Seanad Éireann debate -
Wednesday, 18 Nov 1953

Vol. 43 No. 1

Telegraph Bill, 1953—Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Minister for Posts and Telegraphs (Mr. Childers)

It is scarcely necessary for me to inform the house that the telegraph service is being run at a serious loss. This loss amounted to £141,000 in 1939/40; it was £403,000 for the year 1951/52, and for 1952/53 it is estimated at £430,000.

A number of factors have contributed to this position. Operating and maintenance costs have more than doubled since 1944 and more than trebled since 1937; the volume of messages carried by the telegraph services has been declining steadily from year to year, and the existing rates of charge for ordinary and press telegrams, which have been undisturbed since 1937 and 1920 respectively, bear little or no relation to the level of current costs. It is difficult to give any precise estimate of the loss per telegram at present but I am advised that on average the Post Office loses at least as much again as the charge paid by the sender.

We are not, of course, alone in having the problem of a losing telegraph service. Practically every country in the world has had a similar problem. In Great Britain, where the population is much more dense and evenly distributed than in this country and where telegraph rates are higher, the loss on the service runs to about £4,500,000 at present and is, I understand, giving rise to serious concern. Our problem is accentuated by our sparse and scattered rural population.

It is easy to suggest ways of reducing a loss of this kind without increasing charges. The most attractive is to cut charges in the hope that traffic will increase enormously and the loss per telegram may be reduced if not eliminated. Unfortunately, this course is out of the question if your charges are already basically uneconomic. That is the position with regard to existing telegraph charges.

A second possibility is to reduce expenditure drastically by economies and by more efficient methods. That course has been and is being followed to the maximum extent practicable. Already morse working has been abolished at a large number of offices, teleprinters have been installed at the larger centres and telegrams are being voiced over telephone lines in cases where that is the most economic way of disposing of the traffic. We cannot, however, hope to effect economies of anything approaching £400,000 a year in this way. We are therefore compelled to take the only other course open to us to help to bridge the gap, viz., to increase charges. I do not think the Post Office can be accused of precipitation in this matter. There are few, if any, services available to-day at 1937 prices, let alone 1920 prices.

I need hardly labour further the point that increases in telegraph charges are necessary. They are clearly justified and the purpose of this Bill is to enable such higher rates as may be decided upon to be brought into force and to be amended from time to time, as may be necessary, without further legislation. Briefly, it proposes to repeal the statutory limits on inland telegraph rates and press telegraph rates contained in Section 1 of the Telegraph Act, 1928, and Section 16 of the Telegraph Act, 1868, as amended by Section 1 of the Post Office and Telegraph Act, 1915, and so enable these rates to be adjusted from time to time in the light of the costs and general finances of the service.

With regard to the higher rates of charge proposed, I am not in a position to make an announcement because I wish to have every aspect of the telegraph service examined before new charges are fixed. I have accordingly set up a departmental committee to undertake an exhaustive examination and to report to me. Apart from any possible economies which may be possible as a result of improved methods and organisation, it will be necessary to decide to what extent, if any, the telegraph service should continue to be subsidised by users of other Post Office services and/or the taxpayer. The telegraph service is a declining service because mainly of the rapid progress being made in the extension of the quicker and more convenient telephone service.

Nevertheless, it is difficult to conceive of the telegraph service being entirely superseded by the telephone service; and unless you can dispense with it altogether you must retain telegraph staff and maintain telegraph lines and apparatus to provide the service. In some respects, the telegraph service has been invested with the character of a social service but the ordinary person of poor or limited means uses it so infrequently that the benefits conferred by cut telegraph rates are of little a value to him. It must also be remembered that there is probably a limit beyond which increased telegraph charges will not bring in additional revenue. I have merely touched on these aspects of the problem to indicate that the question of fixing higher charges is not a very simple one and it is preferable to defer the matter pending the fullest consideration than to take decisions now which may have to be modified within a short time. When the new charges are decided upon, they will be fixed by statutory regulations which will be laid before both Houses, and it will be open to all members of either House to discuss them by way of special motion.

This Bill may be criticised, as it has been in the Dáil, on the ground that it will reduce control of the Oireachtas over the telegraph service. As I have already indicated, it will be necessary to lay regulations fixing new charges before both Houses of the Oireachtas so that the control will not in any real sense be impaired. Moreover, in proposing that telegraph charges should be fixed from time to time by statutory regulations, the Bill will do no more than bring the procedure for revising telegraph rates into line with that which operates for other Post Office charges such as postal and telephone charges.

At one time similar limits applied to postal and certain other Post Office charges but they have all been removed, the last limit of the kind on the postal side being repealed by the Post Office (Amendment) Act, 1951, the Bill for which was prepared in the time of the last Government. I believe there is nothing really contentious in this Bill and I recommend it to the members of the Seanad.

Mr. O'Higgins

I think it is wrong that the Minister for Posts and Telegraphs should bring in a Bill of this type as distinct from Budget legislation. What is proposed to be done in this Bill is quite clear. The Bill is a very short one and unless a person went to the bother of reading the various Acts referred to it is just three meaningless paragraphs.

I understand the position to be that by this little three-section Bill a Minister is putting himself in the position to increase telegraph charges and that he is not indicating to the House what increases he proposes to impose on the public. It is quite clear from the figures which the Minister has given that he is facing a situation in his Department where money is required, that money is going to be raised by taxation of one kind or another. To my mind, the proper way in which to raise the money and the proper time to do it is when the annual Budget is introduced. What the Minister is proposing here is to tax the people further. He may argue that he is being honest and straightforward about it, that the losses are incurred by his Department and that he is going to jack up the charges in his Department to offset these losses.

I see no reason why this could not be done by announcing the introduction of this legislation or similar legislation as part of the Budget statement and Budget policy. The only protest I have against this Bill is that, and contrary to being honest and straightforward in introducing a Bill of this kind, I believe the Government and the Minister for Posts and Telegraphs have hoodwinked the public. Over the last six or eight months, starting with the Taoiseach, every Minister of State has been bemoaning the fact that the community here is taxed too high. The Taoiseach himself used the expression that the people are staggering under the weight of taxation. That has been the note sounded by various Ministers for some months past and, instead of showing their sincerity and earnestness when they make speeches like that, we find that while taxation may not be increased in the Budget, straightway the Minister for Posts and Telegraphs proposes increased charges of one kind or another. It may be that they are necessary. I complain that if they are necessary the straightforward and honest thing to do is to explain that when the general financial and economic review is taking place during the Budget discussion.

I would like the Minister to give the House some information about this Bill. Quite frankly, I have not been able to study the earlier Bills which are referred to in the three sections here. I want to know if I am correct in saying that the position is that the law, as it stands at present, fixes maximum charges and that it is only by introducing these repeals that the Minister can secure authority to increase these charges now.

Mr. Childers

That is correct.

Mr. O'Higgins

If that is correct, and the Minister tells me it is, the next thing I want to know is, will the Oireachtas have control over the Minister and his Department in fixing the increased charges? I do not think it is right that the Oireachtas should pass over the authority to any particular officers in the Department of Posts and Telegraphs. The Minister indicated, in introducing this Bill, that any regulations made would be laid before both Houses of the Oireachtas. I am satisfied if that is given as an assurance, but I want to know has it also got the force of compulsion. Does the law compel the Minister to lay the regulations before both Houses of the Oireachtas?

Mr. Childers

Yes.

Mr. O'Higgins

If it does, the control of the House will be retained to some extent.

Mr. Yeats

Senator O'Higgins says this is a very simple Bill, but he did his utmost to contradict what he said. Of course, he is entirely wrong when he suggests that this is a question of taxation. No question of taxation arises at all. If anyone sends a telegram he is merely paying the Post Office for services rendered. If he were in the United States of America and wanted to send a telegram, he would go into the office, fill up a form and pay the amount required. That would not be taxation—especially in the case of America, as the telegram would be sent by a private concern. If he goes through the same procedure in Ireland he is also paying for services received. The fact that it is the State which transmits the telegram does not in any way alter the form of payment—it is still for services rendered and it is not taxation.

Whether it is taxation or not—and I maintain very strongly it is not— there is no additional call on the public. As the Minister pointed out, the Post Office expects to lose this year £430,000 on the telegraph service. If by increased charges the Minister is able to do away with that loss and runs the service without losing any money next year—it is not likely he can go that far, but let us hope he can reduce the losses, if he can increase the charges in time and sufficiently—that section of the public which uses the telegraph service will have to pay £430,000 in addition to what it pays at present; but, as against that, the section of the public which pays taxes will be saved £430,000. If any element of taxation arises under the Bill, it is that there should be less taxation and not more, that there should be a general saving to the taxpayers of anything up to a maximum of £430,000 and some of the general public—some of whom never send a telegram—instead of being asked to hand over an increasing annual sum in respect of this service, will be asked to pay less.

Mr. McGuire

I have not much to say, except that naturally as a businessman and a member of the business community, I regret anything that is going to mean further expenses and further costs on the operation of business. I must confess that I was quite impressed by the Minister's presentation of his case. What struck me about it as interesting was the fact that all the factors he enumerated as being the cause of the loss and as causing the necessity for raising prices for telegrams were all the same factors that we in business encounter to-day. If the Minister is able to get his Bill through the Dáil and now through the Seanad with the approval of both Houses, I hope it will at least make people more sympathetic to the difficulties of business people nowadays.

I happened to walk into the Dáil this afternoon for a few minutes and I heard a man talking about the immense profits being made in business nowadays. It seems to me that a wrong atmosphere is being created by that sort of talk. What really happens is that a few spectacular cases are picked out of people who happen to make profits because of some particular circumstance. The same could be said of a Government Department. It might have been said a year ago about Aer Lingus doing so well, that therefore all these Government places should be able to reduce all their prices. That is the kind of comparison we get nowadays. For that reason, I am sympathetic to the Minister.

I was glad to see that he told us that he had scouted all the ordinary ways of dealing with the situation without raising prices, before bringing in this Bill. He mentioned that he had tried to see if the Department could be run more efficiently by cutting down costs and doing things in a better way. I should say this about the Minister for Posts and Telegraphs: I think he has made a great improvement in the postal services and that they are efficient nowadays. For that reason, I think he has brought a good case here; but I would like to get this bit of kudos for the business community. I hope that he—and, through him, the other members of the Government— will be more sympathetic to the difficulties of the business people to-day.

An Leas-Cheann Comhairle

The Minister, to conclude.

Mr. Childers

Senator McGuire showed sympathy with the difficulties we have had to face in the Post Office. First of all, I would like to deal with the speech by Senator O'Higgins. He suggested that there was something deceitful about my action in introducing this Bill. I have made speeches in the Dáil and up and down throughout the country, making it perfectly clear that I regard the Post Office as a semi-commercial service and that the public should regard it as such. It has nothing to do with taxation. I dislike taxpayers having to pay a sum—which could quite easily run into £2,000,000 or £3,000,000—in order to subsidise what should be—and, as I have said before, I hope will always be—a semi-commercial service.

It so happened that the increased charges for the telephone and postal service were made around about the time of the last Budget. Before I increased charges, I was anxious that the full effect of 14,000 miles of new trunk circuits should be in evidence in the telephone service and I was particularly anxious to be able to say to the users of the postal service that only 10 per cent. of all the regional deliveries were restricted in the sense of not being a daily post. I managed to be able to achieve both these improvements in the service just around about the time of the last Budget and, as a result, the increased postal and telephone charges were introduced at that time to overcome a very serious deficit.

We do everything we can in the postal, telegraph and telephone services to insist on a good output. There is no branch of the Civil Service where a higher proportion of the staff is subject to measurement of the amount of work they can do. We know, regarding accountants, roughly how many telephone accounts can pass through their hands. All through the country, thousands of postmen have their walks checked to ensure they are doing their work with reasonable efficiency and reasonable dispatch. We have an entire section devoted to methods of business organisation, called the O. and M. branch, led by two very able men who have been trained in business methods.

For a number of years they have been reducing the cost of the service by thousands of pounds, by introducing changes of a business kind, eliminating unnecessary forms, simplifying forms, eliminating forms of accountancy whose cost is far greater than it should be for that particular type of item. As a result, the traffic of the three services has increased since the beginning of the last war by 70 to 135 per cent. in the various services, but the staff has increased by only 28 per cent. There has also been a very big increase in the output of the engineering branch, which deals with the telegraphic and telephone side of the services.

The reason why we have been able to maintain the service as a semi-commercial institution is two-fold. First of all, I can commend to the House the officers of the Department, who are efficient people and a zealous body of men. The second reason why we have been able to do it is that successive Governments have wished that the service in all its branches should pay for itself and, if there happens to be a deficit in one particular branch, that another branch should help to subsidise it. We could argue for a long time as to how far the three branches should be self-dependent. In most countries of Europe there is an element of subsidy from one branch to another.

The first reason, as I have said, is the efficiency of the staff. The second is the willingness of the successive Governments to make these services pay. The three services have lost £500,000 in 20 years of operation. In some years there were profits, in other years there were losses, while in others there was more or less an even balance in the accounts. Half a million pounds are a negligible percentage of all the turnover of the three services taken together. I might add that the last Government during its period of office raised charges by £1,000,000 a year, taking the two services, postal and telephone, together. I have every admiration for their so doing. They raised charges on three separate occasions. On the last occasion they left the proposals for me to implement.

As I have indicated already, the last Government prepared for introduction the Post Office (Amendment) Bill, 1951, which I brought through the two Houses of the Oireachtas and which eliminated all the remaining types of restriction upon the increasing of postal and telephone charges, restrictions that were the result of earlier Acts, in the same way as the restrictions we are now removing in regard to the telegraph service. Now the whole of the three services will have charges that can be increased by statutory regulations.

Under these regulations, I am compelled to place the increased charges for examination by the Dáil and Seanad. If any member of the Dáil considers that the increased charges are excessive he can raise the matter by special resolution. I am glad the House has co-operated with me in enabling the Second Reading to be completed to-night. I can only assure the members of the Seanad that so long as I am in charge of the services I will do my utmost to improve their efficiency and to insist at all times on their commercial character.

Question put and agreed to.

Bill put through Committee without amendment, reported, received for final consideration and passed.