Dáil Éireann debate -
Tuesday, 3 Jul 1956

Vol. 159 No. 1

Aireacht na Gaeltachta. - Telephone Capital Bill, 1956—Second Stage.

Minister for Posts and Telegraphs (Mr. Keyes)

I move that the Bill be now read a Second Time. This Bill is the eighth since the transfer of services in 1922. Its purpose is, briefly, to authorise the Minister for Finance to borrow further moneys up to a limit of £6,000,000 for continued development of the telephone service. The money will be borrowed as required over a number of years.

As Deputies are no doubt aware, expenditure on the telephone service falls under two broad heads. The ordinary running expenses on day-to-day operation and maintenance of the system are met out of moneys voted annually by the Oireachtas under the Post Office Vote. On the other hand, expenditure on extension and development of the system—for example, on the erection of new exchanges, the provision of additional trunk lines and the installation of subscribers' telephones—are met out of funds provided by the Minister for Finance under the Telephone Capital Acts.

These Acts empower the Minister for Finance to issue out of the Central Fund sums not exceeding a stated amount for the development of the telephone service. The issues are subject to estimates of expenditure being submitted to and approved by the Minister for Finance. The Acts also authorise the Minister for Finance to borrow in order to meet or repay the issues from the Central Fund and for that purpose to create terminable annuities extending over a period not exceeding 25 years. The annuities are paid annually in six-monthly instalments out of moneys provided in subhead M of the Post Office Vote.

The total amount authorised to be raised under the previous Irish Telephone Capital Acts to finance works carried out since 1st April, 1922, is £16.75 million, of which £16.33 million approximately had been expended up to March 31st last. Of the latter amount some £12.6 million still remained to be repaid on that date.

The last Telephone Capital Act, that of 1951, was for £8,000,000 and was intended to cover a broad programme of works comprising new and extended exchanges, additional subscribers' installations and trunk circuits, new buildings and additional kiosks and call offices. Of the funds authorised to be raised by the 1946 Telephone Capital Act a balance of £1,057,000 odd remained at 31st March, 1951, making, with the £8,000,000 authorised by the 1951 Act, a total of £9,057,000. Here is how over the five years to 31st March last the bulk of that money was spent:

Subscribers' installations and underground development schemes	£3,335,000
Rural Call Offices	376,000
Trunk Circuits (including underground trunk cables)	2,332,000
Exchanges—new and extended	1,218,000
Buildings	403,000
Reserve stocks of engineering stores	910,000
TOTAL	£8,574,000

In the five years, much has been done; over 35,000 exchange lines and 50,000 telephone stations have been provided and the total number of exchange telephones in service is now 120,000 approximately as compared with 86,000 odd in 1951. Local calls increased from 69,000,000 in 1950 to 88,000,000 in 1955 and trunk calls from 9.4 million to 13.7 million.

In 1950, trunk call delays were the rule rather than the exception. The outstanding development in the meantime has been a great increase in the capacity of our trunk network, particularly of our main trunk routes. The works carried out include completion of the southern coaxial trunk cables from Dublin to Cork, Limerick, Waterford and Athlone; the provision of the northern trunk cable to Drogheda and Dundalk; the laying of a third trunk cable, to be completed this month, to Mullingar, Longford, Carrick-on-Shannon and Sligo, with a branch to Athlone; the erection of extra wires and the installation of carrier equipment on hundreds of other routes. Altogether the mileage of trunk circuits in service has been increased from 45,000 miles at the end of 1950 to some 92,000 at the end of 1955. In other words, trunk circuit mileage has been more than doubled in 5 years. The corresponding increase in the total number of trunk calls has been 46 per cent. approximately. Although it cannot be claimed that long delays have yet been entirely eliminated, no-delay services have been provided over a great part of the system and the trunk services generally have been greatly improved.

It may be of interest to mention that the handling of trunk calls has been considerably expedited over a large number of routes by the introduction of a degree of trunk mechanisation, whereby the operator at the originating exchange is able to dial a call through one or more intermediate trunk exchanges to the called subscriber without the assistance of another operator. For example, an operator at Sligo can dial directly to a subscriber at Cobh via Dublin and Cork exchanges.

In Dublin, a new trunk exchange opened in 1952 at St. Andrew Street, Dublin, has greatly facilitated trunk working and improved the service for Dublin subscribers. In the city and suburban area, new automatic exchanges have been established in Upper O'Connell Street, Finglas, Priory Park (Blackrock), Dundrum, Foxrock, Clondalkin—Tallaght, Sutton —Howth, and Whitehall and extensions have been carried out at all existing exchanges. Outside of Dublin, automatic exchanges have been provided at 21 places including Dundalk, Waterford, Athlone and Mullingar. In most of the larger provincial centres magneto switchboard equipment has been replaced by modern operating suites. Altogether over 530 extensions or renewals of switchboard equipment have been carried out at various exchanges.

Continuous 24-hour service has been introduced at 78 exchanges where the service was formerly restricted and the attendance at 305 other small exchanges has been increased by 14 hours weekly in each case. 97.5 per cent. of our subscribers now have continuous service.

The rural call office scheme for providing a telephone in every rural post office has been completed, apart from two offices which are in course of being provided. Although the use made of these telephones is, in most cases, small, they do provide a valuable means of communication in areas that would otherwise be isolated. In cities and towns, over 230 additional kiosks were provided during the period in question.

Although the number of telephones being installed is now greater than ever before, we still have a waiting list. It may well be asked why there should be such a list so long after the war, when most other shortages have disappeared. The first point to be noted is that the problem is not one peculiar to us. Most countries still have waiting applications for telephones, our nearest neighbour having no less than 360,000.

The difficulty in providing telephones everywhere promptly lies in the fundamental necessity to forecast for several years ahead what the likely requirements will be, to plan for exchange and underground cables, and to order the equipment and have it installed well in advance of the treatment of individual applications for telephone service. The experience in most countries has been that public demand for telephones has been outrunning the capacity of the telephone industry and administrations to meet it except after some delay.

In common with most organisations requiring staff for engineering and electronic work, we have found it difficult to recruit and retain an engineering staff sufficiently strong to expand the system at a rate sufficient to overtake demand which has now reached a level of about four times what it was immediately before the war.

Let me give some figures to show how steeply demand has been rising in the last few years. In 1954, the number of applications received was 16 per cent. greater than in 1953; the 1955 demand rate was 25 per cent. greater than in 1954; for the first five months of this year, it was some 17 per cent. over the corresponding figures for last year and about 44 per cent. greater than it was two years ago. The bulk of the increased demand is for private telephones. It is obvious that to cope with an increasing demand of this magnitude more staff is required and an increase in the rate of development entailing a substantial increase in the level of capital expenditure on the service. This brings me to the financial position of the service and to its capital needs for the next few years.

For many years past the telephone service has been run, on the whole, at a profit. In the current year, the margin of profit would virtually disappear if pre-July 1st charges were to remain unaltered. This is not surprising when it is considered that wages, costs of materials and total annual expenditure on the service are on average respectively about two and a half times, three and a half times and six times what they were in 1939. On the other hand, telephone rentals are only about 50 per cent. and call charges, as recently revised, about 66 per cent. overall greater than the 1939 rates. Our rates compare very favourably with those in other countries.

The small increases in rentals and call rates as compared with the much greater increases in money incomes have undoubtedly put telephones within the reach of people who could not afford them pre-war. Moreover, the great increase in residential building schemes, often at fairly considerable distances from main shopping centres and places of employment, has stimulated demand for private telephones.

This demand is welcome in so far as it indicates more telephone consciousness among our people and so long as we have the capital resources to satisfy it. Telephone development, however, requires heavy capital investment per subscriber. Apart from the subscriber's instrument and his individual pair of wires to the nearest exchange, the whole complex system of lines, cables and exchanges must be maintained and expanded in step with growth in subscribers' lines and call traffic if bottlenecks resulting in congestion and delays are to be avoided. The capital investment in the system has grown from £57 per telephone instrument in use in 1938-1939 to £125 in the past financial year.

In considering the future capital needs of the telephone service, we are faced with the unpleasant facts that capital is very scarce and that it is also abnormally dear. The funds for telephone capital development must be raised by the Exchequer which is unable to meet all the demands upon it for desirable capital expenditure. The needs of the telephone service must, therefore, be weighed against those of the other capital services which are also financed through the Exchequer, such as housing, sanitary services, hospitals, agricultural development, etc. As Minister responsible for the telephone service, I am, of course, concerned that its claims be given full weight.

On the other hand I do recognise that, since there is a serious shortage of capital, I cannot reasonably expect telephone development and particularly the extensive installation of private telephones, which now constitutes a very large part of the increased demand, to be regarded as of such overriding importance that the needs of the service should be met in full at the expense of the other capital services to which I have referred. After careful consideration, it has been decided, subject to the approval of the Oireachtas, to provide telephone capital funds for the next four years on the basis of the average rate of expenditure over the past few years, that is, at £1,500,000 a year. The present Bill is, accordingly, for £6,000,000.

The £6,000,000 will not be sufficient to meet completely, on the basis of recent demand, the anticipated needs of the service over the next few years. That is to say, we cannot go ahead to install all the subscribers' lines that could otherwise be provided, to undertake all the underground development schemes required in built-up areas to meet and anticipate application for telephones, to install all the exchange equipment we otherwise would to extend automatic working or to provide all the additional trunk lines we would endeavour to provide if there were no capital shortage.

The amount of work to be done under all these headings will be limited by the amount of money available and the works programme will have to be adjusted accordingly. New schemes that can be postponed without materially affecting the standard of service to subscribers will be postponed. Thus, manual exchanges will not be converted to automatic working if a reasonable standard of service can continue to be given on a manual basis. Ways and means will be sought of postponing other costly schemes, such as major trunk underground schemes.

Expenditure on the provision of plant for new subscribers will have to be related strictly to the amount of money available for the purpose. We shall have to do the best we can on a restricted programme based on a capital allocation of £1,500,000 a year commencing in the current financial year. Our efforts will be directed towards reducing and keeping the level of capital costs within this figure in a manner that will cause least inconvenience to all concerned. By and large, there should be no material variation in the volume of employment given.

The following programme indicates under broad headings how the £6,000,000 is likely to be spent. It is in rather general terms as it is important, if we are to make the best use of the limited money available, that there should be a considerable measure of flexibility in carrying it out:

Exchanges—new and extended (including buildings)

£1,250,000

New automatic exchanges will be provided at Drogheda, Dublin, Sligo, Limerick, Galway, Longford, Naas and a number of other places. There will also be heavy expenditure on extensions of existing exchanges. Provision is being made for commencing the erection of a third trunk exchange at Dublin and for a satellite automatic exchange at Cork to relieve the existing exchanges. As I have already indicated, it is proposed to defer the planned conversion to automatic working of manual exchanges in cases where there is no compelling need for conversion.

Trunk Service

£1,450,000

Additional equipment will be installed on the southern and northern trunk cables in order to maintain a sufficiency of circuits for no-delay working on these backbone routes. The trunk programme will include the installation of a considerable amount of carrier equipment and on shorter routes the erection of aerial cables and physical wires. The general aim will be to improve the standard of trunk service that obtains at present on routes where there are delays but assuming that trunk traffic will continue to increase at the rate realised in recent years, it is unlikely that, while capital shortage persists, it will be possible to get much nearer our long term objective of a no-delay system than we are at present. Indeed, it may not be possible to avoid a temporary deterioration of service on some routes.

Subscribers' Installations and Underground Development Work

£3,300,000

It would be mistaken policy to devote an excessive amount of the limited capital available to subscribers' installations and associated work at the expense of exchange and trunk works. The result would be to create a need for additions to exchanges and additional trunk lines that could not be met—in other words, the intake of new subscribers would exceed the capacity of the system. The expenditure under this heading is therefore limited by the necessity of maintaining a balanced programme.

A large part of the expenditure will be on underground cabling schemes in the cities and larger towns but mostly in Dublin. The Dublin underground has posed one of the most difficult problems with which our engineers have had to deal. A complete recabling of the whole area has had to be undertaken and contractors have been employed to supplement the Department's own efforts. However, cable laying and jointing involves highly skilled work and takes a considerable amount of time. The main scheme has now been under way since 1954 and although it has been more than half completed, much still remains to be done, particularly in outlying suburban areas. Even if there were no financial difficulties it would be a considerable time before all areas could be reached, but the work will now take longer to complete because the necessity of keeping expenditure within certain limits compels us to reduce the amount of underground relief work which is at present being carried out.

Outside the larger centres, underground difficulties are not so serious but the capital cost of long rural lines per subscriber is disproportionately high and it may be necessary to restrict the amount of work of this kind which is undertaken. The number of new subscribers' lines connected is not expected to show any great variation from the numbers connected in former years but in view of the rising demand for service a bigger waiting list can hardly be avoided.

In short, the £6,000,000 will be used to meet all essential needs, to give a reasonable standard of service and to provide for a reasonable measure of development including the installation of approximately the same number of new subscribers' telephones as we have been installing in the past.

I do not think the House will have any hesitation in providing more money for telephone development. It is money well spent and, while I am sorry that more funds cannot be made available for the purpose, we in the Post Office cannot expect to be unaffected by the difficult financial situation in which the country finds itself.

Mr. Childers

I was wondering if it is fair to ask the Minister—obviously, I do not like to spring a question on him to which he can find no easy reply —before we begin this debate if he could tell me how much he would like to have spent instead of the £6,000,000? What is the optimum amount he would like to have spent? Is it possible for him to give us that figure before we commence the debate? I take it the Minister is not able to do that.

We are supporting this Bill in order to keep telephone development going and because we realise the vital necessity for an improvement in the whole of the telephone services of this country, but I think that the Minister has been persuaded by his colleagues on an entirely wrong basis to restrict development. When we hear that an absolutely modern function of development in our society is to be restricted for capital, because of capital shortage, I think it is a most short-sighted attitude. One might as well have said: "We will prevent steam engines coming into this country because they cost so much" or, "We will prevent radio development beginning in this country because it costs so much."

The Minister for Finance, in all too-dulcet terms, has been pleading for more efficiency in industry and more efficiency in distribution. He has been pleading for greater output. Greater output and greater efficiency all need the enlivening of the mind; they all need quicker methods of thought; they all need the application of the maximum number of new ideas in connection with every kind of electrical and other techniques. It seems to us that it is an entirely backwoods conception to restrain development in regard to a modern communication device. The Government must surely be aware that if they mean anything but mere platitudes in talking about a reduction of costs, and increases in efficiency, they mean a multitude, thousands upon thousands, of individual decisions to increase efficiency and to reduce costs; individual decisions affecting the distribution of commodities throughout the country; individual decisions reducing the costs of making decisions, of sending messages, of getting machinery repaired, of getting goods distributed and of getting goods manufactured.

An increase in efficiency means, as I have said, a change in mentality, one for which the Government itself should give a lead because the telephone service is one of many forms of communication which are absolutely essential attributes of the quickening which we need in this country. The Minister so far, because of the backlog of telephone work done since the war, has never yet been compelled to advertise the telephone service, and so he has not been concerned to collect all the facts, which could be to his hand, to show the reduction in costs effected when a person takes a telephone, that despite whatever rental is paid and in spite of the cost, for a huge modern community the telephone becomes an absolutely essential economy in costs, an essential attribute of increased production and of more economic distribution.

Even if you take into account purely the whole question of repairs, or servicing or delivery of goods, the telephone enters more and more into the picture. Quite apart from that, there is another factor to be considered. The telephone service is helping to pay for the postal and telegraph services and as far as I can gather during the last five years the postal and telegraph service lost over £1,500,000 between 1953 and 1956 and the telephone service contributed £480,000 to offset that loss. In every year the telephone service produces a profit. In every year the taxpayer, as a result, is saved some of the burden of taxation involved in making the three services, as a whole, pay. I have always fought for the principle that the whole of the three services should be self-supporting. The fact that they lose money is one example of the appalling atmosphere of sentimentalism in which we have lived in this country since the war.

The Minister, I know, wants to make the three services pay as best he can and has imposed some very heavy charges on the community in order to do so. These charges, while heavy, will in fact relieve the taxpayers by the amount the deficit decreases, and everybody has to be aware of the fact that they do pay taxes, whatever the fraction is, in income-tax in order to discharge whatever the remaining net deficit may be at the end of the year's operation. But if the telephone service is to make more profits there can be no real progress so far as capital development is concerned.

Capital development in a case of crisis of this kind might well be applied in the fullest possible measure to get the greatest possible increase in revenue for the telegraph service. It also might be applied to assist production and distribution in so far as they need any priority in the supplying of trunk circuits or telephone instruments, but as the Minister knows, the telephone service is exactly like smoking cigarettes because the cigarette habit is a snowballing process, and to arrest it midway seems to be very unwise and likely to defeat the very desire of the Minister to avoid having to impose higher taxation by restricting the process of development and so quite possibly making the telephone service lop-sided in one direction or another, so that normal increase in revenues will not take place.

The Government have apparently decided to attack a modern communication principle in their difficulty in finding capital for development. They have also decided, apparently, to take the risk of losing the normal growth of profit on the telephone service which assists them in balancing their budget. It seems to me to be a very short-sighted policy and I note from the Minister's speech that he himself can have no very great enthusiasm for it. He merely spoke in very polite tones of his regret that enough capital had not been made available. I am well aware of the Minister's difficulties and of the fact that he is but one of several persons in the Cabinet. I am well aware that he has to fight a difficult corner, but I feel, speaking from the point of view of the development of a country as a whole, we surely ought not to impede modern communication of this kind.

The Minister may say that money has to be found for more essential things, but surely the Government should at least consider at the present time that, unless they encourage a greater efficiency, unless they encourage greater production, unless they encourage the use of modern devices, they will not be able to get the sort of private productivity operating here which will enable them to find the capital for things like housing and all the other social services. In other words, the Minister may quite easily be depriving the country of various forms of improvement in the future because of an attitude towards a modern technique which seems to me to be over-restrictive and overconservative.

I am well aware that there may be an absolute capital difficulty; there may be a position in which, at least for the moment, it would be impossible for the Minister to plead for the maximum amount of capital he requires. I do not want to pretend that there are not these capital difficulties. I do not want to over-exaggerate what I am saying by implying that the Minister now, in this very year, could possibly secure the full amount of capital which he would like to have spent in the next 12 months. But, when I see a Capital Bill before the House in which he mentions a total sum of £6,000,000 and clearly implies that the total sum is less than he would like to have spent, I cannot help feeling that that is too pessimistic an attitude. Even if for the present year capital may have to be restricted, surely we are not going to live in an atmosphere of capital-deficiency gloom for four years. Surely, at least, the Minister would have been permitted by the Government to have said: "Well, this year we cannot say how much we will find for capital, but here is a Bill and here is a sum, not £6,000,000, but £8,000,000 and we hope that, either in the second, or third or fourth year, the great volume of capital will come for this new form of communication technique."

Surely the Government might have been able to say that with all the more force when they know that this country has one of the lowest telephone densities in Europe. I do not know what the figures are now and I am afraid that among the many questions I asked the Minister I did not ask him this particular one. The figure at the end of the last Government's term of office was that there were roughly four telephones to every 100 people. That was the level in Italy and the next figure, for France, was something like six and then you went straight away up to the 16, 20 and 25 mark in the case of all the northern European countries.

Telephone consciousness is low in this country because we have not had that drive towards greater productivity, greater modernisation, greater use of scientific methods which should have been the case ever since the last war ended and, to my mind, to restrict the growth of telephone consciousness is to restrict the growth of the kind of mentality we need if we are to get over our economic difficulties.

As I have said, it is no use my taking an exaggerated point of view. I am aware of the Minister's immediate difficulties, but what we do not like is the fact that there is implied in his speech a continuing restriction. If the Minister can tell us that the £6,000,000 could possibly be increased by another Capital Bill in the second, third or fourth year, if the Minister can tell us that he has not been told of any essential restriction in capital in the year 1957, that would be good news to us, because, according to his own statement, a small amount of money has been held over from the previous capital sum made available under the last Telephone Bill and it may be that he could have some restriction this year and that next year he could then proceed again at full blast. So I hope the Minister in his reply will tell us whether it is possible that the decision to restrict capital could be modified at any time by the present Government and that he would then be in a position to marshal his capital and go ahead and to allow the telephone service to snowball at the pace at which all such devices should snowball in the modern world and in the modern community.

Having made some general observations, I should like to say a few more things in regard to the details of telephone development. I asked the Minister some questions, which I deliberately intended to be helpful to him, in connection with postal, telegraph and telephone development, so that the public could be enlightened as to the difficulties faced by the telephone service in helping to keep the other two services going. One of the questions I asked was concerned with the total staff. I think that, in connection with this Telephone Capital Bill, we should note that the staffs of the postal and telegraph services have increased by only some 3,000 people since 1947, although there has been a very big increase in the number of postal items sent through the post of 33? per cent. for the same period, and that the total engineering staff of the telephone service has increased by 150 persons since 1954 and had increased by 291 from 1951 to 1954.

The Minister speaks of the difficulty of getting staff. I was well aware of that difficulty in my time and we were doing our utmost to try to obtain better staff, first of all, by improving the arrangements for technical teaching and by making arrangements for taking students from the various technical schools and enabling them to go through a further course of training when they had joined the telephone service, and next we were doing our best to encourage the universities to improve their electronic equipment and to do everything they could to increase the number of students who would come forward to take the B.E. degree.

Apparently, the problem is still with the Minister. I do not like to see that small increase of staff in the engineering service. I am glad to see the small increase of staff in what might be called the administrative carrying service, because it indicates efficiency. In connection with the engineering service, that very small increase of staff indicates that apparently the Minister has not yet been able to solve the problem of finding staff and I wonder whether he will not have to do more in the direction of breaking away from the stranglehold of Civil Service control of salary levels; I wonder whether he has been doing his utmost in that respect. I should like to ask him, now that he is going to find more capital, even though it is a restricted amount, whether he sees any solution to the problem and why it should be that, nine years after the war, although the telephone service makes a profit, although the telephone service is snowballing, something in the way of staff conditions enables electronic industries in England and in this country to take staff from the Department of Posts and Telegraphs, and also prevents staff going to the Department of Posts and Telegraphs, and that even applies in the case of advertisements that have been inserted in previous years and that possibly are being inserted at the present time inviting persons of other than Irish nationality to become assistant electrical engineers. Would the Minister tell us what his current difficulties are and whether there is a solution to the problem?

It seems a great pity that we have this annual output of engineers from University College Dublin, and that there are the demands of Bord na Móna, the E.S.B. and the telephone service and that the telephone service lacks from year to year at least from 12 to 15 new graduate engineers and also, as far as I can gather, lacks technical staff from the technical college level. I should like to ask the Minister what hope he has of spending economically and efficiently even the money he is proposing to spend, unless he can get over that difficulty which, I admit, is a very serious one.

The Minister referred to the fact that other countries had arrears in respect of subscribers waiting for service. In a country that has, as I have said, a comparatively low telephone consciousness as compared with Great Britain, I should like to feel that that should be no excuse for delay in joining subscribers' lines. As the Minister is aware, in the two years previous to his taking office, there was a very rapid overtake. He has been overtaking the position, I notice from figures which he supplied in a reply to a parliamentary question but, nevertheless, at the end of it all, there are still some, I think, 4,000 subscribers waiting for service, including quite a number whose applications have been outstanding for over two years. I do not think that capital should be restricted for any reasons in the direction of not encouraging subscribers to join the telephone service. People do become discouraged at having to wait so long and it is not an incentive to people to take the telephone service if they have to wait. Having regard to all the new housing that is being done, it is extremely essential that we catch up on these arrears if we are to spend this capital.

I should also like to ask the Minister what the position is with regard to areas where there are now no appreciable delays in service but where it would appear that the number of calls made has not yet sufficiently increased to cover the huge increase in capital and maintenance costs. I noticed that the interest on capital and the annual maintenance costs increased from 1947 to 1955 by 65 per cent. I want to ask the Minister whether he is satisfied that the revenue from the telephone service has grown proportionately and is likely to grow proportionately so that that element of maintenance and capital will not become an ever-increasing burden upon the service.

Further I should like to ask the Minister whether he is satisfied that, without advertising or any other means of publicity, the telephone service in the areas where there are no delays is being used to the maximum or whether the existing subscribers are being charged too much under the new charges. Is he satisfied that the whole of the complexes of telephone charges in relation to annual capital charges for maintenance are now properly related to each other so that the service can progress in an ever more profitable way? This is a highly technical matter and it is very difficult to go into it completely but from the questions I asked the Minister I rather gathered the impression that capital and maintenance charges were growing pretty quickly and that whatever is done with the capital now being voted by the Dáil, a very big effort should be made to increase telephone call revenue so as to catch up. No doubt the Minister will be able to tell us something about that.

Now that the Minister is in difficulties in regard to securing capital, I think it is a good thing to mention new ideas in the House. We have a terrific lack of productivity since 1947. Recently we had a statement made by an eminent economist that the total increase of production per head since 1949 is only 7 per cent. and in the rest of Europe it is 24 per cent.

We can afford to speculate a bit. We can afford to talk about things which we might have whispered only a few years ago. I wonder whether it might not be a good thing to have a more independent basis even if the officers of the telephone service had to hire or use the services of the postal and telegraph staff for many purposes. I was beginning to wonder whether we might not benefit more from some further freedom and whether the service might not be more efficient than at the moment, if there were greater freedom. All these matters should now be examined. We have evidence of torpidity since 1949. I hope the Minister will consider all these matters while he is spending this money.

As the Minister knows, there was an independent industrial consultant appointed to the engineering service during the period of office of the last Government. The staff showed the same helpful, constructive attitude that the staffs of any company do who believe in efficiency and who are reasonably efficient. It is only the really bad companies who resent the presence of a specialist industrial consultant. I understand that that consultant remained in the telephone service until very recently.

In the first two years of his office many of his proposals were accepted with alacrity by the officers of the Department in the same way as his proposals were accepted by some private companies with whom he worked most successfully before he came to the telephone service. I understand that since then most of his proposals have been accepted and that there have been virtually, with very few exceptions, no difficulties with the staffs of unions.

An Ceann Comhairle

That would be more relevant on the Vote for the Minister's Department.

Mr. Childers

One of the things proposed was that the staffs of the telephone service, even though it is the Civil Service, should be given incentive bonuses. If the staffs of private telephone manufacturing companies and private cabling companies can earn more money on a basis agreed to by their trade unions, why should not the telephone service be able to do so? The Minister will be able to make this capital go further if he is able to persuade the Minister for Finance, who longs to reduce the numbers of persons required for the Civil Service, that in this case the number should be increased.

The Minister for Finance says he is full of ideas about improving the efficiency of the Civil Service. I hope the Minister for Posts and Telegraphs will accept the scheme in which the Civil Service will get away from the tradition of having no incentive bonuses for anything. In this way we would get more work done with the full consent of the unions. The incentive bonus scheme is absolutely essential.

The Minister speaks of a restriction in the number of automatic exchanges which will now replace the old type of manual exchange. I would ask the Minister whether that is one of the restrictions that will be imposed on him as a result of the difficulties of getting capital. He ought to be a little bit more explicit about that. Before the Minister assumed his position, there had been an examination of that whole matter, even without there being any unreasonable restriction of capital.

Take an automatic exchange such as Dundalk, for example, and examine the increase in the number of new local subscribers as a result of their being able to dial one another. Take the number of new local calls made and then make a comparison with a town like Drogheda, where the exchange has not been improved. When the service improved the total number of new local subscriber costs and trunk costs seemed to be increasing at the same time. In Dundalk, where a large sum of money was spent in supplying an automatic exchange, the annual capital figure required to amortise the cost of the exchange and the increase in maintenance involved, if there was any, was a greater sum than any economy made. Accordingly, it was decided that some of these exchanges should not be built until the whole of a large area could be automatised and until all the outlying satellite exchanges could be joined to one another and to the main exchange. Only when there was a given density would it pay. It might be better to wait and do a much bigger job which would prove more economic in the long run.

The Minister seemed to indicate that one of the economies he is going to make is in relation to the question of going ahead with those kinds of exchanges. I should like to know what is the present view in regard to that matter? I am referring to the difficulties to be faced with by his officers in respect of the larger exchanges, including satellite exchanges worked automatically, and the better method of carrying out the job. I am not speaking of the very big exchanges such as Limerick, Sligo and Galway, where they are good enough, but I am speaking of the exchanges in towns of 1,500 to 4,000 people. There does not seem to be much point in spending a lot of money if, in fact, there are not any savings and so long as the trunk service is good, the exchange is working reasonably efficiently and the conditions for the workers are reasonably satisfactory. As the Minister knows, there have had to be improvements in exchanges for the sake of providing proper conditions for girls, who in some places are working in very dark conditions, and in some places where there have been outbreaks of illness, which were altogether unjustified according to post office standards. I am not speaking of changes that will take place for those reasons but changes where those factors do not operate.

The Minister spoke of the progress that had been made since 1950. I would like to say at this point, as the Minister well knows, that the tremendous jump in telephone development that took place between 1951 and 1953, as compared with the three previous years, gave him a tremendous head start, so to speak, and the increase in work performed by a staff which increased only 16 per cent. during the period—many of the increases were very much larger than that—was extremely startling. The increase in the mileage of trunk circuits provided, for instance, was 376 per cent. between 1951 and 1953; the number of kiosks erected increased by 130 per cent.; the number of automatic exchanges opened increased by 33 per cent., and the number of exchanges extended increased by 19 per cent.

Those increases apply to the whole of the development of the telephone service during that period. I have noticed that the present Minister has not been able to keep up the rate of increase. I dare say that might not have been possible because the rate of increase was very startling, and the corresponding figures for 1953 to 1955 show a decrease in the rate of activity. I do not know what the reason for that is but, as I have said, I hope it is not due to a restriction of capital and I hope above all that it is not due to the fact that the Minister is now finding it even more difficult than I did to get staff.

The pace of the increase has not been the same. I hope that the Minister, who has a most able staff, including a great number of young men, will not allow himself to be ballyragged by his colleagues and that he will put the telephone services, along with agriculture, along with industrial development, along with anything that quickens people's minds and gives them new ideas about industrial methods; I hope he will insist on pushing it, pushing it and pushing it again or we will never get out of the mess we are in this country.

Mr. McQuillan

I am sure that all Deputies will agree to give the Minister the necessary authority in connection with the Bill before the House. I find myself in somewhat the same position as Deputy Childers in that I am disappointed and very sorry at the attempt that I see here to reduce our capital development programme in general. There was a great deal of discussion in this House, and there is a great deal of discussion outside it at the moment, in connection with the cost of Government services and Government administration. I think all sides of this House are unanimous that the cost of Government should be reduced, but it is a different thing when we find that the Government and the Cabinet interpret that feeling in the sense that they feel it is wise and desirable to apply the axe to the capital development programme.

There have been various rumours floating about in recent weeks that the Cabinet have decided, in view of the tight position with regard to money generally, to cut drastically our capital development programme in many spheres. Here we find the first practical proof that there are some grounds for the truth of that particular rumour. Deputy Childers asked the Minister—very naively, I think— could he say what he would feel he would be able to spend if he were allowed to increase the actual amount under this Bill. I have no doubt but that the Minister could spend, and spend efficiently and well, another £2,500,000 or possibly £3,000,000 under this particular heading of telephone capital development.

If we take that figure of £2,500,000 or £3,000,000, we find it corresponds very closely with the suggestion abroad that it is the Government's intention to reduce the capital development programme by approximately 30 per cent. for the coming year. Let us take this fact into consideration. The telephone service is, to my mind and to my knowledge, one of the few paying services in this State. It pays its way and it makes a profit. The general criticism of Government services is that they are not profit-making and that they have to be subsidised. We find here in regard to one service that is able to pay its way and make a profit that the Government have decided to slow up its development programme. To my mind that is anything but a sensible approach for the Minister or for the Government to take.

The idea has been advanced here, and explained by Deputy Childers, that the demand in recent years for telephone services has grown and has snowballed. People are beginning to realise that, in this age of competition and speed, it is essential that communications be of the most efficient nature. If we are to develop economically and if we are to expand agriculture in order to exist, we must have two things run efficiently: transport and communications. Our transport system is in a bad way at the moment. Are we now to bring the communications system to the same level as the transport system?

The demand is there. The demand for telephone services is growing daily in the rural areas, and it is in the rural areas that the Minister should meet the demand, or he should at least give priority to those areas. I had many disputes with his predecessor on this question of priority with regard to telephone installations, and I am still not convinced that a raw deal was not given to the rural areas in connection with this very essential service. As far as I can see, from the figures given by the Minister here, the cities, and in particular Dublin City, have got the biggest share and will get the biggest share in the future in regard to the money spent. The economic process, when applied to the telephone service, does not work out mathematically. We are told that the more people who take such services as telephones and rural electrification, the less danger there would be of an increase in the cost of these services. As far as I can see, in recent years, in spite of the fact that you have a tremendous demand for more telephones, the cost of the service seems to go up hand in hand with that demand.

Surely there is something wrong there. It is most disheartening. Perhaps, in justification, the Minister will say that at least we are able to keep our heads above water in this Department. He may say the service is paying for itself. If that is the argument he will offer, I suggest he should go ahead full steam with the programme to ensure that by getting more people to avail of the service the cost will come down. The demand is there. By meeting that demand, we would be increasing the profit to the State as a whole and, at the same time, giving more efficient service throughout the country.

The day of doing business by telegram and letter is gone. The quickest and most efficient method is the telephone, and that being the case, there should be no slowing down in that development. It is not a question of having to tell the House that in ten or 15 years the service will pay for itself, because the service is paying for itself at the moment. Why disturb that situation? That, mind you, is not the whole picture. The Minister disclosed in the course of his opening remarks that the position would be reached during the year where a deterioration was likely to occur in some areas. I want the Minister to tell us now the areas involved; I want him to let us know where those areas are. Is Dublin the main area where this deterioration will occur or will it apply to rural areas which are already getting the knife?

It is bad enough to have people waiting for long periods to make trunk calls without having to wait still longer. This morning I tried to make a trunk call. The distance was 12 miles. I had to wait 25 minutes. I was lucky to get the call through even then.

Mr. Keyes

That end of it could not disimprove.

Mr. McQuillan

That certainly could not get any worse.

Mr. Keyes

It will not be any worse than that.

Mr. McQuillan

If that is the attitude the Minister is going to take, there is not likely to be any improvement.

Mr. O'Hara

The Deputy could have taken his bike.

Mr. McQuillan

I would have made my call as quickly had I gone off in my car but I was in such a temper that I might have killed somebody on the road. The Minister said there was an increase of 46 per cent. in the turnover with regard to trunk calls. That is a tremendous figure and surely we should back the Minister and ensure that an increase of that nature is kept up. As far as I am concerned, I am only too willing to give the Minister my vocal assistance in the House and outside of it to ensure that the axe is not wielded on a service that is paying its way.

The Minister says he believes there will be no unemployment as a result of this reduction. My reply to that is there is bound to be. There will be unemployment wherever these capital services are reduced. We know that a reduction of employment in any service has a snowballing effect. We want to ensure that there is no disemployment in this service. If you knocked ten people out of work in one line of business it is very hard to check what are the final figures that will be disemployed as a result of those ten dismissals.

There is just one other point I want to make and it is in reference to the salaries of staff. There is still difficulty in regard to the recruitment of technical and engineering staff. As far as I am concerned, the technicians and engineers in the Department are excellent. The danger I see is that the Post Office service will not be able to hold on to these men, apart altogether from the question of getting new men into the service. We must be realistic on this question. We have to compete with firms outside. We must compete with attractive salaries and conditions across the water and if we wish genuinely to compete with those conditions and salaries offered outside there is only one way to do so and that is to raise the emoluments and salaries of those whom we wish to attract. There will not be any difficulty whatever in getting suitable material for the technical posts open if proper salaries are paid to these people.

With regard to the administrative end of the question, one of the best means of getting efficient service in the telephone system is to pay those we already have a living wage. I want to refer in particular to sub-postmasters and sub-postmistresses in rural areas, and hope the Minister will be able to see his way to improving the lot of those administrative officers. They give long and weary hours in the service of the State and are paid only scandalous rates of pay. If their conditions were improved, the efficiency of that service would improve a hundredfold.

Mr. Rooney

I think the criticism of the reduced amount asked for in this Bill is unnecessary. Let us look into the past history of this programme of the provision of telephones and we will find that in the 30 years from 1922 to 1952 only £16,000,000 was provided. In the five years from 1951 to the present time, £8,000,000 was provided. Accordingly, we can see that since 1948, and since the war, the Department of Posts and Telegraphs have done a very big job in the provision of a telephone network all over the country at considerable expense.

The figure of £8,000,000 was provided on the last occasion on which the Minister for Posts and Telegraphs introduced a Telephone Capital Bill. He brought in that Bill after there had been considerable pressure and at a time when there was a very long waiting list and backlog, when the Minister was trying to deal with people who had been many years on a waiting list for telephones. There is still a long waiting list, but the people are not so long waiting. When that Bill was introduced previously there was very great pressure and £8,000,000 had to be provided. That appeared to be a figure that would fairly meet the pressure brought to bear by the people who had been so long waiting.

The pressure came from people who not alone required the service of telephones but who also required exchanges through which those telephones could be provided. The figure of £8,000,000 included a sum for the provision of exchanges, so that now an increased number of subscribers can be catered for. The £6,000,000 provided in this Bill is for a period of four years. That will ensure that £1,500,000 will be spent per annum in the extension of the telephone service. This will involve the provision of still more exchanges. The point I want to make is that £1,250,000 has already been spent on the provision of exchanges which need not be provided again and through which a very large number of private subscribers can get the service.

This Bill intends to provide a further large number of exchanges; in fact, it proposes to provide nearly the same number of exchanges as have already been provided, according to the amount of money allocated. That will mean that, through those exchanges, we can then get a very large number of subscribers. The main thing is the provision of these exchanges through which the services can be channelled. I am satisfied, in the circumstances, that £6,000,000 for the coming four years will be equal to the £8,000,000 provided in the previous four years because we now have exchanges —through the expenditure of the previous £8,000,000—which were not there previously and for which much of the £6,000,000 will not be required.

I am glad to see from the Minister's statement the considerable amount of progress which has taken place, especially since the telephone service is providing substantial revenue. Of course the question of the repayment of the capital arises. Deputy McQuillan raised the question of a short trunk call which he wanted to make. I should like to confirm that these short trunk calls are very unsatisfactory. It is much easier to get calls to Cork, Limerick or Belfast than it is to get a call through to a point 20 miles outside the city. I particularly wish to speak about Rush, Lusk and Skerries; Balbriggan, too, is limited in the matter of the intake of calls. These places are a disgrace because people who are paying a substantial telephone rental in these areas are not getting the service to which they are entitled.

A subscriber from Skerries will come into Dublin and will ask for a telephone number in Skerries, which is his home. He will be told that there is no reply from his number or that there is a delay of perhaps half an hour. He may be told that his telephone appears to be out of order. He may have used that telephone before he came into Dublin, but as soon as he comes into Dublin and tries to get into contact with his own home, this is the kind of reply he gets. He is able to say that his telephone was working that morning and that there is somebody at the other end ready to answer it. I doubt if there is any district in the whole of Ireland, having regard to the proportion of subscribers, from which more complaints come in than come from Skerries, Rush and Lusk. I am glad that attempts are being made to make a dial system available for these three places, similar to the system in Swords, Malahide, Portmarnock and other places nearer the city.

I find it difficult to understand why telephone calls from Dublin to Cork and Limerick can be obtained almost immediately while there is indefinite and very long delay in the case of places 20 or 30 miles from the city. I hope that this proposal will ensure that subscribers in those areas will get satisfaction. I think that subscribers who are greater distances away are able to get better service. I know of many places where private subscribers have increased in numbers very rapidly and where the local exchanges are incapable of dealing with the volume of calls. What is really needed is an extra line or two, an extra trunk line which will ensure that the large number of calls can be catered for.

I feel that the remarks of Deputy Childers, so far as the smaller amount of capital is concerned, are not justified. I feel that the £6,000,000 asked for in this Bill will give as much, to a greater number of people as the previous £8,000,000, or even more, service. That amount was spent in laying, if you like, the foundations in the matter of providing exchanges which previously did not exist, so that a very large number of subscribers could be catered for. This Bill is going to spend almost the same amount in the provision of further exchanges, and, like the rolling snowball, the extra amount of money which is to be spent on these exchanges will result in a very much greater number of subscribers being able to avail of the services and so become a source of very valuable revenue to the Post Office.

I feel that there is no reason for the House to worry about the fact that the amount of £6,000,000 asked for on this occasion does not equal the amount previously asked for. We can remember the conditions which existed before the previous £8,000,000 was asked for and the very large number of people who wanted service and who now have it. A large number still want service and will avail of it when these facilities are provided.

I should like to say that here in Dublin City there is an unsatisfactory position for a great number of subscribers because, when they want to get a telephone, they are told that the cable is not capable of taking extra subscribers and that they will have to wait until a cable is provided. It seems from the engineering point of view, in any case, that especially in the outer districts of Dublin City, a very vigorous programme of replacing cables or of providing a better cable intake is necessary immediately. It is no consolation for people in these outer portions of the city to be told that they cannot get a telephone until the new cable is laid. Probably the cable-laying in various parts of the city may take a very long time to complete, but if efforts were made to provide the cables very quickly in those extended areas, where there are large populations, the expenditure would be justified by the very large numbers of subscribers who would immediately come in.

I want to compare that problem with the problem of bringing telephone services long distances down the country from local exchanges. We know that bringing telephone wires and poles for long distances out through the country and connecting them up with local exchanges involves a considerable amount of expense and the revenue from that expenditure is not nearly so great as the revenue that would become available if we pursued as quickly and as vigorously as possible a programme of laying cables in the outer areas of Dublin City where there is a dense population. Through such a programme, a large number of subscribers could get a service within a reasonable time, instead of being told that they must wait indefinitely until a cable is laid in the area, which would enable subscribers to get that service.

Mr. O'Hara

The last speaker, Deputy Rooney, finished on a very selfish note——

Mr. McQuillan

And gave the game away.

Mr. O'Hara

——when he asked that all the people in Dublin who desire to have telephones installed be connected in a hurry, with no regard for the rural dwellers. I do not contribute to that point of view. As Deputy McQuillan put it, the rural areas are most in need of a telephone service. If the citizens of Dublin have no telephones in their own houses, almost invariably they have a telephone next door or a few doors away or the public telephone kiosk is very convenient. While I do not begrudge them the benefits of an efficient telephone service, I feel the rural areas should get prior consideration. I am sure also that the Minister will not be swayed by what Deputy Rooney has said in that regard and that, being a rural Deputy himself, he fully appreciates the difficulties of people living in a rural area.

We have undoubtedly made progress, if rather slowly, for some years past in the matter of installing telephones both in the rural areas and in the city. There are many telephone installations in the country which have brought great benefits to the rural community. There is much leeway to be made up and you still find in some rural areas that people are eight, ten or more miles away from a telephone. These matters should be looked into as early as possible.

An increased amount of money should, if possible, be made available for the telephone service. The telephone is being used more extensively to-day than every before. So far as business people are concerned, it is of the greatest importance that they should have telephones installed. In disposing of goods and transacting business quickly, where money may be made or lost, it is absolutely necessary that the installation of telephones be continued with the greatest possible speed.

It is my experience, having had a telephone installed for a long number of years, that we have a great number of breakdowns in this country, particularly in the West of Ireland. Yesterday I tried to phone Swinford which is seven miles away. It took 35 minutes before the call was put through and I was told by the Post Office people it was due to breakdowns. I tried later in the evening and it took something like 25 or 30 minutes. That is a common occurrence in my part of the country and the Post Office service van is regularly on the road trying to keep lines and telephones in working order.

Whether these breakdowns occur in the city I do not know, but I believe it is due to the policy pursued by the Department of Posts and Telegraphs for a long number of years, of purchasing secondhand materials from Great Britain and elsewhere, instead of buying or manufacturing completely new instruments and materials. We all appreciate that if we buy a secondhand motor car it is not as dependable as a new car. We cannot be always sure when we go out in the morning whether it will start or not and it is in the garage very often for repairs. It is bad economy in the long run to buy secondhand telephonic equipment from foreign countries for installation here. I believe it is the main reason why we, in the West of Ireland particularly, have that disadvantage of frequent breakdowns. A breakdown can be very serious at times. A telephone might be required to summon a priest, a doctor or an ambulance. If it is out of order it can have very serious consequences, especially in the rural areas.

It also seems to be the practice of the Department of Posts and Telegraphs to send that type of scrap to the country. I have noticed many times in Dublin City more modern instruments installed. They look newer and in better condition. I understand that the department for servicing such instruments is centred in Dublin. You would think, therefore, that they would keep the instruments that are in poor condition convenient to the centre where repairs can be carried out expeditiously rather than send them to the country. That would avoid the necessity of transporting such equipment for repair from the rural areas to Dublin, which causes great delay.

If the Minister's Department is pursuing this policy of buying secondhand material for the country, I would ask the Minister to discontinue it as early as possible. I fully appreciate that the war was a serious handicap to telephone installation work generally. I also appreciate the point stressed by Deputy Childers, the difficulty of providing properly trained staffs. That was a big problem during the war and is still a big problem for the reason that outside this country, due to war conditions, our people who took up telephone work were able to command higher rates of pay and gain more experience than at home. It was, therefore, quite difficult to attract people into the service at home and I am afraid that, generally speaking, we have not the best technical staff for that reason. I am quite prepared to concede that we have some very competent people employed but in some instances I am afraid we have been obliged to make do, to take people into the service who have not the technical knowledge and the technical knowhow which they have in other countries. Our best people have emigrated and have gone into the telephone service in other countries.

I should like to see more kiosks installed on country roads to form a connecting link with nearby towns. It is regrettable that there should be so many accidents on our roads, accidents in which lives are often lost. Sometimes those involved in such accidents have to travel seven or eight miles before they reach a telephone. It would be a paying proposition for the Department to install more kiosks between towns to afford motorists and the rural community in general a better means of telephonic communication for the purpose of, perhaps, sending for doctors or ambulances should accidents occur. Indeed, there is no reason why a better telephone service should not be provided for the people who live in the country.

Some speakers have referred to the badly paid staffs, and to the fact that sub-postmasters are not receiving enough remuneration. We all know that, when a sub-post office becomes vacant, there are many applicants.

Mr. Cunningham

Not now.

Mr. O'Hara

The reason there are so many applicants is that a sub-post office tends to increase business in a business premises. There is quite a lot of talk from time to time about such appointments, I admit. In connection with the young girls and boys who are employed on the telephone service in the rural areas, I have been told by some of them that they receive as little as £1 or 30/- per week from their employers. Having regard to the present cost of living and the standards these people are expected to maintain, that is a scandalous state of affairs.

Mr. Childers

On a point or order, I did not know we would be allowed to discuss the annual expenses of the entire Postal Department, including sub-postmasters, in which are included postal, telegraph and telephone facilities. Had I known that, we could have had a thorough departmental debate.

An Leas-Cheann Comhairle

I understand the Deputy is discussing the rates of pay of staffs working in exchanges.

Mr. Childers

He was discussing sub-postmasters.

Mr. O'Hara

I was discussing the rates of pay of those employed on the telephone service in rural areas. I was pointing out that some of these receive as little as £1 and 30/- per week. I understand they are paid by the sub-postmasters and sub-postmistresses. That is the point I was making. Deputy Childers may have misinterpreted me.

Mr. Childers

I quite agree with the Deputy, but we can all discuss these things now that the debate has been widened.

An Leas-Cheann Comhairle

I do not think the debate has been widened. The Deputy is in order in discussing staffs working in the various exchanges. The Bill concerns itself with exchanges and those employed in them.

Mr. O'Hara

With all due respect to Deputy Childers, he addressed himself to that question, too. Certainly Deputy McQuillan dealt with it. He referred to remuneration and, in particular, he referred to sub-postmasters and sub-postmistresses. In no other type of employment to-day could one get people to work for such low wages. It is wrong that they should be expected to work for such low wages. It is more than wrong when one remembers that in these rural exchanges there is a round-the-clock service and some of these young boys and girls are expected to get up any hour of the night and answer telephone calls. If they refuse, they will be dismissed.

That situation definitely exists. I have had occasion to refer to it before. It still continues. It is certainly wrong and it is grossly unfair. These boys and girls should have the normal eight-hour day. Their work is responsible work. Successive Governments have failed to do anything to remedy that position. These people are public servants. They are expected to be in good humour, no matter who is out of humour or in humour. Something should be done for them, and I am asking the Minister now to take the necessary steps to ensure that they will be paid a proper wage as soon as possible and given proper working hours. I would not be in order in dealing with the question of living conditions.

An Leas-Cheann Comhairle

That is a matter for discussion on the Estimate.

Mr. O'Hara

I appreciate that. If the Minister does nothing more than ensure that these people are given proper wages and proper hours, it will be something which will stand to his credit for many a long year. I think it would be a worthwhile step on his part.

I understand there are approximately 4,000 subscribers on the waiting list. It will take some time to get round to providing telephones for all these people. In view of the fact that the telephone service is a paying service, the Department is losing by its failure to connect up these 4,000 subscribers. Some of these have been waiting for a year; some have been waiting for two years. I appeal to the Minister to connect up these people as soon as possible, particularly the applicants in rural areas. Two years is a long time to wait and it may well happen, as Deputy Childers said, that they will get tired waiting, with consequential loss to the Department of Posts and Telegraphs.

Mr. Cunningham

One of the greatest dangers I see is that telephones will be priced out of popular demand. A number of speakers have adverted to the fact that the telephone service pays its way. Yet, we have the position that on 1st July we had very steep increases in the cost of telephone calls. If the telephone service is paying its way, why is it necessary to have these steep increases? Is the telephone service to be used to bolster up some other form of Post Office activity? If that is not so, why was it necessary to increase telephone charges?

At the present rate, at the rate operating to-day, the Minister will find that the demand for telephones will be substantially reduced. If he were to take a census of those who are waiting to become subscribers, I think he would probably find a very substantial drop in that number. That should not happen in a country where, as Deputy Childers has stated, we have only four telephones per 100 of the population. There is no guarantee that this is the last increase. It seems to me to be on a par with what happened in the case of rural electrification, when we had the E.S.B. getting money from the public by way of borrowing and now we have an application for a 10 per cent. increase. I think this is on a par with that.

While, admittedly, it is necessary to expand this service in order to serve the business community and especially to serve the farming community, we will not do so if we, year after year, do what we have been doing this year, and if we are to have such increases in years to come. The position will then be that the telephone will become a luxury and only those who find it absolutely necessary will have recourse to the use of it.

Seeing that £6,000,000 will be forthcoming some time before the end of the next four years, I would like to appeal to the Minister to consider the rural areas. The Minister may have noticed that, in the Six Counties, at strategic points, such as at cross-roads, they have telephone kiosks for the express purpose of serving the farming community. In this country, no matter how hopeful we are, the time when every farmer will have a telephone is still far distant. For that reason we must try to meet him in some way. I think we should follow the idea adopted in the Six Counties and install public kiosks for the benefit of the farmers in all the rural districts.

I do not think that the present method of selecting places for the installation of public telephone kiosks is the best. I understand that, in order to get a telephone kiosk, a town must have a population of 3,500 people. A town of such a population may have an industry, or a number of industries, which are important but I think that the farming industry in a rural area is still more important. It should be the duty of the Department and the Minister to see that, in the interests of the production drive and of rural social life, there should be no lack of telephone facilities.

We have not yet reached the stage in which every sub-post office has got a telephone. Very many sub-post offices have not got them. I would say that it should be the first objective of the Minister to install a telephone for the use of the public, and especially for the use of the farming community, in every sub-post office in the country. When that is done, kiosks should be erected at strategic points to serve districts which would not be served by the local sub-post office.

In dealing with the sub-post office question, I would appeal to the Minister, as other Deputies have done, for better financial treatment for those in charge of them. I had a case brought to my mind recently in which an office had been switched over from nine o'clock closing, or it might have been seven o'clock closing, to round-the-clock operation, and the extra remuneration which was paid to the local postmaster was 1/5 or 1/7 per day, or it might be per week. That is the sort of thing that is operating in rural sub-post offices—for very much extra work, for being on call for 24 hours per day, a few pence are thrown to the sub-postmaster for undertaking the work.

I have nothing further to say on this Bill except to warn the Minister that, whereas Deputy Childers thought that £6,000,000 would not be enough to do the work which is envisaged, I think that if the charges for telephones and telephone calls increase any further, they will be too high.

Mr. Keyes

The main brunt of the criticism of this Bill has been with regard to the amount sought. Deputy Childers asked me a fairly straight question as to what I, as Minister, would put forward if I were a free agent. I will give him a straight answer to that question. I would probably have put down £8,000,000, as the Deputy himself put down in 1951, as the amount which would be required for five years. I would have gone on somewhat similar lines to those Deputy Childers followed and I would have invested funds in the telephone service as he did then when telephones were in great demand.

However, we have to have regard to the circumstances in which we find ourselves to-day. There is a national shortage of money for capital development. I have been Minister for other Departments in which there was need for capital expenditure and, while I might demand the full requirements of the telephone service, I would not like to forget that other forms of national development should get their share of the money available. I think it would be selfish if we were to go all out 100 per cent. for our needs and requirements to the exclusion of somebody else.

While we are stepping down our projected programme somewhat, there will not be any closing down or slackness in the work. We will be working at our full capacity and, if times improve, it will be possible to spend the money much more quickly. It has been suggested that I have been too gloomy in providing for four years of depression. I am hoping that the situation will be much better than that, but I thought it wise and prudent to take the long view and not to anticipate any stepping-up of the programme before that time. If our circumstances improve, there is nothing to prevent this money being spent in a shorter period than the four years I have mentioned. We can go right ahead and spend faster but in the beginning it is more prudent, having regard to the shortage of capital, to take a long view. We are not tied to spending it in the four-year period. If things improve we can increase the amount first undertaken. In my opinion, we shall not have any worthwhile disemployment as a result of this measure although there may be some disemployment of casuals. We should have been employing extra men if we had gone on with our full programme but, with this restricted programme, there is no question of any disemployment except of casuals. However, the extra employment we should have liked to give will have to be postponed and some of the bigger schemes we had in mind will have to be deferred.

By and large, the service will be continued and we will maintain the standard of service which has already been given. There is no conflict between urban and rural areas and there will be no such conflict so far as the Department is concerned. Deputy Rooney mentioned that long lines of communication are uneconomic and that we should concentrate on cabling. Both will have to go hand in hand. Cabling in Dublin has nothing to do with rural servicing and we will continue it to the best of our ability, at the same time attending to the cabling in Dublin, more than 50 per cent. of which has been completed. We intend to go on with that work but at the same time we will not neglect the requirements of the rural community.

Deputy Childers asked if anything is being done to increase revenue in areas in which there has been considerable capital expenditure. In view of the restriction of capital expenditure generally, the position is that areas which have any margin of plant over and above current requirements will need that margin in full to meet demand in the next few years. Generally, we do not try to stimulate demand in such areas as we might boost the demand and then be unable to provide the capital to meet it.

I mentioned the employment of technical staff. That difficulty in the recruitment of technical staff arises from the extra demand for persons with the necessary technical qualifications. With recent developments in the electronic field, it has been difficult to get these people. You cannot expect to get men with such qualifications without offering them a proper salary. As a result of conciliation agreements, the salary scales have been satisfactorily adjusted and should attract the men required. I might mention that for some years past non-nationals have not been excluded from these technical posts. Since we got this conciliation machinery going, and acquired an outlook different from the Civil Service outlook, we have been able to recruit people on lines similar to those of outside concerns. We could not hope to attract people with the requisite qualifications if we were not able to compete with outside concerns so far as salaries, and so forth, are concerned.

Nobody can say how long or how short the present capital difficulty will continue. We are hoping it will last only a short time but we are making provision lest it should be prolonged and that is the reason for providing for a period of four years.

Deputy Rooney mentioned the conditions in Rush, Lusk and Skerries. We are installing an automatic telephone exchange to serve the Rush-Lusk area and Skerries is due to be converted to automatic working in the coming year. I hope the difficulties which the Deputy has experienced will be completely wiped out when the new automatic exchanges have been provided. I find it difficult to understand why there should be such delays and I wonder if "no replies" are fairly general.

Deputy Cunningham says the telephones might be priced out of popular demand. I think I answered that point in my opening statement. For many years, the telephone service has, on the whole, been run at a profit but, at the same time, that profit is being almost wiped out because of increased wages and increased costs of materials. All in all, we are not overcharging or asking for anything in excess of what we have to pay. The increases have been reasonable. They were imposed only because we did not want to get into an insolvent position. We have to pay our way. There have been two rounds of increases for the staff, as well as increased costs of materials. These factors forced us to raise the charges which were the minimum required to keep our head above water. I do not think these increases will drive the people from the phones. I have received very few complaints about the increases either from the towns or the country. Of course, there have been some grouses, but, by and large, I do not think they are considered unreasonable.

Deputy Cunningham spoke about consideration for the rural areas. We have put a telephone in every rural post office in Ireland, except two. I should be pleased to hear from the Deputy if the figure is more than two. My information is that there are only two sub-offices without a phone and I think they are located in County Mayo. Therefore, if Deputy Cunningham knows of any other sub-post office where there is not a phone, I shall be glad to hear of it. I think that that was an important step towards encouraging people to use the telephone. Deputy O'Hara mentioned that there are places seven and eight miles from a telephone; they must be very remote and very few.

Mr. O'Hara

Some of the post offices are very far apart.

Mr. Keyes

They are not seven or eight miles apart; generally, they are between three and four miles apart. I should not like to have anybody living seven or eight miles from a telephone. At very considerable expense, we installed a telephone in each and every one of the sub-offices. It is my desire that the people in the rural areas should be enabled to keep in touch with the doctor, the clergyman, and the veterinary surgeon. I will press on with that work. Our first step was to put a telephone into every sub-post office. The establishment of kiosks is different. In rural areas, kiosks are fairly costly to maintain and they are liable to be abused. We erect them only where there is a reasonable demand for them. If we erected them at cross-roads I believe they would be used for purposes other than telephoning. However, we are erecting kiosks in places where they are most needed.

Mr. MacCarthy

One of the rural difficulties is that, in the evening when nearly all transport ends, the post office closes and then there is no means of getting at the phone. If it were a kiosk, of course, it would be available all the time.

Mr. Keyes

With regard to the question raised about the assistants in sub-post offices, they are not really in the employment of the Post Office at all; they are employed by the sub-postmaster. The sub-postmasters themselves have an organisation—I do not know whether there is any organisation for their employees—and I can only assume that they are paid on scales comparable with those paid in the shops in the area.

Mr. O'Hara

Indeed, they are not.

Mr. Keyes

How do they attract assistants at all then? However, it is not a matter over which we have control. We merely control the sub-postmaster who employs his own staff and I should be inclined to think that he would have to meet competition from the shops in the vicinity.

Deputy McQuillan was worried about the possibility of unemployment and I think I have answered that. I do not expect there will be any unemployment created, except among "casuals." We will retain the status quo, although we would have done better if we did not have this restriction. I think I have covered most of the points made, but if I have omitted to reply to any Deputy, I can assure him that all the points raised have been noted for consideration. I thank the House for the reception given to this Bill, and I give the assurance that, even if the amount is restricted to something less than I would have liked myself, there will be no change so far as we are concerned in working for telephone advancement in both rural and urban areas. As regards industrial activities, I can say that they will get the priority essential for their success and the decrease in the amount of capital available will not retard industrial progress.

Question put and agreed to.

Agreed to take remaining stages to-day.