§ Considered in Committee under Standing Order No. 71A.
§ [Mr. DUNNICO in the Chair.]
Motion made, and Question proposed,
That it is expedient—
§ The POSTMASTER-GENERAL (Mr. Attlee)
It is some time since a Debate on a Resolution of this nature has taken place. I think the last occasion was in 1925. I should like to give one or two reasons why we are asking for this sum, and to explain the Resolution. It has become customary to provide for the capital needs of the telephone and telegraph services, and certain minor postal services, by a Bill founded on a Financial Resolution every three years. That method of budgeting, so to speak, for three years was introduced for the first time by the right hon. Baronet the Member for Croydon (Sir W. Mitahell-Thomson), and he gave very cogent reasons why that was a sound businesslike procedure. It is obvious that, if you are carrying on a big business, you want to estimate as far ahead as you can, and in this case it is for the convenience of the Post Office, of the Treasury, and of the manufacturers. The amount for which we are asking as capital for this undertaking for the next three years is £32,000,000, of which all but £2,800,000 is for the telephone service. We estimate that we shall have in hand between £1,500,000 and £2,000,000, so that our provision of capital is really at the rate of little more than £11,000,000 a year. We have allowed a little extra 878 in order that the money shall not run out. This is an increase in the actual figures of rather more than £1,000,000 a year over the expenditure of the past three years, and the expenditure for these past three years was again in excess of the previous three years. That is as it should be with an expanding service.
But it is very dangerous to take actual figures in these days of changing price levels, and the amount that we are actually asking for is really rather greater than would appear from the figures. I may roughly estimate, perhaps, that £32,000,000 is equal to £36,000,000 on the price level of three years ago, and I must inform the Committee why we desire an enhanced rate of capital expenditure. The items are telegraphic plant, Post Office sites and buildings, and telephone capital expenditure. The telegraphic plant amounts to some £400,000 for the three years, minor works and such matters as lifts, repairs, electric light, heating and so forth amount to £379,000, and sites and buildings, mainly Class 2 Post Offices—the bulk of our Post Office buildings are provided by the Office of Works—absorb the rest. As to telephones, new exchanges account for about £9,000,000, underground and overhead lines £7,000,000, local and subscribers' lines about £12,000,000, and sites and buildings for telephones about £3,000,000. There are other smaller items that I could give, but those are the main items, in order that the Committee may see what the expenditure consists of.
The amount of capital required for a business like the telephones obviously depends on our rate of increase of custom. When our predecessors in office made an estimate of the amount of capital expenditure which they would require for these three years, they had at the same time to think of what the increase of business would be, because the policy in running the telephones has always been to keep a very small margin of profit and to return in lower prices and better service anything above that. In the course of the last few years there have been a number of instances, which I gave in the last Debate on telephones, of those improvements of service and lowering of charges. We, therefore, work with a comparatively small margin. On the other hand, it has always been the policy of the administration to work well ahead of the actual demand.
879 The telephone service is an expanding service. I should like to give one or two figures with regard to that expansion. In the five years from 1925 to 1930 subscribers have increased from 1,390,000 to 1,882,000. That is something like a 50 per cent. increase. Our net annual intake of new subscribers is round about 130,000, when you have set off those who have discontinued subscribing. It is clear, therefore, that somewhere about that order of increase is necessary to meet the capital charges under the proposals put before us in the time of our predecessors. There has been a big increase in the number of telephone exchanges. The number is now 4,893. Members for rural constituencies are specially interested in developments in their localities. The increase in rural telephone exchanges has been very great. The total number is now 3,366. Since the beginning of 1929, 445 rural exchanges have been opened. I should like the Committee to note that figure, because it is very considerable. We cannot be said not to be offering facilities in rural areas. In the same period 9,000 call offices have been opened. These increases have been effected during a time of industrial depression.
The Committee will naturally wish to be assured that the anticipated new business will justify this capital expenditure. There are certain matters over which we have no control. We have to judge what the course of trade will be, and we hope for a change in trade conditions. But it is not enough in a business to wait for trade to come. It is necessary to go out and get it. I should like to refer to a passage in a speech by the right hon. Gentleman the Member for Croydon on this point. He was replying to a Member who asked why he did not go in for advertising. He said:In the last few days I have seen exhortations to start an advertising campaign to try to popularise the telephones. There is no good advertising, unless you are in the position when you get replies to your advertisements, to deliver the goods, and, frankly speaking, owing to the arrears which accumulated during war time, we are not in the position to deliver the goods the demand for which ought to come from a largely extended advertising campaign."—[OFFICIAL REPORT, 28th July, 1925; col. 391, Vol. 187.]880 8.0 p.m.
That was the position in 1925, but the position has changed since then. We are in a position to-day to gain a very large intake of subscribers. We have something like 25 per cent. of spare plant. Of course, that spare plant is all over the country, and you necessarily, in a business like the telephones, have to keep spare plant ready in various parts of the country, because you never know whence the demand for an increase may come. That amounts to 387,000 lines. The Committee will see, therefore, that we actually have the plant there if we can get the increased number of subscribers. That explains why you cannot expect to put a large number of people to work on telephone construction, but that is by the way. I say it is necessary to-day, taking the line taken by my right hon. Friend the Member for South Croydon, to look at this matter rather differently from 1925, when the Post Office was admittedly hung up by lack of plant.
To-day we have the plant and we are working to put in more plant, but we have, if the Financial Resolution is to be justified, to see that we not only maintain our rate of increase, but accelerate it. For that there are two things that we need; one is new subscribers, and the other is an increased calling rate. I do not want to go into detailed matters of administration—indeed, I might be out of order if I did—but in order to justify my capital expenditure as proposed, I must show that we are out to get the custom to justify the plant that we shall put in under this Resolution. We are proposing, by advertising, by posters, by canvassing, and so forth, to go out for the business, as I said just now. We are also proposing certain changes with regard to the offering of party lines, which is also recommended to us at all events as an experiment; and, therefore, I say that we are in a position to do more business and out to get more business.
I would like to say a word particularly with regard to rural telephones, because I feel that the Committee should take as much feeling of responsibility as it can before this Debate closes, and every hon. Member can very much help to make this financially a success. I have here a list of the exchanges opened in rural areas during the last two years, and if one casts one's eye down that list to see the 881 number of lines working per exchange, he will find that it is very much under capacity and very much under the economic number desired. We make a loss on our rural business, and we have frankly to recognise that. We believe in doing it, but we should try to minimise that loss as much as possible. If I run my eye down this list, I see exchanges with nine subscribers, with eight, with nine, with seven, and so forth, and there are very few that show anywhere near the 50 subscribers which is about the number that makes for financial equilibrium. The Committee will see, therefore, that an increase of subscribers in the areas where the exchanges are not fully provided with customers would make a big financial difference. We have the plant there, but we want it fully used.
The same thing applies to other exchanges, but there is something more than that, and that is the increase in the calling rate. That again is largely a matter of acquiring a telephone sense, of popularising the telephones, and I think we have to do a great deal more in this country in that way. It is a matter in which I should like to ask the co-operation of everybody in this House, because really a telephone, if nobody but one's neighbour has one, is of very little use, and the telephone is one of those benefits which increases the more we can get others to share in it; and particularly in the rural areas increased user will come by an increased range of subscribers, but will also come by a realisation of the advantages; and we need an increased calling rate. Our calling rate has been going down, but that is largely because we have been taking in the rural exchanges, and we are looking to the rural localities eventually to justify the very big capital expenditure that has been put into the rural districts, and quite rightly put in.
I think that is all that I would say at this juncture in recommending this Financial Resolution to the Committee. I believe that the time has come now in telephones when a greater publicity will pay, when a greater good will will pay, and all of us should take care that we do not unwittingly damage a national asset by, shall I say, over criticism. Criticism is thoroughly good. It is really rather a tribute, as a matter of fact, to the telephones that complaints about the telephone service are still apparently news in 882 the newspapers. If anybody complained about the suburban train service, it would not be news, because it is so frequent. Unfortunately, we get a good deal of criticism in the papers, and I do not complain of it, but I think we could do better, and I hope hon. Members in all parts of the Committee will be encouraged to realise that if you want a cheap telephone service, a fully developed service, you cannot get it by discouraging people from using the telephone, but only by an increased user. I hope the Committee will, therefore, support this Financial Resolution. If anything, it may be said that my estimate of capital expenditure in the next three years is optimistic. I do not think it is optimistic if, as I say, we go out and get the business, because I believe that the business is there to be got.
§ Viscount WOLMER
I should like to thank the Postmaster-General very much for his careful and lucid explanation of the Resolution before the Committee. He has told the Committee that it represents the three years programme of the Labour party for telephone development, and I am bound to say that if you compare that programme with the hopes that were held out to the nation before they took office, and even with the hopes that were held out to the nation soon after they had taken office, that programme is exceedingly disappointing. When a Financial Resolution of this nature was last before the House of Commons, it was moved by my right hon. Friend the Member for South Croydon (Sir W. Mitchell-Thomson), in 1928, and on that occasion the Labour party did not hesitate to condemn my right hon. Friend's programme as very inadequate. The present Parliamentary Secretary to the Admiralty, who in those days used to speak for the Socialist party on Post Office affairs, said this about the last Telephone Money Bill which my right hon. Friend introduced:The Postmaster-General could have developed the telephone branch of the service very much more rapidly than he has done. Developments at this time would help the unemployment problem."—[OFFICIAL REPORT, 24th July, 1928; col. 1239, Vol. 220.]That was the gospel which they used to preach to us in those days, and in the manifesto that the Labour party issued entitled "How to Conquer Unemployment," which was, I think, a reply to a book with a somewhat similar title that 883 came from the Liberal party, this statement was made:The telephone system in this country is capable of great and rapid development, and the Labour party is prepared to spend capital freely on developing it.That, of course, is the policy of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) and the Liberal party, and I understand that, as a result of the assurances that the Government have given to the Liberal party as to the amount of money that they are prepared to spend on telephone development and other methods for diminishing unemployment, the Liberal party are prepared to keep the Government in office. This is what, in the Liberal book "How to Tackle Unemployment," is the policy advocated:By adopting a vigorous policy we showed that it should be possible to increase the average number of telephones by 300,000 per annum for the next five years, instead of by 125,000 per annum, the figure at which it now stands.I am bound to say that this is a very meagre realisation of those promises that were held out, and even of the promises that the present Secretary of State for the Dominions held out when he first assumed the office of Lord Privy Seal. When he became Lord Privy Seal, he announced in this House that he was going to use the Post Office very much towards helping to solve the unemployment problem. Speaking here on the 4th November, 1929, he said:We have no right to say to a private employer, you speed up,' without making a similar appeal to Government Departments. Consequently we asked the Post Office what they would do … In response to the appeal we made the Post Office have decided to accelerate their programme and they propose spending £750,000 this year and £750,000 next year on extensions of the telephone programme. That at least is an indication that the Post Office is not reluctant and is not behind the others."—[OFFICIAL REPORT, 4th November, 1929; col. 666, Vol. 231.]That in itself was an exceedingly disappointing pronouncement, but, as I shall show in a few moments, even that has not been realised by the Government. It was a perfectly inadequate contribution for a party that was talking about rapid development of the telephones in order to deal with the unemployment problem, and in fact the right hon. Member for Carnarvon Boroughs did not disguise his 884 disappointment. This was his comment on it:His telephone proposals are ridiculous. I looked at the figures spent upon telephones in 1928, when my right hon. Friend here (the Member for Croydon) was in office—£10,207,000; the year before, £11,615,000; the year before that, £11,902,000; and the right hon. Gentleman comes here and says, I have at last found a Postmaster-General, liberal, daring, venturesome, not like the poor miserable things we have had, and he is going to spend—three-quarters of a million!' The right hon. Gentleman—I do not know whether he is responsible or some of his friends—announced in the newspapers that we were to expect a surprise. I have not got it. Hon. and right hon. Gentlemen opposite have got it."—[OFFICIAL REPORT, 4th November, 1929; col. 694, Vol. 231.]I think that that is a very just criticism of the Labour proposals for helping to solve unemployment by telephone extension. But the right hon. Gentleman has not lived up to that. If members of the Committee will look back at the Debate which we had three years ago when my right hon. Gentleman the Member for South Croydon (Sir W. Mitchell-Thomson) was introducing a similar Resolution, they will find that he said:I am asking the Committee now to give me a further credit of £25,000,000. This, with the £4,000,000 in hand, will, I estimate, last me until the end of March, 1931."—[OFFICIAL REPORT, 24th July, 1928; col. 1245, Vol. 220.]But at the end of March, 1931, the hon. Gentleman had about £2,000,000 in band. In fact, the Government have not been spending money at the rate which my right hon. Friend the Member for South Croydon mapped out for a Conservative Government.
§ Mr. ATTLEE
May I remind the Noble Lord that there has been a very considerable change in prices since then. I think I warned him of that beforehand.
§ Viscount WOLMER
The hon. Gentleman mentioned that fact, and no doubt that may account for some of the money, but the fact remains that the Government are not expanding telephones at any faster rate than the Conservative Government which they so freely criticised. If the hon. Gentleman will look at the same Debate, he will see that my right hon. Friend was able to tell the House that there had been an expansion during the past year of 122,000 telephones, whereas I noticed that the hon. Gentleman in his speech just now was only anticipating an expansion of 885 120,000 telephones per annum. That is to say, he is content to budget for a lower figure than my right hon. Friend the Member for South Croydon was able to record in his last year of office.
§ Mr. ATTLEE
I said that the figure was regarded as necessary in order to meet the capital expenditure. I said that with an increased capital expenditure we should need an increased amount.
§ Viscount WOLMER
If I misunderstood the hon. Gentleman apologise, but I understood him to say there was an increase of 120,000 a year.
§ Viscunt WOLMER
Whatever may be the exact difference in the rate of increase between this Government and the last, the hon. Gentleman will agree that there is no very material difference.
§ Viscount WOLMER
I shall be very glad to hear from the hon. Gentleman what it is. Telephones were being expanded at the rate of about 12,000 a year for the last three years we were in office, and the rate of expansion at the present moment is not appreciably more than that, if it is anything like it. As the hon. Member for Crewe (Mr. Bowen) has found out on more than one occasion before, I am afraid that he will have to confess that there is very little difference between the wicked reactionary Tory Government in this matter and the enlightened Socialist Government which it is his honour and pleasure to support. The hon. Gentleman has permanently reconciled himself to and is budgeting for, that rate of increase. [Interruption.] He must accept responsibility for the estimate, which will leave sufficient money to allow the telephone increase for three years. He said so just now in his speech.
§ Mr. ATTLEE
I am sorry to interrupt the Noble Lord. I pointed out, as a matter of fact, that there was a very large amount of surplus plant, and that therefore a much bigger rate of increase was possible if we could get the business.
§ Viscount WOLMER
The administration has carried surplus plant, and, of course, if the hon. Gentleman has added to the amount of surplus plant he is carrying, it will raise his costs. He cannot carry idle plant without adding to his casts. The whole of that plant must represent capital expenditure which he has to meet, and, therefore, the more plant he is carrying, the more he is adding to overhead charges, and that is bound to reflect itself upon telephone development.
§ Mr. ATTLEE
The Noble Lord is exactly inverting what I said. I said that if you add to that plant, the economic thing was to try to get a bigger rate of advance, not necessarily in accord with the amount of new capital expenditure.
§ Viscount WOLMER
I should be interested to know, if the hon. Gentleman makes a further reply, what hope he can hold out to the Committee that there is going to be any absorption of that plant during the next three years. Even if he absorbed the whole of that plant, we should still remain a fifth-rate Power in telephone development. We should still remain eighth or ninth on the list of telephone countries. The point to which I should like particularly to draw the attention of the Committee is the very serious effect that the under-development of our telephone system has upon the unemployment question. I think that the Postmaster-General will bear me out, that if you could get an acceleration in telephone development you could increase employment in about 60 different trades. Every one of them is a trade in which there is heavy unemployment, and you would be finding just the sort of employment that is required. You would be giving employment to skilled artisans in the trades in which they have acquired their skill, instead of putting them to work such as making new roads, in which you would be wasting the whole of their manual skill.
I would ask the Committee to compare our position with that of the United States of America. In America they are spending about £140,000 every year on telephone development, or more than the total value of our telephone plant. We all know that America has a population three times as big as this country—
§ Viscount WOLMER
If you divide those figures by three, it shows the sort of figure we should be spending on our telephone development if we had the same rate of telephone development as they have in the United States. There is no greater fallacy than to suppose that there is some special disability inherent in this country which prevents our developing telephonically in the way that other countries have done. The sole cause is the inefficiency of the Post Office as the machine designed for this particular purpose. I have previously directed the attention of the right hon. Gentleman to the example of the islands of Jersey and Guernsey. It is a very instructive example, although very small. There you have an island which had an independent telephone system with two and a-half times as many telephones per head of the population as the island whose telephone were run by the Post Office. At that time Jersey whose telephones were run by the Post Office had a higher telephone development than England.
I do not want unduly to restrict the Noble Lord, hut detailed criticism of administration does not arise on this particular Resolution. That will naturally come when the Estimates of the Department are submitted.
§ Viscount WOLMER
I am not criticising the administration of the right hon. Gentleman, because the facts to which I have referred did not occur within his tenure of office. I am merely dealing with the cause of his asking the Committee for such a small sum for telephone developments and that, I submit, is in Order in this Debate. I will not go wider than you have indicated as right. If we could get an increase to the amount of two and a-half times in the telephones of this country, which is the rate of increase to which the example which I have quoted points, we should have a programme of telephone development of something in the neighbourhood of £300,000,000. That is the sort of figure that represents our telephone deficiency compared with the standard of efficient telephone countries. That is a terrific figure. How the Lord Privy Seal would envy a five-year programme in which he could spend that money on telephone development. I know that the Treasury never finance loans of that scale. I do 888 not think that the right, hon. Gentleman will take us sufficiently into his confidence to say whether he has had any difficulty with the Treasury over this Bill, but I am certain that, if he asked the Treasury to sanction schemes to provide £60,000,000 a year for five years, he would find that they would tell him that it conflicted entirely with their schemes for redeeming the National Debt. Any telephone extension on that sort of scale is quite impossible so long as the Post Office is under Treasury control.
What is the real cause that prevents the right hon. Gentleman from developing the telephone system, as I am sure he would wish to do 7 It is, as he has indicated, the lack of demand. He is carrying 25 per cent. spare parts, and that is a very unfortunate state of affairs. The causes of the lack of demand are high charges and inferior service. It is all very well for the right hon. Gentleman to deprecate criticism, but you are merely pursuing the ostrich policy if you pretend that all is right in the telephone service of this country, and that the public are satisfied with it. If the right hon. Gentleman has not forgotten everything that he learned before he went to St. Martin's-le-Grand, he must know that no such satisfaction exists. Our high telephone charges account amply for the lack of telephone demands. Let me take the cost of the telephone to the average subscriber in the country district. I believe the average number of calls is something in the neighbourhood of 1,500 a year to the subscriber. If you take a subscriber in the country, living one mile from the exchange, that is, within the radius, in England, if he makes the average number of calls the telephone costs him £13 a year; in Denmark, £6 5s.; in Sweden, six guineas—
§ Viscount WOLMER
In these figures I have calculated that the subscriber would be on the telephone for five years and would pay for the provision of the installation, 20 per cent. being charged each year. That is the fairest way in which you can compare the figures. It is always difficult to compare figures when the charges in different countries are on a different basis, but in all these cases 889 I have provided for the installation charge. In Canada the charge is £7 5s., and in Australia £9 5s. Take a subscriber five miles from the exchange, that is, outside the radius: in England the charge is £37 5s.; in Denmark, £12; in Sweden, £17; in New York, £28 18s.; in Canada, £7 5s.; and in Australia, £9 5s. Those figures show a tremendous discrepancy, which accounts amply for the fact that the telephone is not used in this country as much as it is in other countries. The telephone costs the subscriber a great deal more than it costs in the other countries. Why is that? Because our telephones have cost more to instal. The British telephone has cost £77 to instal, the American telephone £47, and the Swedish telephone £37. When we compare the cost of the British system with that of the American system, we find that a sum of £44,000,000 has been wasted on our system which would not have been expended if we could have erected it as cheaply as the Americans have erected theirs. These are gigantic figures, and they amply account for our high charges and the lack of telephone demand.
I have also reminded the Postmaster-General why it is that the Americans have been able to erect their telephones so much more cheaply than we are able to do. The right hon. Member for South Croydon sent a commission of inquiry to America on the subject. I do not know whether the Postmaster-General has been able to read the report of that commission, but, if not, I hope he will do so, and he will find that laying a mile of cable in America took 384 man-hours, and in this country 808 man-hours. Jointing a cable took 40 man-hours in America and 92 man-hours in England. Figures of this sort account for our high telephone costs and our high telephone charges.
§ Viscount WOLMER
They are taken from the report of the deputation sent to America by the Postmaster-General of the day.
§ Viscount WOLMER
Speaking from memory, I think it was in 1928. I shall be interested to know whether the right hon. Gentleman has been able to improve 890 on those figures. The right hon. Member for South Croydon at once set oh foot machinery to bring about an improvement in our figures. I have quoted every one of these figures before. The late Postmaster-General, whom I am glad to see in the House, did not challenge a single one, and the present Postmaster-General has paid me the compliment—
§ The PRESIDENT of the BOARD of EDUCATION (Mr. Lees-Smith)
I challenged them, and I answered them. The House divided upon them and gave their answer to the Noble Lord.
§ Viscount WOLMER
The right hon. Member has not been able to correct a single figure that I gave except to say that certain rooms in the Sheffield telephone exchange were let. That is the only correction the right hon. Gentleman has made in my figures.
§ Mr. LEES-SMITH
We had a Debate in this House in which I answered the Noble Lord's figures, and it was followed by a Division in which he obtained 44 votes.
§ Viscount WOLMER
Certainly we had a Debate on a private Member's night, but the right hon. Gentleman did not challenge the accuracy of a single figure of mine, and his successor in office said:It is easy to say, as the Noble Lord the right hon. Member for Aldershot says, 'you cannot answer my figures.' The figures may be right, but, unfortunately, the deduction is entirely wrong."—[OFFICIAL REPORT, 19th March, 1931; col. 2224, Vol. 249.]
§ Mr. ATTLEE
The Noble Lord was comparing figures for various years without any reference whatever to the purchasing price of money at the time. That is what I was referring to.
§ Viscount WOLMER
The figures as to the comparison of costs in different countries are all of the same period.
§ Mr. ATTLEE
The particular instance where I disproved his figures was when he was comparing one year with another without taking the slightest reference to the fact that prices had fallen during those years.
§ Viscount WOLMER
The hon. Gentleman has not disproved any one of the figures I gave, and, in spite of what he has said, I think his memory must have played him false in this matter. He 891 has not disproved a single one of the figures I gave in the Press or in this House on the question of Post Office costs. Whatever the Postmaster-General may think about my conclusions, I am glad to see that the Liberal party have arrived at the same conclusions. They say:We believe it is absolutely impossible to secure the best results so long as the telephone service continues to be a part of of the Civil Service.I am delighted to have the co-operation of the Liberal party in this matter, and I suggest that if they want a bigger telephone development—
The Noble Lord must not discuss the question of private or public control of the telephones on this Vote.
§ Viscount WOLMER
I recognise that the principle of Parliamentary control is more of a shadow than a substance, and, as we are not able to deal with this matter in all its aspects, I will content myself by saying that if hon. Members below the Gangway want, as I know they do, to see a rapid development of telephones in this country I hope they will join with me and others in pressing for a reform of the organisation under which the telephones are at present administered. We have it now on record that, in spite of the optimistic phrases of the Lord Privy Seal the other day, the present Postmaster-General is only counting on the same sort of telephone development in the next three years as has taken place in the last six years.
§ Mr. ATTLEE
This is the second time the Noble Lord has made the same misrepresentation. I must remind him that when I referred to the figures of development I was referring to the development in the past three years and that I hoped to improve upon them. He now says that it is on record that I am counting only on the same sort of telephone development in the next three years. I said nothing of the sort.
§ Viscount WOLMER
The Postmaster-General cannot get away from his own statement. He is asking for £32,000,000, which is going to last for three years, and he has 25 per cent. of spares. He points out that £32,000,000 now is worth about £36,000,000 a few years ago. 892 Taking his figures at £36,000,000 and his 25 per cent. of spare parts, you only get a rate of development on our telephones in the next three years of the same rate as we have had in the past few years.
§ Viscount WOLMER
I mean that when the hon. Gentleman has used every spare part and every shilling of this money we shall still be the eighth or ninth country in the rate of telephone development. It can be described as the rate of development. If the hon. Gentleman uses the whole of this money we shall be still eighth or ninth in the development of telephones among the countries of the world.
§ Viscount WOLMER
The hon. Gentleman is not talking the same language as I am. The rate of development is the rate at which you develop, and, if we develop telephones at the rate for which the hon. Gentleman is allowing, and for which he is making financial provision, we shall still be in a position of complete telephone inferiority as compared with other countries in the world. The Socialist party accept that sort of position as one which they regard as tolerable, and are prepared to continue the administration on lines which brings about that result. They refuse to undertake the drastic reforms which alone can lead to a reduction of cost and a consequent reduction of charges, which will give any rapid telephone increase in this country.
§ Mr. BOWEN
The Noble Lord is always interesting, but the difficulty I find with him is that he never learns anything. We have had a good many Debates on this and kindred matters in the House, but it does not matter what figures or arguments are produced to the Noble Lord he is still unconvinced. He is firmly convinced, on the one hand, that the Post Office is no good for anything but postal matters. He is firmly convinced that, because it is controlled by Parliament, there is very little hope for the telephones so long as the Post Office has to come to Parliament for any money. I could accept a good deal of what he has said if I were conscious 893 that he or his right hon. Friend the late Postmaster-General had shown any real desire during their term of office to improve the telephones at the rate of expansion which he has outline to-day or bring about the drastic changes which he now seeks to make.
Undoubtedly there is some reason for criticism in the Post Office telephone system. I do not know of any system that we could not criticise. The strange thing about it is that, if it happens to be a system in any way connected with the State, it becomes a habit to criticise it. I suggest that, if the Noble Lord went down by train to his constituency to-morrow and something happened to delay him for half-an-hour, he would take it kindly and make no complaint. I am going to join him in something which he has said to-night, probably much to his surprise. I believe the proposal of the Postmaster-General might have been a little more courageous. I feel that there is a certain amount of departmental timidity and caution in the Resolution asking for money to the extent of £32,000,000. While I listened intently, I could not understand the difficulty of the Noble Lord in grasping the point of the Postmaster-General that he was proposing to spend more money in the next three years than had been spent in the previous three years. My trouble and difficulty is that it is not enough.
I should like to see more money spent on the development of telephones substantially throughout the country, first, because I believe it would mean an increase of employment, and, secondly, because I believe that in the long run the Post Office would get their money back. I am certain that, if the Noble Lord had his utility company, there would be no expansion at all, because it would be concerned about taking profits, and seeing that there were no overhead charges that were not met by income, and to such an extent that there would be no margin of any kind. I suggest that the real cause for the want of development of our telephones is the lack of demand. But the Noble Lord put it down to high charges and inferior service. The time will come when he must join the rest of us in saying that the service in this country will compare with the telephone service in any country.
894 It is useless going to the United States to seek comparisons in costs, when they have their own timber and other requirement. They have natural resources which we cannot hope to have. These difficulties on our side must add very substantially to the cost of our production. The money proposed, by comparison with the last few years is, in my humble submission, not sufficient—provided always that the House is prepared to take certain risks. If we cannot justify an expansion of the service or the investment of an increased amount of capital in the service, by improved service and increased traffic, there are certain risks to be taken into account. One risk is that the service as a whole, if capital charges are to be set against it, will not be able to show a surplus, will not be able to meet fully the overhead charges, however many attempts may be made to produce those economies.
In these circumstances, the House must face the possibility of running a subsidised telephone service for the benefit of the community. It has either to do that or have a very much more restricted telephone service, to be run at cost or to be run with a margin of profit, if you like, for a public utility company—a certain margin for future development. Unless it is found to be possible, I see no hope at all for improvement of any kind in the telephone service. I shall, however, give a few figures in order to indicate that, so far as I can see from what has been done in the past, the proposed development is not as extensive as it might be. In 1925–6 a sum of £10,807,000 was used as capital in net addition to telephone plant. In 1928–29 the figure was £9,289,000. In 1929–30 it had dropped to £8,907,000. My hon. Friend proposes that the expenditure for the next three years shall be at the rate of £11,000,000 per year. He is taking account also, I understand, for the improved value of money in comparison with previous years, and he might be able to spend more than £11,000,000 as prices come down. I commend him for that. He is indicating an increase upon previous years, contrary to what the Noble Lord has said. In actual fact he will in business get more value for his money than has been possible owing to the price of money and prices in previous years.
895 I agree with my hon. Friend that the Committee must be satisfied that new business will be secured to justify expenditure. If new business can be secured by a reduction of charges, these charges must have some relation to costs. If the public demand a very cheap but a highly efficient service, they must pay for it, either directly or through taxation as a result of the margins or subsidies which may be given through money Resolutions in this House. There is no help for it. I agreed with my hon. Friend when he said that we have to develop the telephone service. I have already stated in this House that it is not always a question of charges, but a question of getting inculcated in the people the habit of using the telephone system. I would like to see a very substantial expansion of our rural area development, but I would like it to be understood that I would not find myself very happily in support of that development if it meant that it had to be at the expense of cheap labour. The Post Office do now—and I fear that a public utility company would more so—attempt to run their services by the use of labour at very cheap rates.
The hon. Member is now covering a rather wider field than is permissible on this Vote, and other Members will desire to follow him if I permit him to develop that argument.
§ Mr. BOWEN
I did it unconsciously, and, following the Noble Lord, I was led astray. I suggest that if my hon. Friend has only one thing in mind—cautiously to improve the service, to expand its utility and to put further capital into it as traffic develops—he is on sound businesslike lines. If, however, he is joining with the Lord Privy Seal in the desire to have telephone extension to provide employment then I suggest that he is not going far enough. The Liberal proposal is to spend £95,000,000 in five years instead of £45,000,000, which is, roughly, the present rate of capital expenditure, and, of the additional £50,000,000, it is proposed that £30,000,000 should be concentrated on the first two years giving a two year programme of about £50,000,000 instead of less than £20,000,000. It is an ambitious proposition, based on the ex- 896 pectation that by sinking a huge amount of capital in rural area telephone development, you will induce the rural population to rise to it and use the telephone service.
I suggest that that is pure speculation and, as my hon. Friend proceeds on cautious lines, I would like him to consider whether or not, if we have to provide work for the unemployed, and if this is a means to that end, more money could not be spent quite safely—not sunk altogether, but expended in such a manner as to produce fruit in future years. He has told us that he has a 25 per cent. margin on hand. From a business point of view that is a serious thing. He cannot afford to have 25 per cent. on his hands for any considerable length of time, something will have to be done to utilise it. The suggestion was made by a right hon. Gentleman opposite the other day that there should be an increase in the number of canvassing officers in order to produce new business. That is a commendable proposition, but I would go further than that. I would be prepared to take some risks. I think the telephone service would stand the taking of a risk, but we ought to take that risk with our eyes open, and as we have had the assurance of the Noble Lord that he on his side—and I am sure he can influence his party—would agree to the expenditure of a larger sum of money, I hope that my hon. Friend will go right ahead and will not fear any profound criticism on the ground that he is spending too much. It means either that or nothing at all. It either means that it is a sound business proposition or that it is nothing more than captious criticism.
We must "get down to brass tacks" in the consideration of this question. It is wholly a question of finance combined with the propositions which we have in our minds regarding the expansion of business. If we cannot justify the use of capital by an assurance of increased business in some form or another, then we are not justified in using it at all. If we cannot justify the reduction of charges on the ground of cost, then we cannot expect that the business population or the population of the rural areas will take up telephones unless the overhead charges or a bigger margin of them are met by this House. We have to 897 make up our minds, finally, whether the telephones are to be run on considerations of cost, whether they are to be run on considerations as to a margin, or whether they are to be run almost regardless of cost and regardless of whether there is a margin or not, the House, meantime, facing up to the question of subsidy. These are the propositions which arise on this occasion and which arise from the proposition of the Noble Lord. I regret that my hon. Friend has not gone further, but I commend him for having gone further than we have gone during the last three years. I hope it is not too late to suggest that further development of the telephone service can be undertaken with due regard, however—I must make this final reservation—to the people who are called upon to do the work, so that they shall not be brought in on anything like cheap labour rates.
§ 9.0 p.m.
§ Mr. SHAKESPEARE
The House always listens with interest to the lion-Member for Crewe (Mr. Bowen) who speaks as an expert and when he says that he regrets that progress in this matter has been so slow, one may be quite sure that he is making a cautious statement. I congratulate the Noble Lord the Member for Aldershot (Viscount Wolmer) on two counts, the first being that he handed such a bouquet to the Liberal policy of telephone development in connection with the unemployment programme and the second, that he made such a moderate speech. His attack on the Government was restrained and conservative and quite out of proportion to the needs of the case. I thought that the Postmaster-General grew impatient quite unnecessarily. Indeed the hon. Gentleman ought to be very angry with himself, and I am sure that when he has been a few months longer in his present position he will be very concerned about the speech which he made to-night. I was horrified to hear the unfolding of the great policy which the Lord Privy Seal adumbrated the other day.
I asked a question yesterday as to the amount spent on telephone development for the last three years and the answer showed that in 1928–29 the amount was £10,199,000; in 1929–30 it was 10,054,000—a decrease—and in 1930–31 it was esti- 898 mated at £10,000,000. And surely the talk about a fall in prices is a most piteous argument. I have never heard a Service Minister presenting an Estimate which was about the same as the previous year's, saying that we were really spending more because prices had fallen. The argument always used on those occasions is that we have managed to save a little and the Labour Government is saving money on the Fighting Services. We cannot allow the Postmaster-General to get away with the argument about a fall in prices. I do not know if I was right in understanding the Postmaster-General to give an estimate of £9,600,000 for telephone development in 1931. He divided an average of £10,000,000, as I understood, over three years in certain categories, and I gathered that some £9,000,000 was in respect of telephone development.
§ Mr. SHAKESPEARE
Then it is worse than I thought. It is less than £9,000,000 on telephones, compared with £10,000,000 last year and £10,199,000 in 1928–29.
§ Mr. ATTLEE
The point is that the total calculation is in the neighbourhood of between £33,000,000 and £34,000,000 of expenditure because of a certain amount in hand. If we take away from that sum £2,800,000 it leaves about £31,000,000.
§ Mr. SHAKESPEARE
I think that makes the case rather worse. You can judge this matter on two grounds. You can judge the amount of money that should be expended, from an ordinary business point of view, taking the telephone needs of this country in relation to the development in other countries. That is one way. Taken on that view alone, this amount is piteous. Another view earl be taken. We can say that distress in this country is such, and unemployment is so great, that we ought to try and expedite all revenue-producing schemes such as telephones. On that view, the rate of planning ahead is lamentable, and, if you combine both views, it is tragic. I am amazed that, within a few days of 899 the Lord Privy Seal making his statement, the Postmaster-General should come here and waste the time of the Committee in putting forward a demand for £33,000,000 to be spent over three years, which is rather less, leaving out the fall in prices, than the average spent for the last three years. The Postmaster-General has admitted that after two years of a Labour Government there was a surplus of £1,500,000 on telephone development.
The need was as urgent two years ago as it is now. The Noble Lord gave figures to show how Great Britain was falling behind her commercial rivals. The United States have 158 telephones per 1,000 of the population. We have 36. Even Denmark has 93, so that it is not a question of area. When the United States, as the Noble Lord pointed out, added telephone development as part of their unemployment programme, they added 40 per cent. to the normal programme of £100,000,000, and spent last year £140,000,000, as corn-pared with our £10,000,000, which will fall to £9,000,000, leaving out the fall in the price of materials. I do not want to criticise the Postmaster-General; it is quite clear that he is speaking from a brief that has been supplied to him, as to every other Postmaster-General at every triennial period. I have no doubt that when he gets down to it, he will, with the great ability that he has shown on other matters, add 100 per cent. to the rate of acceleration. Like the Noble Lord, I misunderstood what he said about the rate of increase of telephone subscribers. I was under the impression that the figure of 125,000 was mentioned, but he made that explanation of the rate of increase which is expected.
Anyone who views this from the Post Office standpoint would say that, economically speaking, we are entitled to expect a rate of increase of 200,000 or even 250,000. In fact, the experts whom we consulted in "We can tackle unemployment," put the increase at 300,000. The Postmaster-General may smile, but some of the greatest expert telephone engineers in the country were consulted before that estimate was made. It may be an exaggerated estimate, but let us say at least that we can get an increase of 200,000 subscribers per year. Has the Postmaster-General calculated what will 900 be the increase with the money to be voted by this Resolution? I agree with the noble Lord that, whether the Postmaster-General said 120,000 or not, it will be something about that, and probably not quite as much. It is not a question of administration. It arises out of the policy very closely connected with the vote of this money.
The Lord Privy Seal said he was embarking on a big advertising campaign in order to increase telephone development. I have in my hand what I presume is one of the first series of leaflets arising out of the new push policy. I do not know what the picture on the front page is intended to mean. It might mean anything. It is the picture of a man emerging from a hole in a pavement with a long pipe in his hand. How that is going to persuade anyone to consider using a telephone I do not know. [Interruption.] I am given to understand that it is American, but I can show the Postmaster-General many other types of American advertisement which will increase subscribers more effectively than this one. The American would show on the front page a picture of a charming lady smoking a certain brand of cigarette, the makers of which would pay for the whole advertisement. You might depict a long-distance talk between a British business man and someone in Buenos Ayres, or a farmer ringing up the local market asking for the price of cattle. This extraordinary and suggestive advertisement is the right colour being in red, but it will not add one subscriber. I hope that the Postmaster-General will give attention to this side of telephone development, because it is the most important side, as he knows. I hope, too, that he will consult some of the leading advertising firms, and not rely on the advice of his Department. The Postmaster-General used big words, and said we must go well ahead of demand and go out for business. As far as I am concerned, the Government will go out but for not doing business.
§ Mr. EDMUNDS
I hope that the Postmaster-General will press this development scheme with great vigour. I am informed by those who are engaged in the engineering department of the Post Office that many discharges are im- 901 minent in the South Wales district, which I represent. That naturally fills them with great alarm. I do not altogether rely upon that rumour, but when I look at the Post Office Estimates, I find that in the engineering and telephone department, a reduction in the number employed is provided for.
§ Mr. EDMUNDS
I was only drawing attention to it in order to show that there is some concern whether this programme of development will be pursued with vigour. If the Post Office are estimating for a reduced number of unemployed in this department, it does not square very well with the programme of development as indicated in this Financial Resolution. I simply rise in order to put that point to the Postmaster-General, and to ask him to press forward with the development in order that these discharges will not take place, and that his Department may contribute something really solid to the solution of our unemployment problem.
§ Lord EUSTACE PERCY
I should not have risen had it not been for the intervention of the Postmaster-General a little while ago, not so much for the intervention itself, as for the light which he threw on a practice with which we are all too familiar in these Post Office Debates—the practice of Ministers thinking that they have dismissed detailed statistics when they have made a few vague general remarks about them. The late Postmaster-General claimed that he had refuted the figures advanced by my Noble Friend in a certain Debate, and adduced as proof that he had defeated the Noble Lord by a certain number of votes. I do not know since when it has become the custom to estimate the truth and the force of speeches in this House by the number of people who vote for the Minister concerned. If that is to be the test most of the propositions advanced by the Government in the last Parliament must partake of the nature of eternal truth. Surely that is too petty an argument for the right hon. Gentleman to advance to the House. I have looked up the Debate referred to, and find that the late Postmaster-General 902 dealt with only two of the figures produced by my Noble Friend. In the case of the Swedish figures he said, "You must always remember that Sweden has a priority rate." I am not reading the whole of his remarks about Sweden. Does anybody who knows the telephone system in foreign countries by experience suggest that the existence of a priority rate invalidates arguments as to relative costs?
§ Mr. LEES-SMITH
I would like to point out that I explained what the Swedish system was, and explained that if we adopted the Swedish system here we should destroy all rural development of telephones in this country.
§ Lord E. PERCY
The right hon. Gentleman did not explain that, he asserted it. He said that if we applied the Swedish conditions to this country the greater part of our rural telephone developments would be wiped out, but he did not explain why.
§ Lord E. PERCY
I think not. I will read what the right hon. Gentleman actually said:I take one instance, because it has been the most frequently quoted in this Debate, the comparison with Sweden. I would point out that the Swedish rate which has been quoted is the ordinary rate, but that in Sweden if you want to he sure that your message will go immediately"—an assurance which we never have in this country—you have to pay the priority rate,"—I wish to Heaven I had the opportunity of doing so!which is twice the rate we have heard quoted here. Rural rates in Sweden have also been quoted more than once, but in this country we establish a rural exchange if eight subscribers can be found, whereas in Sweden, unless they can obtain 50 subscribers, those who wish to establish an exchange have to provide the equipment, provide the junction lines to the exchange, and pay the operator. Sweden has been quoted to us as an example of the method of developing rural telephones. If we applied Swedish conditions to this country the greater part of our rural telephone development would be wiped out."—[OFFICIAL REPORT, 12th February, 1930; col. 562, Vol. 235.]
§ Lord E. PERCY
Those conditions would wipe it out? Yes, if the Post Office insisted on always providing its own lines in every rural exchange; but the right hon. Gentleman knows perfectly well that if he adopted the Swedish system, and allowed private persons to provide the lines, he would get much more development and much cheaper development.
§ Mr. LEES-SMITH indicated dissent.
§ Lord E. PERCY
The right hon. Gentleman suggests that he would not, but he must know that there are many customers of the Post Office who have wished to do this for years, and have not been allowed to do so. It is no good the right hon. Gentleman shaking his head.
§ Mr. LEES-SMITH
There has been practically only one customer of any substance who has wished to do it.
§ Lord E. PERCY
But the right hon. Gentleman has never gone out and looked for them. We who are customers of the Post Office know that there are many more than the Post Office has ever heard of. In these matters the Post Office has no imagination; that is what makes it different from the Post Office in Sweden. The Post Office in this country assume that you cannot, by offering decent terms, get 50 subscribers, and therefore they have to come down to the measly number of eight. [Interruption.] I think that is quite Parliamentary.
§ Lord E. PERCY
They assume that people here will not do what they do in Sweden, provide their own lines, but they have no sort of reason for saying so. It is only an instance of what we who have had anything to do with Government Departments know so well—that there are a great many things which a Department will not even contemplate the possibility of, and the function of a Minister is to make a Department contemplate the possibility of things which they have assumed to be impossible. If the Minister does not perform that function he performs no useful function at all, and might just as well not be there.
I must come to the right hon. Gentleman's other instance, because I am sure it will interest the present Postmaster-General, who attaches such importance 904 to the question of comparative costs. The late Postmaster-General thought it sufficient to say that he had refuted my Noble Friend on the subject of the United States by admitting, as he did admit, that the capital cost of a telephone in the United States is £47, and in this country £67. He explained that by saying that a great deal of our development in this country was underground, although I think he rather exaggerated the importance of that factor. He then said that if you take the annual cost, allowing for depreciation and interest, of a telephone in the United States and a telephone in this country, it works out at £9.17 in this country and £10.97 in the United States. The Postmaster-General prides himself on the fact that while the capital cost in this country is more than twice what it is in the United States at a comparative level of prices, the annual cost is only rather more in the United States than it is in this country. That he regards as a refutation of my Noble Friend's figures. That is the kind of off-hand bureaucratic argument to which we are getting accustomed in this House; it is offered as a sufficient answer to really serious business arguments.
I assure the Committee that there is no party question about this, because we do not claim on this side of the House that we did with telephone developments what ought to have been done. We are claiming that we have now realised that so long as the present system continues, the system under which you depend for your finance on Treasury considerations which depend not merely on the business prospects of the Post Office but on the general public credit and the level of War Loan; and so long as you are tied to the Civil Service organisation of the Post Office—I am referring to the managing staff and not talking of the operators—rather than to the organisation adopted by the most progressive businesses of this country, which give due managerial position to the technicians, so long will you not get any efficient development.
Our complaint against the present Government is that they are perfectly conservatively satisfied with the present position, and when any of us makes these criticisms, they think the veriest off-hand arguments are sufficient—arguments which would not be considered for one moment by any meeting of shareholders if they were advanced by the 905 chairman of an industrial company. Surely this House of Commons should be at least as intelligent as a body of shareholders—one of the least intelligent assemblies. I do implore the Postmaster-General to try to deal with the criticisms made upon his business in the spirit in which the chairman of an industrial company would meet criticisms by the shareholders. I do not ask for any greater courtesy than that, or for a greater sense of responsibility than that, hut really, when the late Postmaster-General said that the accuracy of his remarks and of the defence of his policy was proved by the fact that he got a majority of the Members of this House to go into the Lobby at the behest of the party whips, he was really conducting a line of argument of which any chairman of any decent industrial company in this country would be ashamed.
§ The ASSISTANT POSTMASTER-GENERAL (Mr. Viant)
The discussion this evening has been exceedingly interesting. I do not think the Postmaster-General will for one moment fear any of the criticisms levelled at the Department. On each occasion on which he has had the opportunity of speaking in this House so far he has stood up to criticisms, and been able to give a good reply on behalf of the Department. I do feel that often the criticisms made here are not as fair as they might be. I often think that some of our greatest concerns would do very much better if they were criticised to the extent that the Post Office is criticised in this House and out-side. The criticisms levelled here from time to time, and the comparisons which hon. Members attempt to draw, are often unreal. Comparisons have been drawn this evening between circumstances in Sweden, in America and this country. Take America. We are confronted with entirely different circumstances here in regard to the installation of the telephone service. In the town-planning of America the architect who is responsible for the designing of buildings always takes into consideration the installation of the telephone service. In the cities of America, they take no exception to the overhead system. They make provision between their blocks of buildings for telephone equipment.
906 Immediately you embark on the development or installation of telephone wires in any town or rural area in this country, you come up against the county councils and the local authorities who want you to put the wires underground. I do not say it is their fault, but it is characteristic of the British temperament. Furthermore, we have repeatedly received requests in this House from hon. Members on behalf of local authorities to avoid overhead wires, though they wanted a cheap telephone service none the less. A private company would not be permitted to do this any more than the Post Office. As a matter of fact, I think the Post Office is in a position to erect overhead wires far more readily than a private company would be, for we have certain powers, and we are in a position to exercise them from time to time. If we are going to draw comparisons, let us have real comparisons and proper analogies. I am speaking of the method of equipment, and the ways and means that are available and the difficulties that are put in the way of our own telephone service by the local authorities. I have not in mind the points which, apparently, the Noble Lord the Member for Aldershot (Viscount Wolmer) had in mind. I am speaking of the capital expenditure involved in the installation of equipment compared with America, Sweden, Germany and other countries.
We have been criticised this evening because we are anticipating development at the rate of 120,000 subscribers during the forthcoming year. If we get that number we shall be developing at the same rate and to the same extent that development has taken place in America in the past 12 months. That, no doubt, is information to the Noble Lord. In Germany, the development last year showed that the number of new subscribers was 60,000. We are making up the leeway. The Noble Lord said that during the last of the three years of his administration the increase in subscribers amounted to 122,000. Let him remember that he had a remarkable opportunity of making up the arrears which accrued during the War years. We have not that opportunity, for we have been competing against trade depression. Our chances of development have been minimised to that extent.
907 The whole Debate has progressed along the line of assuming that £32,000,000 was all that we were likely to spend in the development of the telephone service during the next three years. That is all we are asking for at the moment, but it would be wrong to assume that we are satisfied with that rate of development. We are prepared to come to this House in six months' time, and ask for more money if the Noble Lord and his colleagues will assist us in increasing the development to an extent which would justify us in asking for further money.
§ Viscount WOLMER
Why did the Postmaster-General say that that was the provision for the next three years?
§ Mr. VIANT
That statement was made on the assumption that the development was not going to be intensive, but my hon. Friend would not be justified in sinking expenditure into the earth for which he is not going to get any return. For this reason, his prudence should be appreciated by the Committee, and I do not think that the Postmaster-General should be criticised in that respect. We are anticipating, and we are going to see that the number of subscribers is increased, and my hon. Friend would be prepared to meet Members of this House in older to give them all the information at his disposal to enable them to become missionaries in the development of the telephone service. My hon. Friend would welcome their help and assistance in that respect.
When this Estimate is criticised, I ask hon. Members to remember that, in addition to the purchasing power of money having increased, and in addition to an improved organisation and improved methods of construction and direction, we have reduced our charges by anything up to 20 per cent. That needs to be taken into account when considering the sum which we are asking the Committee to vote this evening. All that arises very largely as a result of the consideration which has been given to improved methods of construction, and undoubtedly a great deal of valuable information was obtained as a result of the visit of the commission to America. The Noble Lord the Member for Aldershot, when he is making use of comparative figures from other countries visited by the commission, must hear in mind that that information 908 was the result of private conversations, and that the commission obtained that information on the understanding that it was to be confidential. I hope the Noble Lord will bear that in mind in the future.
§ Viscount WOLMER
The hon. Gentleman surely does not accuse me of making public any information which ought not to be made public. The hon. Member seems to suggest that I have made public something which ought not to be made public. There are many important facts to which it is necessary to draw the attention of the public.
§ Viscount WOLMER
The hon. Member surely does not suggest that what I have done is a breach of confidence.
§ Mr. VIANT
The document itself containing the evidence was to be treated confidentially, and the evidence was given upon that understanding. In reply to the remarks made by the hon. Member for Norwich (Mr. Shakespeare), I would like to draw his attention to the White Paper which was issued to Members of the House and which showed that it was estimated that £29,200,000 would be required for the telephone service and £2,800,000 for the postal and telegraph services. The hon. Member for Norwich asked if the £2,800,000 was to be taken each year for the Postal and Telegraph Services. That is not so.
§ Mr. SHAKESPEARE
I was dealing with the three years percentage of £29,200,000. I divided that by three, which shows just over £9,000,000 spent, and barely £10,000,000 last year.
§ Mr. VIANT
Added to that, there is approximately £2,000,000 which we had in hand. I assumed from the speech of the hon. Member for Norwich that he was under the impression that this £2,800,000 had to be deducted each year and that it was not the aggregate sum, but I am pleased to know that he was not under that impression. I wish to impress upon hon. Members that, if this sum is spent before the date which is anticipated, we are at liberty to come to the. House and ask for a further sum. 909 With regard to what has been said about the speech of the Lord Privy Seal, it should be understood that in co-operation with my hon. Friend we have certain schemes under way, and I hope we shall get, a real push on with telephone development. In regard to that development, we must justify the expenditure to the House and that must be borne in mind on all occasions. I have now done my best to answer all the questions that have been put to me.
I gather from the speeches which have been made on this Vote that there is disappointment in all parts of the House in regard to the sum asked for in this Vote. After listening to the speeches of hon. Members opposite, I have concluded that they would have been well satisfied if the Government had asked for £100,000,000. Like my hon. Friend the Member for Crewe (Mr. Bowen), I am exceedingly cautious in regard to the policy which the Government are pursuing at the moment. I do not say that that policy is wrong, but I wish they had justified why it was so little and why not more as I think hon. Members were expecting. My hon. Friend who has just spoken has not met the criticism which came from the benches opposite. I was glad that the Noble Lord the Member for Hastings (Lord E. Percy.) had no complaint to make about the operators, but he complained about the management. I understood that he meant by the term "management" the higher officers in the Service—the First and Second Secretaries of the Post Office, the Assistant Secretaries, and the principals. I do not know whether it is the policy of the Postmaster-General, either the previous one or the present one, to bring those men together so that they may operate in the way in which a board of directors would operate for a public utility company. If that method has not been explored, I think that it ought to be explored. May I also make the suggestion that even the management might be stimulated if they were to have more courage and more faith in the common sense and knowledge of the operators, who have suggestion to make? Neither the previous Government nor this Government has yet made the fullest use of the capacity that is there to he utilised whenever we get a Postmaster-General who will rise to the occasion.
910 The Noble Lord the Member for Aldershot (Viscount Wolmer) explained the smallness of the amount mentioned in the Resolution either by the action of the Treasury in imposing a limit or by the fact that there was no demand for telephones. I think there is a huge demand for the telephone service when you can bring it within the capacity of the spending power of the people. I wish that my hon. Friend who replied to this Debate had told the House, and T want this point cleared up, does the Treasury prevent the Post Office from expanding Is it or is it not true? After all, the Noble Lord the Member for Aldershot was an Assistant Postmaster-General, and, so far as the higher administration is concerned, he ought to know more about it than I do. I believe he does, and time and time again he has repeated this charge that the Treasury imposes a limit on the development of the Post Office. Frankly, I want to see a Labour Government—
§ Viscount WOLMER
I have never said that the Treasury refused to give money for the development of the Post Office to meet the present demand. What I have said is that the Treasury could not finance Post Office development on the scale that you get in America and other highly developed countries without upsetting the arrangements for the conversion of National Debt and the national finance transactions.
I did not suggest that the Noble Lord had stated that the Treasury had refused. I think his suggestion was that in this case there had, shall we say, been a Treasury representation which had imposed a limit, and I understand imposing a limit to mean, in this connection, a limitation upon the possibilities of development of the telephone service.
§ Viscount WOLMER
I asked the Postmaster-General that question. I wanted to know, and I am equally disappointed that he did not reply.
§ Mr. ATTLEE
I will reply now. As the Noble Lord knows perfectly well, an estimate has to be made for a series of years. If I ran short, I should go to the Treasury again with confidence that they would supply what was needed for the Government's proposals.
I am glad to have that statement, but I did gather, when the Postmaster-General spoke, that he was following the policy of his predecessor, that is to say, that the expenditure was to be spread over a period of three years. I ask myself why, in these times, it should be three years. There is no reason why this Government should follow the precedent of the previous Government if the circumstances have changed. I was very glad to hear the Assistant Postmaster-General declare that, if necessary, the Government would come back to the House in six months and ask for more, but, if it is felt that he may come back in six months and ask for more, it seems to me that it might have, been put in now. However, I am very glad to hear that statement.
This Debate has been mainly upon the telephone service, and I appreciate that that is very important, but I have noticed that the allocation of capital for expenditure on telegraphs has been steadily diminishing. I know that there is a transfer of traffic from telegraphs to telephones. I do not know at what rate that transfer is proceeding, but that seems to me to be an additional reason for increasing the amount of money expended in the development of the telephone service.
I have only one other point to raise. The amount to be expended on the postal and telegraph side is about £2,800,000. I gathered from the Postmaster-General that money was to be expended on buildings, and I venture to suggest that £10,000,000 might very well be spent on Post Office buildings. I understand that the money will be spent on the Class II offices. I have been in the city of Birmingham, where there are offices which are not a credit to the Post Office. I think it was two years ago that I went into the sub-office at Oldbury, in Birmingham. The administration admits that new building is required, but my information is that the building operations have not yet begun.
There is ample scope for spending money on Post Office buildings. Let me give the House one illustration in conclusion. At Plymstock a new sorting office was needed, and that question was under consideration from 1927 on into 1930. Various reasons were given for the delay in beginning the work. The ques- 912 tion had to be considered by the Office of Works, and I have no doubt that the Treasury had to be consulted also. It takes too long for the Department to give us these buildings, and I want to suggest to my hon. Friend the Postmaster-General that he can help to relieve the unemployment in the building trade by speeding up the erection of the new post offices which are required. There are many offices in this country where the Post Office business is an incidental; there is hardly room for the public to transact Post Office business in a number of offices around the City of Birmingham. I say that that is not creditable to the Post Office. There is a point in development, surely, where, for the sake of the credit of the Department and the convenience of the public, a new building should be erected; but, instead of that, sometimes the Post Office business appears to be a sort of second-hand business to a newspaper agent. That is not good enough for the Post Office. I appeal to the Postmaster-General to speed up the erection of new offices. I have a list of places—Birmingham, Leeds and other big centres—that need them. I am glad to hear the admission that the Treasury provides what the Postmaster-General asks for, and I hope he will be successful in his demand from the Treasury for getting on with new buildings. I suggest, in that, connection, that he would introduce a very welcome change if, in erecting buildings, the Post Office would make them big enough to let out portions and earn revenue instead of paying rent to other owners.
§ Mr. E. BROWN
The Committee have listened with great interest to the hon. Member. I am sure the Parliamentary Secretary, if he has not looked into Plymstock, will do so during the week. I can give him another illustration of the kind of thing of which the hon. Member has been speaking. Right opposite Mount Pleasant there is a narrow grocer's shop at a busy corner with a little counter where two girls work under very difficult conditions. It is a very busy centre at certain times of the day, and, if the hon. Gentlemen will pay a surprise visit, he will see the kind of thing that is in the minds of hon. Members. They are really a little exasperated when Ministers assume a kindly sort of superior air, as if 913 criticism ought not to be welcome. When the hon. Gentleman seems a little irritated at criticism and so desirous of defending his officials, I am reminded of a story of Sir William Harcourt. He once told a Minister, "You are there to tell the public officials what the general public will not stand." That is why we are here. We cannot tell the officials ourselves, but we are here to tell the Minister what the general public feels, and I have no doubt that on this matter of the development of the Post Office the general public feels very strongly.
With regard to telephone development, it is not formulae that are wanted. There is not a Member in the House who has not had in his constituency cases such as I have had of discharges of telephone engineers in busy cities—I have communicated with the Postmaster-General about constituents of mine—in great cities where there is a vast potential demand, but we are put off every time. The Assistant Postmaster-General comes from Devonshire. He is likely to be cautious, but he ought to be bold as well. I would add my small word to that of the Noble Lord and others who have asked the Postmaster-General not to treat criticism as unfriendly, but as representing what is felt in the constituencies, that in this time of great unemployment there should be a far-sighted, programme, not merely for three years, within the duration of a particular Parliament, but to meet the needs of a potential demand. If sufficient energy and drive is put into it there might be an immense expansion in the most valuable telephone service.
§ Resolution to be reported to-morrow.