explanation of the Clause, and I submit that is so meagre and unsatisfactory that the Committee is now entitled to a much fuller explanation.
    Clause 2 (1)says:
    "…any capital expenditure incurred after the passing of this Act for the purposes of the Post Office Savings Bank shall be deemed
    720
    not to have been incurred in the execution of the said enactments."
    As the Bill deals generally with capital expenditure, the Committee is entitled to know, first, what the Assistant Postmaster-General has in mind and what kind of commitment he envisages in regard to capital expenditure incurred after the passing of the Act for the purposes of the Post Office Savings Bank. Does this capital expenditure represent £1 million, £10 million or £15 million, and over what period, and for exactly what purposes? Those are details on which the Committee is entitled to be informed before it allows the Clause to be accepted.
    Reference is made on more than one occasion in the Clause to
    "…enactments relating to the Post Office Saving Bank. …"
    "Enactments" is a loose word, and I do not see any definition in the Bill of what is comprised in this vague and somewhat general term. What are the enactments relating to the Post Office Savings Bank? I concede that reference is made to the Savings Banks Act, 1929, but it seems to imply that some provisions other than those of the Savings Banks Act, 1929. are included in the vague term:
    "…enactments relating to the Post Office Saving Bank. …"
    The Committee ought to have very much fuller information on this than has so far been provided.

    721
    3.0 p.m.
    It may well be that no major point of principle is involved in this Clause, or no point of principle of the same magnitude as was involved in the previous Clause. It is a pity that there is no Law Officer present. We have now reached a point where the representatives of the Treasury are no longer required. In any event, they have disappeared. At one moment we had present in the Chamber not only the Chancellor of the Exchequer but the Minister of State for Economic Affairs and the Financial Secretary to the Treasury. But now they have all flown and we are left with the Assistant Postmaster-General, and also an important official of the Royal Household whose presence we welcome though I very much doubt whether he will make any constructive contribution to our discussion.
    It may be that the Assistant Postmaster-General will be at some disadvantage in dealing with the legal point I have raised as to the exact meaning of, "enactments relating to the Post Office." There is obviously more than one, otherwise the word would not be in the plural. I do not know how many there are. I have not had the opportunity of looking up all the legislation relating to the Post Office. Perhaps my hon. and learned Friend the Member for Northampton (Mr. Paget) may be able to supplement the information which I have not found it possible to obtain for the benefit of the Committee.
    Some capital expenditure is envisaged but no indication was given to the House by the Assistant Postmaster-General on Second Reading of what was this capital expenditure relating to the Post Office Savings Bank. I hope that the Assistant Postmaster-General has had time to collect some information on the subject and that it will be possible for him to supply the information I seek. Regarding the legal point I raised, I suggest that arrangements should be made for the early attendance of one of the Law Officers of the Crown to help the Committee in its deliberations on this Clause.
    Mr. Paget: I have found this a very difficult Clause. In the previous Clause we had a complete constitutional innovation. Parliament which, previously, had always insisted on meticulous control of the expenditure of
    722
    money, was invited, in cavalier fashion, to surrender that control and to vote money for the Post Office which, we were told, was not to be used by the Post Office at all, but was to be used for these defence purposes.
    Now we come to Clause 2, which provides in subsection (1):
    "For the purposes of any enactment relating to expenses incurred in the execution of the enactments relating to the Post Office Savings Bank, any capital expenditure"—
    mark that, any capital expenditure—
    "incurred after the passing of this Act for the purposes of the Post Office Savings Bank shall be deemed not to have been incurred in the execution of the said enactments."
    Why is this? Is this really a defensive expenditure which it is unfair to put on the savings banks? If so, is it not even more unfair to put this sort of expenditure on the Post Office? It is the most curious way of dealing with the Savings Banks Act, 1929. That is an interesting Act and its terms will have to be considered by this Committee if we are to come to a conclusion on this Clause. Subsection (2) of this Clause provides:
    "In paragraph (c) of section five of the Savings Banks Act, 1929"—
    and then come several lines in brackets, which I do not think I need read, save to draw attention to them as I shall be coming to the actual Section of the 1929 Act—
    "the words 'the Postmaster-General and' and the word 'respectively' shall be omitted."
    Let us see what is the effect of this omission from Section 5 of the Savings Banks Act, 1929. That Section provides:
    "For the purpose of any enactment (including this Act) which provides that the expenses incurred in the execution of the enactments relating to savings banks by the Postmaster-General and the Commissioners respectively"—
    and those are the words which we are asked to omit—
    "are to be defrayed out of any specified fund, the expenses so incurred shall be deemed to include—".
    Then it sets out what shall be deemed to be included. This, of course, is the vital matter for the purpose of this Clause. They are:
    "(a) such sum as, in the opinion of the Treasury, approximately represents the amount in each year of the accruing liability in respect of the benefits for which any officers or persons employed by the Postmaster-General and the

    723
    Commissioners respectively in the execution of the said enactments will on their retirement become eligible under the Superannuation Act, 1834 to 1919;"
    Here is the first question which I wish to ask. Why is it that these annuities should suddenly be borne by the Post Office— and apparently out of capital, though one would have thought that they were income expenditure—instead of being borne by the Commissioners as intended by the Act? The next item which we have to consider is:
    "(b) such proportion of the salary, or of the said accruing liability in respect of superannuation benefits, of any officer or person who is so employed in part only in the execution of the said enactments as, in the opinion of the Treasury, is attributable to the execution of those enactments;".
    One has to look back earlier in the Act to see what those enactments are.
    At the beginning of the Section, it is stated:
    "For the purpose of any enactments (including this Act) which provide that the expenses incurred in the execution of enactments relating to savings banks by the Postmaster-General"—
    Then, quite suddenly, and for no reasons that I can understand, though doubtless we shall have some explanation, it says that
    "such proportion of the salary, or of the said accruing liability in respect of superannuation benefits, of any officer or person who is so employed in part only in the execution of the said enactments"—
    which are the Savings Bank enactments —apparently ceases to be payable by the people whom Parliament said they were to be paid by, and are, like the defence expenditure, shot on to the Post Office.
    Can the Minister tell us why this is so? Is this, again, concealed expenditure on defence? Are these methods whereby what is spent on expenditure on defence ceases to be a matter of Parliament and becomes something which has to be dealt with on a security basis, but concealed from the electorate?
    Paragraph (c) may be even more remarkable still:
    "any capital expenditure incurred in providing premises wholly used by the Postmaster-General and the Commissioners respectively for the purposes of the said enactments and such part of any such expenditure incurred in providing premises partly used as aforesaid as was, in the opinion of the Treasury, incurred for those purposes:"
    724
    That really contains three separate factors. First, we have any capital expenditure incurred in providing premises wholly used by the Postmaster-General. Second, we have the capital expenditure incurred in providing premises wholly used by the Commissioners. Then, of course, there is the additional case where they may be used jointly.
    The paragraph goes on:
    "used …for the purposes of the said enactments."
    Later in my speech, I will try to work out what are the purposes of these enactments, which requires looking not only at the earlier part of this Act, but at other Acts. Then, it states:
    "…in providing premises partly used as aforesaid as was, in the opinion of the Treasury, incurred for those purposes:"
    Why is it that we have suddenly to alter that arrangement laid down by Parliament, when, apparently, one would have thought it a sensible arrangement? Why do these expenses respectively require shifting on to the Post Office and from the people on whom they were originally placed? It is made even more interesting by a proviso which reads:
    "Provided that, if in any case where the amount of any such capital expenditure has been charged to the said fund, the premises in respect of which the expenditure was incurred are sold"—
    That is the first case, so that where this Post Office money, as it is now, instead of Savings Bank money, is applied to capital expenditure for premises which are sold—
    "or ceased to be used for the said purposes, there shall be deducted from the amount thereafter chargeable to the said fund such sum as may be determined by the Treasury.…"
    Here we see the Treasury coming in all the time as the arbiter to represent the then value of the premises or that part of the premises which was used for the purpose.
    3.15 p.m.
    Why alter this arrangement? That is the point on which we are all so anxious to have information because, apparently, this was a division of the burden between the Post Office and the Savings Bank. There is the proviso that when any of this property is sold there is to be a division, a handing back, and now it is all to be borne by the Post Office. Why is that so, and what has done it?

    725
    We finally come to paragraph (d,) which is the list of these expenditures which we have to consider. It says:
    "in the case of any premises occupied by the Postmaster-General and the Commissioners respectively wholly or partly for the purposes of the said enactments"—
    and those are the Savings Bank enactments—
    "and in respect of which no rent is payable, such an amount as is estimated by the Treasury to represent the rental value of the premises or of that part of the premises used for the said purposes."
    Here we have the case where premises are occupied jointly by the Post Office and by the Commissioners of the Savings Bank and are used for purposes of the Savings Bank Acts, but where no rent is payable for them,
    "such an amount as is estimated by the Treasury to represent the rental value of the premises or that part of the premises used for the said purpose after allowing for any capital expenditure incurred as aforesaid which has been charged to the said fund."
    This seems to be a very peculiar list of expenditures to be dealt with in this curious manner. The alteration is in paragraph (c) of Section 5 of the Savings Banks Act. The words "Postmaster-General" are to be omitted and the word "respect" is to be omitted so we get down to a reading as follows:
    "any capital expenditure incurred in providing premises wholly used by the Commissioners for the purposes of the said enactments."
    Here, apparently, we have not merely a payment of the whole amount by the Post Office of expenditure in which they have at least a joint interest, but we have their exclusion where they have no interest in it at all and where it is used wholly by the Commissioners and is not used by the Postmaster-General. None the less, suddenly, the Post Office have to pay. That seems to require a lot of justification, unless we are to hear that this, again, is an instance of concealed defence expenditure.
    Look at what are the purposes of this Act, that is, the purposes of the enactments for which all this expenditure has to be carried out. They are set out at the commencement of the 1929 Act. The earlier Acts are the statutes of 26 and 27 Victoria, which deal with this matter in Chapter 87 and at 54 and 55 Victoria, Chapter 21. I think I am right in saying—and perhaps my hon. and gallant Friend the Member for Brixton
    726
    (Lieut.-Colonel Lipton) who knows so much about this subject will correct me if I am wrong—that Chapter 21, Victoria is the earliest of the savings banks statutes.
    I think I am right in saying that it is that statute which provided for the institution of savings banks and in respect of which the original capital expenditure which we are now asked to alter was made. It was made quite early in the reign of Queen Victoria—if my memory is right, somewhere about 1842.
    The second Act, which developed it to a considerable extent, was Chapter 87 of the Queen Victoria statutes, which came a good deal later in the reign and expanded this very benficial activity in public savings to an ever-widening extent. But I think that the purposes of these two Acts, which are referred to in Section 5 of the Savings Banks Act, are in some degree summarised in that Act itself, so it may be sufficient if I simply quote that Act rather than go back to the earlier Acts.
    The first section, according to the marginal note, is an amendment as to security to be given by the officers of the banks. It is that very security whose incidence we are now altering. The provision with regard to that security—and this is the first purpose of this Act with which we are dealing—is as follows:
    "The security to be given in pursuance of section eight of the Trustee Savings Banks Act, 1863"—
    That is the section of the Victorian Act—
    "as amended by any subsequent enactment, may be either in the form required by that section as so amended or, if the Commissioners and the Inspection Committee approve, in the form of a single bond of a guarantee society guaranteeing all the persons employed by the bank or at any branch thereof who are required to give such security."
    So We see that the first purpose deal with security bonds to be given for conduct by employees. Perhaps the Minister will be able to deal with this question. Is it still the custom of the savings bank to take security bonds—fidelity bonds I believe they are called—from its employees? This was certainly the practice in Victorian times, but I should doubt very much whether it is the practice now.
    The Chairman: Does that come under capital expenditure?
    Mr. Paget: Yes, according to the definition of capital expenditure which is given in this Clause.
    It deals with annuity sums and capital and"lump"sums—that is the word used —as a capital expenditure. Indeed, it is the very capital expenditure which we are transferring from the Commissioners to the Post Office and apparently the liability arising with regard to these fidelity bonds, which is the first purpose referred to in Section 5 of the 1929 Act about which I am asking. Apparently these fidelity bonds are to be transferred from the Commissioners to the Post Office. It would be interesting to know why that is being done. That is the effect of this Clause.
    The second purpose which is dealt with here is:
    "When security is given in the last-mentioned form"—
    That is, the fidelity bond—
    "the annual premium on the bond shall be paid by the trustees."
    I am not quite certain about this. Is that payment of the annual premium within Clause 2 or is it not? Is that still to be paid by the trustees or is it now to be paid by the Post Office? It goes on to say:
    "and the trustees shall be entitled to recover from each person covered by the bond such proportion of the premium as that person's annual salary bears to the total amount of the annual salaries of the persons covered by the bond."
    It may be that that is the answer to the question which you, Sir Charles, asked me a short time ago. The capital nature of these bonds arises upon their forfeiture and it may be on the forfeiture of the bonds that the transfer takes place. I am bound to say that I have had great difficulty in construing this. It is an important matter since it involves public expenditure and it is for that reason I am asking for explanations on these various matters.
    The next purpose is the security required by paragraph (f)—this is of the first Victorian Act. the Savings Bank Act of 1891—
    "to be given in respect of the amount received on account of special investments shall not be separate from the security required by the said section…and accordingly the said paragraph (f) shall have effect as if the word 'separate' were not contained therein."
    728
    I ask the Minister to tell us about the nature of these securities with which we are dealing. Are they still a current liability or are they a current asset— could I have the attention of the Minister for a moment? I am referring to that item amongst the purposes which is set out in Section 1 (3) of the 1929 Act, and asking whether the items there set out are assets or liabilities and as to the terms on which they are to be transferred.
    The next paragraph deals with an obligation as to the opening of the savings banks, and I do not think that it is affected by the legislation which we are now asked to introduce.
    Clause 2 repeals Section 5 of the Savings Bank Investment Act of 1863 which provides that one half of the securities held by the Commissioners for savings banks shall consist of securities the interest of which is chargeable on the Consolidated Fund.
    Now I come to Section 4 (1) which provides that:
    "The Commissioners shall in every year out of the amount by which the gross amount of the interest accrued during the preceding year on the securities standing in the names of the Commissioners to the credit of the Fund of the Banks for Savings appears by the account laid before Parliament under section seventeen of the Customs, Inland Revenue and Savings Banks Act, 1877, to have exceeded the gross amount of the interest paid and credited in that year to trustees of savings banks, apply, in accordance with the directions of the Treasury, such sums as the Treasury may from time to time authorise …in the first place, the expenses incurred by the Inspection Committee in the exercise of any powers conferred by the enactments relating to trustee savings banks; …in the second place, the expenses incurred by the Commissioners in the execution of the said enactments."
    This is the provision for servicing the fund. How is that provision affected by this Clause? Is the liability to service these funds transferred from the hon. Gentleman's Department to the Commissioners? Do they stand where they were. or what?
    3.30 p.m.
    The second provision is that:
    "Section fifteen of the said Act shall have effect as though the surplus of the interest accrued above the interest paid and credited were diminished by the sum so applied and subsection (2) of section four of the Savings Banks Act, 1891, shall have effect as if a reference to the amount available under subsection (1) of this section were substituted for the

    729
    reference to the amount available under subsection (1)."
    That looks as though this is a surplus which is subject to transfer by this Section.
    We should all be interested to hear from the Minister whether this assumption is right. Am I right in assuming that this is transferred? Perhaps the Minister would prefer to answer that question later. I fully sympathise with him. This is a highly complicated matter and it is difficult to appreciate precisely how the very complicated provisions of three Acts of Parliament which set up the Savings Bank are to be variously affected by these transfers.
    I do not think that we need refer to Section 6, which is merely an amending Section. But Section 7 appears to be important and, indeed, extremely obscure. Here again it is very difficult to interpret whether the alteration of the words in Section 5:
    "any capital expenditure incurred in providing premises wholly used by the …Commissioners"
    is affected by the power of surplus special investment capital provided by Section 8. Are premises an investment of capital? They normally are, of course, but here I should have been a little surprised if the intention was to transfer all these matters.
    Section 8 contains important words and I should like to know the effect on them of what we are to do in this Bill. They are:
    "Subject as hereinafter provided, the trustees of a trustee savings bank may, with the consent of the Commissioners, apply a part of the surplus capital held by the bank on account of special investments towards the purchase of land."
    The purchase of land presumably includes these premises. I am not sure of that and I think the position should be made clear. It may be that these premises are put in a category separate from the investment fund. Sometimes when one alters the words to different words one does not appreciate all the circumstances that they arise.
    The hon. and learned Gentleman the Member for Kensington, South (Sir P. Spens) has very great experience of how the alteration of words in a statute very often has most unexpected results, and I am not certain whether the results which the alteration of these words have on
    730
    Clause 8 has been altogether appreciated by the Minister. Here we have the provision:
    "…part of the surplus capital held by the bank on account of special investments towards the purchase of land or the provision of buildings for the purposes of the bank,"—
    that seems to bring it right in here—
    "and section four of the Savings Banks Act, 1904, as amended by this Act, shall have effect accordingly."
    Then there are the provisos, and it may be that they save the situation. I am not certain, but the Minister will doubtless give us his views when we reassemble to discuss this on a future occasion, or perhaps we may have the advice of the Law Officers of the Crown on what is a rather difficult matter. The proviso which I think may be relied on provides that
    "(a) the Commissioners shall not give their consent in any case if the amount proposed to be applied would, when added to any sums already applied under this Section (excluding sums applied towards the purchase of any land or the provision of any buildings which have been sold), exceed twenty per cent. of the surplus capital as shown on the last annual valuation."
    Here there is a limitation of investments in land including the bank's own premises, and as far as I can make out 20 per cent. of the deposits. If the liability in respect of building is transferred to the Post Office, it effects the investment line which has been laid down for a number of years and which, of course, is a factor of some importance in the depositors' security. I can remember that in 1939 an alleged threat to the security of Post Office deposits played a notable part in the General Election. To what extent are we doing that very same thing by the alteration of these words?
    Lieut.-Colonel Lipton: My hon. and learned Friend will not want to be inaccurate. I think what he meant was the 1931 Election and not the 1939 Election.
    Mr. Paget: I thought I referred to the 1931 Election, but I may have made a slip of the tongue. I am most grateful to my hon. and gallant Friend. I am sure that the Government would not wish to expose themselves to a similar charge, and I feel sure that we on this side of the Committee would not be so disreputable as to make it.

    731
    Time is running short and I do not suppose we shall get the opportunity to discuss fully this Clause today. That will have the advantage of providing the hon. Gentleman with an opportunity of consulting the Law Officers to ask what this alteration provides for.
    There is a second proviso here which may also have surprising results. It says:
    "all moneys accruing from or in connection with the sale, exchange or lease of any land purchased or buildings provided under this section—"
    and the Assistant Postmaster-General will bear in mind that that expressly includes the bank buildings which we are here referring to and dealing with—
    "—exchange or lease of any land purchased or buildings provided under this section, or of any part of any such land or buildings, shall be invested by the trustees as if they were moneys received for special investments."
    That, of course, involves the question of the two categories, the deposits and the money placed in the bank by the executors, and such cases as those in which the bank is a trustee; but, apparently, they are to be treated in the first category —or is it the second?—and, in consequence, the matter falls within the variation which we are now affecting.
    The next purpose here which we have to consider—and all these purposes are, of course. affected—is:
    "The value of any land purchased or buildings provided under the provisions of this section shall be taken at such an amount as the Commissioners may from time to time fix and shall be included in the annual valuation."
    It provides for annual valuation the normal definition which would be equally applicable if we were concerned with a rating question. So that matter would seem to be relatively simple in construction. The only question is whether the purposes set out in Section 8 are intended or not intended to be transferred by this Clause. I should have thought it rather surprising if that were the intention, although it certainly seems to be the effect of the words.
    The next provision, which, I do not think, is quite so simple, is the provision with regard to the limits of the savings banks annuities. Section 11 provides that the limit of the amount of an annuity granted to any one person under the Government Annuities Act. 1864, and the
    732
    Government Annuities Act, 1882, shall be £300 a year instead of £100 a year. These annuities are now, apparently, according to Section 5, being transferred to the Post Office. Are they transferred subject to this limitation, or are they not?
    The Chairman: Do these come under capital?
    Mr. Paget: Well, Sir Charles, they come under capital as defined by Section 5 of the 1929 Act, which is incorporated by Clause 2 (2) of the Bill we are now considering, because Section 5 of the 1929 Act expressly, as I said earlier, brings in the annuities as the purposes which are to be transferred by Clause 2 (2) from the Commissioners to the Post Office. Whether from an accountancy point of view it would be correct to describe them as income or capital I do not know, but I would humbly submit that it is not really relevant. What is relevant is whether they are capital for the purposes of this Bill.
    3.45 p.m.
    That Section provides a special definition of this capital by reference to Section 5, which includes these payments as capital payments. I should have thought that that was correct. An annuity has two aspects. It has a capital value, which is the lump value that, I understand, is being transferred, and an income value, which is the annual payment. It is in the case of the capital value that the transfer from the Commissioners to the Post Office appears to be taking place. So I should have thought that that would come in.
    The only question I wish to put to the Minister is whether, now that the annuities are to be transferred from the Commissioners to the Post Office, the limits which the 1929 Act imposed on these annuities are still applicable in the hands of the Post Office. It is not a very clear question, and over the week-end the Law Officers will have an opportunity to apply their minds to that. I do not think that Section 12 can be affected because it really deals only with an accountancy matter, so we can pass on to Section 13, which deals with the actual investment policy of the Commissioners. It says:
    "There shall be included among the securities in which the Commissioners may invest in pursuance of section nine of the Post Office Savings Bank Act, 1861"——
    The Chairman: Does that affect the provision of premises?
    Mr. Paget: I think probably not, and that you are right, Sir Charles, about that. It affects premises as part of what one might describe as the investment folio after they have been acquired. It is probably true to say that this Section is confined to the provision of new premises, that is, premises before they find their way into the Bank's investment folio. In that sense it may well be that Section 13 would not be affected.
    Section 14 again deals directly with the superannuation allowances which are to be transferred. Perhaps I can put my point in this way. If they are transferred under Section 5, I think they will be transferred subject to the form and limitations as set out in Section 14.
    Mr. Gammans: Will the hon. and learned Member tell me where, anywhere in this Bill, there is any question of transfer of assets?
    Mr. Paget: I am very sorry that I have not been successful in carrying the Minister with me in my arguments because that is rather where we started. If the Assistant Postmaster-General will look at Clause 2 (1), he will see that it is stated that
    "For the purposes of any enactment relating to expenses incurred in the execution of the enactments relating to the Post Office Savings Bank, any capital expenditure incurred after the passing of this Act for the purposes of the Post Office Savings Bank shall be deemed not to have been incurred in the execution of the said enactments."
    Those are the enactments which I have been reading. If this expenditure is not incurred in pursuance of those enactments, it rests where it started, namely, on the Post Office. It only parts from the Post Office when it is in pursuance of the enactments, and the provision is that the liability in respect of this expenditure remains with the Post Office
    and is not transferred to anybody else. The Minister may be right in saying that it is in perpetuum and not in the past. I think that has been the assumption of my argument.
    Mr. Stephen McAdden: On a point of order. Sir Charles. Will you ask the hon. and learned Gentleman to speak a little more quickly, as I cannot quite follow his argument?
    The Chairman: I was able to hear what the hon. Gentleman said.
    Mr. Paget: I did not quite hear your Ruling, Sir Charles.
    The Chairman: I was asked if the hon. and learned Member could speak more quickly, and I said that I was quite able to hear what he said.
    Mr. Paget: I think, Sir Charles, that the speed of a Member's speech is not normally within the jurisdiction of the Chair.
    I was saying that this is a rather complicated discussion and one is apt to lose the trail, but I think that the Minister will agree that the underlying assumption is that we were dealing with these investments and premises in perpetuum and not as to the existing premises already there. In that sense, I would agree that there is not a transfer of existing property; it is a transfer of future property, and I think that all future property is widened by the very wide words of Section 5 which expands the general meaning of property by bringing in the annuity conception, if I may put it in that way, and also affecting, as we have seen in Section 8, the problems of the ratio of the deposits.
    Mr. Butcher Mr. Butcher rose in his place, and claimed to move, "That the Question be now put."
    Question put, "That the Question be now put."
    The Committee divided: Ayes, 110; Noes, 59.

    Division No. 161.]

    AYES

    [3.56 p.m.

    Aitken, W. T.

    Boothby, R. J, G.

    Bullard, D. G.

    Allan, R. A. (Paddington, S.)

    Bossom, A. C.

    Bullus, Wing Commander E. E.

    Ashton, H. (Chelmsford)

    Boyd-Carpenter, J. A

    Butler, Rt. Hon. R. A. (Saffron Walden)

    Baxter, A. B.

    Boyle, Sir Edward

    Channon, H.

    Beach, Maj. Hicks

    Braine, B. R.

    Clarke, Brig. Terence (Portsmouth, W.)

    Beamish, Maj. Tufton

    Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)

    Cole, Norman

    Bell, Ronald (Bucks, S.)

    Bromley-Davenport, Lt.-Col. W. H.

    Colegate, W. A.

    Bennett, F. M. (Reading, N.)

    Brooke, Henry (Hampstead)

    Craddock, Beresford (Spelthorne)

    Bishop, F. P.

    Brooman-White, R. C.

    Crookshank, Capt. Rt. Hon. H. F. C.

    Black, C. W.

    Buchan-Hepburn, Rt. Hon. P. G T.

    Crosthwaite-Eyre, Col. O. E.

    Crowder, Sir John (Finchley)

    Hutchinson, Sir Geoffrey (Ilford, N.)

    Robinson, Roland (Blackpool, S.)

    Cuthbert, W. N.

    Johnson, Howard (Kemptown)

    Robson-Brown, W.

    Deedes, W. F.

    Lancaster, Col. C. G.

    Ryder, Capt. R. E. D.

    Doughty, C. J. A.

    Legge-Bourke, Maj. E. A. H

    Salter, Rt. Hon. Sir Arthur

    Drayson, G. B.

    Lindsay, Martin

    Scott-Miller, Cmdr. R.

    Drewe, G.

    Low, A. R. W.

    Shepherd, William

    Duthie, W. S.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Simon, J. E. S. (Middlesbrough, W.)

    Elliot, Rt. Hon W. E.

    McAdden, S. J.

    Smithers, Peter (Winchester)

    Erroll, F. J.

    McCorquodale, Rt. Hon. M. S.

    Smithers, Sir Waldron (Orpington)

    Fell, A.

    Macdonald, Sir Peter (I. of Wight)

    Spearman, A. C. M.

    Fleetwood-Hesketh, R. F.

    Mackeson, Brig. H. R.

    Spens, Sir Patrick (Kensington, SO

    Fletcher-Cooke, C.

    McKie, J. H. (Galloway)

    Stanley, Capt. Hon Richard

    Fraser, Sir Ian (Morecambe & Lonsdale)

    MacLeod, Rt. Hon. Iain (Enfield, W.)

    Stuart, Rt. Hon. James (Moray)

    Galbraith, Cmdr. T. D. (Pollok)

    MacLeod, John (Ross and Cromarty)

    Studholme, H. G.

    Gammans, L. D.

    Macpherson, Maj. Niall (Dumfries)

    Thompson, Lt.-Cdr. R. (Croydon, W.)

    Garner-Evans, E. H.

    Markham, Major S. F.

    Thornton-Kemsley, Col. C. N

    George, Rt. Hon. Maj. G. Lloyd

    Marlowe, A. A. H.

    Vaughan-Morgan, J. K.

    Gough, C. F. H.

    Marshall, Sir Sidney (Sutton)

    Vosper, D. F.

    Gridley, Sir Arnold

    Mellor, Sir John

    Wakefield Edward (Derbyshire, W.)

    Grimston, Hon. John (St. Albans)

    Nicolson, Nigel (Bournemouth, E.)

    Ward, Hon. George (Worcester)

    Harris, Reader (Heston)

    Nield, Basil (Chester)

    Ward, Miss I. (Tynemouth)

    Harrison, Col. J. H. (Eye)

    Oakshott, H. D.

    Webbe, Sir H. (London & Westminster)

    Harvey, Ian (Harrow, E.)

    O'Neill, Rt. Hon. Sir H. (Antrim, N)

    Wellwood, W.

    Heath, Edward

    Partridge, E.

    Williams, R. Dudley (Exeter)

    Hill, Dr. Charles (Luton)

    Perkins, W. R. D

    Holland-Martin, C. J.

    Pitman, I. J

    TELLERS FOR THE AYES:

    Horobin, I. M.

    Powell, J. Enoch

    Mr. Butcher and Major Conant

    Hudson, Sir Austin (Lewisham, N.)

    Raikes, H V.

    NOES

    Albu, A. H

    Freeman, John (Watford)

    Paget, R. T.

    Ayles, W. H.

    Greenwood, Anthony (Rossendale)

    Pargiter, G. A

    Bellenger, Rt. Hon. F. J.

    Hamilton, W. W.

    Parker, J.

    Benn, Wedgwood

    Hobson, C. R.

    Plummer, Sir Leslie

    Beswick, F.

    Holman, P.

    Silverman, Julius (Erdington)

    Bevan, Rt. Hon. A. (Ebbw Vale)

    Hudson, James (Ealing, N.)

    Simmons, C. J. (Brierley Hill)

    Bing, G. H. C.

    Jeger, George (Goole)

    Smith, Norman (Nottingham, S)

    Brockway, A. F.

    Johnson, James (Rugby)

    Snow, J. W.

    Broughton, Dr. A. D. D.

    Key, Rt. Hon. C. W.

    Stewart, Michael (Fulham, E.)

    Butler, Herbert (Hackney, S.)

    King, Dr. H. M.

    Stross, Dr. Barnett

    Champion, A. J.

    Lee, Miss Jennie (Cannock)

    Taylor, Rt. Hon. Robert (Morpeth)

    Crosland, C. A. R.

    Lewis, Arthur

    Viant, S. P.

    Darling, George (Hillsborough)

    Lipton, Lt.-Col. M.

    White, Mrs. Eirene (E. Flint)

    Davies, Ernest (Enfield, E.)

    MacColl, J. E.

    Whiteley, Rt. Hon. W.

    Delargy, H. J.

    Marquand, Rt. Hon. H. A

    Willey, Octavius (Cleveland)

    Ede, Rt. Hon. J. C.

    Mikardo, Ian

    Williams, Ronald (Wigan)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Mitchison, G. R.

    Winterbottom, Richard (Brightside)

    Edwards, W. J. (Stepney)

    Morgan, Dr. H. B. W

    Evans, Albert (Islington, S.W.)

    Moyle, A.

    TELLERS FOR THE NOES:

    Evans, Edward (Lowestoft)

    Oswald, T.

    Mr. Wallace and Mr. Hannan.

    Foot, M. M.

    Padley, W. E.

    Question put, and agreed to.

    Clause ordered to stand part of the Bill.

    Clause 3.—(SHORT TITLE.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Several Hon. Members Several Hon. Members rose——
    It being after Four o'Clock and objection being taken to further Proceeding, The CHAIRMAN left the Chair to report Progress, and ask leave to sit again
    Committee report Progress; to sit again upon Monday next.

  RAYON (SERVICE USE)
  Motion made, and Question proposed, "That this House do now adjourn."— [Mr. Butcher]
  4.2 p.m.
  Mrs. Eirene White: We have had a good many debates on textiles in this House, and this afternoon I wish to call attention to what is perhaps a rather narrow issue but one of the highest importance to those of us who are concerned with the rayon section of the textile industry.
  I raise it because in my constituency I have an area which is peculiarly vulnerable to any recession in the rayon industry. I may say that the towns of Flint and Holywell are largely dependent on rayon for their livelihood. We have at present a situation where last week workers with less than 20 years' service in the industry were dismissed, and only those with more than 20 years' service were able to carry on with their work. That gives some indication of the seriousness of the position in my own area.
  I do not wish to lay undue stress upon the employment difficulties in this industry at the present time. I hope they are temporary. I know the Parliamentary Secretary is well aware of them. I came to this subject of the alteration of or addition to specifications of Service Departments so as to use more rayon textiles and fabrics through the needs of my constituents, but I very soon decided that it was one which merited attention on its own. I need not persuade the Parliamentary Secretary that synthetic fibres have their own special uses and advantages. He has an up-to-date outlook in these matters, and I will not stress that point beyond saying that very considerable advances have been made recently in the rayon industry.
  It was perhaps unfortunate that the industry came out of its adolescent stage, so to speak, just before the last war and a good deal of wide-scale development was held up owing to the war. Utility specifications have some restrictive effect on wide-scale development, although that did not stop technical and scientific research, in which much progress has been made in the last few years. What we are asking is that that progress should be recognised by those who are responsible for entering into contracts for purchases by Government Departments.
  738
  I find that there are still extraordinary misapprehensions about the position of rayon, which has never quite lived down its early name of artificial silk. It is, therefore, apt to be considered as something which is a substitute or second-best. This, I believe, is today entirely unwarranted. I am sure that the Parliamentary Secretary recognises that there are certain definite advantages in synthetic fibres in that they can be fashioned to meet required specifications.
  For example, in the early days it used to be suggested that if one put rayon fabric into very hot water it would immediately disintegrate. Today, we have a rayon mixture sheeting which can be boiled and sterilised without detriment. The industry realised that treatment of that kind was a necessary requirement for hospital sheets, and it set about making a product which would fulfil those requirements. I will not go through the long list which I know that the Parliamentary Secretary has had an opportunity of studying. In many of the articles concerned there are positive advantages in the use of rayon either by itself or, more often, in combination with one or other of the natural fibres of wool or cotton. One then gets the best of both by combining the qualities of both.
  During the past few weeks, when my interest in rayon has become manifest, many people have said to me, "Surely, if you push rayon, will you not do so only at the expense of Lancashire and Yorkshire, which have their own problems? Will you not therefore be adding to unemployment in those areas even though you may quite properly be doing something for your own constituents?" To that there is the answer that that is not necessarily so.
  It is true that continuous filament yarn is not completely interchangeable with wool or cotton in its processing, but the main arguments which have been going on recently between the trade and the Department have not, on the whole, been concerned with the specifications for filament fabric. The main arguments have been concerned with the use of rayon staple in conjunction with other fibres.
  We believe that that is not in any way detrimental to employment in either Lancashire or Yorkshire. Staple is designed precisely to be used on the same machines as wool or cotton. Therefore,

  739
  the spinners and weavers in Lancashire and Yorkshire can feed their machines with one fibre or the other. To them, as far as employment is concerned, it will make no difference. As my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) says, it will positively help.
  Apart from that, rayon has positive advantages which should be stressed. It is, of course, made in this country. It does not have to be bought for dollars as does cotton. Normally it is very much cheaper than either wool or cotton. It is in the public interest that it should be used. It is not subject to anything like such violent fluctuations of world markets as the natural fibres. It has these positive advantages, I would urge for this reason that it is in the interests both of private buyers and public buyers that they should use rayon fabrics wherever possible.
  Discussions on this matter have been going on at what one might call fairly high level for a matter of at least two years since the dollar aspect of this question was realised to be one of considerable importance. What I hope that we shall have today from the Parliamentary Secretary is some account of the situation which has now been reached in this matter. He was present yesterday at a useful discussion which we had at the Ministry of Supply. He knows that certain points were raised then.
  I was extremely glad to find that the Minister of Supply had decided that a working party should be set up consisting of officials and representatives of the industry, with the Parliamentary Secretary in the chair. We hope for great and rapid results from this working party. I am sure we shall not be disappointed. There are, after all, degrees of leisure-liness which can be permitted to public departments. What was perfectly reasonable last year when the order books of the rayon industry were full, would be quite unreasonable today, although even then I should have thought that the dollar aspect was one of urgency.
  What we are asking is that, wherever possible, alternative specifications should be allowed for these contracts to permit of rayon taking its place with other materials. We are not asking that it should necessarily displace them, unless
  740
  it can be shown to be better. All we want is that rayon should have its fair place in the specifications which are allowed. Where it is felt that sufficient trials have not been given for outright alternative specifications to be possible, we ask that sufficient orders should now be placed to enable large-scale user trials of the shirting, sheets, blankets and the other items with which the hon. Gentleman is acquainted, to go ahead.
  We should like to know from the Minister what steps are to be taken in future to see that there is better coordination between the different Government Departments which make use of these articles and textiles, and that, where one Department, for example—in this instance, the Post Office—has made very extensive tests of the articles, the result of those tests should be brought to the attention of other Departments concerned, which should not begin their own tests all over again.
  We should also like to know from him whether it has been decided that it will be possible to reach a conclusion as to the wearing qualities of certain articles without having to wait possibly two or three years until they have arrived at what the Services call destruction point. I believe that an intelligent guess may be made long before that period has elapsed. We also hope that the working party will be able to make suggestions to other Departments, not only the Service Departments which may be concerned in public purchases, so that they may themselves become aware of the advantages of the use of rayon in textiles.
  For instance, we shall have a Coronation next year, and the Ministry of Works will be responsible for some of the decorations. I suggest that it might be possible for the Ministry of Works to see whether the materials which may be used—bunting and so on—would have the advantages which I suggest are to be found in rayon material.
  The plea I put forward now is definitely a plea for rayon on its merits. I believe we can make a very good case for the use of rayon on its merits. We are not asking that it should be used where other fabrics are more suitable, but we believe, at any rate, that tests have shown the considerable advance

  741
  which has been made in rayon development. The fact of the matter is that at the moment there is a degree of urgency, because of the unemployment situation, but that is only one part of the case put forward for the consideration of the Government, which we believe to be a very strong case indeed.
  4.13 p.m.
  Air Commodore Harvey: I am glad to support the hon. Lady the Member for Flint, East (Mrs. White) in what I think is the very strong case which she has represented to the House. In so doing, I should like to thank the Minister of Supply and my hon. Friend the Parliamentary Secretary, who will reply, for the interest they have taken in this matter, which has been raised mainly through the activities of the hon. Lady in recent days.
  There is no doubt that the situation in the rayon industry is acute. In my own constituency of Macclesfield, which was known throughout the world as a great silk producing town, we now produce more rayon than silk, but at present we have very serious unemployment in that borough, which we think is just as badly off, in proportion, as are other places in Lancashire.
  It seems to me that the Ministry of Supply could speed up the tests, not only in the Post Office, but by the Prison Commissioners, who have made considerable use of rayon. Exhaustive tests have been made, and I should have thought that the benefit of these tests could have been used in assessing the value of this fibre. Spinning machinery is going to be used in Lancashire, and it will continue to be used. That is important. We have also heard that in America specifications are issued to the Forces for rayon for parachutes used for dropping equipment, not human beings. Could the Minister see that we accept the American specifications? It may not be easy, perhaps, but the possibility could be looked into.
  Then there is the case of khaki shirting, a tender for which has already been issued, where the specification is 60 per cent. wool and 40 per cent. cotton. The mixture of 60 per cent, wool and 40 per cent. rayon is considerably stronger and cheaper, and the firms who are making this fabric have given it exhaustive tests. They are very knowledgeable people and
  742
  know their business, and I would ask my hon. Friend to take note of their tests and to get particulars of them as quickly as possible.
  The same can be said with regard to socks. They are much cheaper with the rayon blend, and tests in this respect have now been taking place for two years. All hon. Members know that socks do not last very long. A soldier, I believe, is issued with four pairs of socks a year. Could not a complete quarter's supply be made in the rayon mixture? That would be a great help in trying out wool and rayon socks in one large sample.
  As regards blankets, the 45 per cent. rayon blend is 6s. 4d. a lb. whereas the 100 per cent. wool is 7s. 2d. a lb., and I am told that the shrinkage of the blend blanket is 17 per cent. as against 26 per cent, for the all-wool. I realise that the rayon industry as a comparatively new industry and that in the past it may, perhaps, have over-stated its case. But I am confident from the discussions we have had with the industrialists that they are only anxious to put forward fibres which they know and can trust to carry out the work for which they recommend them. It will ease the balance of payments position of this country because home products will be used, and it will bring the emphasis on the smaller textile companies which are not all in Lancashire.
  I should like to say again that I have the greatest sympathy with the Lancashire problem, but nevertheless there are small towns throughout the country which are equally hard hit, though the distress is not so concentrated. If the Government can give some assistance in that direction, they will assist the morale of the people running the businesses and that of the workers, and may well encourage civilian buyers to place orders. I am confident that the Government and my hon. Friend, who has taken a great interest in the suggestions I have put to him, will do their utmost to see that rayon is used in greater quantities than before.
  4.18 p.m.
  The Parliamentary Secretary to the Ministry of Supply (Mr. A. R. W. Low): I am grateful for the way in which the hon. Lady the Member for Flint, East (Mrs. White) initiated this debate and my

  743
  right hon. Friend has asked me to say how grateful he is to her for the interest she has taken and also to my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) and one or two other hon. Members for the interest they have taken in it and for the time they gave up yesterday in bringing to him the valuable deputation which discussed this matter.
  Before I come to the immediate steps which we are taking—and I regret that I cannot announce anything very concrete today—I should like to refer to some of the more general issues. The point has been made that there is an advantage to our balance of payments in encouraging the use of rayon so as to reduce the amount of cotton which we have to import. This is true. One of various calculations made shows that each one million lb. weight of rayon substituted for natural fibres saves £250,000, largely in dollars.
  Rayon uses imported materials, but the cost of these is much less per lb. weight of rayon than is the cost of importing cotton or wool. It has also been argued, and was today by the hon. Lady and by my hon. and gallant Friend, that rayon is cheaper than either cotton or wool, and that an admixture of rayon will reduce the price of a textile material. This is probably true in general, but, as the House will be aware, prices will depend partly on the proportion of rayon used and partly on the current prices of the various fibres. All Departments of the Government are, of course, well aware of those two factors. I will see that the points that the hon. Lady made at the end of her speech are brought to the notice of my right hon. Friend.
  I should like to say a few words about the size of Service orders. By now most of the cotton and wool cloth required for the re-armament programme has been ordered. The percentage of rayon in cotton-rayon mixture would vary but the average would not be more than 30 to 40 per cent. and in wool-rayon mixture it would be less. One pound of rayon might produce about five yards of pure rayon fabric and therefore one million pounds of rayon might be used in about 15 million yards of rayon-cotton mixture. Even if orders could be placed on this scale they would provide only a small direct
  744
  help to the industry which has a potential output of 440 million lb. weight a year.
  As I understand, however, the argument for increasing the quantity of rayon in clothing and materials ordered for the Services does not rest on the direct impact which that might have upon the rayon industry, and particularly upon employment in the rayon industry. I am glad that the hon. Lady appreciates that we are all aware of the unemployment situation in that industry and that we are anxious to give as prompt help as we can.
  The argument rather is—and I agree with it—that an increase in the amount of rayon used in Service orders would have a psychological effect upon the industry and upon possible consumers of rayon. I should add here—as the hon. Lady explained—that the substitution of rayon for cotton or wool will have little or no adverse effect on employment in Lancashire and Yorkshire in particular. Rayon is spun and woven on the same machines as natural fibres.
  In the past comparatively little rayon has been used by the Services. Its use has been virtually confined to men's summer vests, to a number of items of women's underwear, stockings, ties, lanyards and ribbon, to linings and to parachutes. I understand that the mess dress of the W.R.N.S. has contained rayon. In 1951–52 the expenditure by the Ministry of Supply on rayon mixture clothing was £16,500, only part of which was for rayon itself. So far, orders for 1952–53 have been on much the same scale and represent one-fiftieth of 1 per cent. of the expenditure on clothing and textiles generally.
  There has been discussion from time to time about the use of rayon in parachutes and it might help the House if I gave a few facts. Eighteen months ago, following satisfactory trials, the first production order was placed for a number of light-weight escape type parachutes to be used in jet aircraft. There has been some difficulty in the manufacture of this fine and light-weight fabric, but progress has been made recently and it is likely that there will be further orders. Nearly 10,000 flare parachutes made of the same type of light-weight yarn have been ordered.
  Paratroopers' parachutes are still made of nylon. Supply dropping parachutes

  745
  have been made mainly of nylon in the past, though there has been a small order for some rayon parachutes of one type. It would be of advantage to the national economy if more rayon could be used and less nylon. Experiments are to take place with a rayon yarn for supply dropping parachutes. These trials will take some months——
  Mr. T. Driberg: In connection with the point which was made by my hon. Friend the Member for Flint, East (Mrs. White) about using the result of research by other Departments, is the hon. Gentleman aware of the fairly encouraging answer I had yesterday from the Minister of Health about the progress of tests in the use of rayon in surgical dressings? Will he see what can be done in that respect by Service Departments and the R.A.M.C?
  Mr. Low: I am aware of the answer my right hon. Friend gave yesterday. The hon. Member may not know that the Minister of Health was present at the meeting we had in the morning. We and the Ministry of Health and the Service Departments are co-operating in this matter. I think the hon. Member can be certain that we are alive to the importance of co-ordinating Departmental action in these matters; and if improvements have to be made on what was done in previous years we will quickly make them.
  What more can be done? We must accept the fact that however desirable it is that rayon should be substituted for cotton or wool, the Services cannot accept a change in the materials which are used for Services clothing unless they are satisfied that the new materials will meet in full their necessary specifications. The clothing must be able to stand up to wear in the climates for which it is designed, and often to very hard wear. It must also stand up to somewhat rough laundering treatment. It must not lose its toughness if it gets wet. and there are other needs, too: and one cannot altogether exclude considerations of taste.
  Before a new type of material is adopted, therefore, there has to be a thorough test of the qualities of that material, and this must be followed by trials by some of those who will wear or use the clothing. The hon. Lady made the point of the time taken up in all
  746
  these processes. I will certainly have a close look at that and see what can be done, if anything, to reduce it.
  Two years ago a technical advisory committee was set up in the Ministry of Supply with these terms of reference:
  "To examine and report on the extent to which use can be made of synthetic fibres in the economic development of clothing and general stores for Service Departments."
  This committee includes representatives of the Admiralty, of the Air Ministry and of the industry. The Ministry of Supply keeps closely in touch with the War Office. Though this committee has concentrated a great deal of its efforts on rayon, it has also had to investigate the use of nylon and other synthetic fibres. The object of the committee was not a short-term object, and it remains so. We are grateful for its hard work, although little has so far resulted. However, trials of 25 materials are now taking place with rayon.
  During the first year of the life of this committee the demand for rayon appeared to be well in excess of supplies. There was not the present urgency to hurry on with the trials, and, therefore, most of the trials of important materials did not begin until towards the end of 1951. In several cases these trials have proceeded far enough to be hopeful, or even more than hopeful, that the material will be acceptable to the Services.
  Mr. Anthony Greenwood: Does that include denim?
  Mr. Low: Yes.
  In normal circumstances it might be desirable for all these trials to be carried on to their full conclusion and to be followed by careful examination by the Service Departments. However, in the present state of the re-armament clothing programme, and as a result of the acceleration of orders in that programme, there may be a case for departing from the normal rule and for taking decisions to order a small or large quantity of the mixed rayon material for more extensive trials in the Services. In some instances there may be a case for taking the decision now to include rayon mixture in the specification required for particular cloth that may be being ordered.
  Yesterday, as the hon. Lady said, my right hon. Friend the Minister of Supply received a deputation led by her. The

  747
  deputation included my hon. Friend and some other hon. Members and also leaders of the rayon industry. I have already said that there were other Government Departments there represented by Ministers, including the Board of Trade and the Admiralty. The deputation gave my right hon. Friend their views and their experience, for which he is grateful, and which he welcomed. My right hon. Friend then set up a working group under the chairmanship of myself, to include representatives of the Ministry of Supply and Service Departments as well as leaders of the industry, to examine the possibility of including rayon mixtures in some of the orders which remain to be placed.
  Conclusions will be reached by this working group before the end of next week. Results will be rapid. I cannot say how great they will be. I must stress
  748
  again that in this matter the Ministry of Supply has to carry with it its customers, the Service Departments, and that we accept completely that their specifications must be fully met. Moreover, we accept that no permanent change in the type of material used for Service clothing can be made without the fullest trials.
  But our attitude to the general problem is plain. We want to help the rayon industry first, because we want to help to reduce or remove unemployment—and our actions may help to increase confidence in this way—and second, because we should welcome the increased use of rayon for balance of payments reasons, and our leadership in this matter must be of some importance.
  Adjourned accordingly at Twenty-nine Minutes to Five o'Clock.

  NEWTON AYCLIFFE DEVELOPMENT CORPORATION (CHAIRMANSHIP)
  NEWTON AYCLIFFE DEVELOPMENT CORPORATION (CHAIRMANSHIP)
  CIVIL DEFENCE (FIRST AID TRAINING)
  CIVIL DEFENCE (FIRST AID TRAINING)
  HACKNEY CARRIAGE LAW (REPORT)
  HACKNEY CARRIAGE LAW (REPORT)