Orders of the Day — Telephone Service.

– in the House of Commons on 31st March 1927.

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Photo of Lieut-Colonel Sir Gilbert Acland-Troyte Lieut-Colonel Sir Gilbert Acland-Troyte , Tiverton

I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof the words this House regrets that the telephone service is not conducted by private enterprise, and considers that steps should be taken to provide improved postal and telephone facilities in rural areas. Before I deal with the terms of this Amendment, I wish to draw the attention of the House and of the Postmaster-General to a question in connection with the administration of the Post Office which I regard as one of great importance. I notice, from the last Return published, that the number of disabled ex-service men employed by the Post Office is smaller than the number employed in any of the other Government Departments, with the exception of the Admiralty. I know that in the case of the Admiralty there are special reasons, as we were told yesterday. But I hope the Postmaster-General will be able to give this matter favourable consideration, and to see that a greater number of ex-service men shall be employed by his Department. There are a great many jobs under his jurisdiction which can be done both by disabled ex-service men and by sound ex-service men. In the case of postmen, I believe the Postmaster-General employs 50 per cent. of ex-service men. I think that that proportion should be increased to 75 per cent., and I hope my right hon. Friend will be able to see his way to do this. I might enlarge on this question, but I am not sure whether I should be in order. I should like, however, to draw attention to it.

In what I propose to say on the Amendment, I hope the House will forgive me if I refer to certain specific cases which have occurred in my constituency, and as to which I should like the Postmaster-General to make inquiries. They are, in my opinion, not isolated cases, but cases typical of what is going on all over the country, and I think my right hon. Friend will see that, if he is able to put these cases right, he will be able to put right similar cases in other places. The cases may be of purely local interest, but as there are many other cases of the same sort, I think it is worth while my mentioning them. As regards the postal services, I do not think we have very much to complain of; on the whole, I think they are pretty good. We should, of course, like to see a considerable increase in the number of second posts, but I fully realise that, in country districts, the expense of increasing the number of places where second pasts are received would be too great. having regard to the value that would be got from them. I think, however, that the Postmaster-General might be able to extend the system by which a second post is delivered at rural offices, but not sent round to individual houses. In some cases the second post is sent to the post office, and people who wish to make sure of receiving their letters can send to the post office in the afternoon or evening and get them. If they do not send, the letters are delivered in the ordinary way the following morning. If this could be extended, it might be found to be well worth doing.

4.0 p.m.

Another slight difficulty from which we suffer is that in a great many places there is no post out between mid-day on Saturday and 4 or 5 o'clock on Monday afternoon. This is because the local postman is given a Saturday half-holiday, and it is right that this man should have a half-holiday. He is a very hard worked man. He often has to walk 12 or 15 miles in the day, and he is frequently away from home 12 hours or more. Therefore, if any man be entitled to a half-holiday the local postman most certainly deserves it. This difficulty of not being able to get our letters off on Saturday afternoon might be got over by employing some reliable young man with a motor bicycle to go round and collect the letters. I believe it would be possible to find some really reliable young men who own motor bicycles and who would be willing to do this work for some small payment, say 6d. per mile, and it would be of considerable advantage to us if it could be done.

We are getting now some little way from the War, but there are cases in my constituency where I know that the pre-war postal facilities have not yet been restored. It is quite time that those facilities were restored. I might mention one instance. In a district near Uffculme in pre-War days the post went out at 7 o'clock in the evening, but it now goes out at 5 o'clock. That means that a farmer who has been to market or to the county town on private or county business cannot get home again in time to post his letters, and therefore he loses a day's post. I hope that it will be possible to restore these facilities. In this same district, there is another difficulty which might very easily be adjusted. It is a matter of local adjustment. There has been correspondence going on now for over two years between the parish council and the local postal authorities on the subject, and nothing has been done. There is a group of houses and a farm that do not receive their letters until 11 o'clock in the morning, whereas two fields away, not more than 400 or £00 yards distant, another farm receive their letters at 7.30 in the morning. This is because in one ease the post comes from Burles-comb and in the other from Uffculme. That is a thing which could be easily adjusted by the local postal authorities by putting this group of houses into another postal area, and I hope that the Postmaster-General will see that it is done.

As my right hon. Friend knows, both the. postal and telephone services at Burles-comb are far from satisfactory. Our chief complaint, however, is not on the subject of the postal services, but on the subject of the telephone service. I believe that this House has never yet refused to vote any money required for the development of the telephone service. I believe that during the last four financial years the telephone service has produced a profit of £3,600,000, after allowing for depreciation and for interest on the money. I know that at the present time the House has voted the Postmaster-General a sum of £1,000,000 per month for the development of the telephone service. I am afraid that we in the country districts do not get our full share of that £1,000,000 per month. I am afraid it is used more for the development of the telephone service in the towns, and such things as the telephone service between here and America, which may be very desirable, but which does not benefit the people in the country districts very much. There is not the least doubt that it is really more important that the telephone service should be developed in the country districts than in the towns. The isolated country districts require these facilities more than people living in the towns, and, by increasing these facilities there and giving more telephone communication, you will encourage people to go and live in the country districts, which is a thing that everyone in this House desires to see.

Unfortunately, the telephone is a rich mans luxury, but it ought not to be so. It ought to be cheap, so that it could be placed within the reach of everybody. The best way of cheapening the telephone is by increasing the number of people who use it, and the best way of increasing the number of people who use it is by cheapening it. It is up to the Postmaster-General to start this circle by doing everything he can to reduce the telephone charges and to make them lower so as to bring the telephone within the means of all classes of the community. As an example, I might mention that in Canada the cost of the telephone is about one quarter what it is in this country and that, according to an answer which the Postmaster-General gave to the hon. Member for Stone (Mr. Lamb) about a week ago, the number of users in Canada is four times the number of users in this country. That shows how by cheapening the rate you will be able to increase the number of users. The charges for the telephone are not only too high, but in many cases they are also unfair and want adjusting. I should like to take another case in my constituency. There is a place called Whimple. I do not suppose that many hon. Members have heard of Whimple, but I expect that most of them have drunk the cider which is made there and which is very good. The telephone charge from Whimple to Exeter, a distance of eight miles, is 5d., which is higher than the charge from another place not in my constituency, Honiton, which is 16 miles from Exeter, and the line from Honiton runs within quite a short distance of Whimple. That, obviously, is ridiculous, and requires to be adjusted. There is another grievance so far as farmers are concerned. There are two different rates, one for business houses, and one for private houses. Farmers are charged on the higher of these two rates. That is quite wrong, and I hope that the Postmaster-General will change it and charge them on the lower rate. That would mean a difference of 7s. 6d. per quarter, which is worth having, and it would encourage more farmers to take the telephone.

The trouble is that the postmaster-General is afraid to take risks in regard to the telephone. He fails to realise that the supply of the telephone will make the demand. He waits for the demand to come before he gives the supply. It ought to be the other way round. He ought to give the supply, because there is not the least doubt that the demand will follow. There is a rule to which he sticks too closely. He will not supply an exchange unless there are eight guaranteed subscribers. That rule ought to be relaxed in any place where there is a prospect of the telephone becoming a paying concern within a reasonable time. I know the case—I need not mention the name—of a place with 700 inhabitants, and he refuses to supply the telephone because there are only six guaranteed subscribers. If an exchange were placed there, it would serve not only that village but two other villages, giving a population of about 1,000. There are, on the average, 33 subscribers to every 1,000 people, so that if a telephone exchange were put there the probability is that in a short time, instead of six subscribers, there would be 33. That is the sort of enterprise which the tight hon. Gentleman ought to undertake. Any private concern would do it. Take the case of the multiple shops. They do not wait until they are certain of having a paying concern before they start in a village or town. They plant a shop in a place where they think it will become a paying concern in a few years time, and, until it does become a paying concern, the loss is borne by the other shops which are paying. If this can be done by a private concern, if this can be done by a dividend-producing concern, it ought to be done by a public service, which is not primarily run to produce money. The telephone service ought to be run for the convenience of the country and not with the idea of producing money and relieving other taxpayers.

The Post Office ought to advertise its wares, and it ought to advertise them in and attractive manner. At the present time, if you ask for the telephone or how it can be got, you are given a form which explains it all but it takes you about half-an-hour before you can understand what it means, and it takes you another half-hour to work out a complicated sum to find out how much it will cost you, and then probably you are wrong. It ought to be put quite simply and clearly, so that any farmer or anybody who wants the telephone can see at once the advantage he would get and see also what it would be likely to cost him. Anyone who applies for the telephone in a new undeveloped district ought to be given every encouragement. It would be worth while to give the pioneers of the telephone in a new undeveloped district preferential treatment by allowing them to have it cheaper for a few years. Such applicants ought to be encouraged in every possible way.

The best advertisement which the telephone or any business can have is that it should have a thoroughly satisfied number of clients, and any new man applying for the telephone in an undeveloped district ought to be used as a decoy duck. At the present time, so many difficulties and complications are put in his way that, instead of him acting as a decoy duck, he acts as a scarecrow, and discourages other possible applicants. That is not the right system on which to develop the telephone. The fact that the telephone can be extended by means of ordinary commercial methods was shown very clearly by what happened at the Ideal Homes Exhibition a short time ago. The Telephone Development Association had a room there is order to encourage the use of the telephone, and, as a result, 115 people signed agreements to take the telephone and 230 people in addition left their names and addresses in order to be interviewed by Post Office officials with a view to taking it. That shows how by a little careful advertising the use of the telephone can be extended.

I should like to see an extension of the system by which private lines can be put on to places where there is at present a call office. In some places where there is a call office, it is possible for what I believe is called a single subscriber exchange to be formed. It means that there is a sort of small exchange formed in the village in which the call office exists, and it is run by the post mistress of the village and can be easily run by her. This is only possible when a village is on a circuit by itself. In some cases there are five or six villages on the same circuit, and it cannot be done. I believe that without any great expense it would be possible to put a large number of these villages on a. single circuit, and the extra expense would be more than paid for by the three or four subscribers who would take private lines from these local call offices.

The Postmaster-General ought to aim at trying to get 'exchanges in as many villages as possible. He ought to aim at getting call offices in practically every village and at practically every railway station. It is of very great importance to farmers that they should be able to communicate quickly with railway stations, and it would also be of considerable advantage to the railway companies, because it would mean in many cases that they would get their trucks cleared 24 or even 48 hours earlier than they do at present. It would save delay, as very often the post arrives too late for the farmer to send to the station the same day he receives the letter, whereas if he used the telephone he could send off the same day. In respect to the carriage of live stock, it would often save him going to the station, perhaps a considerable distance, two or three times in the same day to meet the train on which he hopes it will arrive, I hope the right hon. Gentleman will do all he possibly can to make call offices available at as many stations as possible and at any rate every station at which there is an exchange in the neighbouring town.

One slight trouble about village call offices is that there is no privacy. The call telephone is probably put in a village shop or the post office. In many cases there is no room in the office for a private box to be installed but it would not cost a very great deal to put a kiosk just outside in which you could telephone with comparative privacy. In my own post office, there is a private box but there are two telephones, one inside the box and the other outside. The one inside the box is supposed to be reserved for the use of the post-mistress and the one outside is for the public. If it is necessary to have two instruments in one post office the public ought to have the advantage of using the one which is in comparative privacy. I hope the right hon. Gentleman will secure as much privacy as he can in call offices.

In conclusion, may I say that I am sure he wishes to improve the telephone and postal services in our villages in every way he can and I hope he will be able to do more than he has done. I should like to thank him and the Assistant Postmaster-General and the Parliamentary Private Secretary for the very kind way in which they have met every case I have put before them. No one could have met me in a better or more helpful way than they have done. I can assure the right hon. Gentleman that this question of the telephone service in country districts is causing a great deal of interest. People are beginning to want to have the use of the telephone, and if he will hasten the supply of call offices and exchanges in the villages he will receive the gratitude of the people who live in the country. Money so expended will not be wasted. It will be an investment, and a good one, which will bring back a reasonable return. I hope he will be able to tell us he is going to go forward with a steady progressive development in country districts, and that we shall see a great improvement in a very short time, and I hope he will not allow himself to be handicapped by the Treasury.

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

I beg to second the Amendment.

My hon. and gallant Friend has not said anything about the first part of the Amendment regretting that the telephone service is not conducted by private enterprise, but I am not going to run away from that part of it. I believe if it had not been for the Government—I do not say the Post Office—having taken it over we should have had a very much more efficient service than we are getting at present both in town and in the country. A very instructive answer was given to my hon. Friend the Member for Stone (Mr. Lamb) with regard to the use of the telephone in our Dominions and in foreign countries. The figures were, for the United States 150 per thousand, Canada 130 and so on, and Great Britain 31. In the United States and in Canada they are run by private enterprise, and they have developed much more than under our State run service. I believe Denmark is high up in the list with 96 per thousand, and New Zealand, which I believe is run by private enterprise, 94. In Sweden some people only have a half time service—12 hours instead of 24. I should like a little more information on these details as regards private enterprise or State management in the countries mentioned in this question. In reply to a later question he said that on 31st January Great Britain had increased from 31 to 33 per thousand, but he could not give the figures for other countries. There is a company in British Columbia which gives these figures in a quarterly journal. We are always told of the difficulty and expense of the development of the service in rural districts. It must be far more difficult in Canada, but their figures show an increase of 7.1 per cent. for 1926 as against our increase from 31 to 33 per thousand in two years. I think that shows clearly that our telephones are carried on in a very unenterprising way, and it is time they bucked up, especially in the rural districts.

Another drawback I am always met with when I ask why we cannot have more telephones in rural areas is that the Treasury will not let them have the money. That is another disadvantage of State management. A private company chooses the time and the opportunity and goes to the public and borrows the money when it is cheapest and most businesslike to do so Here, if the Post Office sees a chance to extend the service it is blocked by the Treasury, which says we cannot afford it. That is one of the reasons why private enterprise always beats State management. There is another point in which the telephone service is more badly run in this country. I do not want to boom the Canadian Company and it may be giving my right hon. Friend a chance to get something back on what I have said, but the whole object of advertisement is to make people pay attention and get money from them. Among other things, there are chatty little articles in this quarterly magazine and some rather tall stories. There is one about pheasant shooting which is rather pleasant reading. It says that when game is missed by one gun it is possible to send a message by telephone to another shooter to be on his guard. Another little story is that a recent theatrical dispute was settled between New York and San Francisco by two people talking to each other continuously for five and a- quarter hours. Notwithstanding all these tall stories it is very good advertisement. No people look after their employes better than these companies in our Colonies, they place the whole facts on the table and, in addition, they pay very satisfactory dividends.

I wish to enforce what my hon. and gallant Friend has said about the necessity of farmers having telephones. The railway companies have approached the Postmaster-Generals of both Governments to help in patting up telephones at their railway stations in rural districts. It is absurd to wait till business comes. The only way is to go out and get the farmers to join so as to make it pay. I should like to offer a few words of thanks to the Postmaster-General and the Assistant Postmaster-General. It is not their fault that we cannot get these things, but it is the fault of the system and of State management instead of private enterprise. I know they realise the necessity of opening up the country districts if they had the money. I have brought several cases to their notice lately. Putting telephone kiosks round new and growing towns will do more to aid the development of rural life and the amenities of the people who live in the villages and towns than anything else they can do.

Photo of Mr Charles Ammon Mr Charles Ammon , Camberwell North

The House, I am sure, was very interested in noticing the difficulty which the Mover and Seconder of the Amendment experienced in fathering it. Although they made some measure of attack on the postal and telephone system, they concluded with words of eulogium upon and congratulation to the Postmaster-General and the Assistant Postmaster-General, assuring them that the Amendment was in no sense an attack upon them. Thereby, they were, in anticipation, looking for the castigation that must surely await them later on. What really emerges from the De- bate is that it is not so much that they have any real complaint about the system itself, but that their Amendment is an attack, on the part of those who are in favour of private enterprise, on a service simply because it happens to be publicly owned and controlled. That, evidently, is the whole gamut and gravamen of the charge.

Brigadier-General BROWN:

And because it is inefficient.

Photo of Mr Charles Ammon Mr Charles Ammon , Camberwell North

I will endeavour, later, to deal with some of the points that have been raised by the two hon. and gallant Members. The curious position now put before us is that, to some extent, the Postmaster-General and I will be found to be working in harmony. That will dispose of some of the accusations that are occasionally brought against trade unions and their officials, that they are not concerned about the industry so much as regards its efficient working and the service which it gives to the public. Before coming to the particular points raised by the Mover and Seconder, it would be well for the House to bear in mind what was the position before the Post Office took over the telephone service. I do not think we need pay serious attention to any suggestion that the Post Office as such should be under private enterprise. I imagine that it is mostly the telephone service that concerns the Mover and Seconder. It is well to bear in mind that the telephone service came under the control of the State, directly, in 1912. It came under the control of the State in response to a very widespread agitation, due to the inefficiency and incapacity of the telephone company to meet the private needs which were demanded of them. After considerable discussion and investigation by a Committee of inquiry set up by this House, it was decided that the State should take control. It is well to remember that an attempt was made to get a very large and inflated price for the stock and goodwill of the company. On that matter being submitted to arbitration, a considerably less amount was awarded by the arbitrators than was claimed by the company. When the State had acquired the plant of the National Telephone Company it was found that the plant had so deteriorated and was so inefficient and so utterly useless to meet the then needs of the telephone service that £8,000,000 had to be expended in order to make it work even along barely efficient lines. That is one of the comments we may make in regard to the service that was then given by the private company.

It was arising out of the particular provisions which had been referred to in this House again and again, that the Committee was appointed, on the initiative of the father of Captain Wedgwood Benn, who until recently graced the benches behind us. In March, 1895, it was resolved: That a Select Committee be appointed to consider the proposed draft agreement between the Postmaster-General and the National Telephone Company, and report with reference to the monopoly which may thereby be created; the granting of telephone licences to municipalities, and generally on the future policy of the Post Office with reference to the extension of the telephone service. The result of this investigation was to bear out all that had been said with regard to the inefficeney of the private telephone company, and to hand over the system to State control and ownership. If anything could emphasise the value of the telephone system being under State control, it was the fact of the valuable service rendered by the telephones, and the telephone staff during the War. The service received the encomiums of all concerned. Perhaps there could be no stronger argument that could be brought forward of the need for such a service being directly under the control of the State.

I was interested to hear both the hon. and gallant Members make a comparison, an invidious comparison, I think, between the telephone system in this country and the telephone systems in the United States and other countries. The comparison with the "United States is interesting because, curiously enough, the people of the United States who are mainly responsible for the organisation of the telephone service there, do not concur in the opinions expressed by the two hon. Members. In 1915, when I was in the employ of the Post Office, it was my pleasurable duty to make an unofficial inquiry and to travel across the United States and present a more or less informal unofficial report to the Postmaster-General at that time. Sir Herbert Samuel. The result of my inquiries and investigations from the Atlantic to the Pacific coast was, undoubtedly, to emphasise the fact that as far as the efficiency of the service was concerned, this country had nothing to learn from the United States of America.

Photo of Lieut-Colonel Sir Gilbert Acland-Troyte Lieut-Colonel Sir Gilbert Acland-Troyte , Tiverton

I did not say a single word against the efficiency of the service in this country. My object was to draw attention to the conditions in the rural districts. I am not one of those who are always com plaining about getting wrong numbers. I believe the efficiency of the service, generally speaking, is. very good.

Photo of Mr Charles Ammon Mr Charles Ammon , Camberwell North

I am glad the hon. and gallant Member has dissociated himself from the remarks of the Seconder, who interrupted me and pointed out that he was concerned with the inefficiency of the service. It is with that point that I wish to deal. We have narrowed down the attack now and have divided the opposition by 50 per cent. The mere fact that there is a larger number of users of the telephone in other countries does not indicate that the service is better. Many considerations enter into that. Take the case of the United States. In the first place, there is a tremendous difference in population. A further consideration is the difference in the standard of living. One might just as well argue in regard to America and this country the question of motor cars. In America, the bulk of the working people use motor cares simply because their means enable them to do so. I have not the slightest doubt that the worker in this country would be equally willing and delighted to do that, and the householder would be glad to have a telephone if he could afford it. The hon. and gallant Members are arguing on false premises, and that does not establish the case against the telephone.

I was interested in taming up a reference by a distinguished visitor to this country from the United States in 1923. He came over to inquire into the postal, telephone and telegraph service in this country and to see whether the United States had anything to learn from us. I commend to the Postmaster-General that side of the organisation of the Post Office. It would be well to keep our people continually in touch with other countries and to see whether we can learn anything from them, towards improving our service. Mr. Eugene White, the assistant to the Postmaster-General of the United States, who visited this country said, in the course of his remarks about our system: Your postal and telegraph system are as near perfect as can be, and as for your telephone work, America has nothing to teach you. Modesty is not one of the strong points of America, and when we get such a good unsolicited testimonial from the United States, I think the Postmaster-General need not be very much disturbed in his bed as to any criticism that may come. Here is a testimony from a person who was sent to make inquiries, and his testimony says that so far as this service is concerned, America is certainly not to be taken as the standard whereby we should be judged. One is pleased to note that the testimonials are not confined only to visitors who have come from another country. For instance, in the "Manchester Guardian" of the 13th January,, 1925, there was published a resolution passed by the Manchester Chamber of Commerce, a business body of no small importance and one which speaks with a certain amount of authority. The resolution said: The Telegraph and Telephone Advisory Committee of the Manchester Chamber of Commerce has reported to the Chamber on the meeting held between the Committee and the Postmaster of Manchester and the district manager of the telephones. The report emphasises the close association which exists between the officials and the Chamber, and says, "There is little doubt that the Manchester organisations are extremely efficient and are fulfilling their duties to the public in an admirable manner.' That is a fairly high testimonial to come from business men with business experience.

Brigadier-General BROWN:

Have you any testimonials of that sort from rural districts?

Photo of Mr Charles Ammon Mr Charles Ammon , Camberwell North

If my hon. and gallant Friend will allow me to go on, I will endeavour to meet him in every way. That testimonial indicates that the Post Office is free from a good deal of the criticisms which have been levelled against it, and I believe it is because trade unionism has flown through its departments for so many years and has brought them into contact with the wider world and with a bigger understanding of the needs of the people. In this respect, however much we may differ in other ways, the Postmaster-General will not deny that the unions have always tried to co-operate with the Department in endeavouring to make the service as efficient as possible. There is another testimonial, from a gentleman whose name carries some weight in the business world. It is from Mr. Gordon Selfridge, the head of a big store in this country. Talking about comparisons between the telephone service in this country and foreign countries, he says: These comparisons are usually ill-informed and dictated largely by the desire to discredit State enterprise. That was the intention of the Mover and Seconder of the Amendment. America is often held up as an example of efficiency under private enterprise, but the criticism by Americans of their own service is just as strong and persistent as criticism here. Mr. Gordon Selfridge has expressed his opinion on the superiority of the British telephones in unambiguous terms: we have had experience of systems both in America and on the Continent, of systems controlled both privately and by the State, and without the slightest hesitation do we award the palm for all round satisfactoriness to the telephones of London. Those who have been to Paris know how poor telephones can be: those who have been to Now York get some idea of the ' boosting ' capacity of the American when they hear him compare the system there with here. The Seconder of the Amendment seemed concerned with the question of boosting more than anything else. He wanted the Postmaster-General to take a leaf out of the book of another country and to go in for boosting.

Brigadier-General BROWN:

The figures which I quoted went to prove that there was greater development.

Photo of Mr Charles Ammon Mr Charles Ammon , Camberwell North

Hon. Members will remember that the hon. and gallant Member gave some interesting quotations with reference to certain things, which he said might not be true but which were used for boosting the system. He wants us to copy that and to go in for boosting. What we want to maintain is an efficient service rather than a service which depends upon boosting. Mr. Gordon Selfridge continues: In their own typically British manner, without paying too much attention to newspaper stories of inefficiency (so valuable to the news editor when people will simply not get murdered), certainly without any public boasting of the difficulties they have overcome, and the enterprise they have shown, those in control at the General Post Office have produced a telephone system that for general efficiency is second to none. I congratulate the Postmaster-General on these unsolicited testimonials from sources which are not ex-parte.

Photo of Sir Waldron Smithers Sir Waldron Smithers , Chislehurst

Can the hon. Member tell the House whether there is any truth in the rumour that Mr. Gordon Selfridge once made an attempt to take over the Post Office as a private enterprise, and as a sideline to his own business?

Photo of Mr Charles Ammon Mr Charles Ammon , Camberwell North

I imagine that the right hon. Gentleman the Postmaster-General will be better able to reply to that than J am. That hardly falls to my side of the Table. Anyway, if so, Mr. Gordon Selfridge has certainly been doing his best to write up the stock, and make the price he would have to pay for it pretty high if he were to take it over. So that the Postmaster-General would be sure of a very good deal in (hat respect, and that is the highest testimonial one can give to the good work and efficiency of a public enterprise as compared with a private enterprise. Certainly whatever may be said with regard to any other Service, on no grounds can there be any sort of comparison, except a very odious one, between the telephone system as controlled and administered by State enterprise, and that of private enterprise in the days gone by. It is interesting and refreshing to fine so strong an individualist as the Postmaster-General being pushed into the position of having to defend this State enterprise, and to show that it is giving as good a service as can possibly and reasonably be expected. It is not my business or my concern to defend or to have anything to say as far as the organisation of the Service is concerned. That, naturally, is the duty of the Postmaster-General himself. I am concerned, of course, with the well-being and the working conditions of those engaged in it, and with the desire that the Service should be as efficient as possible, it being the duty of all in the Service to do their utmost to make it as efficient as they possibly can, and they, in return, have the right to expect the best possible remuneration for the duties discharged. The Mover of the Amendment made several references, which I heard indistinctly, but which, I gathered, were proposals that the Postmaster-General should do something that would increase, in some way or other, the number of casual or temporary employes in the Post Office.

Photo of Lieut-Colonel Sir Gilbert Acland-Troyte Lieut-Colonel Sir Gilbert Acland-Troyte , Tiverton

One of my suggestions would have that effect.

Photo of Mr Charles Ammon Mr Charles Ammon , Camberwell North

I hope the hon. and gallant Gentleman will give further thought to what that means. It would reintroduce into the Post Office a system of working that we hope has long since disappeared. For many years that had to be fought, because there were numbers of men in the employ of the State who came in for part-time employment and received remuneration that did not afford them a proper means of livelihood, which reflected on the State and even laid the State open to grave danger from dishonesty, and so forth. Anything of that kind, therefore, must be resisted not only in the public interest, but also in the interest of those who would be likely to surfer thereby. I feel sure the hon. and gallant Member did not think that out fully in all its implications before he made any such proposal. I want also to point out to him one effect of another suggestion of his, that the number of disabled men in the Service should be increased. I want it to be distinctly understood that I am not saying a word against the employment of disabled men in the Service, but I would point out the effect of that suggestion. Complaint is made again and again in this House, not without cause, of the rising tide of charges and costs of the various Services. Hon. Members must not forget that a very large part of that increase is because of the discharging of duty and obligations to ex-service men in this respect. I believe the Post Office has exceeded the quota allotted to it. The effect of that is, that through no fault of their own, these men are not quite able to give all the service, and as full and efficient service, as a man who is not disabled or in any way prevented from rendering his work, so that you have to employ a larger number of men and there is a higher wage bill owing to the higher age of entry into the service. That in itself imposes an additional burden upon the Department which has to make up the cost. I am not saying a word against that beyond this, that you cannot have it both ways. It is no good attacking the Government—whatever Government it is—or the Departments because of the rise in the cost of wages, and then attack them because they do not do certain things which are bound to increase those charges. That would be the effect of the hon. and gallant Member's proposal, as it is already the effect in the various Departments.

Photo of Mr John Whitley Mr John Whitley , Halifax

I had better make it clear that, although the hon. and gallant Member was quite in Order in referring to this question, he was in Order because he was then speaking on the Main Question. Once that Amendment has been moved and seconded, and is before the House, the Debate must be confined to the Amendment. It does not cover the point about ex-service men.

Photo of Mr Charles Ammon Mr Charles Ammon , Camberwell North

I, of course, bow to your ruling at once, but I would point out, with every respect, that the Amendment does refer to the efficiency of the service itself. The employment of disabled men does have relationship to the service rendered. However, I will leave the point, having dealt with it quite sufficiently.

Photo of Lieut-Colonel Sir Gilbert Acland-Troyte Lieut-Colonel Sir Gilbert Acland-Troyte , Tiverton

May I refer to one point on the question of the ex-service men?

Photo of Mr John Whitley Mr John Whitley , Halifax

No; it is now excluded.

Photo of Mr Charles Ammon Mr Charles Ammon , Camberwell North

There are two or three points on which I am in cordial agreement with the Mover and Seconder, and wish to reinforce their statements. I hope that when they talk about the need for further advertising they will support the demands I have recently made upon the Postmaster-General. The thing to advertise still more is the cash-on-delivery system, in order that it shall be known throughout the length and breadth of the country, so that people may take the fullest advantage of the system. I think this is germane to the discussion, as it is part of the enterprise of the Post Office, and for the moment one would point out that again and again complaints are coming in from business people that little or nothing is known of this system. If one looks up the Debate that took place, it largely centred round the help that the system might give to small- holders and people carrying on a certain amount of agricultural work. It is not an exaggeration to say that this system is hardly yet known in the country and among the smallholders, and it is the Postmaster-General's duty to do all he can to advertise that system, to insist on advertising it just as he did the telephone system by a cancelling stamp on letters, with the words, "Say it by Telephone." In the same way, he should now say "Send it by Cash-on-Delivery," and so bring it home to every house. It does not lie in the mouth of the Postmaster-General to reply to me, as he did the other day, that it is not his business to support any particular system. It is his business to make his Department as efficient as possible, and to attract as much revenue and trade in his particular Department as possible. In that respect I find myself in whole-hearted agreement with the Mover and Seconder of the Amendment, and I hope the Post Office will spend more money in advertising both their telephone service and the cash-on-delivery system. I do not know bow far the Post Office can accelerate the meeting of telephone orders by placing with outside firms the making of those telephones. There is a demand there that they could meet, and if that is one of the difficulties standing in the way of the Postmaster-General, I sincerely hope he will look into it and endeavour to meet that as far as he possibly can.

I do not think anybody will seriously stand up in this House and support the contention that the telephone system would be better under private enterprise. I think that was put in the Amendment to add a little spice to it. But there may be some grounds for complaint—the Postmaster-General can say better than I can—that the demand for rural telephones has not been adequately met. I do not know how far that may be due to the usual conservatism—I do not mean in the political sense—of the farmer. To put up a stone-wall attitude with regard to the party line system shows how utterly useless it is to quote Canada in this connection, for there the party line system is wholly in use, and there is co-operation in making it a success. But here we get nothing but stone-wall obstinacy with regard to it. The conditions in Canada are in no way com- parable, having regard to the large tracts of country, the size of farms and so forth, but certainly, if it comes down to the number of telephones in rural districts, I think that might very largely be met if our own farmers were as willing to co-operate with the Post Office in this particular respect. It is interesting to learn that in 1892 when the question of the taking over of the telephones was being discussed in this House Sir James Fergusson then Postmaster-General, stated that the difficulty which a political body would experience in resisting the demands for unprofitable extensions of the telephone service was an important reason why the State should not take over the entire telephone service. That places Sir James Ferguson among the prophets.

I was interested to hear from the hon. and gallant Member the suggestion that the first duty of the State service is service rather than profit. That, of course, is always the point of view that is put forward on behalf of private enterprise. We hope that is going to be extended more and more to all forms of industry as we develop still further, and here we have a demand from the Conservative party that we should increase the number of telephones and extend the service, even although it may mean that we reduce the profits so far as the cash side is concerned. That is not my affair; it is the affair of the Postmaster-General, but I do call the House to witness that it is, perhaps, one of the best testimonials we can have for public ownership and public service, that here we have at once the demand that the first duty is the public service, and that that is being discharged as far as lies in the power of the Postmaster-General.

It is impossible, I submit, to make out any case for a return to private enterprise in the postal or telephone service. Some of the proposals that are suggested by the Mover would only result in worsening the hours and conditions of employes and give very small benefit, if any, to the community itself; but I hope that, as a result of this discussion, the Postmaster-General will use his powers of advertising still more and make the service more widely known to the public, and that, with the co-operation of this House, and as a result of this discussion, the service may be more efficient than it has been hitherto to the community as a whole.

5.0 p.m.

Photo of Sir James Macpherson Sir James Macpherson , Ross and Cromarty

I desire to say a few words on the postal and telephone facilities in rural districts only; I will leave the rest of the discussion to other hon. Members. Those of us who represent rural constituencies were fortunate in listening to the speech delivered by my hon. and gallant Friend the Member for Tiverton (Lieut.-Colonel Acland-Troyte). We are all agreed that he covered the case for the rural districts clearly and admirably, and consequently my speech will be very short indeed. I agree with him that the profits of the Post Office should really not go back to the general fund but should go back to the Post Office itself in a more efficient service. It is an extraordinary thing to consider that we have not yet got back in the rural districts to pre-war postal facilities. I have recently sent two or three cases to my right hon. Friend the Postmaster-General, who is always so courteous and so anxious to help. I should like to pay him that tribute. I have sent him quite recently two or three cases. I suggest that the rural districts should have the same postal facilities as they had before the War. I am perfectly certain that anybody who knows the country districts knows the value of the rural postmen. If hon. Members consider the isolation and the distance of the rural districts away from the madding crowd, they will realise that the arrival of the postman is the event of the day. He brings news from the various localities and he brings what is much more important, news of their relatives and friends from other parts of the country. In saying this, I am expressing the views not only of my own constituency, but of all other rural parts of the country.

Let me say a word or two about rural telephones. I quite agree with every word said by my hon. and gallant Friend the Member for Tiverton and by my hon. and gallant Friend the Member for Newbury (Brigadier-General Brown). There is no doubt that the coming system of communicatibn of information is the telephone in this country. I would beg my right hon. Friend the Postmaster-General to reconsider his attitude to- wards the minimum number of subscribers. I know heaps of people in the North of Scotland who would willingly become subscribers, but they cannot get more than five or six people to take the service. The farmer is beginning to realise the value of the telephone as a commercial asset. He knows perfectly well that it is the most efficient way of getting direct information from the market town as to the prospects in regard to the sale of certain of bra stock and other produce. If good telephonic communication existed between the marketing town and the farmer, it would save the farmer no end of trouble. It would keep him in close personal touch with events in the country market town, or in other towns with which he had business. In many parts it is impossible to get more than four or five subscribers. My right hon. Friend must also remember this, as I think was indicated in the speech of my hon. and gallant Friend the Member for Tiverton, that people in the country districts are very conservative. Many people I could mention regard the telephone still as a very uncanny instrument. You have only to bring it to their notice and show them how useful it could be to make them become users of it. That, surely, is what the Post Office wants. The Post Office wants a good telephonic system all over the country, and the more telephones are used the better it becomes for all concerned. My hon. and gallant Friend said he wanted cheapness. I have reason to know that what has been said in regard to Canada is perfectly correct, and there is no reason why we should not have as popular a telephonie system in this country as exists in any part of the world. I have sent two or three cases quite recently to my right hon. Friend. I would refer to one case in particular, the case of Garve, which is at the end of the railway, and from Garve right through to the West Coast of Scotland there is no telephonic communication of any sort: My right hon. Friend should realise what that means. There is no chance to get a doctor in those isolated districts, and there is no chance of getting in touch with any human being except by an occasional motor car. The right hon. Gentleman ought not only to consider part of the country, but he ought to consider all the rural districts and make the telephonic system as efficient as he possibly can.

Photo of Captain Robert Henderson Captain Robert Henderson , Henley

I rise to make what I hope will be a practical suggestion to the right hon. Gentleman the Postmaster-General with a view to assisting telephones in rural areas. I am aware that the Postmaster-General usually receives more criticisms than compliments in this regard, but I should like to congratulate him on the great improvements which he has effected in the telephone service in rural areas. In the rural areas around Oxford that is largely due to the fact that he has recently converted the City of Oxford to the automatic exchange, and I would suggest to him, in view of the remarkable improvements that have come to the telephone service within that city area from the automatic system, that he should consider whether he could not possibly see his way to utilising the automatic exchange for direct connection with the rural exchanges. The situation there is one which I am sure he will find in a great many other parts of the country; a large city surrounded by a ring of small country exchanges, ranging from eight to 20 subscribers. Ninety-nine per cent. of the telephone messages have to go through the main city. I would like to bring this point to his notice, and I believe it is one that will have a practical commercial reality. If he calculates the economy that may result in savings on all these small exchanges, and if he balances that against the cost of connecting the country lines right through, connecting them direct on the automatic exchange, he will have a greatly improved and more efficient telephone system.

There is one other suggestion which I should like to make to the right hon. Gentleman. The hon. Gentleman the Member for North Camberwell (Mr. Ammon) said that we should advertise the cash-on-delivery system and said that it was not used as much as it might be. I can quite endorse that, but it is going to catch on, and a great many people are really beginning to ask about it. There is one difficulty which has cropped up, and it is that there are limits to the carrying capacity of the unfortunate country postman. I would suggest that the Postmaster-General should consider whether a more extended use might not be made of the motor tricycles that the Post Office are using in some parts. It is very difficult to get the cash-on-delivery parcels despatched by the first post out in the day, but I think that the second post out amply meets requirements. The expert advisers of the right hon. Gentleman are more competent to deal with this matter than I am, but I suggest that the right hon. Gentleman should consider whether he should not issue more motor tricycles to be used with carriers for those postmen who are travailing through several villages to take parcels out by the second post. I throw out that suggestion for what it is worth. There is one other point that I should like to bring to the notice of the right hon. Gentleman. One of the greatest difficulties in getting the telephone extended to the country is the opposition of country postmasters and country postmistresses to it. I have recently found myself being in the position of acting as a temporary commercial traveller for the Post Office and endeavouring to get a local exchange formed by one's own neighbours and friends. I would point out to the Postmaster General that no support towards this is given on the part of the country post office. As the previous speaker said, the telephone is still regarded as a very uncanny thing in many parts of the country. It gives a great deal of trouble to the country post office, and the idea is that the extra remuneration granted for it is not adequate to meet the trouble involved. Therefore, if the right hon. Gentleman could see his way to make direct communication with the main exchanges, I think that in itself would lead to a very large extension in the number of the subscribers in the country areas.

Mr. BECKETT:

I listened to the speeches of the Mover and Seconder of this Resolution with very great interest, because they seemed to have decided upon a mutually pleasurable division of labour. The hon. and gallant Member for Tiverton complained somewhat bitterly about the lack of enterprise and the lack of willingness to spend money which the Postmaster-General and his Department were showing in regard to the extension of the telephones to rural areas. No sooner had he sat down than his confederate in this Amendment rose and appealed to the House to let us have private enterprise in the telephone service in order that; the two mutually contradictory objects of this Amendment might be balanced. I have yet to hear a speaker in this House who will suggest. that the extension of the telephones to rural areas—with which I am heartily in agreement—is likely to prove an immediately strikingly profitable financial success. There is no doubt that it is one of the essential services which the State can organise and perform for the community, and it will be a great service to each member of the community. It will ultimately provide, perhaps not a very large, but a very comfortable and very safe return on the capital expended on it, but I do not think that it is the kind of financial enterprise that would be likely to appeal to a private firm holding a gigantic monopoly, such as the Mover and Seconder of this Amendment propose to hand over to some people who are responsible to nobody and who can be advised by nobody, in the way that he and others have endeavoured to advise the Postmaster-General this afternoon. It also seems to me such an extraordinary waste of time to bring forward this Amendment, because we are always being told in this House and outside that the Conservative party are the great friends and supporters of the rural areas. No sooner do hon. Members opposite think of some remarkable suggestion which will benefit their friends in the rural areas than they say, "We must get the telephone service away from the Conservative Minister, or we shall never be any good to our rural friends in regard to getting telephones." Nearly all the hon. Members have criticised the telephone service, and I think they have criticised it very soundly. There is probably no hon. Member in this House who could not, from his own personal experience of the telephone, get up and upbraid the responsible Minister somewhat bitterly if he happened to be in that mood. We remember the time when we wasted half an hour trying to get a number, were told that there was nobody there and we knew there was someone there all the time, and forget the thousands of times when we get through to a number without any difficulty at all.

The criticism I have to make in regard to the telephone service is the extraordinary autocratic manner in which it is occasionally conducted. During the past few weeks some subscribers in London who, for reasons of their own, which are no concern of anyone else, desire that their names and telephone numbers should not be put in the telephone directory—and there are some public men whose lives would be intolerable if the Postmaster-General was allowed to blazon their telephone numbers abroad to the world—have been written to by the Post Office telling them that their names will be put in the telephone book unless they provide in writing good and sufficient reasons why they should not. It is very much like a butcher telling you that he will not serve you until you have sent him in writing an application, three days in advance, saying exactly what meat you want, how you are going to cook it, when you are going to cook it, and who is going to eat it. It is a most autocratic impertinence on the part of the Department to ask any customers to send in writing applications, and I suggest to the Postmaster, who, of course, is not personally responsible, that he should remind some of his head officials occasionally that they are the servants of the public and are not exactly in the position of being Father Confessors.

But all these criticisms which we can make of the telephone service can be made of any large private company in this country. The larger the business, whether it is run by a Minister of State and a Department or by a board of directors, shareholders and managers, the more your red tape is bound to increase. the greater the divorcement between the men and women in the lower ranks and people at the top, and the greater the difficulty of considering each small item of the Department's or company's business. I am certain that for every fault for which we can criticise the Post Office we could easily match it with a similar and equally bad fault in respect of every large monopolised trade company in this country. There is another point on which I want to touch. The hon. and gallant Gentleman who seconded the Amendment gave us figures, which may mean anything—generally they amount to very little—about the proportion of telephone subscribers in a number of different countries, some of them under private enterprise and some under public enterprise.

He appeared to be very surprised to find that Denmark, where they have a public service, is very high in the list of telephone-using nations He was not able to understand it, but I suggest that it does not need a great deal of intelligence to know why Denmark is so high in the list. It is because the social services in Denmark are largely controlled by people who believe in public enterprise, not by people who do not believe in it. Hon. Members opposite say they want the telephone service put back into private hands. At the same time they say: "We do not want to say anything against the Postmaster-General and his colleagues. We are not criticising them. All we want is that this monopoly should go back to private enterprise." How can they say that without criticising in the most severe manner the right hon. Gentleman and his colleagues? What is the suggestion? Is it suggested that no board of directors in their senses would select the right hon. Gentleman to run their business? Is it suggested that he is less likely to look after this business because he is a Minister of the Crown than he would be as a director of a company? I do not make either of those suggestions.

If it is suggested that the right hon. Gentleman is one who would be entrusted by a board of directors to run their business, that he is of sufficiently high personal character to be trusted to give as much attention to a public Department as he would to a private business of which he was a director, then the difference between the right hon. Gentleman in charge of this enterprise as a Minister of the Crown and in charge of it as a director, is that, as it is, the right hon. Gentleman is in the fortunate or unfortunate position of receiving representations from 614 of his fellow-citizens whenever they wish as to his Department, whereas if he were a director of a private company nobody would be able to make any kind of responsible representations to him. The attack is not levelled at either of the two Ministers of the Crown in this House who control this service, because hon. Members op- posite are continually vying with one another in expressing their high regard for the ability and integrity of the higher branches of the Civil Service. This contradictory Amendment is brought up completely without hope, because everybody knows that the Conservative party opposes progress until time forces them to give way, and when they give way they never go back. Once they try Socialism they like it so much that they never go back to private enterprise. When hon. Members opposite give us all sorts of reasons why the great panacea of private enterprise should not be applied to this Department, I regret very much that the Mover and Seconder of the Amendment did not carry their inquiry a little further. They expressed sympathy with the Postmaster-General. I do so also. To be in charge of a humdrum business Department when your public utterances show that you have the soul of an executioner must be a very difficult thing to do, but although the desires of the Postmaster-General may be for greater opportunities for heroic and martial exploits, I hope the House will leave the conduct of this Department in his hands rather than in the hands of people who are responsible to nobody.

Sir EVELYN CECIL: I had not intended to intervene in this Debate, but after listening to the speeches of hon. Members I think I ought to, as I had the honour of being Chairman of the Select Committee on Telephones which inquired into this matter in 1921–22. I cannot but regret that the hon. Member for Gateshead (Mr. Beckett) should endeavour to bring so much party politics into this Debate. It is quite unnecessary. The Telephone Committee was a non-party body, and although the Mover of the Amendment referred to private enterprise as against public enterprise, I would like to say that in the matter of the telephone service we cannot go back on what we have done. I was in this House when the National Telephone Company was taken over by the State in 1911, and I remember that there was a great deal of doubt about the matter and the price at the time, and for a number of years it was repeatedly asserted that the old telephone service was better than the telephone service under the State. I do not think it is any use traversing these matters now. It may be that in our own minds we think that private enterprise might have been the best way of dealing with this service, but what we want to do is to deal with present facts.

One of the chief matters which the Select Committee on Telephones pressed rather strongly was that in order to improve the service it was desirable to have a more separate organisation of the telephone administration within the General Post Office itself. That is to say, and so far it has been carried out, they wanted to secure the greater independence of the head of the telephones in the Post Office, and while an appointment of that kind was subsequently made, I am still a little uncertain as to whether the head of that Department now is, or is not, under the Secretary of the Post Office. The idea of the Committee was that the head of the telephone department should be really independent for all practical purposes of the department of the Secretary, and directly under the Postmaster-General. That I think would very likely lead to fuller responsibility within the telephone department itself, and direct responsibility could be brought back if there was any failure in any part of the service. It is the system of administration in several other Continental services, where the telephones are in use.

Something has been said as to whether the Postmaster-General could reduce the number of guaranteed subscribers required in order to institute a telephone. I do not like to express any opinion on that. It is largely a matter of finance which can be worked out in the Post Office itself. Many of us think that it is very easy to alter certain points of detail of administration of the telephones, but in practice, and, after the inquiry which I had the honour of conducting, it often turns out to be much more difficult than appears at first sight. By way of illustration I want to turn to the question of rural areas. The Committee was strongly of the opinion that the telephone service should be extended to rural areas as far as possible. It was not likely to be a good financial proposition, because any first attempt of this character is almost necessarily a losing proposition. We were told that in Norway, in particular, there was an ideal service, and that we might find our model there. With the expert adviser on the Committee, Mr. W. Cook, I went to Norway to make inquiries. It was quite true that up many of the little valleys a telephone service existed, but it was nearly always a party line, which might be objected to in this country. It was sometimes run by a little independent local company. Further, we found that the service was not open all day by any means, but only during certain hours, and that if you wanted to ring up for a doctor or surgeon or for any other vital purpose in the middle of the night you could get no reply at all. So that things were not quite as reported to us in evidence.

But I do believe that much can be done in rural areas in this country, and that the Post Office has done much in recent years in rural areas. More can be accomplished, no doubt, but if we look to some of the countries where the extensions into rural areas have been very successful we find two or three rather interesting circumstances. The hon. Member opposite mentioned Denmark. He was inclined to claim it as a sort of Socialistic victory. I do not know whether he really knows the circumstances in Denmark. I happen to have made some inquiry. In the central island of Denmark, where the telephone service is exceedingly efficient, it is run by a co-operative society of the farmers. It pays very well. The farmers are keen about it and work it well together. It is private enterprise, and it is generally popular. In Canada and the United States, again, there are many party lines. If you do not mind being on a party line you get a cheaper subscription and a service in very remote districts. It is the fact that a large percentage of the population in Canada and the States are on the telephone, much larger than here. It does not lie entirely with the General Post Office to produce that result in this country.

It does partly, I agree, but there is such a thing as what I may describe as the telephone habit. Those who pay a visit to Canada or the United States know quite well that everybody seems to live on the telephone; the slightest thing that has to be done is effected by telephone, to such an extent that no wonder everyone finds it essential to possess a telephone. That is not so in this country. It certainly is not so in some of the more agricultural districts. I think it is largely due to the lack of the telephone habit in this country that the figures here are not as high as on the other side of the Atlantic. Telephones assist commerce and may add to the amenities of life, and if the nation as a whole adopted the habit more freely than at present, proprio motu, I think the Post Office would join in with them in giving every impetus to an increase in the number of telephones and in making the service successful and prosperous.

Photo of Sir Rhys Morris Sir Rhys Morris , Cardiganshire

I do not wish to say anything about the fisrt part of the Resolution relating to private enterprise. I agree with the last speaker that discussion of that part is purely academic discussion. But with the remaining part and, indeed, with the whole of the speech of the hon. and gallant Member for Tiverton (Lieut.-Colonel Acland-Troyte) in reference to rural telephones, I fully agree. I rose more particularly to ask the Postmaster-General one question, and that is with regard to the guarantee. The difficulty is not only a difficulty as to the number of guarantors required in the small rural areas, but the additional difficulty with regard to the amount of the guarantee demanded from them. That presses particularly heavily in the first year after the telephone is installed. The telephone habit has not been formed during the first year, and very often difficulties are experienced in obtaining the sum necessary to pay the guarantee.

Photo of Sir Rhys Morris Sir Rhys Morris , Cardiganshire

The guarantee in respect of the call box in the rural area. Sometimes the sum demanded is rather high. I am quite prepared to join in the compliments to the Postmaster-General, that he is at all times sympathetic to us, hut in spite of that fact in many of the rural areas people are condemned to find a substantial sum. The method which they undertake in order to find the sum demanded is in many cases to arrange a concert or some other form of entertainment, and then the right hon. Gentleman the Chancellor of the Exchequer comes along and demands a part of the revenue by way of Entertainments Duty. I want to ask the Postmaster-General to exercise his influence with the Chancellor of the Exchequer, and to get from him a promise to forego the Entertainments Duty in all classes of entertainments which are arranged for the purpose of defraying the guarantee demanded by the Post Office. That in itself will be an impetus. In my own experience I have not found it necessary to approach the Postmaster-General in the second year, but in the first year I have had occasion more than once to make this application. Hitherto I have not been successful in the applications that have been made.

Photo of Major Charles Price Major Charles Price , Pembrokeshire

I heartily agree with my neighbour the hon. Member for Cardiganshire (Mr. Morris) in what he has just said, but I hope that the Postmaster-General will extend his powers of persuasion to other Departments to assist in rural telephones. There are the Development Commissicners, who can make a grant to some of the inaccessible and widely scattered rural areas. There is also the fund for marketing, which is to be applied to all Empire produce, and this matter relates to part of the Empire. There are many ways in which the Postmaster-General, if he treats the matter as an enterprising trader anxious to sell his wares would treat it, could put into operation something that would help the rural districts financially. We do not want in rural districts separate lines. That applies especially to parts of Wales and I daresay to many places in Scotland, where the farms do not run to more than 100, 50 or 30 acres. In one village in the mountainous part of my county they asked for a telephone box and signed the guarantee without reading it. Now they are met with a charge of £36 which will practically swamp the whole of the available cash wealth of that district. Their wealth lies in their property and stock, and every single penny of cash is far more valuable to them than it is to the townsfolk.

I hope that something will be done, so that wherever there is a rural post office a telephone will he in that office to act as a call office. There is no reason why that should not be. I hope also it will he arranged that in the rural districts there is a post office for every 5,000 or 6,000 acres of land. It is not too much to ask. All parties are unanimous about one thing, and that is "Get back to the land." We ask the Post Office to do their share in getting people back to the land by offer ing them postal and telephone facilities. The difficulties that we have are with regard to doctors, markets, and in a hundred and one ways in which people cannot get into touch with more populous centres by using the telephone. Telegraphs are useless, and in nine cases out of ten there are no telegraphs. We are as isolated as we were 100 years ago. That is not progress, and it is something in which the Postmaster-General can help us very much. We are always met courteously and we always get replies to our letters and questions, but we are not met with very much progress. I hope that that will be changed in future, even though it may cost a little more money than in the past.

There is one other matter relating to my own county, and that is that in one place we have a post office that is exceedingly busy. It requires from its operators a very high degree of efficiency in special lines. Almost every other post office where this state of efficiency is demanded of its servants is in Grade 1. We unfortunately are still in Grade 3. I refer to the post office at Milford Haven. If my right hon. Friend will compare it with other post offices in Grade 2, he will see that we have a claim to be graded up, and I hope he will give effect to the suggestion at the earliest possible opportunity. There are one or two other matters that I wish to mention, but I will put them to my right hon,. Friend personally, because I do not believe in overloading the ship. I am very glad that we have had an opportunity again of discussing the question of rural telephones, and I hope that the discussion will be more effective than its predecessors

Photo of Sir William Mitchell-Thomson Sir William Mitchell-Thomson , Croydon South

I would like to congratulate my two hon. and gallant Friends upon having, by bringing forward this Amendment, initiated a very interesting and a very useful Debate. Their Amendment, as has been said, has two parts. I hope they will forgive me if I say that the first part is rather of an academic nature and the second part of a more immediately practical nature. Perhaps, therefore, they will appreciate the fact if I first direct my observations to the second part, although I shall have something to say about the first part before I conclude. First of all let me say a word or two about some of the specific points raised by my hon. and gallant Friend who moved the Amendment. He asked what, if anything, was being done to give better clearances from Uffculme and the Culme Valley generally. It is quite true that the hours of clearance in that locality are earlier in some places, in fact in most places, than they were before the War. There is one place where the hour is later, but I agree that on the whole the hours are earlier. That is due to a rearrangement of train services. The mails are now conveyed by motor to Exeter, and I am doing my best to see whether the running of that motor car service can be accelerated, and I will try to meet the hon. and gallant Gentleman in that respect. He raised the question of the hours of postal delivery in Burlescombe. In Burlescombe revised times of postal delivery have already been put into operation. Before the revision the hours, broadly speaking, were an hour's later delivery in the morning, and under the new revised times I do not think he will find that there is much to quarrel with "when I tell him that at one point in the revision the present delivery is 9 o'clock in the morning and at another 8.50, and the delivery is completed in the district by 10 o'clock in the forenoon. I do not think on the whole there is very much cause of complaint where that can be said. As regards the question of the telephone charge from Whimple to Exeter as compared with the telephone charge from Honiton to Exeter the hon. and gallant Member seemed to be under a misapprehension. The telephone charge from Whimple to Exeter is 5d. at all hours of the day, while the telephone charge from Honiton to Exeter is 9d. from 7 to 2, 7d. from 2 to 7, and 6d. from 7 to 7.

This Debate has ranged very largely around the question of rural telephones and while I should like to follow the right hon. Gentleman the Member for Ross and Cromarty (Mr. Macpherson) into a discussion of the very interesting topic which he raised but did not pursue—indeed I do not think it would have been in order to do so—I refrain on the present occasion. The subject of the Post Office contribution to the Exchequer receipts is much too large to be dealt with at the present moment but at some time or another that may be a very fitting sub- ject for consideration and Debate. I think I had better deal straight away with the question of the rural telephones. I may say at once that I agree with many of the contentions which have been laid down by the right hon. Gentleman the Member for the Aston Division of Birmingham (Sir E. Cecil). The House may not be aware of the fact that he is in many respects entitled to claim the honour of being the parent of the rural exchanges and I think I ought to pay a tribute to him in that regard. Many of the recommendations which have recently been made and some of which have already been carried out, are due to him. I think I can best put the rural position to the House by describing exactly what it is that the Post Office does at the present moment and what it offers in the way of a telephone service in the rural areas. There are three types of telephone service offered by the Post Office in the rural areas. There is the exclusive circuit for the use of a subscriber and of that subscriber alone; there are subscribers' rural party lines and two-party lines, and there are the public telephone call boxes. The direct exclusive line for the sole use of the subscriber through a telephone exchange which is always open is the best and most efficient type of telephone service, and the aim of the Post Office is to offer this type of service on terms which are likely to be acceptable to the largest possible number of people. It is for this reason that the normal rental tariff is made available. That rental tariff varies with the radial distance from the exchange.

The House, of course, will appreciate the fact that the greater the radial distance from the exchange, the greater the cost of connection. Country subscribers within one and a half miles of established exchanges where there are at least 15 subscribers, pay for connection with that exchange the normal standard charge of £7 a year for business premises and £5 10s. for private houses. A very long exclusive line costs more, and therefore, in consequence, the charge is necessarily higher. It follows that the best way of extending the service in the rural districts is to increase the number of exchanges, so as to bring as many people as possible within the reasonable radial distance from an exchange, the reasonable radial distance, for all practical pur- poses, being something like two miles. But experience both here and in other telephone-using countries shows that very small exchanges can only be run at a loss and if, therefore, rural exchanges were established unconditionally at the normal tariff, an undue and disproportionate financial burden would be thrown on the telephone service as a whole. It is quite true the loss on the small country exchange tends to diminish as the number of subscribers grows, and it may ultimately disappear; but to start with the deficit is comparatively heavy and imposes a substantial burden for a good many years. A single individual, or two or three individuals, cannot reasonably claim, it seems to me, to be provided with a telephone service at a subtantial loss and the deficit incurved at the opening of a small exchange can, therefore, only be justified if a reasonable number of people in that locality are going to benefit from the opening of the exchange. Under existing conditions we have fixed that number at eight. We have adopted a scheme, originally sketched out by my right hon. Friend the Member for Aston, for encouraging the establishment of these new telephone exchanges by offering to provide such exchanges in any area remote from the existing system, where a reasonable amount of support—that is to say, eight subscribers—can be obtained, provided only that the exchange can be connected up with the general system without incurring excessive cost for junction wires.

Under this scheme there has been remarkable development. In 1913 the number of rural exchanges was 1,254. There are now nearly 2,700, and of these over 1,000 have been provided under this new system at unremunerative rates. The number of these exchanges is steadily growing, at the rate, now, of 13 or 14 a month. Each starts on the average with about 12 subscribers. They can start with eight where other conditions are fulfilled, but the average taken on the whole works out at about 12. There is this point which is satisfactory—that the number of subscribers to these exchanges Is tending to grow all the time. The average number of subscribers per exchange under the new scheme rose in 1925 from 14.8 to 16, and in 1926 rose still further to 17.3, but although the individual exchanges are growing—and as they grow they gradually get nearer the point at which they will pay their way—the total sum of the loss incurred by the telephone service itself on the rural exchanges as a whole tends steadily to increase with the increase in the total numbers. The average initial loss is large. The average initial loss on each of these exchanges is something like £50 a year. I have not got figures for 1926, but in 1925 the average initial loss per new-exchange opened was £56.7 and the average loss per subscriber was £3.64. A steady improvement in the position of the older exchanges is more than set off as the new exchanges come along. That is why while the position of the individual exchanges is improving, the total loss is tending steadily to grow.

I have been doing my best and will continue to do my best to see what can be done to keep down construction costs in rural areas. I have asked one of my chief officers to review this question again in conjunction with the engineers to see if anything can be done to reduce the figures. I would like the House to appreciate that there are difficulties in the way. In the first place there is the difficulty common to the whole telephone service, which is that whereas it is true in most businesses that the larger your turnover the less your plant costs, that is not true in the telephone service. It is the experience of every telephone administration in the world that as the business grows, so do the plant costs per sub-.scriber tend to rise, owing to the increased complexity of apparatus and means of connection. Again, whatever you do, you cannot so cut the costs of construction as to depreciate the quality of the reception of speech. It is all very well for some of my hon. Friends to say as they sometimes do say, that the country would be well satisfied if they got a cheaper rate even with a slightly inferior quality of speech reception. I know quite well that my hon. and gallant Friend the Mover of the Amendment if anything went wrong with the service would be quick to let me know about it, and even if he were satisfied with an inferior reception of speech, those who rang him up would not be satisfied on their part. While it is quite true that you can run a type of light construction, it is only economic to do so from a practical commercial point of view where you are quite certain that you will not afterwards have to go to the expense of erecting heavier poles and lines. That type of light construction is all right where you are sure that you will be only linking up one subscriber, but that is precisely the type of case where ex hypothesi the Post Office cannot look for lucrative development later.

Another point is that the further into the country you get and the further away from the existing system the higher are the attendant costs of construction such as travelling, subsistence, haulage, and so forth. These increase in proportion to the distance from centres. The further out you get and the more scattered are your subscribers, the longer the average length of line which the Post Office has to construct within the circle of one and a-half miles, because your subscribers being more scattered it becomes less possible to carry two subscribers' wires along one set of poles. These are some of the difficulties in the way of the construction' policy, but I repeat the view which I have expressed before in this House, that it is right and necessary for the proper development of the service as a self-supporting telephone service—and the telephone service must continue to stand on its own feet—it is right and proper that it should carry, in so far as it can carry, an unremunerative fringe of business in order to provide for constant expansion.

Photo of Major Charles Price Major Charles Price , Pembrokeshire

Are we to understand that unless there are eight subscribers, no call office can be installed?

6.0 p.m.

Photo of Sir William Mitchell-Thomson Sir William Mitchell-Thomson , Croydon South

No, I hope my hon. and gallant Friend will not understand that. Eight subscribers are the condition for the setting up of a rural exchange under the rural exchange scheme. I am going to talk in a moment about party lines, and then I shall say something about call offices. There are three things: First of all, the rural exchange for an exclusive line service; secondly, party line service; and thirdly, public call offices. I was saying that, in my judgment, the Post Office ought to carry an unremunerative fringe of business in order to provide for expansion,, but if the interests of the large majority of the subscribers to the telephone service are not to be prejudiced by having their rates unnecessarily kept at a high level, you must keep your expenditure on the unremunerative fringe under some sort of control, and growth on the outskirts of the system must have some relation to growth in the remunerative areas, and must not be artificially stimulated by a subsidy in the form of rates which are out of all relation to costs. Let me repeat that we are spending, and have spent, on establishing new rural exchanges in the last few years very large sums of money. There are already over 1,000 rural exchanges providing subscribers in the country districts with a telephone service at from £3 to £4 a year below the cost. This benefit is being extended to something like 150 people in 13 or 14 new districts every month, and in the districts already served it is being taken advantage of by more and more people.

I do not think it can be said, from the point of view of the general subscriber, that we are treating the rural areas unfairly at all, and when I am asked to reduce the rates still further, I must point out that to reduce the rates still further in existing conditions could only result, in a few years' time, in creating an economic position in which either all telephone rates would have to be raised, or the general taxpayer would have to subsidise the telephone service. That is what has actually happened in some countries which have rushed rural development without taking account of the cost thereby thrown on the general body of subscribers. When I talk of other countries,, may I say that there are certain snags, in comparing this country with other countries, over which one is apt to stumble—I have tripped over some myself, and, therefore, I speak feelingly on the subject—unless you make some inquiry into the variation in local conditions. Two points are very frequently forgotten. In the first place, exclusive line subscribers in this country are nearly always given the benefit of full trunk facilities. They can communicate with anyone, and they can speak at the ordinary trunk tariff not only to anyone in this country on the system, but to anyone on the Continent, and,, if they like, to anyone in the United States of America. That is a state of things which certainly does not obtain in many other countries. Secondly, a large proportion of our exchanges here have a continuous service day and night, and, in fact, at all except the very smallest exchanges, we try to make some sort of arrangement under which people can be switched through at night on a party line basis so that they get some sort of night service. This, again, is very far from being the case in some of the other administrations to which reference has been made.

One point was made by my hon. and gallant Friend on which I must correct him, because it was repeated by more than one speaker in the Debate. There was a sort of suggestion made that telephone development in rural areas was being slowed down because we were anxious to get on further with telephone development in the towns. That is to say, the suggestion is that the rural areas are being, I will not say starved, but less well fed than they ought to be in order that the towns may get more nourishment. Really, that is absolutely the reverse of what are the facts. Out of about 950,000 subscribers throughout the country, 88,000 are connected from rural exchanges, a proportion of 9.3 per cent., and that is not disproportionate if you reflect that the population outside the urban districts of the country is only 20 per cent. Only 20 per cent. of the population of Great Britain lives outside the urban districts, and as you have 9.3 per cent. of the telephone subscribers living in the rural areas, I do not think that is a disproportionate figure.

But still more significant—and I would call my hon. and gallant Friend's attention especially to this—as a symptom of the efforts which we are making to develop the rural telephone system is the rate of growth, and as to the rate of growth the figures are as follow: In the last two years between 1924 and 1926 the direct exchange lines to urban exchanges have grown from 715,000 odd to 850,000 odd, a growth of 19 per cent. in the urban districts. The wires connected with rural exchanges have grown from 63,000 to 88,000, or a growth in the same period of 39.7 per cent., as opposed to 19 per cent. I do not think, therefore, that my hon. and gallant Friend can successfully contend that we are starving the country districts in order to feed the urban areas. It is quite true that there remain certain areas, still more remote from the centre of telephone development, which the main telephone service cannot reach—the sort of cases which my hon. Friend there has in mind—and in such cases the residents may not be able to afford an exclusive line service. That is the class of district in which a party line service is and can be used, and, I agree with my right hon. Friend, ought to be more used than it is at present.

There are two forms of party line service—the two-party line and the rural party line. The two-party line is, in effect, an exchange connection shared between two subscribers. It is of limited scope, but it is economical for two neighbours living at some distance from their exchange. The rural party line service is normally much cheaper than the direct line service, and the Post Office is prepared to put up a rural party line service on standard terms in any district where support can be obtained. I am not saying that the rural party line service is as good as the exclusive line service. It is not. For instance, trunk calls are usually limited, for technical reasons, to a radius of 150 miles, and the user of a line between several people, while obviously presenting certain conveniences, also obviously presents certain drawbacks, but it does provide scattered districts with a cheap local form of service, especially for isolated houses, and it is particularly cheap if one reflects that it is part of the scheme that all subscribers to the one party line service can call up each other without being charged for calls at all. It, therefore, provides a suitable means of development for the outer fringe of the telephone system, and experience does show that, as rural party lines are opened up, and as people do get the telephones added, although it is in some cases of a rather slow growth, rural party line users do tend to transfer, as rural exchanges come along to be built, from rural party lines to rural exchanges, and so you have a constantly widening circle going on, and consequently we find that, whereas the number of rural exchange subscribers grows, the number of rural party line subscribers tends to remain fairly constant. At the present moment the figure is something like 10,000 subscribers, but we are always ready—and I emphasise this again—to canvass in any rural area in order to try to get people to join in taking a rural party line.

Photo of Mr Granville Wheler Mr Granville Wheler , Faversham

Will the right hon. Gentleman say a word about facilities at railway stations?

Photo of Sir William Mitchell-Thomson Sir William Mitchell-Thomson , Croydon South

My hon. and gallant Friend has anticipated the course of my observations. I shall come to that point, but I thought it would arise more appropriately if I passed, as I am on the point of doing, to the question of call offices. I have said something about exclusive lines and comething about party lines, and there now remains the third means of serving the rural communities with telephone facilities, and that is by the provision of public call offices. Where there is already an exchange, it enables people who do not need or or cannot yet afford to have a telephone to have some opportunity of sending telephone messages, it may be even in an emergency, and for this reason a public call office is usually provided with every rural exchange-There are villages, many of them, in which there is as yet no exchange, and in villages such as that a call office does constitute what you might call an outpost of the general telephone system, making the whole system available for anyone in the village who cares to use it. The call fees are certainly not large. They vary with distances. They start at 2d., and the Post Office is prepared to provide call offices in any post office or other suitable premises, or to put up kiosks, provided only there is a reasonable prospect of the things paying their way.

Photo of Sir Robert Hamilton Sir Robert Hamilton , Orkney and Shetland

Does the right hon. Gentleman refer to soundproof boxes?

Photo of Sir William Mitchell-Thomson Sir William Mitchell-Thomson , Croydon South

Yes, as far as it is reasonably practicable. It is not possible, as the hon. Member well knows, in many cases actually, for reasons of space, to make such provision, but where it can be done, we do try to do the best we can. The point I was about to make was that we have already provided call offices wherever there was a reasonable chance that a call office, if erected, would pay its way, and quite a email use of a call office will enable it to do so. The annual cost for maintaining a call office within one-and-a-half miles of the exchange with which it is connected varies from only £11 to £15, and the receipts from four or five calls per day in the first case, or half-a-dozen calls in the case of the call office costing £15 will cover the expense, and even when the exchange is further off, as far as three miles, the expense can be covered by 10 or 12 local daily calls. It might be inferred from these figures that call offices should be provided in the large majority of villages, and it is quite true that the installation of call offices is proceeding very rapidly. Last year we installed about 320 call offices, and there are now altogether in rural areas 6,677, but there still remains a very large number of places where, unfortunately, there is little hope of, a call office being self-supporting at present. The reason is that experience shows that the use of a call office where it is provided in a rural village is surprisingly disappointing.

Photo of Mr Robert Richardson Mr Robert Richardson , Houghton-le-Spring

Has the right hon. Gentleman any standard as to the population surrounding any village for it to have a call office placed there by the Post Office?

Photo of Sir William Mitchell-Thomson Sir William Mitchell-Thomson , Croydon South

Only a general estimate of the use likely to be made of the call office, and how fallacious that is, will be seen when I relate the other half of the sad story which my hon. and gallant Friend below the Gangway told with such feeling just now. He alluded to a locality where a call office was established, and where he said they had found themselves unable to supply the guarantee which had become due. In that case, I went into the facts, and I have since refreshed my memory. What actually happened was what so often happens. A petition, signed by practically every inhabitant in the village, at least by something over 100 inhabitants, was presented in favour of the establishment of a call office, and somewhat optimistic—I will say no more—forecasts were made as to the use which was likely to be made of it. The Post Office authorities have become a little bit sceptical of these forecasts, and I think perhaps not without reason. This was a case in which the expenditure on providing the service was pretty high, and they took the precaution of requiring a guarantee. In fact, the receipts from that office in the first year after its establishment were somewhere about £5, and that sum, divided by the number of applicants who had signed the original petition, showed that they had made less than six calls each during the year. Really, that is a type of case which the State cannot be expected to meet at the expense of the State. In such conditions it is not right to establish or to continue a call office at the expense of the general body of telephone subscribers. When there is a local demand for a call office the cost ought really to fall on the locality, and it is to provide for cases of this sort that the guarantee system is valuable.

I would like to say one word with regard to the question, also raised by the hon. and gallant Gentleman, as to the general provision of call offices. Nearly half of the 13,000 rural post offices in the country, including "five-sixths of the postal telegraph offices, are already provided with call offices, and I agree that the object at which we should aim is to secure that the whole of the rural telegraph offices shall, in course of time, be equipped as call offices. The number is rapidly growing. The hon. and gallant Member for the Faversham Division (Sir G. Wheler) asked me a question just now about the establishment of call offices at railway stations. A desire is being constantly expressed by farmers, and agriculturists generally, for further facilities for communicating with rural railway stations. I agree that this is a desire which ought to be satisfied, although it is fair to say that here again tests which I made as to the use made of the facilities after they have been provided show that the forecasts in some of the petitions got up were somewhat optimistic. Still, I do think it is a need which ought to be met, and which I am doing my best, jointly with the railway companies, to try to meet as far as possible. We have been making a special effort with the railway companies during the past few months, and we have been able to make arrangements with several railway companies, for providing call offices for telephones, to be available for incoming calls at railway stations. where the railway company cannot afford to rent an exchange line. Nearly 100 addi- tional rural railway stations have already been, or are being, provided with telephones under this scheme, and about 40 more are under consideration. One railway, the Great Western Railway, which has been most helpful in this matter, has, I am told, given instructions to its station-masters that when they are reporting the arrival of consignments they are, if the. consignee is on the telephone, to use the telephone for that purpose in preference to using, as hitherto, the ordinary means of postal communication.

I am afraid I have already detained the House at some length, but I cannot sit down without saying one word about the other half of my hon. and gallant Friend's Amendment, the half which deals with what I may call the more academic question of the relation between State enterprise and private enterprise in the telephone service. The telephone service is really a plant of very recent growth. Its early youth was stunted, and its growth was certainly hindered by innumerable changes of policy on the part of the Governments of those days. Looking back, as we can do now, with the wisdom that comes after the event, and with the knowledge which is born of experience, one can see perfectly clearly that there were only two courses open to the Governments of those days—either, from its inception, to have developed the system by State enterprise, or to have handed telephones over, lock, stock, and barrel, to be operated by a private monopoly.

There is a great deal which could have been said in favour of either course. From the point of view of State enterprise, the State might very properly have considered that as it already owned the telegraphs it would be as well that it should manage and own the telephone service, so that the two could grow up side by side. From the point of view of private monopoly, it might have been contended that private interests afford the stimulus of gain and also enjoy a greater freedom from hampering administrative regulations; and private enterprise, if it made gains, would have retained those gains and would not have seen them vanish in other directions. All that might have been contended with a great deal of truth at the time, and when I look, as I constantly do, at the methods and finance of the greatest telephone ad- ministration in the world, the American Telephone and Telegraph Company, I realise that in many respects private enterprise has its inherent advantages. But there are also difficulties, and great difficulties in the way, difficulties which are greater in a highly industrialised country like this than there were 50 years ago in the United States of America. if the Governments of those days had decided to entrust the development of the telephone service to private enterprise they would have had to be prepared to entrust to that monopoly all, and more than all, the powers which the Postmaster-General now enjoys in regard to wayleaves. I do not know that Parliament would have done it, and I do know that it would have been very bitterly opposed by local authorities.

But it is really idle to speculate on what might have happened if the Government of that day had decided either for State enterprise or for private monopoly. In fact, they chose neither. They adopted a middle course, and, as usual with middle courses, it had all the disadvantages of both and few of the advantages of either. They licensed the companies to operate in certain restricted areas, on a royalty basis. They hedged them about with a series of restrictions upon their operations. They also authorised the Post Office to have exchanges on its own account, for the purpose, so it was said, of stimulating competition. These conditions completely crippled the service. Although they were relaxed in 1884, still, when the master patents ran out in 1891, Parliament was deluged with complaints about the inefficiency of the telephone service, both the National Telephone Company's service and the Post Office service. In 1892 a new policy was adopted, and the trunks were taken over by the State at a cost of something under half-a-million, I think £459,000, the deal being completed finally in 1896.

Still, the difficulties about way-leaves continued, and the National Telephone Company, which had by then swallowed up all the other competing telephone companies, had to do as best they could in bargaining with municipalities and local authorities all up and down the country in order to get wayleaves for their wires to enter the territories of those local authorities. In many cases local authorities made great difficulties and drove a very hard bargain. It was seen quite soon that that policy had broken down; but still the competition microbe was infecting the minds of statesmen, and so this attitude was adopted. It was then said, "As municipalities are making difficulties and putting obstacles in the path of the development of the service of the National Telephone Company, why not let municipalities themselves conduct their own services?"

That policy was ordained in 1899. What happened? This is a curious side light on municipal enterprise in this respect. Some 60 municipalities made application for permission to start their own telephone services under licence. Only 13 licences were actually taken out, and of those 13 only six were actually taken up. Of those six, five were surrendered within a very few years upon sale of the undertaking either to the Post Office or to the National Telephone Company. One survived, and survives to this day, in the City of Hull, which still operates a service under licence from the Post Office, on a royalty basis.

Photo of Mr Thomas Johnston Mr Thomas Johnston , Dundee

And it is the cheapest!

Photo of Sir William Mitchell-Thomson Sir William Mitchell-Thomson , Croydon South

The City of Hull as a unit has certain advantages as to being geographically and economically self-contained which do not operate in the case of other local authorities. Between 1901 and 1905 a series of agreements was concluded as to the terms upon which an option was to be exercised by the Government to take over the telephone service, and it was arranged that it should be taken over in December, 1911, on "tramway terms." It was, in point of fact, taken over at that date, the price paid being just under £12,500,000, the portion of the Post Office telephones being valued at £9,000,000 out of a total of £21,000,000. The valuation of the Post Office telephones to-day 31st March, 1927, is £95,000,000 gross and £81,000,000 net.

I spoke about competition. Let me add one word on that point. In most businesses competition is a most valuable tonic. In the telephone business it is a slow poison, as the House will appreciate as soon as I explain the facts. If you have a system of close working agreement between your two competing systems, providing for the greatest possible facilities of inter-communication between the two—because communication with a large number of other subscribers is vital to every subscriber—it follows that you must have a whole set of other working agreements as to standardisation of plant, hours and general working conditions. If you do that you to all intents and purposes eliminate competition altogether. On the other hand, if you do have sustained and vigorous competition going on, two sets of people competing against each other, each sticking to their own subscribers, each refusing to give inter-communication with the other, not only do you have a restricted service from the subscribers' point of view, but, in the end, you have the service being starved because of the continuance of the policy of rate cutting. Sooner or later one service or the other succumbs, and then you are left with a whole array of wasted and wasteful duplicated plant. That is true of the telephone service, because of the necessity of maintaining communication, but in most businesses we regard competition as helpful and necessary. The question is academic rather than practical at the present moment, and, while I agree with my hon. and gallant Friend that he and I might have held different views on this question 30 or 40 years ago, it must be recognised that we have to deal with the conditions as they exist to-day. No doubt it is open to argument which would have been the better horse, but you cannot swop horses now. That is physically impossible at the present moment with the whole of our operations, lines, cables and all the rest as they exist to-day. With an apology for my long speech, I wish to thank my hon. and gallant Friend for the way in which he moved his Amendment, and I hope that, having achieved his object in raising this Debate, he will now allow the Motion to go through and les us proceed to the discussion of another subject.

Question put, "That the words proposed to be left out stand part of the Question."

The House proceeded to a Division:

Mr. F. C. Thomson and Mr. Penny were appointed as Tellers for the Ayes, but there being no Members willing to act as Tellers for the Noes, Mr. Speaker declared that the Ayes had it.

Main Question again proposed.