Skip to main content

Ways And Means

Volume 155: debated on Friday 16 June 1922

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Considered in Committee.

[Mr. JAMES HOPE in the Chair.]

Mechanically-Propelled Vehicles

Motion made, and Question proposed.

"That where a licence has been taken out for a mechanically-propelled vehicle at any rate under the Second Schedule to The Finance Act, 1920, and the vehicle is at any time while such licence is in force used in an altered condition or in a manner or for a purpose which brings it within, or which if it was used solely in that condition or in that manner or for that purpose, would bring it within a class or description of vehicles to which a higher rate of duty is applicable under the said Schedule, duty at such higher rate shall become chargeable in respect of the licence for the vehicle."—[Mr. Neal.]

The Resolution deals with a small matter which has arisen in the administration of the system of motor taxation. This motor taxation originated under the Finance Act, 1920, and was supplemented by the Roads Act of the same year. They established the system of the licensing of vehicles, and the vehicles were divided into six classes. It is necessary, however, for me to mention only three—"road locomotives, tractors, agricultural engines, etc.," which were taxed according to their weight; "commercial goods vehicles," which were taxed on a similar basis; and "any other vehicle," which was intended mainly to include private motor cars, taxed on a horse-power basis. It is not intended in the present Finance Bill to deal with the general system of taxation, and the Resolution which I move is the foundation of a small Amendment to stop up a leakage which was discovered by the ingenuity of the profession to which I belong, in reference to those three classes of vehicles. The taxation of the agricultural engine and commercial goods vehicle was based on weight, as I said, and the word "solely" was introduced in the Section dealing with the matter; that is to say, where a vehicle was solely used for the purposes which were indicated, it should become liable to the specific duty. Some persons thought, rightly or wrongly, that having got a vehicle which was clearly within the class named, if they used it even on an odd occasion for some other purpose, they might avail themselves of the lower duty which attached to the other class of vehicle.

Let me give a simple illustration. A five-ton electrically-propelled goods-carrying vehicle used by a flour merchant, is liable as a commercial goods vehicle to a duty of £30 per annum. Some ingenious person came to the conclusion that if that vehicle were transformed from its ordinary use as a goods-carrying vehicle

Rate of duty chargeable in respect of a licence tobe used only for vehicles chargeable with duty under paragraph 1 and 2 to the Second Schedule to the Finance Act, 1920.Rate of duty chargeable in other cases.
If the licence in a licence to which the one set of regulations is applicable.£5£25
If the licence is a licence to which the one set of regulations is applicable.£1£5

into a passenger-carrying vehicle, by putting a few forms upon it, and taking a few people for an outing, it would then become chargeable for the duty of £6. I will not trouble the Committee with further illustrations. The matter can he conveniently discussed when Amendments are put down to the Finance Bill, hut it will be seen that this is giving rise to anomalies and inequities not only on the part of the Ministry with which I am connected, and which is charged with the administration of the Road Fund, but on the part of other vehicle owners who have observed the spirit as well as the letter of the Act, and have paid their proper contribution. The Resolution which I move also incidentally deals with one other matter. Questions have arisen as to whether a person who has a licence of some sort, although not the appropriate licence for the vehicle he might use, is liable to any penalty under the provisions of Sections 8 and 13 of the Roads Act. It is to remedy those matters that it is proposed to move Amendments to the Finance Bill. This does not impose any new tax upon the public at large. It is really only a verbal Amendment of the. law which is thought to be necessary.

Notice taken that 40 Members were not present. Committee counted, and 40 Members being present—

Question put, and agreed to.

General Licences Under Roads Act,1920

Motion made, and Question proposed,

"That in lieu of the duty chargeable under Section nine of the Roads Act, 1920, in respect of general licences issued under that Section, there shall, in the event of the Minister of Transport in pursuance of any powers which may he conferred upon him issuing two different sets of regulations applicable to such licences, be chargeable in respect of such licences duty at the following yearly rates:—

This is a Resolution which the Government are proposing with a view to an Amendment which has been desired very much by those who are interested in the manufacture and sale of motor vehicles. Under the existing legislation, dealers in motor cars are entitled to have what is known as a general identification mark licence, entitling the manufacturer or dealer to use a car for trial or test purposes or to give a run to prospective purchasers. It has been very much abused in the past, and the difficulty of dealing with the matter has caused a number of prosecutions up and down the country by the police authority, some of which have been very much resented by persons in the trade. Under those circumstances, a small informal committee was set up to consider whether any amendment was possible, and the Resolution which I now move, upon which hereafter an Amendment to the Finance Bill will be put down, embodies the recommendation of that committee. We propose that, instead of there being one class of these licences, there shall be two. The duty payable under the general licence to-day is £10. We propose that, under the first of the two classes I have just mentioned, a duty of £25 will be payable, but that will enable, say, a dealer in motor cars to have a very much freer user of his car for his own personal purposes. One can readily understand that an agent who has a number of cars in his care may desire to make runs with those ears, in order that he may be able to tell customers what his own personal experience of a car may be, and, instead of having to take out prematurely a licence for each one of those cars, we propose that he be enabled to take a general licence, for which he will pay £25, which will give him a very much freer user of the cars he has at his disposal, so that he may not find himself harassed by undue interference as he goes about the country.

The police also desire this alteration, because their duty, under the administration of the law as it stands, to hold up people on the road, and challenge them as to whether they are using their cars within the somewhat narrow limits of the Regulation, is an unpleasant matter both to the police and those subjected to this treatment. Therefore, it is at the request of the trade that we propose this licence for more general user, but we propose also a second licence for a somewhat narrower and stricter user, that is to say, purely and simply for purposes in connection with the business, for testing cars, and giving prospective customers an opportunity of seeing the nature of the vehicle they require. Therefore, we propose two sets of Regulations instead of one, one set giving a much more extended and freer user to the motor agent, so that he may not find himself harassed, and the second being more limited, and giving the rights which I have indicated. We propose, therefore, to reduce the duty in the second case from £10 to £5, as we increase it in the first ease from £10 to £25.

I have just one observation or two to make. One is to congratulate the hon. Gentleman upon this proposal having been brought forward. I have no doubt my experience is that of most hon. Members—that there has been expressed generally a very strong grievance on the part of those who are proprietors of motor-car businesses at the trouble which has arisen from time to time, and very often between the proprietors of these businesses and the local police. Very great resentment has been expressed. One instance, showing the resentment expressed in a letter to me, I had an opportunity of placing before the lion. Member. I should only like to ask whether the Department has been in consultation with the organisations representing these motor-car traders, and whether they have expressed agreement as to the alteration of the figures, or whether they have simply expressed agreement as to reform being necessary? Have they agreed that these are fair figures having regard to all the circumstances? Perhaps the hon. Gentleman will let the Committee know if there has been some arrangement made between the parties concerned; he is anxious, I know, to meet the reasonable requirements of the trade throughout the country. This is the introduction of a somewhat small matter, but it will be a reform very eagerly welcomed.

I thank my hon. Friend for his words of congratulation. We have tried to meet the views of those concerned. The Committee of which I have spoken contained representatives of the different branches of the industry. Their recommendations included the figures which are embodied in the Resolution, and were unanimous.

As to the first part of this Resolution, it is rather difficult to understand, but I think on the whole it is quite clear as to the rate of duty to be applied. I do not quite understand the second part. Am I right in thinking that the object of the second part is merely to allow a motor-car passenger to be given a trial trip at a lower rate of licence than is applicable at the present time?

I understand from the hon. Gentleman in charge of the Resolution that one of the objects of the second part of the Amendment is intended to apply to cases where the motor dealer, in order to sell a motor vehicle, gives a trial to a prospective purchaser, and is, therefore, able to get a licence for the trial at a lower rate. I may have misunderstood my hon. Friend.

No; the right hon. Gentleman has not misunderstood, but what he has stated is not the complete case. There is also the case of the manufacturer who wishes to test his machine before registration and paying the duty, and matters of that kind are intended to be covered by the Amendment.

Question put, and agreed to.

Stamp Duty On Certificates Of Registration Of Alkali, Etc, Works

Motion made, and Question proposed,

"That in lieu of the stamp duties chargeable on certificates of registration of the works mentioned in Sub-section (1) of Section nine of the Alkali, etc., Works Regulation Act, 1906, there shall be charged duties at rates which shall be fixed by the Treasury after consultation with the Minister of Health and the Secretary for Scotland, and which shall be such that the duties levied under the said Act shall not exceed the amount required to meet the costs incurred in respect of the remuneration (including superannuation allowances) and expenses of the inspectors, and otherwise in connection with inspection under the said Act, and different rates of duty may be fixed as respects different classes of works."—[Sir J. Baird.]

12 N

This Resolution leads up to the Clause which is to be inserted among these presented on the Committee stage of the Finance Bill, and is to alter the Stamp Duty imposed upon the certificate of registration of certain works under the Act of 1906. The Act says:

"(1) An alkali work, a scheduled work, a cement work, or a smelting work shall not be carried on unless it is certified to be registered.
"(3) A certificate of registration… shall be enforced for one year.…
The Act imposes a scale of stamp duties,£ in the case of an alkali work and £3 in the case of any other works, and the Commissioners of Inland Revenue shall issue stamp forms of certificate for the purpose. When these figures were agreed to by the House originally, it was the intention that they should cover the cost of inspection of works necessary before the certificate could be granted. It has turned out that the cost of inspection and other costs incidental to granting the certificate exceed the cost of the certificate. The Geddes Committee drew attention to the fact, and suggested that the cost of the certificate should be raised so as to meet the expenditure involved upon the Government. It has been found difficult, without largely burdening the industry, to get those concerned to assent to prices which heavily burden the small manufacturers, but we found that we could get the consent of the manufacturers to bear the cost of the certificate being raised so as to cover the whole cost: therefore the proposal submitted to the Committee, and embodied in the Resolution, that the duties to be levied under the Act referred to shall not exceed the amount required to meet the cost incurred. The amount it is proposed shall be settled by consultation between the Treasury, the Ministry of Health, and the Secretary for Scotland, and there is every reason to believe that an equitable arrangement will be come to. The Resolution does not specify the exact amount, but does limit the amount of the levy to the total cost incurred, and the reasons for that are set out.

Although this is only a very small matter it is a very objectionable innovation into our taxation system. It is indeed giving to a Department the power to impose taxation upon the subject without the sanction of this House. In the present state of affairs this House fixed or has fixed the amount chargeable upon the various concerns, and now an alteration is proposed to be made by a recommendation of the Geddes Committee by which the total cost, as I understand it, of the inspection of factories is to be charged on the industry. This House has no voice in saying what is a reasonable amount to be so charged. That is left to the Board of Trade or the Inspecting Department, and they may raise their costs to any extent they like, and those costs have to be borne by the industry whether this House approves or not. That, in my opinion, is a very objectionable institution, and this House would be far better advised in the case of registration fees to keep control of the matter, and not to allow it to be in the hands of the Treasury. I do not know whether this is the time to deal with this innovation or whether it should be done on the Finance Bill, but I hope those who take an interest in the curbing of the bureaucracy will take the opportunity in this House strongly to enter their protest.

I have only just had the opportunity of reading this Resolution, and it appears to me that the fears of the hon. and gallant Member for East Middlesbrough (Colonel P. Williams) are well founded. I believe he has given correct interpretation of what will take place if this Motion be carried, and eventually embodied in the Finance Bill. At the present moment certain duties are charged on certificates of registration of the works used for alkali purposes and they are dealt with in Sub-section (1) of Section 9 of the Alkali, etc., Works Regulation Act, 1906. What we are going to do is for the future, instead of Parliament imposing certain charges under the Section I have mentioned, the Minister of Health and the Secretary for Scotland can impose those charges after consultation with the Treasury. That is an extraordinary course. It is a complete innovation and contrary to the custom and practice of this House from time immemorial. In the past, taxation has been imposed by this House and not by the Secretary for Scotland or the Minister of Health, and we seem now to be going back to the days of Charles I.

I do not see any member of the Labour party present. I always understood that the Labour party were in favour of democracy, by which they mean "government of the people by the people, for the people," and yet they are not present on this occasion to prevent the government of the people by the Minister of Health and the Secretary for Scotland, after consultation with the Treasury. This seems to me a most extraordinary proposition and I very much regret that only some 15 Members were present to hear the remarks of the hon. Gentleman opposite. In a Committee with only 15 Members present, we are going to make a tremendous alteration in the principle which governs taxation and finance, and I shall be quite willing to divide against this proposal if the hon. and gallant Gentleman opposite will support me. I do not think that we ought to pass a proposal of this sort, and we seem to be passing rapidly from our usual constitutional procedure to a system of government by the Cabinet and that is what I object to. If we are to have an autocratic government I would much sooner be governed by the King. If the hon. and gallant Gentleman who spoke last will tell with me, I shall certainly divide the Committee against this proposal.

The last speaker and the hon. and gallant Gentleman who preceded him are quite correct in drawing attention to this innovation. We are, however, placed in this difficulty. On the one hand we have to impose a charge on an industry not in excess of what we believe is necessary to meet the costs incurred, because that would be a handicap upon the industry. On the other hand, if we do not do this we shall be forcing the taxpayer to bear the difference between the amount collected in the form of licences and the costs incurred. The product of the licences last year was about £4,000, and the cost of collection and inspection was about £10,000. It is hoped by this proposal to be able to arrive at an amount of revenue which, if it does not cover the entire cost, will go a considerable way in that direction. It will be seen from the Resolution that the amount to be imposed must not exceed the amount required to meet the cost incurred in respect of the remuneration and expenses of the inspectors, and the work which is necessary to collect this money paid in the form of registration.

I am surprised to find the right hon. Gentleman the Member for the City of London (Sir F. Banbury) alluding to the Minister of Health as a new Minister, because he is really only a direct successor of the President of the Local Government Board. I do not complain of hon. Members exercising immense care to see that the taxpayer is not overcharged or that this House does not lose control over the amount of taxation imposed, but in this proposal we are definitely limiting the amount to be collected, and the House can refuse in the Estimates to pass any amount which is considered to be excessive, and they can do this on the Estimates of the Ministry of Health. Under these circumstances I hope they will not divide the Committee, because if this Motion be not carried they may be forcing the taxpayer to provide the deficiency, and we are not asking for power to impose a charge in excess of what the industry ought to be asked to pay. Under these circumstances I hope this matter will not be pressed to a Division.

As I understand it, the sum in question is estimated to amount to about £6,000. My hon. and gallant Friend says, "Here is a sum which is very small indeed. It is limited by providing that it shall not exceed the expenditure." He also says that in Committee of Supply, if the expenses are too great, the House can check them. Everybody knows that in Committee of Supply a small sum like this is almost certain to be overlooked, and, if it be not overlooked, the Minister in Charge will say, "This is only a very small point. You cannot move a reduction which is a vote of censure upon the Government on a small point like this. It is absolutely necessary. You do not want to impose a heavier charge on the industry." And nothing will happen. Then my hon. Friend says, "After all, you do not wish to put a charge on the taxpayer." He has rather misunderstood my objection. If these duties are to be altered, the amount of the alteration should be put in the Resolution, and should be confirmed by this House. The object is right, but the method is wrong.

Hon. Members may say, "What does it matter about a small amount of £6,000?" It matters very much. If we pass this Resolution, how do we know that in a few years to come some Government will not take this as a precedent, and introduce another Resolution giving perhaps greater powers, and a larger limitation as to the amount? If any objection be made, they will say, "Oh, but the hon. Gentleman is mistaken. This is not an innovation. There is a precedent for it. If the hon. Gentleman will only look at the Resolution of 16th June, 1922, he will see that there is a precedent for it." Then in all probability, the vast number of Members in the House will not know what occurred on 16th June, 1922, and they will say, "Probably this is all right," and an innovation will occur. The only time to check these things is at the commencement, and, if it be such a small amount, for Heaven's sake do not let us alter the procedure of this House, and introduce an entire innovation for a small amount. We do not know what harm we may be doing. There may possibly be some delay by putting in the amount, but what does that matter if you get over all the objections? I really cannot see why my hon. and gallant Friend cannot agree to this suggestion.

There is another danger. As far as I can see, there is no limit to the number of inspectors that may be appointed. We know the Ministry of Health is not exactly an economical Ministry, and it may say—I do not say under this Government, but under some future Government—"We must have some more inspectors to inspect these alkali works." The whole charge will come on a very small industry which may have very few friends in this House, bureaucracy will be increased, and a great injustice will be done to the trade. This House could not stop it, because it would he done under the Regulations. That is an equally large danger, because there is nothing in the Resolution limiting the number of inspectors required. I think we ought to hear from the Minister in charge as to whether there cannot be some check placed on the number of these inspectors. It is a very great danger, and will seriously prejudice the trade which will have to bear the whole expense.

I do not think that the explanation given by the hon. and gallant Gentleman is at all satisfactory. He seems to charge us with desiring to put a burden on the taxpayer. We wish to do nothing of the sort. We say that this House should have control over the amount levied, and fix it at an appropriate amount to meet the cost. It very frequently happens that this House votes taxation in the nature of Income Tax in excess of the requirements of the year, and the next year, that Income Tax is reduced to absorb the surplus. In this case the duty ought to be fixed to meet the cost of inspection. If it be found that the amount is too great, then the next year in the Budget it. should be remitted, so as to absorb the surplus in the same way. This is a very important departure, and it is a very dangerous one. I would like to call the attention of the hon. and gallant Gentlemen to the fact that there has been in recent years a very great demand for industries to provide for the unemployment in those industries, but I take it it would be exceedingly improper for this House to let the Minister of Labour levy a tax on an industry to meet the unemployment within that industry, and for this House to have no control over the amount of that levy or the means by which it should be raised. This House should not part with the control of any such levy upon an industry. These levies are becoming increasingly difficult for industry. Every industry is groaning under the burden of taxation, and gradually we are having additional burdens of taxation imposed on industry. It is bad enough when the amount is definitely; fixed by this House, but to allow two Ministers in consultation with the Treasury to impose any cost they think fit on an industry and for us to have nothing to say to it is a departure which this House would be very ill-advised to make, and, if my right hon. Friend will divide, I shall be very glad to go into the Lobby with him.

I omitted to see the point, raised by my hon. and gallant Friend the Member for Honiton (Major Morrison-Bell), which is another strong argument against passing this Resolution in its present form. My hon. and gallant Friend points out that under this Resolution there would be an opportunity for a Government who wished to reward its friends to appoint a large number of inspectors. It gives an opportunity for corruption. It gives power to Ministers to appoint inspectors with an unlimited amount of salary, including superannuation, and charge the cost to the industry without the House of Commons knowing in the least what the charge is going to be, and that, to my mind, is a most dangerous innovation. I have had the privilege and pleasure of my hon. and gallant Friend's acquaintance for some years, and I really do not believe that he thought the Resolution really entailed these results. I do ask them whether it is not worth while to postpone the consideration of this particular Resolution until we have a larger number of Members present than we have now. If not, I shall certainly divide with my hon. Friend.

I cannot accept my right hon. Friend's suggestion. This Resolution has to go through a Report stage when, very likely, there will be a larger attendance of Members. That depends on the amount of interest which hon. Members really take in the subject. As regards the point raised by my right hon. Friend, is it really the case that we are taking powers now by this very moderate proposal to increase indefinitely the number of inspectors? Surely that is not the case. If this Resolution be accepted, and the Clause which will be based on it is passed, our power to appoint inspectors remains precisely the same as it is, and my right hon. Friend will take care that we do not appoint too many. He always does.

On reflection my right hon. Friend will admit that the passing of this Resolution in no way hampers him in his efforts to keep down expenditure, and the number of officials, so that that particular point has very little substance. With regard to the charge imposed upon industry referred to by the hon. and gallant Member for East Middlesbrough (Colonel P. Williams) we are confronted with this alternative. The Geddes Committee recommended that the cost of levying these duties—which, nobody would deny, involves inspection and registration and somebody must pay for that—should be recovered from the industries. When the Bill was passed in 1906 there is very little doubt—though I have not looked up the Debate—that the Minister made it clear to the House that the cost of the inspection should be met by the amount of the payment. No doubt we have been disappointed in that. The cost of inspection, like everything else, has gone up. What are we to do? Is the taxpayer to meet the difference? Is the Government to be prevented from reducing the burden on the taxpayer? That is what it comes to. This is an effort on the part of the Government to carry out the policy of economy. We are relieving the taxpayer from the burden which he now has to meet, represented by the difference between the amount collected for licences and the cost of inspection, etc. If my hon. Friends insist that the taxpayer ought to bear that cost, they cannot escape from the position that they are resisting a legitimate and honest attempt by the Government to reduce the charges which fall on the taxpayer.

I am sure that the hon. Baronet does not want to state the case unfairly, but there is the alternative of increasing the fee to meet the actual cost, and letting this House have the control over the amount of the fees charged.

Then we are in this position. So far as our information goes, and as a consequence of consultation which takes places between those concerned, my hon. and gallant Friend will agree, that if you put on industry a charge representing the legitimate cost of inspection, etc.—and my hon. and gallant Friend will admit that inspection, if done at all, should be well done by competent people—the legitimate cost of that inspection does exceed what we think would be a legitimate charge to meet the proposal of the Geddes Committee. We propose not to go so far as the Geddes Committee in imposing a charge upon the industry, but we want to be reasonable and to impose a reasonable charge which will be sufficient for the purpose and which will be settled by the Treasury after consultation with the Minister of Health and the Secretary for Scotland. The most satisfactory way would be to charge industry with as much as you fairly can do of the cost of collection, limiting definitely the total cost of collection. There is a distinct precedent for that in the Finance Act of last year which provides in Section 61, Sub-section (1):

"The stamp duty charged on local authorities by the District Auditor's Act, 1879, as amended by any other Act, in respect of the audit of their account by district auditors, shall, instead of being calculated according to the scale contained in the First Schedule to that Act, be calculated according to a scale to be fixed from time to time by the Treasury after consultation with the Minister of Health."
That precedent must have escaped my right hon. Friend's attention. This is on all fours with that, only that the sum involved is different. But the present procedure follows the precedent of last year. I hope that he will accept my assurance that there is no intention on the part, of the Government to appoint large numbers of additional inspectors and in any event there is nobody in the Kingdom who is more vigilant than he in asserting control over public expenditure. In the circumstances I trust that he will not press the matter to a Division.

It is true, no doubt, that at present a large number of inspectors can be appointed and they would be paid by the taxpayer. Consequently, it is just possible that one might be able to induce the House to object to an increased number of inspectors. Linder this Resolution, however, the inspectors will be paid by a duty charged upon the alkali works, and in these circumstances I very much doubt whether you could get a sufficient number of Members of the House to do two things: firstly, to vote against the Government—it is very difficult to get anyone to do that—and, secondly, to vote against the Government on the ground that the alkali works have got to pay something. I do not think the hon. Baronet has made out much of a case by saying that the Government already have power to appoint inspectors. He has said there was a precedent, and I listened with great interest to hear what it was. There could not have been a worse precedent, for it was done last year, probably in the same kind of way in which it is being done now—in an almost empty House, when I, probably, was asleep or talking to someone else, and there was hardly anyone there. Therefore, I venture to say that last year's precedent is a very bad one. Moreover, it confirms my argument that, if we pass this, we shall be told on another occasion that there are two precedents and not one. I am ready to fight one, but I am not quite certain that I should be able to fight two; but I am not going to be asleep again to-day, as, apparently, I was last year. I listened carefully to what the hon. Baronet read, and I do not think it is quite the same precedent. What I understood him to read was that there was to be a variation in the stamp duty. This, however, abolishes the stamp duties. It says:

"That in lieu of the stamp duties chargeable on certificates of registration of the works mentioned …there shall be charged duties at rates which shall he fixed by the Treasury after consultation with the Minister of Health. …"
Therefore, you are doing away with the stamp duties on registration, and imposing, instead, duties upon an industry by which, without Parliament being required to sanction the charge, you compel that industry by an Order of the Minister of Health with the approval of the Treasury, to pay a certain amount of money. That is totally opposed to all the principles which have ever governed the House of Commons.

I am afraid that, quite unintentionally, I did not give my right hon. Friend all the information that should have given him with regard to the precedent. If I had gone on reading, it would probably have been clearer to him, and perhaps the Committee will bear with me if I quote the whole of the Subsection, because I agree that this is a very important principle. The Subsection runs as follows:

"The stamp duty charged on local authorities by The District Auditors Act, 1879, as amended by any other Act, in respect of the audit of their accounts by district auditors, shall, instead of being calculated according to the scale contained in the First Schedule to that Act, be calculated according to a scale to be fixed from time to time by the Treasury, after consultation with the Minister of Health and with such associations of local authorities as appear to the Minister to be concerned, and the scale so fixed shall be such as to secure that the duties levied under the said Act shall he sufficient to meet the costs incurred in respect of the remuneration, including superannuation allowances, and the expenses, of district auditors."
The parallel, therefore, is absolutely complete. My right hon. Friend says that he was probably asleep when that was passed last year, but, although he might have been asleep at one of the stages, he certainly was not asleep at all of them, and, therefore, I am surprised at his putting forward that argument. Quite seriously, I suggest to him that the precedent established last year, and accepted by the House, is one that may be legitimately applied now, and that the two cases are absolutely on all fours, with the exception that a very much smaller sum is involved in the present case than previously.

I am much obliged to the hon. Baronet for reading the whole of the Sub-section, which puts a considerably different interpretation upon the matter. It means that the local authorities have to be consulted. I do not know that that is a good thing. I do not say that we ought to allow a tax on any individual, or any body of individuals, to be imposed by the Ministry of Health and the Treasury, even after consultation with the local authorities, but the local authorities are brought in there, and the public have some possible chance of being protected by them. They are not brought in here, and I still say that, as far as I can understand it, that was merely an alteration in the stamp duty, whereas this is the abolition of the stamp duties and the imposition of other duties. The real point, however, is that, under this Resolution, we are going to give power to impose taxation and charges upon an industry without the amount being sanctioned by Parliament. I say that that is an innovation. The hon. Baronet says that it is only a small one, but that does not affect the principle. The only other argument is that we did it last year. I remember that the late Sir Charles Dilke, in this Chamber, when he was confronted with a precedent which he thought was a bad one, said, "Mr. Speaker, for goodness sake, because we have made one mistake, do not let us make another." I did not agree with Sir Charles Dilke in his politics, but I think that that was a most sensible remark, and one which it is very necessary at the present time that hon. Members should bear in mind when they are met by the argument that on some occasion in an empty House, without knowing what was going on, certain bad things were done.

Question put.

The Committee divided: Ayes, 97; Noes, 42.

Division No. 140.]

AYES.

[12.45 p.m.

Agg-Gardner, Sir James TynteFremantle, Lieut.-Colonel Francis E.Neal, Arthur
Amery, Rt. Hon. Leopold C. M. S.Gee, Captain RobertNewman, Sir R. H. S. D. L. (Exeter)
Baird, Sir John LawrenceGeorge, Rt. Hon. David LloydNewton, Sir D. G. C. (Cambridge)
Baldwin, Rt. Hon. StanleyGibbs, Colonel George AbrahamNicholson, Reginald (Doncaster)
Barlow, Sir MontagueGilmour, Lieut.-Colonel Sir JohnNield, Sir Herbert
Barnes, Rt. Hon. G. (Glas., Gorbals)Glyn, Major RalphParker, James
Barnett, Major Richard W.Green, Joseph F. (Leicester, W.)Pease, Rt. Hon. Herbert Pike
Barrand, A. R.Greig, Colonel Sir James WilliamRenwick, Sir George
Bartley-Denniss, Sir Edmund RobertHacking, Captain Douglas H.Richardson, Sir Alex. (Gravesend)
Benn, Sir A. S. (Plymouth, Drake)Harmsworth, C. B. (Bedford, Luton)Richardson, Lt.-Col Sir P. (Chertsey)
Boscawen. Rt. Hon. Sir A. GriffithHerbert, Dennis (Hertford, Watford)Roberts, Samuel (Hereford, Hereford)
Bowyer, Captain G. W. E.Horne, Sir R. S. (Glasgow, Hillhead)Scott, A. M. (Glasgow, Bridgeton)
Breese, Major Charles E.Hurd, Percy A.Scott, Sir Leslie (Liverp'l, Exchange)
Bridgeman, Rt. Hon. William CliveHurst, Lieut.-Colonel Gerald B.Shortt, Rt. Hon. E. (N'castle-on-T.)
Broad, Thomas TuckerInskip, Thomas Walker H.Simm, M. T.
Brown, Brig.-Gen. H. C. (Newbury)Jesson, C.Sprot, Colonel Sir Alexander
Bruton, Sir JamesJodrell, Neville PaulStanley, Major Hon. G. (Preston)
Buckley, Lieut.-Colonel A.Kellaway, Rt. Hon. Fredk. GeorgeStewart, Gershom
Burdon, Colonel RowlandKelley, Major Fred (Rotherham)Sturrock, J. Leng
Cautley, Henry StrotherKing, Captain Henry DouglasSurtees, Brigadier-General H. C.
Chamberlain, Rt. Hn J. A. (Birm., W).Lewis, T. A. (Glam., Pontypridd)Taylor, J.
Cheyne, Sir William WatsonLoseby, Captain C. E.Thomson, F. C. (Aberdeen, South)
Churchill, Rt. Hon. Winston S.M'Donald, Dr. Bouverie F. P.Tryon, Major George Clement
Coats, Sir StuartMacdonald, Rt. Hon. John MurrayWalters, Rt. Hon. Sir John Tudor
Cockerill, Brigadier-General G. K.McLaren, Robert (Lanark, Northern)Watson, Captain John Bertrand
Conway, Sir W. MartinMacnamara, Rt. Hon. Dr. T. J.Wheler, Col. Granville C. H.
Davidson, J. C. C. (Hemel Hempstead)Macpherson, Rt. Hon. James I.Winterton, Earl
Doyle, N. GrattanMalone, Major P. B. (Tottenham, S.)Wise, Frederick
Edgar, Clifford B.Mitchell, Sir William LaneWood, Hon. Edward F. L. (Ripon)
Ednam, ViscountMolson, Major John Elsdale
Edwards, Hugh (Glam., Neath)Mond, Rt. Hon. Sir Alfred Moritz

TELLERS FOR THE AYES.—

Evans, ErnestMunro, Rt. Hon. RobertColonel Leslie Wilson and Mr.
Falle, Major Sir Bertram GodfrayMurchison, C. K.Dudley Ward.
Fisher, Rt. Hon. Herbert A. L.Murray, John (Leeds, West)

NOES

Ammon, Charles GeorgeHogge, James MylesO'Connor, Thomas P.
Banton, GeorgeIrving, DanPain, Brig.-Gen. Sir W. Hacket
Birchall, J. DearmanJohn, William (Rhondda, West)Sexton, James
Bromfield, WilliamJohnstone, JosephShaw, Thomas (Preston)
Cape, ThomasJones, Morgan (Caerphilly)Thorne, G. R. (Wolverhampton, E.)
Clynes, Rt. Hon. John R.Kennedy, ThomasWatts-Morgan, Lieut.-Col. D.
Craig, Captain C. C. (Antrim, South)Lawson, John JamesWhite, Charles F. (Derby, Western)
Davies, Rhys John (Westhoughton)Lister, Sir R. AshtonWilliams, Aneurin (Durham, Consett)
Edwards, C. (Monmouth, Bedwellty)Mills, John EdmundWilson, James (Dudley)
Finney, SamuelMorrison-Bell, Major A. C.Windsor, Viscount
Foot, IsaacMyers, ThomasWintringham, Margaret
Foxcroft, Captain Charles TalbotNaylor, Thomas EllisWood, Major M. M. (Aberdeen, C.)
Galbraith, SamuelNewbould, Alfred Ernest
Hallas, EldredNicholson, Brig.-Gen. J. (Westminster)

TELLERS FOR THE NOES.—

Henderson, Rt. Hon. A. (Widnes)Nicholson, William G. (Petersfield)Sir F. Banbury and Colonel Penry Williams.

Power To Borrow Moneys Required For Certain Sinking Funds

Motion made, and Question proposed,

"That the Treasury may raise money in the same manner in which they are authorised to raise money under Sub-section one of the War Loan Act, 1919, for any of the following purposes, that is to say:—
  • (a) for providing during the financial year ending the thirty-first day of March, nineteen hundred and twenty-three, for the issue out of the Consolidated Fund of the sums to be issued there-out, under Section forty-five of the. Finance Act, 1921, for the purposes of the sinking fund established under that Section in connection with the 3½ per cent. Conversion Loan; and
  • (b) for providing during the said financial year such sums as are required in connection with the 4 per cent. Victory Bonds, or stock or bonds forming part of the 4 per cent. Funding Loan, 1960–90, which are transferred in satisfaction of death duties, or are as required under Section two of the War Loan Act, 1919, to be issued to the National Debt Commissioners for the purposes of the sinking funds established in pursuance of that Section in connection with the 4 per cent. Victory Bonds and 4 per cent. Funding Loan, 1960–90; and
  • (c) for providing for the repayment to the Consolidated Fund of all or any part of the sums issued out of that fund for the purposes aforesaid;
  • and that the provisions of Section. One of the War Loan Act, 1919, shall have effect accordingly."—[ Sir J. Baird.]

    This Resolution is necessary to the passing of Clause 30 of the Finance Bill. The whole subject was very thoroughly discussed on the Second Reading. The Clause authorises the Treasury to borrow money for the purpose of meeting, in the first place, the Sinking Fund for the 3½per cent. Conversion Loan; in the second place, the Sinking Fund for the Funding Loan and Victory Bonds, and, thirdly, Funding Loan and Victory Bonds tendered in payment of Death Duties. I hope the Committee will not desire me to enter into further details at this stage. When the Clause comes up, the subject will be gone into again, but it is impossible to introduce the Clause unless the House gives us this Resolution.

    Question put, and agreed to.

    Resolutions to be reported upon Monday next.

    Committee to sit again upon Monday next.

    Telegraph Money

    Considered in Committee, under Standing Order No. 71A.

    [Mr. JAMES HOPE in the Chair.]

    Motion made, and Question proposed,

    "That it is expedient to authorise the issue out of the Consolidated Fund of such sums, not exceeding in the whole fifteen million pounds, as are required for the further development of the telephonic system and to authorise the Treasury to borrow money, by means of terminable annuities or by the issue of Exchequer Bonds, for the issue of such sums or the repayment thereof to the Consolidated Fund; and to provide for the payment of the terminable annuities or of the principal of and interest on any such Exchequer Bonds out of moneys provided by Parliament for Post Office services or, if those moneys are insufficient, out of the Consolidated Fund."—[King's Recommendation signified.]—[Mr. Kellaway.]

    The reason for the Resolution has been briefly explained in the Memorandum which has been issued. It provides for the raising of £15,000,000 to be capitally expended on the telephone system, which amount is estimated to last until April, 1924. Legally, the telephone is a telegraph. That is the reason why the Bill is called Telegraph (Money) Bill. The capital for the development of the telephone system is provided by the Commissioners of the National Debt, and is repaid to them by the raising of annuities to be charged to the Post Office Vote, both for the interest and sinking fund. Last year, when a similar Bill was brought before the Committee, the amount asked for was £5,000,000. That amount will be exhausted in July. A criticism was made on that occasion by a right hon. Gentleman opposite that it was inconvenient that the Committee should be repeatedly asked for comparatively small sums of that kind. I agree that there was force in that criticism, and to-day I am asking for £15,000,000, an amount which will cover the estimated capital expenditure on telephone development for a period of just on two years. The fact of having to come to the Committee on fairly frequent occasions has its advantage, because it enables the Committee to get some view of the way in which the telephone system is being developed, and to make such criticisms as it desires on the growing efficiency or otherwise of that system.

    I do not think that the position of the telephone system can be properly understood without some reference to its history. The Post Office only became responsible for the whole of the telephones of the country in January, 1912. At that time 80 per cent. of the telephones of the country were under the control of the National Telephone Company and 20 per cent. under the control of the Government. From then onwards the Government became responsible for the whole of the telephones. It must be borne in mind, indeed it is essential to be borne in mind if we are to properly understand the difficulties that existed when the system was taken over, and still exist, that the service had deliberately been depreciated by the National Telephone Company for some years before the transfer. That was inevitable in the circumstances. It is what every great undertaking would have done. Realising that their life was going to end they took as much as possible out of the service in revenue and did not make provision either for renewals or the proper maintenance of their system, so that when the system was taken over by the Government, the first work the Government had to consider was the bringing up to date and the making efficient as rapidly as possible of the existing exchanges, the trunk lines and the overhead lines.

    That work occupied the attention of the Post Office almost exclusively until the end of 1914, so that it was impossible between 1912 and 1914 to devote any considerable amount of money or effort to the proper expansion and development of the system. The energies of the Post Office were almost entirely concentrated on bringing the service up to a higher standard of technical efficiency. From 1914 until the end of 1918 no development was possible. The whole of the energies of the Department were devoted exclusively to purely war purposes, and it. was not until the beginning of 1919 that the engineering department of the Post Office and the Telephone Department were able to devote their attention to that development of the system which is obviously necessary if this country is to remove the reproach which undoubtedly rests upon it of being far behind most other principal countries of the world in the development of its telephone system.

    1.0 P.M.

    I. should like to indicate to the Committee the progress that has been made since the hands of the Post Office were free to deal with developments. In 1919–20 a sum of £3,230,000 was proposed to be expended out of telephone capital on the development of trunk lines and exchanges, and on sites and buildings. Of that sum, £2,647,000 was actually spent. For 1920–21 an expenditure of £6,884,000 was proposed on these three heads, and the amount of capital spent was £5,866,000. Last year, 1921–22, the amount proposed to be expended on these capital works was £9,032,000, of which £7,438,000 was actually spent. For the present year we are proposing a capital expenditure of £9,250,000. Of that sum, £2,760,000 is for the provision of new trunk lines or the completion of trunk lines now under construction, £5,740,000 for new exchanges or the extension and improvement of existing ones, subscribers' circuits and junction circuits, and £750,000 for sites and buildings Dealing first with the trunk lines the principal item in the proposed expenditure of £2,760,000 is £1,727,000 for commitments already entered into, in existence on the 31st March, 1922, in respect of under ground lines, and the laying of trunk lines underground, either begun or authorised in previous years. These include the London-Southampton trunk line, where the work is well advanced, the London, Bristol and Newport trunk line, also well advanced: the Glasgow and Edinburgh underground trunk line for cables; the Derby and Leeds trunk line (cable), the Birmingham and Worcester trunk line, the Colchester and Ipswich trunk line, the Newcastle, Durham and West Hartlepool trunk, the London, Brighton and Worthing trunk, the Birmingham and Derby trunk, and the Birmingham and Manchester trunk.

    The object we have in view is to secure that the great trunk lines of this country shall no longer be in the air, but shall be laid underground. The advantage of that. is enormous. Not only does it mean a great saving in maintenance, but it relieves the country from the danger of interruption of its communications, such as that which we experienced in a very grave form during one of the most important periods of the War, when the whole of the overhead telephone and telegraph lines were swept flat by a great storm which ranged over a trail, 100 miles wide. across the whole of the country. Then in respect of overhead lines, there is a sum of £343,000, and for submarine cables, etc., a sum of £185,000. The works to which I refer are works already being undertaken, but we also include in this year's programme an amount of £504,000 for new main underground cables. These include two long routes from Leeds to Edinburgh, via Darlington, Newcastle and Jedburgh, and from Worcester to Bristol, viâ Gloucester. The former will complete the provision of a main route affording underground communication between London and the North of England and Scotland, while the latter completes the underground communication between Birmingham, Bristol, and South Wales. Some shorter but very important extensions of the underground system, which will he either begun or completed this year, are included in this programme. I do not want to weary the Committee with too many details. but it is impossible to justify the granting of large sums of this kind without giving a great many details. These works include the cables between Manchester and Preston; Bolton, Bury, and Heywood: Bradford and Dewsbury: Bristol and Bath; Pontypool and Abergavenny: and Swansea and Pontardawe: also between Glasgow and Whitecraig, Kirkintilloch and Kilsyth, and Edinburgh and Kirkcaldy.

    There is always considerable consultation between the Engineering Department of the General Post Office and those who represent commercial interests.

    By contract. I think I am right in saying that the Department only keep a staff for maintenance and emergency work, especially where the lines are laid low by storm, and for such detail work as running overhead wires and drawing in and jointing short local cables. All main works are put out to contract. That is all that it is necessary to say at this stage in regard to the trunks. There is an item of £1,537,000 for Exchanges—for the provision of new and the extension of existing switchboards. A great number of the switchboards are sadly overloaded and it is necessary that they should be very rapidly renewed and extended unless we are to have a repetition of the experience of 1918, when the service practically broke down. Relief exchanges are proposed at Kilburn, Wallington, Addiscombe, Thornton Heath, Hounslow, New Malden and Eltham. The first five are under construction. New permanent exchanges will shortly be opened at Barnet, Tottenham, Sidcup and Wembley. We propose to provide this year new permanent exchanges in Central London (near the Tower) and at Wanstead and Woodford. An extension of the equipment at the Hop Exchange will shortly be completed, and later other London exchanges will be extended. In the provinces we propose to provide 20 new exchanges of considerable size. About 30 others will be extended. £1,800,000 is provided for local underground cables and £1,815,000 for the provision of overhead subscribers and private lines. There is a sum of £586,000 for junctions, circuits and call offices and miscellaneous work. For sites and buildings we ask for a sum of £750,000. There is still a very big programme of building work to be carried out in the near future in connection with existing exchanges. I repeatedly have representations made to me as to the inadequacy of many district Post Office buildings. I realise that is an inadequacy with which I have to deal, and we are making as rapid extensions and as many improvements as is possible within the financial limits of the country

    I think it will not be said that the programme which I have so far outlined is an unambitious programme. Certainly many of the existing buildings must be dealt with as soon as the financial position of the country permits. During the current financial year we propose to acquire sites for three new exchanges in the centre of London and about 15 in the suburbs, as well as for 90 new exchanges in the provinces, including Scotland and Wales. We propose to begin building work in connection with the provision of about 25 new exchanges in London and about 80 new or enlarged exchanges in the provinces. This represents a considerable capital expenditure. Having said that, I want for a moment or two to bring to the attention of the Committee some figures which will show the progress which has been made in recent years. I will deal first with the completed work. In 1919 two large new exchanges were completed. In 1920 nine were completed, and in 1921 we completed 37 large exchanges. With regard to the extension of exchanges, one was completed in 1919, three were completed in 1920, and 17 in 1921. The number of lines included in this work represents a very considerable total. In 1919, the local lines represented a total of 13,240; in 1920 67,000, and in 1921 25,900. I will not worry the Committee with the figures as to the junction lines which are also very considerable. Then as to the exchanges. Take the total lines. in 1920, 74,200 miles of double wire circuit underground were completed. In 1921, 129,000 miles and in 1922 we estimate 135,000 will be completed. With regard to the trunk line the figures are strikingly significant. In 1920, 18,980 miles of double wire circuit underground were completed. In 1921, 57,000 were completed, and in 1922 we estimate we shall complete 104,000.

    There will still remain certain areas when these works are completed where, owing to the shortage of plant would-be subscribers cannot be connected. Nothing could be more unsatisfactory to a telephone system than that there should be a considerable number of people in the country anxious for the telephone, but who, owing to the limitation of technical equipment, the Department are unable to provide with a service. In all these works which I am now describing to the Committee that is what we have in view. We want the Department to be in a position to provide a telephone service to meet all demands, and if we are to be in that position we must look at least three years ahead in the provision of exchanges and of lines. It takes at least three years to complete an exchange from the time the order is given and the same period for the provision of the connection, and in these works I have described we have been looking ahead for that period. I was impressed with what was said last year as to the necessity for taking a longer view than that. I asked the Department to prepare for me a programme of work for five years ahead. They have submitted an estimate of capital expenditure amounting, during that period, to £35,700,000. In arriving at that figure there are three considerations to be borne in mind. The first is the rate of development, the rate at which the demand for telephones will grow; the second is the level of prices which you have to assume for labour and materials; and the third is the extent to which the automatic system will be introduced. I will deal first with the last.

    There are many people who think the automatic system is to solve all our telephone troubles. I do not take that view. I had the advantage, when I moved my Post Office Estimates this year, of having among my listeners in the Gallery the head of the telephone system of the United States, who controls, probably, one of the biggest organisations in the world, and certainly much the biggest telephone system. What he does not know about telephones is not knowledge. We have been only too glad to learn from him and to adopt his suggestions. I had the opportunity, afterwards, of discussing with him the question of the automatic. He made a remarkable observation. He said that in the United States the pressure for the automatic system does not come from the subscribers, but from the companies, who see in the automatic system the means by which they can get over their operating difficulties, the provision of the necessary operating staff. But the ordinary subscriber prefers, he said, to have a girl at the switchboard.

    I am certain that, however much operating costs may be reduced—to some extent they would be reduced by the universal adoption of the automatic system—you will not get a more rapid working than you get, for instance, in London, or in any of our great exchanges, where a high standard of efficiency has been reached. That has not been the reason why we have not, so far, introduced the automatic system into London. There are some 14 or 15 automatic exchanges in existence in the country, and the problem is comparatively simple when you deal with a self-contained area served with one exchange. But when you deal with the problem in London. with a great number of exchanges, it becomes exceedingly complex and hard to solve. The difficulty that has stood in the way is expense. All the figures submitted to me as to the cost of providing an automatic service in London make it absolutely prohibitive. Until such time as we can see a workable and reliable system which can be introduced into London on much more reasonable terms than any offered, I should not feel justified in asking the House to vote money for that purpose. Some of the keenest brains in this country and the most able technical men have their energies concentrated on the problem, and I hope that before many years have passed they will effect such reduction in their costs as will enable us to introduce the system in the Metropolis. It must be remembered that there is no other city in the world which presents the same problem as does London.

    The next point is the rate of development for which you must provide. Our forecast, in the estimated expenditure of £35,000,000 for five years, has been based on cumulative developments of 8½i per cent. per annum. That was the rate of expansion in 1920–21, and that, I am advised, may be regarded as a normal year. Development at that rate would give these results: On the 1st April this year there were 975,000 telephones on the Post Office system. I am not proud of the figure, for it is most disappointing, having regard to the number in the United States. An increase of 8½ per cent. would give us 1,058,000 telephones in April of next year, rising to 1,466,000 on 1st April, 1927. But I hope for much better things than that. Compared with the United States that is a miserable figure for 1927. If the use of the telephone grows here to anything like the extent it has grown in the United States the demand would be far greater than that, and if that demand is to be met, of course it will involve a very much larger capital expenditure.

    The other item is the level of prices to be assumed. Looking ahead for five years, anticipating an increase in the de- velopment at the rate of per cent., we should require a capital expenditure of £35,700,000 to meet that development. As regards the percentage increase over pre-War rates, that varies widely in respect of different parts of telephone equipment, and we have had to assume varying percentages, and a drop towards the end of the period. Labour has been taken for 1922–23 as 100 per cent. above pre-War and for 1922–27 as 80 per cent. above pre-War. Taking those three considerations into mind, the very able advisers of the Post Office—the House is sometimes intolerant of compliments paid to civil servants, but I speak now of the technical staff of the Post Office Engineering Department, which has a standard of efficiency of which it is entitled to be proud—these technical men, men who began at the bottom rung of the ladder and have worked up to the head, tell me that these are reasonable estimates. I think the Committee is fairly safe in accepting the Estimates.

    I want to say something about the growth of the Service. The telephone system of this country has improved and it is improving, but I agree that it ought to get very much better and to be more extended. Very gloomy prophecies were made the year before last to my predecessor when the new tariff was introduced. It was said, that the new tariff would lead to a very large percentage of subscribers giving up the service. I am glad to say that whilst there has been a reduction due to that cause it is far smaller than was anticipated. It amounted to about five per cent. of the total number of subscribers and that loss has been much more than made good by the increase in the number of new subscribers. Having regard to the fact that the period covered since the new tariff was introduced was a period of unparalleled depression of trade, and that instead of last year showing an improvement, industrial conditions rapidly became worse, I think that is not an unsatisfactory condition of affairs. The demand is growing at a steadily increasing rate. The new orders secured for the year ending 31st March represented the second largest total on record. The number of new subscribers connected during the 12 months was 71,500, and the number of new instruments connected, including extensions of existing installations, was 134,000. The number of new subscribers for April was the second largest on record and for May was the largest on record. I have very substantial reason to believe from these figures that there is a real revival in trade taking place in the country. I do not believe there is any better test or any more sensitive test of the tendency of trade in this country than the telephone demand. I am glad to be able to tell the Committee that our statistics show that in the demand for new telephones and in the increase in the calling rates, both on the trunks and the ordinary systems, each month is growing steadily better. I believe that this is one of the most substantial signs of an improving condition of trade in this country that can be provided by any test of which we know.

    I said just now that one of the most unsatisfactory features was that we were unable to provide for meeting, on demand, requests for telephones. Two years ago 35,000 people had made requests for telephones and the Department was unable to provide them. When I spoke last year introducing my first Estimates the number of outstanding applications had been reduced to 28,000. That is to say, there were then 28,000 people who wanted telephones but could not get them. To-day, instead of 28,000, the number has been reduced to less than 5,000. I think very considerable progress is there indicated. In nearly all cities and towns throughout the country, intending subscribers may now have telephones installed without delay, but there still remains a number of cases where, owing to the fact that spare lines are not available or the exchange equipment is not sufficient, subscribers cannot be put on. I have had hon. Members asking me, "Why has this constituent of mine, after applying for a telephone, had to wait six months and it has not yet been provided. The excuse which the Department makes is that they have not got spare wires. What nonsense it is for the British Post Office not to have a bit of spare wire available to connect up my constituent!" It is not quite as simple as that. You may have an underground cable carrying 600 pairs of wires, each pair of wires serving a subscriber. If every pair of wires in that cable is at present linked up with a subscriber, we cannot provide any telephone in that district until one of those subscribers no longer uses his telephone. We have to look a long way ahead. If we are to meet the demand we have to provide not for one subscriber but to lay down provision which will enable us to meet the growing demand up to the number of pairs of wires running through that particular cable. It may sound elementary to remind the Committee that every telephone subscriber has got a pair of wires running from the instrument in his sitting room or office, either overhead or through the underground cable, direct to the switchboard, but as I know from Members who submit to me cases of failure to connect up their constituents, that is not universally understood.

    As to whether or not the service is becoming increasingly efficient, I do not want to be charged with complacency, which is the besetting sin of heads of Departments, but I shall say that, in my view, in London and in that area served by the toll system—an area of about 25 miles round the outer circumference of London—we have reached as high a standard of efficiency as can be found in any great city in the world. That is borne out by appreciative letters which I get from subscribers. It is a great mistake to suppose that subscribers are always grumbling. There are some who are not. It is also borne out by what is told me by distinguished visitors from other parts of the world. The average time taken to reply to a call in our local services, taking the country as a whole, the figure for the whole country, is six seconds from the time the subscriber removes the receiver until he gets a reply from the operator. In London the figure is between four and five seconds. I see an expression on the faces of some hon. Members as though they were recalling cases in which they had to wait more than six seconds before securing the attention of the operator. I assure them these figures have been most carefully checked over a great number of cases. [HON. MEMBERS: "By whom?"] By those whose interest it is to see that the service is as efficient as possible.

    I am sorry that on any occasion my hon. Friend should have been kept waiting for 10 minutes.

    Then why not have it changed again? There were 26,000 tests taken and the figure I have given is the result. I should welcome it, if hon. Members were to visit some of our great exchanges in London or the provinces. They will there see the working of the system and have explained to them the method of supervision and the tests which are applied. The percentage of calls lost through numbers being engaged, no reply, etc., has been reduced from 20.9 in 1921 to 17.5 in 1922. There is still room for improvement, but the figures I have given compared with the figures given recently in the "Times" by a writer dealing with the system in America show that this country stands well and is doing quite as well in regard to efficient working as is the United States. As to the trunk underground cables, while there may be some difference of view regarding the local services I think there will be no difference of opinion that the trunk service in this country has greatly improved in recent years. For instance, the delay between Manchester and London has been decreased from an average of 21 minutes to 8 minutes, and as the works which I have described in my introduction come to completion, rapidity of communication between London and the great cities and towns of the country should continue to improve.

    Before I conclude, I dish to say how much we in the Telephone Department were indebted to the work of the Select Committee. I was not able to adopt all the recommendations made by that. Committee, but I have adopted most of them, and I think it will be agreed that the reduction of charges which I announced in the House some time ago, and which will come into operation at the beginning of July, goes a very long way to meet the recommendations of the Committee. I think if I may say so respectfully, that they are in a more workable and a more effective form, but I would like to make this observation about this reduction. I anticipate that as a result of the reduction there will be a greatly increased demand, but there are some very eminent authorities on telephone working who take the view that I was wrong to reduce the rates, and a great authority who was listening to me when I spoke in the House said afterwards, "The Postmaster-General has made a fundamental mistake. He ought not to have reduced his rates; he should have devoted every penny to the development of his system rather than to reducing the rates." I do not take that view. The system is not being cramped for any want of capital expenditure, for the House has, I think, shown courage in the way in which it has provided this system with the money essential for its development; but if it is to grow as it ought to grow, we must continue this process of reducing the cost of the telephone to the commercial community in this country, and if I get the improved results which I anticipate as a consequence of the reduction which I outlined to the House, I think we shall be able to continue that process considerably further and, I hope, at an accelerated rate.

    If there are any other points on which I have not touched—as there are a great number in regard to which I should like to have spoken to the Committee, but if would have meant trespassing too far on their patience—I shall be glad to deal with them on the Second Reading of the Bill. Before I sit down, however, I want to pay a tribute here to a very great public servant who has recently left the Post Office. I refer to Sir William Noble, the late Engineer-in-Chief. I think, perhaps, Ministers have been a little too shy in recognising in Parliament the work that these great public servants do. Sir William Noble, who retired a few weeks ago, is a man who entered the Post Office service some 45 years ago as a telegraph boy, and he ended up as the Engineer-in-Chief of the British Post Office—a very remarkable achievement. He had not the drawbacks that usually attach to self-made men, for he had great breadth of view, audacity, and a single eye to the public good, and I am glad to have the opportunity of saying this as a tribute to one of the most efficient public servants which the Post Office has ever had. I hope the Committee will approve the Resolution.

    I might possibly be misunderstood as a result of an interjection which I made during the speech of the Postmaster-General. I admit at once that there has been a considerable improvement in the service of the Telephone Department, but I did protest, and I still venture to protest, against the statistics that are given, telling us that the average time in London to get an answer from the exchange is from four to six seconds. These statistics do not help us, because they do not refer to the times in regard to which the complaints generally occur, probably at night. Supposing you ring up an operator and are kept waiting four or five minutes, or even ten minutes, as I was, how is that known, unless you take the trouble accurately to take the time, and then send it in? These statistics are no good at all. They are simply taken at a particular time of the day, and it is not at all clear that the operators do not know when they are being taken.

    That may be so, but they are taken at a time when business is in full swing and all the operators are there, and the trouble always occurs when the staff is changed, at eight in the evening, or later on in the evening. I admit at once there is an improvement in the telephone service, but I say that we are not helped by averages of that kind. They are just as good as the average of the pie man, who always said he had 50 per cent. of horseflesh and 50 per cent. of rabbit in his pies, and when he was cross-examined he said there was no question about that because when he bought he always bought one horse and one rabbit at the same time. These things do not help us really, and do not convince the public or oneself.

    In regard to the financial side of this question, what did rather impress me in the speech of the right hon. Gentleman—on a very interesting subject, dealt with in a very interesting way—was the fact that he never, from beginning to end, dealt with the question as to whether or not this large expenditure of capital was going to result in a large loss, or in a small loss, or even in a profit. The fact on which he prided himself, and which he looked upon as a great improvement during the last few years, namely, that in 1919 only some £2,000,000 was spent, that in the following year £3,000,000 was spent, in the following year £5,000,000, and that he anticipated spending £15,000,000 this year, does not satisfy me in the least that the work is being done any better. I want to know what return is to be got on that money. The mere fact that you are going to have a larger amount spent on new sites and new buildings does not necessarily tend to efficiency, and the illustration which the right hon. Gentleman gave of the fact that you must in certain cases, for the sake of one or two subscribers, I think he said, start an underground cable, did not seem to be very convincing from a commercial point of view at all. On the main point which he took, which was that the underground service was necessary and was to that extent a great economy, if that be so, why is he spending £343,000 this year on overhead wires? I have always been rather doubtful as to the great economy which is going to be obtained by entirely putting in underground cables. The expenditure is very much greater, and we are very familiar in London at the present time with the inconvenience caused by laying them. It means taking up roads and dealing with them in that way, and I gather from a part of the right hon. Gentleman's speech that, as far as connecting with subscribers' houses is concerned, it is rather more difficult to do it through cables than by the overhead system. It seems to me, therefore, very doubtful whether we are justified in incurring this very large capital expenditure for that particular purpose.

    I have in my mind a matter discussed in this House not many years ago—probably some other hon. Members remember it—which rather illustrates my point. The Post Office built a tube railway from Paddington to the General Post Office, and they had got a railway running within a hundred yards of them all the time. They had only to connect with the Great Western Railway at Smithfield, about 120 yards from the General Post Office, and they could have landed all their mails at the Post Office, taken them on the rail, and, without any transhipment, put them on the Great Western line. But the Post Office knew better. The engineers, whom we have heard so much lauded to-day, scoffed at that idea, and said they must have their tube, and they did. The estimate of £1,000,000 was far exceeded, and now you have still got that tube running from Paddington to the Post Office. I remember the right hon. Gentleman who was then in charge of the Post Office also offered very kindly that I should go and see the work. That is quite useless. What is wanted is to see that this large capital expenditure is not made on something that is unproductive. That tube railway, so far as I know, is absolutely unproductive. The mails have to be transferred at Paddington, and carried by hand from the tube, put into trucks or vans, and loaded on the Great Western Railway. What I want to make certain of is that when you are spending this £15,000,000, it is really necessary to the efficiency of the Post Office, and that there is likely to be a return upon it.

    The right hon. Gentleman said that he proposed to keep the price down, and 1 think there is something to be said for that. I would like to know how much we are to pay for keeping the price down. He has complained of a lack of development in the country. People are largely deterred from subscribing because of the expense, but if there be a general use of telephones, and most business people and your friends are on the telephone, you have to get on, and the telephone habit is formed. When I first came to London in 1882, the telephone cost twenty guineas a year, and it was only when it was reduced by the company so that the smaller people could come in, that private people subscribed to any large extent. I do venture on a word of protest against putting large sums of capital into an enterprise unless it be absolutely necessary, and, secondly, having regard to the very divergent views as to the automatic telephone, is it wise to embark very large sums of the taxpayers' money unless you are certain that the return is going to be adequate, either directly or indirectly?

    I wish to ask the Postmaster-General one question, but, before doing so, may I be allowed to refer to the average time of calls, because I think the telephone service is entitled to any praise that one can give on this subject? I have been surprised very often in making calls to hear the number asked for before getting the receiver to my ear. It is less than a second. I have been through a good many telephone exchanges, and I realise that the operator must look at the lamp, and plug the right hole, and how that can be managed before you actually take the receiver from the machine and put it to your ear, is to me a marvel and a mystery, and I think the Post Office is entitled to credit for it. I am perfectly certain that London, in comparison with some other capitals, is well ahead in the telephone system. In Paris, if you are not in a hurry, you walk there, and if you are in a hurry, you send a taxi. No sensible person thinks of telephoning. I think a large number of the statements made about the telephones in London are over-stated.

    The Postmaster-General did not mention, in his interesting speech, the question of what is called rural party lines. It would be a great assistance if, in making out his plans for the extension of the telephone system, he could specially consider the rural areas. No doubt he is aware that in Canada farms are connected up with the telephone to an enormous extent. Although it is quite true the numbers in America and Canada absolutely outstrip anything here, would this country stand the disfigurement of the streets by the twisted poles that carry the telephone wires, unrestricted by rights of way and property, as they are over there? Of course, it is very much easier to extend the system when you can dump these telephone poles all over the place. But, in rural areas, will the right hon. Gentleman consider the question of connecting farms at a cheap rate? There are also many places where there is a small fishing industry, and there the telephone would save the industry and the fishermen an enormous amount of money. They cannot now get a message through to find out prices, or if so-and-so will take a catch which comes in late at night. There is very often an enormous amount of food and fish ready to be sold, if only there were telephones in that particular fishing hamlet where they could get through to some bigger market. It might be possible to provide this, though it would not exactly be a paying proposition from the telephone point of view, and help enormously a very hard-pressed industry. It would help the food supplies of the country, and a great many small fishermen who find matters very hard and difficult indeed. I hope the right hon. Gentleman, if he is considering any further extension in the matter of facilities, will deal, perhaps with generosity, with these rural areas and fishing places.

    At the outset I want to enter a protest against bringing forward question of this importance, involving a large expenditure of public money, at this fairly late hour on a Friday afternoon. This matter calls for great consideration and attention on another day of the week. I am sorry I had not the advantage of hearing the Postmaster-General, as I wanted to raise one or two points with which, perhaps, he will deal when he comes to reply. Like the hon. and gallant Gentleman who has just sat down, I hope the Postmaster-General will develop the telephone service to its fullest state and be courageous enough to bring in a uniform rate throughout the country, so that where extension takes place to the rural areas, causing some loss it may be, that loss is made up from the larger demand in the more thickly populated districts. I look forward to the time when in this country there will be a telephone installed in every house. As I have said before, my experience of our own telephone system is that it is a good deal superior to that which obtains in the large towns of the American Continent.

    2.0 P.M.

    In the amount which the Postmaster-General is asking for there is, I presume, included the £4,000,000 which has already been set aside, or earmarked for telephone buildings. I hope in the extension and improvements that he is going to consider he will give some consideration to the wretched buildings now used in some of the large towns, such as Coventry, Sunderland, Scarborough and Sheffield. The accommodation for the public and the staff would be a disgrace to any pettifogging tradesman, let alone a large Department of the State. I know this matter has been brought before the right hon. Gentleman by deputations from time to time. I am hoping, anyhow, that some of the money for which he now asks will be expended in this direction. The Post Office has entered into arrangements, it would appear, with Jersey and the Isle of Man to transfer their telephones to the Governments of these islands. Jersey has accepted, and the Isle of Man has refused. Whether or not it is good policy, for the sake of getting hold of a little ready money, to transfer this service from a central authority and set up another system within what we may regard as the British Islands is a matter well worthy of some consideration. I hope also that some of this money will be expended in meeting some of the difficulties in which those people known as caretaker-operators labour. I imagine that might have something to do with the difficulties an hon. Member found when he had to ring up people late at night. People who sleep on the premises have to be awakened before they can give attention to the telephone. There is an agreement between the Post Office and the representatives of the union, that so far as the cost of living bonus is concerned you have to have regard to it in relation to some of these small offices; but the Post Office seem to be getting their own back by putting up the rent, and by charging these people at a rate even above the 40 per cent. allowed under the Rent Restrictions Act. There is one case that occurs to me at Chippenham, where the telephone is installed in a cottage in a by street. The occupant has had her rent increased to Ss. per week, which compares with 10s. for much better property in the neighbourhood, and is an exorbitant price. I hope the right hon. Gentleman will look into the matter with a view to providing better accommodation both for the public and better consideration for those who have to deal with the work.

    Let me express appreciation of what the right hon. Gentleman said when he paid a tribute to the efficiency and devotion of the Post Office staff, first as to those who did such excellent work during the trying times of the air raids, and, secondly, to the very distinguished public servant who has just retired, Sir William Noble. It is not always one who has won praise in the higher administration who of necessity receives similar praise from those who have been working under him, but on this occasion I am glad to add the testimony of the staff to that of the administrative heads. Sir William Noble has worked his way up from the bottom, right through the Service, to the head, and he is one of the foremost electrical engineers of the country. He has made a great place for himself, and in that struggle he has always had the respect and esteem of the staff which have worked under him. That in itself is a great tribute both to the Post Office and to Sir William Noble, and I am sure the whole Service will appreciate very much the right hon. Gentleman's tribute to a very distinguished public servant.

    Although glad to hear what the Postmaster-General had to say about the underground cable between Edinburgh and London, I was sorry the work is not to be proceeded with at present, for everyone who knows anything about Scotland knows perfectly well that at certain seasons of the year some of the cables are very often destroyed by the storms. It is not an uncommon thing in Glasgow and Edinburgh to find that you cannot possibly get into communication with London and the South of England. It would have been far better, I think, and much more to the interest of the country if, instead of putting in these local cables between London and Bristol, and the other places named, the right hon. Gentleman first of all should see that a cable was laid right from Edinburgh to London, so that in future there should not be that isolation of Scotland that sometimes happens.

    A statement as to the rural position in respect of telegraphs and telephones was made by the hon. and gallant Member for the Honiton Division (Major Morrison-Bell). But there are some parts of Scotland where they are much in need of some communication with other places by telephone. I was in Inverness-shire lately, and I was told that in some parts of the country, and especially in the fishing districts, there was no outer communication at all, and the people of these districts are under a very great hardship and disadvantage in having no direct communication with the various towns to which they wish to send their fish. That is one thing the Postmaster-General should try to put right at once, so that these people, though it might cost the country a little extra, may have some of the advantages that London has: but I am rather afraid that until such times as the cables are underground we shall have difficulty. Some morning after a storm we find in some of these districts that we can get no telephonic communication at all, simply because the storm has destroyed for the time being the overhead wires. The whole solution of the difficulty is this, that the wires should be placed underground and that as soon as possible. Personally, I think that we should provide a sufficient sum to do that work. Much has been said about the automatic system, and it has been stated that we are claiming far too much for it. At any rate, the automatic system would make things much better in some of the local districts, and the sooner we get them the better. I was surprised to hear that the average time of waiting for a call is about six seconds. So far as I am aware, having some knowledge of the telephone system, London is the best place to get a very quick connection. I have always been impressed with the method adopted in London, because it is so different in some of the country districts.

    I have heard someone state in this Debate that they have had 10 minutes to wait before getting a call. The other day I had to send off a telegram in a hurry, and I took off the receiver and stated that I wished to send a telegram. I waited seven minutes and then I was told to wait a little longer, and after nine minutes' waiting I got on to the post office where they attended to my telegram. The girl seemed so much put about that she took the wrong address, and the telegram did not get through until the next morning. I did not complain, and I simply mentioned the matter to the postmaster, who promised to have it attended to.

    Very often there is a great difficulty in getting a call put on. A short time ago I went into the Edinburgh Post Office, waited 45 minutes, and even then I had to go away without getting my call. If the automatic system would alter this state of things, the sooner we instal it the better. I agree that recently things have very much improved. We have been told a great deal about the reduction of charges. I remember on one occasion when I indicated to the Post Office that on account of the high charges I should be unable to keep on my telephone a permanent member of the Post Office staff came to see me and he said: "If you cease to be a subscriber it will mean that nearly every man in your district will give up his telephone." Being a humane man of course I consented not to give up my telephone. The telephone system has very much improved in recent years, but nevertheless we are very much behind America in some respects. I have seen the system in America, and I see no reason why we should not be able to compete with them. The time will come when in every home there will be a telephone. I was struck very forcibly in America with the fact that the working woman could have a telephone for one dollar a month, and she could telephone to the various tradesmen and get all she required, and between the telephone and dumb waiter she had a very good time indeed. If something could be done here to reduce the cost so that we could have a telephone in every home it would be something worth while. On the question of underground cables I hope the Postmaster-General will see the advisability of putting down an underground cable at once between this country and Scotland, in order that Scotland will not be isolated after a storm.

    We are all agreed as to the improvement that has taken place within the last few months in regard to the telephone, although I do not think the staff has yet realised what can be accomplished by an extension of the present system. The Postmaster-General is a West Country man, and I hope he will run down in his little two-seater motor-car to some parts of my constituency, and then I am sure he will realise what isolation exists in many parts of his birthplace. I hope the right hon. Gentleman will ascertain from the farming communities what is the best method of extending the telephone system amongst the farmers. I know the agricultural community is somewhat slow in adopting new ideas, but I am sure they would realise the enormous advantage if the telephone was made more accessible in rural areas.

    I do not know whether the Postmaster-General has gone into the possibility of adopting the exchange system in connection with rural post offices, so that a farmer would know when he comes to the village that there was within his reach some means by telephone of getting into touch with those with whom they do their marketing. I was very pleased to hear a tribute paid by the Postmaster-General to Sir William Noble, and those who are acquainted with the wonderful development which has taken place under his care in recent years will cordially support what the right hon. Gentleman has said about him.

    I want to reinforce the claim which has been put forward on behalf of the rural areas. I am very much afraid that there are some places which cannot be called either rural or urban districts. I wish to make an appeal on behalf of some very small townships in this country which are very badly served with telephones. From the statement which I have heard from the right hon. Gentleman to-day I gather that he intends to concentrate more and more on the large commercial towns of the country, and I wish to appeal for a better system for the small towns.

    The Postmaster-General made a very interesting comparison between the telephone service of America and our own, and I am glad to learn that our service is a better one than the Americans have. He did not, however, tell us what were the figures upon which he based that comparison as to the number of telephones in use in the United States pro rata to the population, and the number in use in this country on the same basis. I agree with what has been said as to the difference in the speed and response to calls in the telephone system in London and in the provinces. I would like to know what is the average number of seconds a user has to wait for a call, for instance, in Manchester and in London. I find that the nearer we approach the House of Commons the quicker we are responded to on the telephone. I do not know whether there is any significance in that fact, but it would be very interesting to find out what are the number of seconds one has to wait in Manchester and Liverpool as against the number of seconds we have to wait in London. I thought, perhaps, that the Postmaster-General would tell the House what was happening at Hull in connection with the local telephone system there. We have had in the Press something in the nature of boosting the local telephone system at Hull. Perhaps he will tell us what is the real nature of that system, who runs it, and how it compares with the telephone system under his control. I would ask him not to have too much regard for the claims that are being constantly made upon him to let out all the work of the Post Office to private contractors. I should have thought that the day had passed when a very large and responsible State Department should let out some of its very small, petty pieces of work to private contractors. I imagine that the Post Office can do its work better and probably cheaper than private contractors.

    There is a point in connection with underground cables that I would like to put to the right hon. Gentleman. I happen to represent a mining constituency. I can well imagine that some day an underground cable will pass through that district, and I am wondering what arrangements he has made with regard to subsidence in mining areas. Apart from the question of the inconvenience caused by the breaking down of overhead telephone wires, it would be interesting to know what is the cost of taking the wires underground as against keeping them overhead. There is a final point that I desire to make. The Postmaster-General told the Committee that the use of the telephone service was a very sure sign of the business prosperity or otherwise of the country. I can hardly agree with that statement, because the telephones, in the main, are used on the commercial side and not on the manufacturing side, while the prosperity of the country must necessarily rest more on the manufacturing side than on the trading and commercial side. I join with the hon. Member for North Camberwell (Mr. Ammon) in saying that it is rather unfortunate that a very important statement like this, involving the expenditure of £15,000,000, should he made on a Friday afternoon. The Postmaster-General ought to have a very much better audience for such a very important statement than he has to-day. In any case, however, we on this side of the Committee are very glad indeed to see the progress that is being made by the Post Office, showing once again that the State, when it is determined, can challenge anybody else in connection with a business of this kind.

    I have heard one or two hon. Members say that they are looking forward to the time when every household has its own telephone. So far as I am concerned, I think if every household had its own telephone, the world would be called by another name. When the Postmaster-General is dealing with the allocation of this £15,000,000, there are a few directions to which I should like to call his attention. There is the case of the farmers. It very often happens that a farmer is expecting some goods by a particular train. He may live five or six miles from the station, and he sends a horse and cart. The goods do not arrive by that train, and the wagon goes back home. They arrive a few trains later, and the stationmaster sends the farmer the usual notification by a postcard. The farmer gets that postcard the next day, but it may happen that it is not convenient to send immediately for the goods. The farmer then has to pay demurrage, and a great deal of time is wasted. The great objection urged in the past against helping the farmers in this matter has been that it is not an economic proposition and that it does not pay. I submit that a State Department is the servant of the public, and, though it may not derive any profit directly, it does help the State and gain a large profit in an indirect way by economising time and bringing more wealth to the country. That is a point which I wanted to make on behalf of the farmers and the agricultural interests.

    There is a minor point so far as the whole community is concerned, but a very important point to the individual. Most of us agree with the old tag that an Englishman's home is his castle. I should like to get a definite promise from the Postmaster-General that he will use some of this money to enable every Englishman to say that his home is his castle and that he is going to do away with the pernicious system, especially in the slum areas, of having telegraph posts in back yards to which there are no means of access except through the living room of the workman's home. It is nothing more nor less than a scandal. I cannot put the blame on any individual, but it certainly does not reflect very high praise upon the Engineering Department of the Post Office. I am thinking of one case which I saw a fortnight ago and about which I have been in communication with the postal authorities. We have a blank piece of ground, about half an acre in extent, on one side of the road, and on the opposite side we have the Woolwich Arsenal Government Factory. Yet the one spot that the Post Office must select to stick up one of these confounded telephone posts is a little back yard, about 5 yards square, where the women have to hang their washing and do their work and where unfortunately the children have to play. I do hope the Postmaster-General will allocate some part of this money to get rid of some of these pernicious posts that are blocking up the little back yards of our industrial towns.

    There is a great tendency on the part of the House always to blame the Government for everything, but, when we are asking the Government to help us in one way, I think we ought to do them justice and not blame them in other matters. I wish to say a few words on behalf of the rural telephones of this country. My hon. Friend the Member for Northern Lanark (Mr. R. McLaren) asked for an underground cable all the way from London to Edinburgh. We found fault with the telephone system last year because we had to pay a higher price for it. I should like to congratulate the Postmaster-General on having brought it back on commercial lines. We cannot, however, expect him to be able to pay out in every way, and if we ask him to develop the rural system of telephones on economical lines, as carried out in America, we cannot expect him to give us enormous underground cables as well, because it will not pay. I also sympathise very much with the right hon. Gentleman's Department on the question of the difficulties to which the last speaker has referred. When I tried to get the telephone to my own private house in the country, I was held up by all sorts of regulations. The local proprietors would not allow the wires to go over their land, and the wires could not be attached to the trees. We ought to remember these matters, and not ask the Postmaster-General to give us something in every way

    I should like him to help us in the way of a rural service on party lines. If he developed the service on party lines, he would get more customers and more money, and he could then put in underground cables. I realise the importance of this very much, because I found in Canada, and we also see here, the disadvantage which follows when there is a snowstorm and wire are broken and communication is cut off. If the Postmaster-General would run the Department on commercial lines and put by a certain amount of money, then, as the demand for cables arose, he could provide them. Run on those lines, it will do more good for the country than in any other manner. I realise also that you cannot expect a new telephone system in the rural districts to pay at once. But in commercial undertakings they put out a certain amount of capital in the hope of getting a return in about five years. I hope that the Postmaster-General will proceed on those lines. I also think it unfair to blame the Government for bringing forward this Vote today. It is not the Government's fault that Members are not here. It is the fault of Members themselves. I hope that the right hon. Gentleman will not hesitate to proceed with these proposals, and that he will have the support of the House in carrying them through.

    There are a few points on which the Committee may desire a reply. The first point raised by the hon. Member for North Camberwell (Mr. Ammon) was a rather curious one. It was that this matter was raised at an inconveniently late hour and on an inconvenient day. What is the matter with the day or the hour? I think, on the contrary, that the time selected has given the Committee a full opportunity of discussing the matter. I am gratified that the Government was able to find time to put it down so that it can be discussed to-day instead of in the early hours of the morning. I think that my hon. Friend should try to find a better point than that. The hon. and learned Member for the Cambridge University (Mr. Rawlinson) wanted to be satisfied that this expenditure was going to be remunerative. He wanted to know what return we are getting. What does he mean by remunerative expenditure? This is capital expenditure and will not involve any charge on the State.

    I have made it my guiding principle since I have been associated with the Post Office that services must be self-supporting services and these services will be self-supporting, and will provide not only the sinking fund and interest on the capital expenditure, but the new business resulting will be remunerative business. I should not have been a party to these proposals unless I was satisfied that they will be not only indirectly but directly remunerative to the State. The hon. and learned Member also asked, "Why spend money on underground cables?" An hon. Member on the opposite side asked, "Why not put all our wires underground?" You have to make your choice between the two. This is the position. You reach a point at which it pays to put your wires underground. It is asked, "If you save maintenance by putting wires underground, why not put all under ground?" That is stretching the argument too far. There is a certain point at which it pays to put the wires underground, at which reduced cost of maintenance covers the increased cost of putting the wires underground. It does not pay to put wires underground unless there are 14 pairs of wires carried underneath. That represents the economic point, and having regard to the great convenience of having the wires underground and the improvement in the service, I agree with my hon. Friend below the Gangway that it should be our object to get underground as many of our wires as possible.

    It depends on the number of wires that have to be carried But undoubtedly in the first instance the cost is heavy. But over a period of time, having regard to the cost of maintenance and the improvement in efficiency of working, it is more than justified. Several hon. Members referred to the question of increasing the facilities in the agricultural districts. The hon. Member for Gains-borough (Major Molson) especially, took the point about rural party lines. That is really the way by which, as far as I can see at present, the difficulty of providing telephones in agricultural districts will be solved. There has been in this country great prejudice among our agriculturists against the rural party lines. They are suspicious of other people hearing their business. That is why the rural party line has been so slow in taking on in this country. But that prejudice is breaking down rapidly and great progress has been made within the past year in the provision of rural party lines. The total number of fixed stations at the end of April was 3,747, an increase of nearly 50 per cent. in the year. During the month of April 204 new subscribers were added. Colonel Orlebar is joining the Post Office Committee, and I shall certainly use his advice and experience in doing everything that can be done to bring home to the rural population the fact that this is the cheapest form of telephone that can be provided. It has drawbacks, but you have to compare them with the advantages. Seeing that the system is almost universal in the rural parts of Canada and in many parts of the United States, I hope that the prejudice against it will quickly disappear.

    Since 1st January this year 245 call offices have been opened in rural districts, and at the present time there are 225 rural districts where call offices have been authorised, but not completed. The progress is steady and indeed rapid. I admit that I was first brought to realise the. importance of improving telephone communications in the countryside by representations made to me in my own constituency. As the result of inquiries which I then made, I was able, with the advice of the Department, to make proposals which have resulted in a very rapid improvement in the provision of facilities, but much more requires to be done. I think that the proposals which I outlined to-day will have a very useful effect in increasing the provision of telephones in this country. Referring to the aspirations of some hon. Members that the time may come when every house in the countryside will have its telephone, that is looking a very long way ahead. I do not suppose that there is the possibility of any postmaster being able to justify to the House any such far-reaching proposal as that. I believe that the solution, if it is found, is going to be found by some technical improvement. A proposal has been made to me by a very ingenious and far-sighted man, by which you would have an automatic system in the countryside where the exchange would be no larger than an ordinary row of bookshelves in a room about 15 feet square. He told me he thought it was within the range of possibility to have a complete exchange working automatically within dimensions of that order, without, any operator being necessary. It is along those lines, I believe, that we shall solve the rural problem and be enabled to put a telephone into every house in the countryside. We have to look for technical developments and improvements, for new inventions, for the application of ingenuity to these ordinary everyday difficulties, before we can really realise my ideal of a telephone in every house in this country.

    I do not rule that out in some circumstances. I was asked what figures there were showing the comparative use of the telephone in the United States and in this country. I am not satisfied with our position in that respect, and the Committee will not be surprised at that when I tell them that in the United States there is one telephone to every eight of the population, while in this country there is only one to every 47. We have a good deal of leeway to make up. My hon. and gallant Friend the Member for Woolwich (Captain Gee), raised a point which I must say was strange to me, and in regard to which I am not fully informed, as to a telephone pole in someone's back yard. I will try and identify the back yard and the telephone pole, and see if something can be done to remove that inconvenience. I should like to thank the Committee for their very friendly reception of the proposals I have made, and to thank them on behalf of the Department for the appreciation they have shown of the improvement in our work.

    Will anything be done to bring about an increase of efficiency in the villages in Scotland?

    I take those villages as being covered by what I have said about the countryside.

    Question put, and agreed to.

    Resolution to be reported upon Monday next.

    Government Of Northern Ireland Loan Guarantee

    Considered in Committee, under Standing Order No. 71A.

    [Sir EDWIN CORNWALL in the Chair.]

    Motion made, and Question proposed,

    "That it is expedient to authorise the Treasury to guarantee the payment of the principal of and of the interest on any loans raised by the Government of Northern Ireland, not exceeding in the aggregate an amount sufficient to raise three million five hundred thousand pounds, and to charge on the Consolidated Fund any moneys required to fulfil such guarantee."—[King's Recommendation signified.]—[Sir J. Baird.]

    The objects of the Bill which will be based upon this Resolution are clearly set forth in the Memorandum which has been issued. The main point which will be of interest, from the financial point of view at any rate, is that it is not anticipated that any charge will fall upon the Imperial Exchequer in re- spect of the guarantee which it is proposed to give. The sum is £3,500,000, and we ask the House to guarantee a loan which will be raised by the Government of Northern Ireland for the purposes set forth in the Memorandum, namely, for public works such as are in Great Britain financed from the Local Loans Fund, for unemployment, and for general Government purposes. The amount is limited to £3,500,000, which sum has been fixed in consultation with the Government of Northern Ireland. The Committee will recognise that the Government of Northern Ireland have assumed very difficult duties at a very difficult period, that the money is essential to the proper carrying on of Government, and that, until matters are more settled and local conditions are more satisfactory, it will obviously be far easier for the Government of Northern Ireland to raise money if the guarantee of the British Government is behind it. I hope the Committee will agree that the guarantee can be justifiably given, and that we have surrounded the giving of it with conditions which will amply safeguard our obligations.

    The Committee will notice from the Memorandum that the Bill will provide that the Treasury guarantee shall not be given until the Government of Northern Ireland have provided, to the satisfaction of the Treasury, firstly, for charging on the Consolidated Fund of Northern Ireland the principal of and interest on any such loans and any sinking fund payments for the repayment of the principal of such loans; secondly, for charging on the said fund the repayment to the Treasury of any sum issued out of the Consolidated Fund of the United Kingdom in fulfilment of the guarantee, together with interest thereon at such rate as the Treasury may fix; and, thirdly, for raising or securing the raising of sufficient money to meet the above charges. The Government of Northern Ireland has already provided, by the Exchequer Borrowing and Local Loans (Northern Ireland) Act, 1922, for the charge on the Consolidated Fund of Northern Ireland of the principal and interest of any loans raised, and of any sums issued from the Consolidated Fund of the United Kingdom in respect of the guarantee, and I hope the Committee will agree to the Resolution.

    I should like to say one word before we Hass this Resolution, in view of what the hon. Baronet said earlier in the day as to precedents. This must not be taken as a precedent that we are going to lend money to the Free State.

    Question put, and agreed to.

    Resolution to be reported upon Monday next.

    Naval Discipline Bill Lords

    Order for Second Reading read.

    I beg to move "That the Bill be now read a Second time.

    This Measure is, I submit, an entirely non-contentious one. At any rate, it did not cause any controversy in the other House. The various Amendments to the existing Naval Discipline Act which it brings forward are all of them, in the opinion of the Admiralty, desirable or necessary, but only one or two of them are of special importance or urgency, and I should like just to say a word or two about those. First of all, Clause 6 makes it clear that officers and men of the Royal Navy, when serving with Dominion naval forces or in Dominion naval establishments, are under the naval discipline of those forces. It is obvious that it would be extremely inconvenient if that were not the case, and in fact some small inconvenience has been felt by the Dominions, and they have pressed us on more than one occasion, particularly Canada, that we should pass this small Measure. I may give the House the sort of instance which can occur. Officers and men of the Navy on their way to or coming home from Bermuda, in the absence of direct steamers, may have to spend some days in Halifax. They are allowed to be put up and spend their time in the naval barracks there, and it is obviously undesirable that they should be in those barracks alongside Canadian naval men without being subject to any discipline, and it is simply to remove that slight anomaly that we are introducing this Amendment, which has not only been pressed for by the Dominion but has been agreed upon with them.

    The other important Amendment is in Clause 7 and the object of it is to bring the position in the Navy in a line with that in the other Services with regard to compulsory deductions from pay for the maintenance of wife or children or illegitimate children in pursuance of an order of the Court. It is, of course, obvious and commonplace that the scale of such deductions which was reckoned sufficient, though I think none too sufficient, before the War, has become altogether inadequate in view both of the increased cost of maintenance of the child and also of the very substantial increase in the pay of the Services. This matter with regard to the Army and Air Force has been settled in the Army and Air Force (Annual) Act passed last year, and the present Clause simply brings us into line with them. The rates of deduction for the lower ratings are brought up now from 6d. a day for wife and legitimate children and 4d. for illegitimate children to a possible maximum of 2s. for a wife and legitimate children and 1s. 6d. per day for illegitimate children, and proportionately higher in the better paid ratings. There is a further feature, in which respect we are also following the example of the Army and the Air Force, in the provision in the same Clause which is to protect a naval rating who has had deductions made from his pay from being imprisoned on landing on the ground that his payment did not cover the whole of the payment imposed by the Court and that he is in arrear. It gives a man a reasonable time in which to show that he has been in a position to earn enough money to pay those arrears. Those are really the only two important Clauses.

    Clause 1 brings naval courts into harmony with the position of other courts competent to award a sentence of penal servitude, namely that it allows a naval court, in accordance with the Penal Servitude Act of 1891, to award a minimum of three years instead of five years, as is provided in the original Naval Discipline Act. Clause 2 simply regularises the position of Lieutenant-Commanders on a court-martial. When the original Naval Discipline Act was passed, there was no such rank as Lieutenant-Commander, and the name Lieutenant-Commander was not inserted in the list of those competent to sit on courts-martial. This is simply formally to rectify that omission. Clause 3 deals with a matter of convenience of administration of courts-martial. Under the existing Act they must sit from day to day. The Amendment provides that if it is for the convenience of the court or in the interest, as it may often be, of the prisoner, a short adjournment, not exceeding six days, can take place. Clause 4 brings the Naval Discipline Act into line with the existing position. Ever since the Criminal Lunatics Act, 18844 removal from prison to an asylum in this country of all offenders, whether in the Navy or not, has been in the power of the Home Secretary, and this is an Amendment simply to recognise that fact, reserving the position of the Navy with regard to persons at the moment outside the jurisdiction of the Home Secretary. Clause 5 is again a formal Clause. The object is to make clear what we have already done for some time in practice, that the position of the marine warrant officer is the same as that of the naval warrant officer, at any rate as regards class 1 of marine warrant officers Whom we are henceforward treating in every sense as officers wherever there is a distinction made in the two categories of officers and men. On the other hand, it excludes a small and rapidly disappearing section of warrant officers, class 2 of marine warrant officers, who are not as a matter of fact employed at sea. Finally, Clause 8 makes it possible not only to print these Amendments, but the Amendments of any subsequent Amending Act in the main Naval Discipline Bill, which is for the convenience of the House and the general public.

    I understand the only effect of Clause 1, which substitutes three years for five years, is that a minimum of three is substituted for a minimum of five. Is that right?

    I have nothing further to say on that, but I do not know what the actual meaning of Clause 8 is. It says:

    "Every enactment and word which is directed by any Act amending this Act to be substituted for or added to any portion of this Act shall form part of this Act in the place assigned to it by the amending Act. and this Act and all Acts which refer thereto shall, after the commencement of the amending Act, he construed as if that enactment or word had been originally enacted in this Act in the place so assigned, and, where it is substituted for another enactment or word, had been so enacted in lieu of that enactment or word, and as if this Act had been enacted with the omission of any enactment or word which is directed by the amending Act to be repealed or omitted from this Act, and the expression this Act' shall be construed accordingly."
    I suppose there is no harm in it?

    It makes it possible in future, when there are further Amending Acts, as no doubt there will be in course of time, for them to be automatically reprinted with the main Act without special Parliamentary provision having to be made on each occasion that they should be so reprinted.

    I should like to find out why these limitations are placed upon the amount which can be recovered from the various ratings. I understand, for instance, that a magistrate has power to order a man, even if he is an agricultural labourer, to pay 40s. a week, in the case of desertion, to his wife and children, but I understand the magistrate takes into account the wages that the man is likely to earn. The restriction that is placed here is certainly much smaller than the discretion which is given to a magistrate. It seems to me that here the law is giving extra protection to the service man as compared with the civilian. There may be some very good reason for it, but it is a principle that has not been accepted in this House for some time. It seems to me that there is no reason why the service man in this respect should be treated differently from the civilian, provided that there is not the fundamental objection that he cannot pay.

    The language does not seem to be quite clear as to the amount that can be deducted. Paragraph (1) of Sub-section (2) says:

    "in respect of a wife or children 4s. a day."
    Assuming there is a wife and three or four children, does this mean that there can be a deduction for each child, and that in the case of a wife there can be this maximum, but no higher maximum, whatever the number of children may be?

    Will the right hon. Gentleman make it clear whether there is any difference whatever in the scale as compared with the other services of the Crown, the Army and the Air Force?

    The position is exactly the same. We are raising the scale in exactly the same proportion, as near as may be, as in the Army and Air Force, in view of the changed conditions. The hon. Member for the Western Isles (Mr. Murray) is a little mistaken as to the legal position. Under the law, the Court may assign such and such payment to be made in respect of wife or children, but it has no power to compel the employer to deduct any sum from the wages for that purpose. When a man is outside the jurisdiction of the Court and in the jurisdiction and under the control of the Admiralty, the Admiralty is empowered by this Act, as by previous Acts, to make such deduction as, in all the circumstances of the Service, they consider is a maximum which can reasonably be deducted for the purpose for which it is intended. The same condition applies in all the Services, and the alteration is made now because the maximum has been increased. The maximum covers the family. In the case of an able seaman whose basic rate of pay is 4s. a day, you could not subtract more than 2s. a day for the maintenance of his family, however many children he had.

    In Clause 7 it states that a sum not greater than 3s. a day may be stopped in respect of a bastard child. So far as I am aware, no greater sum than 10s. a week can possibly be stopped from anybody in respect of a bastard child. Why is a sum of 3s. a day put in this Bill, when is. 6d. a day is the outside sum? The sum of is. 6d. is mentioned in the case of any other naval rating in paragraph (iii). There is a proviso which states:

    "Provided that no such deductions from pay in liquidation of a sum adjudged to be paid by an order or decree as aforesaid shall he ordered unless the Admiralty are, or the person deputed by them is, satisfied that the person against whom the order or decree was made has had a. reasonable opportunity of appearing himself, or has appeared by a duly authorised legal representative."
    3.0 P. M.

    How does that work out in practice? A woman goes before the Court and gets an affiliation order against a sailor. How is she to satisfy the Admiralty that the putative father has had a chance of appearing before the Court? If this Bill is going to throw any onus upon her, or, in the alternative, any onus upon the Court official, it will be one more bar and one more difficulty in the way of the unfortunate mother getting the proper effect of the order which the Court may make in her favour. Perhaps my right hon. Friend will tell me why the sum of 3s. a day can be stopped in respect of a bastard child, when no greater sum than 1s. 6d. can possibly be called for, and, secondly, can he assure me that the proviso will not militate against the chances of the unmarried mother in getting the money paid to her when she has obtained an order from the Court?

    I think the 3s. would cover more than one bastard child in the case of the higher ratings. While every consideration has to be given to the claims of the mother, it is also necessary to give the man reasonable protection, and to see to it that he has a chance of attending the Court. Special arrangements are made to enable the man in such a case to attend the Court or to be able to secure legal representation. I do not think there is any question of the rights of the woman in the case being prejudiced by this Bill.

    Question put, and agreed to.

    Bill read a Second time, and committed to a Standing Committee.

    Wireless Telegraphy And Signalling Bill

    Order for Second Reading read.

    I beg to move, "That the Bill be now read a Second time.

    This is a Bill to amend the Wireless Telegraphy Act, 1904, under which wireless telegraphy has so far been controlled. That Act was limited to the duration of two years, and has been continued since 1906 under the Expiring Laws (Continuance) Act. Some form of control is growingly necessary in connection with the practice of wireless telegraphy and telephony. In the United States a condition of chaos has resulted from the lack of Government control, and the Government there are making very drastic proposals to remedy the condition of things. This Bill continues the proposals in the 1904 Act and also makes a number of new proposals found to be necessary as a result of the experience of that Act. The steps to be taken were considered by an Inter-Departmental Committee representative of the Post Office, the Air Ministry, the Admiralty, the War Office, and all other Government Departments interested in the use of wireless. The Bill does not propose in any way to withdraw from the public the advantages of wireless communication. On the contrary, its effect will be, by ensuring the proper use of wireless, to assist its development.

    The Bill will leave full scope for inventive genius by allowing the erection of experimental stations in proper hands. At the present time some 9,500 licences have been issued, of which 9,100 are licences for receiving, and 400 licences for transmission. The greatest difficulty arises in the transmission, and it is the unregulated issue of licences for transmission in the United States that resulted in the chaos there to which I have referred. We give permission readily for receiving stations, and I am looking forward to a very rapid increase in the number of applications for such licences. The conditions under which broadcasting by wireless telephony will be worked have not yet been decided. As the House knows—I think it is common knowledge—when this question became of real practical importance two or three months ago, I called together all the firms in the country who had shown themselves interested in broadcasting by wireless telephony and asked them to come to an agreement amongst themselves as to the conditions under which the practice of this new art should operate. I do not regard it as desirable that the work should be done by the Government, and I do not contemplate a condition of things under which the Post Office will be doing this work. The part I foresee for the Post Office is that of securing the freest possible play for the inventiveness and ingenuity of all who are interested. I am sorry that I have not so far received any proposals from the films who are discussing this question, but a meeting is taking place at the Post Office to-day between the firms interested and the Post Office officials, and I hope it will be found that some agreement has been come to.

    When I have said that the main provision of the Bill is to continue the powers contained in the 1904 Act, and that we are making proposals to amend what our ex- perience has shown to be necessary, I have really covered the ground covered by the Bill. One interesting provision of the Bill is that it shall apply to wireless in aircraft. When the Bill of 1904 was drawn up, no one had contemplated; the possibility of wireless being used in aircraft, and the Bill in that respect dealt only with vessels at sea. It is now necessary that we should have some guarantee that those who use wireless on aircraft are competent. That provision is felt to be necessary by the Air Ministry, and a proposal to that effect is contained in Section 6 of the Bill. One other provision is that dealing with the position of the Dominions. Hitherto I have had powers of control over the use of wireless on ships registered anywhere in the British Dominions when on the high seas, but as all the self-governing Dominions, and many of the Crown Colonies and Protectorates, now possess the necessary legal powers of control, the Colonial Office think that the power which in the past has been reserved to the Postmaster-General might be abrogated. It will be abrogated by this Bill. While this is a modest Bill, which does not raise any new principle, it is a Bill of considerable importance. Without such a Bill the development of wireless, both telephony and telegraphy, would be very seriously hampered, and we might well be experiencing the great difficulties which have arisen in the United States.

    Is it proposed under the Bill to ensure that all operators on British shipping are qualified operators, and to that extent improve the present situation?

    The Postmaster-General indicated that the Bill is generally one to make permanent the powers he has hitherto possessed. In one or two important details this Bill breaks new ground. One is that it makes provision for dealing with the question of licensing in respect of wireless receiving sets, and it is upon that point that I wish to say a word. In Clause 2, Sub-section (1, e), power is taken by the Postmaster-General to prescribe, subject to the consent of the Treasury, the fees to be paid in respect of the grant or renewal of any licence or certificate. That, presumably, governs the licences now required, for which a fee of 10s. is chargeable, in respect of all the wireless receiving sets. Would it not be possible to add to the Clause a provision that any Regulations which increase the fees chargeable are to be laid on the Table of the House? It is most important that the receiving stations should not be hampered in any way. It is only a few weeks ago that those who are interested in the subject—and they are very many—had their hopes raised very high. Great enthusiasm was created, particularly among the younger members of the community. They felt that they would shortly be able to get a very good wireless service. We were told that eight broadcasting stations were to be established. These eight stations were to cover the whole of the countryside and all who cared to listen in would be able to listen in. I thought it might prove of considerable advantage, particularly to the rural worker, who would get information which otherwise would not be available to him. But up to the present nothing has been done in that direction. I understand that the difficulty is a financial one. I am very glad that the difficulty has arisen at this stage, because in the United States chaos has been caused, largely as a result of not taking a long view and seeing how the scheme was eventually to he financed. I would suggest that this matter can be financed most effectually by placing at the disposal of the broadcasting stations some proportion of the fees now charged in respect of these receiving licences. Under the provisions of the Bill it would be possible to increase those fees. I see no reason for increasing them. It has been estimated that 1,000,000 sets will shortly be established in this country. If only 200,000 or 300,000 were established, that would result in an annual income of from £175,000 to £200,000 per year and half of that distributed over the eight broadcasting stations should secure a very efficient and effective service. Therefore I hope the Postmaster-General will consider the possibility of setting aside portions of these licence fees for the purpose of financing broadcasting stations. I hope he may be able to consider favourably the possibility of doing it on a fifty-fifty basis. The service which would be rendered by the Postmaster-General in this respect is a very small service indeed. It approximates very closely to the 5s. fee charged to the driver of a motor car. It is merely a registration fee, and very little work will be undertaken or, as far as I can visualise the position, will be required by the Postmaster-General in this connection. I also ask if it is not possible at once to give some sort of temporary licence to those who are willing to broadcast information. The right hon. Gentleman told us that difficulties have arisen. At the same time, I do hope that a service may be forthcoming under temporary licence, and that those of us who take an interest in the matter may not be held up from receiving a service of some kind, and that something will be done in this direction pending the formation of permanent regulations.

    Question put, and agreed to.

    Bill read a Second time, and committed to a Standing Committee.

    The remaining Orders were read, and postponed.

    Adjournment

    Resolved, "That this House do now adjourn."—[ Lieut.-Colonel Sir J. Gilmour.]

    Adjourned accordingly at Seventeen Minutes after Three o'Clock till Monday next (19th June).