Public service round the world

Earlier this year, our company chairman JOHN SPENCER WILLS was elected chairman of the British Electric Traction Company Ltd., following the death of the former chairman, Harley Drayton. British Electric holds 50 per cent of the ordinary and non-voting ‘A’ ordinary share capital of Rediffusion Television. John Spencer Wills is also chairman and managing director of Rediffusion Ltd., which has a 37½ per cent voting interest in Rediffusion Television. This article consists of extracts from his annual reports for these two parent companies.

 

We have a fine group of world-wide businesses and in the specialised fields in which we work we are in the forefront of technological development. We have made a notable contribution to the improvement of living standards and a significant reduction in the cost of civilised amenities. We have benefited our own country by a sustained export effort and other countries by providing the capital investment and technical expertise to give them benefits they could not otherwise have. Given freedom and encouragement, we have further markets to explore, both at home and abroad.

But how can Britain attack new markets if saving and productive effort are penalised and tax-gathering becomes virtually a major industry? The Government’s use of taxation as an instrument of social policy cannot be counted a success if groups like ours suffer from a tax burden which penalises effort and stultifies initiative. The tax structure must be simplified, for its understanding engages far more of the time of the best brains in British industry than the country can afford.

Recognition that the distribution of broadcast programmes by wire is a social necessity and an economy is increasing.

The areas where reception of BBC 2 is poor or nil are much more extensive than had been expected. This could lead to hitherto unexpected limits on the number of future television programmes that can be broadcast over the air. The use of wire, instead of aerial transmitters, to bring programmes to towns would not only solve the technical problem, but could produce immense savings if Rediffusion’s highly economical techniques were used.

The Rediffusion community service which makes the benefits of wired reception available to whole communities, on a bulk basis and on bulk terms, has made great strides. We have contracts with the Development Corporations of seven of the new towns, and with numerous local authorities, and many more projects are under negotiation.

In the present service areas of the BBC 2 television programme, which uses the new 625-line standard, the proportion of Rediffusion wired television subscribers who can receive it is many times the national average. This is partly due to the more reliable reception we give, and also the fact that most Rediffusion single-standard receivers for reception by wire (unlike the majority of aerial sets) can be converted at small cost for dual standard reception.

Our wired networks are ready for the expected transmission of colour television programmes.

It is a pity that wired systems, with their inherent advantages, are not allowed to compete freely in the open market. The Government cannot prevent the private listener from illegally receiving the ‘pirate’ radio stations, but they can and do enforce the prohibition against relay companies. If we were not subject to this discrimination, our service would be even more popular than it is.

The previous Government decided that when our present licences became terminable at the end of 1967, we would be given new licences for a period of 12 years. We did not think 12 years for the new licence, or even the 15-year term of the present licence, was good enough. We have been ready for a long time to discuss with the Post Office the details of the renewed licence, but the Post Office are not yet ready to discuss them with us. Meanwhile, our entire relay business is theoretically liable to be closed down on two years’ notice – a highly unrealistic situation.

In television set rental and sales we continue to make excellent progress. The increase in the number of our hirers last year was most satisfactory, and considerably higher than the previous year. Considering the number of competitors and the difficulties some expanding rental firms have experienced, and considering too that our policy is to connect any make of set to our wired service, this progress speaks well for the quality of our product and our service.

The installation and maintenance of closed circuit television installations for local education and other purposes is a growing business in which Rediffusion’s experience is exceptionally useful, particularly where an extensive network is required. The development of this side of the business is undertaken by a central company, Rediffusion Industrial Services Limited, jointly with our regional operating companies throughout the country.

Reditune Limited, our background music service company, is improving its results and further progress has been made in operations overseas, which now cover 41 territories.

Redifon Limited has received the Queen’s Award to Industry for the export achievement of its Flight Simulator Division. Sixty-six per cent of the output of the division, and 54 per cent of Redifon’s total output, were exported.

Redifon’s share of the work on the first stage of the research simulator for the Anglo-French Concord [span class=”ed”>[sic] supersonic aircraft has been completed and the simulator is now installed at Sud Aviation at Toulouse. This simulator is being used for early prototype flight testing and for finalising the design of the cockpit layout.

The communications division of Redifon has supplied marine equipment, oil rig installations and land communication equipment to 60 overseas countries, as well as to United Kingdom customers. It has had a major success with its military transmitter-receiver pack-sets.

Redifon-Astrodata Limited, which is 70 per cent owned by Redifon Limited and 30 per cent by Astrodata Incorporated of California, has started to manufacture a new line of analogue-hybrid computers that are used in solving technical problems involving dynamic solution of differential equations, and for on-line process control functions in industry. Redifon-Astrodata now has a contract for a major computer installation for the Shell company at Amsterdam.

Redifon’s two subsidiaries in the plastics field, Rediweld Limited and Glass Fibre Developments Limited, have been operationally combined and have had a better year. Bigorders have been received for equipment for the Laney system of effluent treatment, which is made under licence.

Redifon (Canada) 1964 Limited has acquired the assets of a small Canadian manufacturing unit, Benco Television Associates, near Toronto and this should assist Redifon’s export activities to Canada and the United States.

Most of the television receivers sold and rented by the group are produced in our own factories. Demand has kept our factories fully employed and we have extended our productive capacity. Eight thousand receivers manufactured by us were exported to Hong Kong during the year, a considerable increase upon the previous year. Sets designed for use on Rediffusion wired networks are considerably simpler and much cheaper than comparable sets designed for aerial reception. This is the reason why the Rediffusion community service, already referred to, can provide the benefits of perfect reception of television and sound programmes by wire, where every house in the district is connected to the service, at less cost than direct reception of television only over the air. Our latest 19-inch ‘Dover’ television set was selected by the Council of Industrial Design for display in the Design Centres in London and Glasgow.

Rediffusion International Limited, the London-based company which has launched many of our now autonomous overseas enterprises, is contributing to the British export drive by representing overseas broadcasting stations, within and outside the group, to United Kingdom exporters. The company is the London agent for the sale of advertising air-time on those stations, which it provides with some of their technical services and programmes, and with marketing and sales promotion facilities which have been found very useful indeed by the newer stations. Once again, the most successful of our operations in the Far East has been our unique television service in Hong Kong. This provides two programmes, one in Chinese and one in English to the 57,000 subscribers (estimated audience over 400,000) to our vast wired network. All our wired network operations in Malaysia, except the small new network in Opoh, had a difficult year with the competition from state-owned commercial radio and television continuing, and with high operating costs.

Our company in Ceylon has added modestly to its number of subscribers and to its profitability, which in difficult circumstances is very satisfactory.

The Malta Television Service continues to attract attention as a model of what a small television service should be. It is in competition with the apparently unlimited resources of the Italian Television Service, whose transmissions are quite well received in the islands. Our wired sound broadcasting network in Malta and Gozo continues to hold its own, notwithstanding the competition from our own television service.

Our broadcasting companies in the West Indies and Guyana continue to prosper and to be well regarded, not merely for the good entertainment but also for the large amount of public service broadcasting they provide.

In Barbados, where we originate a sound programme which is broadcast by wire to approximately half the homes in the island, our service continues to hold its subscribers.

Our sound radio broadcasting company in Trinidad and Tobago (Trinidad Broadcasting Company Limited) does well in competition with the television service in which we are one of the two major partners. Our associated television company, the Trinidad and Tobago Television Company Limited with an impressive percentage of programmes produced or filmed locally, has competition from the Government-owned commercial radio and television services, yet it enjoys 75 per cent of the radio audience.

In newly independent Guyana, our broadcasting company, now named Guyana Broadcasting Company Limited, has recovered from the slump caused by the political uncertainty of the past. Guyana has immense potential wealth which is only now being developed, and has a great future.

The Leeward Islands Television Service in Antigua, in which we are partners with the Government, the Bermuda Broadcasting Company, Columbia Broadcasting System of America and local shareholders, is one of the smallest television operations in the world.

Radio Caribbean Limited, our sound radio broadcasting subsidiary in the Windward Islands, in which we are majority shareholders, at present broadcasts mainly in French to the French West Indies, but we are strengthening the station’s English programme.

We have a minority interest in the Bermuda Broadcasting Company Limited. In spite of competition from rival radio and television stations, that company continues to produce satisfactory results in a market limited to a resident population of 50,000 plus a large number of tourists and visitors.

The quality of the sound and television broadcasting services established by Rediffusion in Liberia, on behalf of the Liberian Government has been widely praised. It is recognised as the outstanding small-station broadcasting service in Africa.

Rediffusion Liberia Limited, which provides the management services for the Broadcasting Corporation and also operates a television set rental sale and maintenance service, is now making – in only its third year – a modest profit.

Our company in Nigeria, which relays the sound programmes of the Nigerian Broadcasting Corporation in the Western Region and in the Federal District of Lagos, has suffered from the violent political disturbances affecting these areas. Between mid-October, 1965, and mid-January, 1966, when the Army seized power, there was a total breakdown of law and order. This resulted in widespread disconnections and loss of revenue. We are confident, however, that given a reasonable degree of political stability, future prospects in Nigeria are good.

The Government of South Africa, having completed its FM radio network which provides programmes in several dialects for the Bantu population, has decided not to renew the licence for our wired relay operation in Orlando, near Johannesburg, which expired on June 4 this year, but by arrangement, we are carrying on the operation for another eight months from that date.

In the United States and Canada community antenna television (‘CATV’) has grown immensely in popularity because it has been able to relay distant stations as well as those that are receivable locally. However, new legislation in the United States is likely to restrict the CATV operator’s earning power considerably and Rediffusion’s very economical system of wired distribution deserves attention by those Americans who are still eagerly entering the expanding CATV field.

In Canada we have profitable CATV networks, at Sherbrooke, Quebec and at Jamestown, Ontario, and a profitable music-by-wire franchise for the province of Quebec.

In many countries where we operate we rent and sell (for cash and on hire purchase) television sets, if there is a local television service. This side of our overseas business is increasingly adding to profits.

Our planning in Rediffusion is always for the long term, as I have already said in relation to our need for a long-term licence. We could materially improve our immediate financial results, at the expense of our future, by standing still. The more important role that wired distribution of broadcasting may have to play in the future, and the greater interest in television that may come with the advent of programmes in colour, encourage us to look to the future. Already, however, some of our ideas are ahead of our time. We aim to provide better service at lower cost, but the competition we face is immense. We therefore encourage our research teams to prepare for the future, and our managers and engineers to keep their feet on the ground, by confining expenditure to projects which should have relatively early commercial success. Even this is an act of faith, expensive in capital, and it is hard to bear the further discouragement of really grievous taxation.

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So much for the problems and developments associated with Rediffusion Limited. Quite a different set are involved when John Spencer Wills puts on his other hat as chairman of the British Electric Traction Company Limited. Within the group there are transport undertakings, laundries, bowling centres and a plant hire subsidiary. The transport undertakings in this country include such bus companies as Southdown, Aidershot and District, Midland Red, East Kent, Devon General, South Wales, and East Trent. About them he said:

 

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No less than 14 per cent has been added to operating costs recently to implement the recommendations on wages and conditions made by the Committee of Inquiry under the chairmanship of Sir Roy Wilson. Attempts to make more use of one-man buses and to effect other economics have met with union unwillingness. In addition, operating costs, and consequently fares, have been artificially inflated by the heavy duty on fuel oil. Further, the industry’s burden of taxation has been increased by the withdrawal of the 30 per cent investment allowance for new buses and coaches.

Manufacturing industries, including the producers of relatively inessential goods, and the extractive industries will in future receive cash investment grants. But no service industries, not even those providing services which are basic necessities, as, for example, transport, will receive these grants. Such blind discrimination which favours all manufacturers and penalises service industries, regardless of the value of their respective contributions to our economy, is astonishing.

We should doubtless be grateful that the bus industry has been spared from the full effect of the forthcoming selective employment tax. Operators will still have to pay the tax, but it will be refunded to them quarterly, so we shall be obliged to ‘lend’ money to the Government free of interest. That does not trouble me as much, however, as the dangers that the subsidy of 7s. 6d. a man to be handed to manufacturers out of the proceeds of this new tax, may prove a disincentive to some of them to install labour-saving plant and machinery and so to release manpower for essential service industries, such as the bus industry, which are suffering from an acute shortage of labour.

Turning to our overseas transport interests, Canadian Motorways has suffered from a prolonged strike of haulage workers in the Province of Ontario, following the union’s refusal to accept a labour arbitration award. The strike, which began in January this year, closed down all the major trucking companies in Ontario, including one of Canadian Motorways’ chief subsidiaries, and lasted for 15 weeks.

Last year was a good year for Jamaica Omnibus Services. The mileage run and the number of passengers carried by the fleet of more than 300 vehicles showed substantial increases.

The road transport undertaking in Africa managed by our partners, United Transport Company of Chepstow, continues to prosper. Through our subsidiary company, B.E.T. Omnibus Services, we have a 41 per cent equity interest in United Transport Overseas, the holding company for these passenger road transport and freight undertakings.

It will be in the interests of all concerned when present antagonisms between Rhodesia and Zambia are moderated, and certainly there are problems, both economic and political, calling for solution in other African countries. It would, however, be incorrect to assume from reports in the press of happenings in widely-spread territories that there exists a state of general turmoil throughout the countries in which we operate. The excellent progress made in recent years by the African companies could hardly have been achieved had this been so.

The arrangements under which the Malawi Government has a financial interest in our transport operations there, and the municipality of Dar-es-Salaam a stake in our Tanzanian operations, are working well. More recently, the municipality of Nairobi has taken a substantial minority interest in our operations in and around Nairobi.

A new development during the year has been an extension of the African group’s touring activities into Ethiopia by the formation of a company there in partnership with a world airline.

An entry has also been made into road transport in Australia, where the growing economy should offer prospects for the carriage of freight by road.

A further expansion of business has been achieved by our subsidiary, Advance Laundries. Practically the whole of the increase came from the commercial services – Towelmaster, linen and garment hire, office cleaning and hotel laundering, which together account for the major part of the Advance Group’s work. On the domestic laundry and dry cleaning side, a major reorganisation of service is in progress in the Greater London area, following the acquisition of the Tip-Top group of dry cleaning companies.

Advance Laundries invests large sums in new plant to increase efficiency. To give an example, research into automation by a research company in which the group has a half interest, will shortly result in the installation by Advance Laundries of one of the first production models of a continuous washing machine which will process cabinet towels at the rate of 1,200 feet a minute.

One of the principal aims of the new selective employment tax is to encourage a more effective distribution of the nation’s labour force. But to impose a heavy pay roll tax on an industry that relies largely on part-time female labour – which would not be likely to interest, or be available to, the ‘favoured’ manufacturing industries – is totally illogical. In addition to the Magnet Bowling centres at Barnsley, Cambridge and Bristol, three further centres have been opened this year at Peterborough, Poole and Darlington. Two more are under construction.

In common with the rest of the contractors’ plant hire industry, the subsidiary, Eddison Plant, was affected by the Government’s policy of reducing grants for road maintenance, and of deferring, as from July, 1965, major building and road construction.

The company now operates over 1,000 road rollers of different types as well as a wide range of other kinds of contractors’ plant. The materials handling division has a fleet of over 500 fork lift trucks with a wide range of lifting capacities. The scaffolding division successfully completed its first full year at Nottingham and these operations have been extended to a depot at Leicester.

The company now has 21 depots covering England, Scotland and Wales, and further depots are being considered to give even better local and national coverage.

All of which shows the wide range of activities covered by the Rediffusion and B.E.T. groups. Whether the individual companies are concerned with producing television programmes or providing the means to receive them, whether they are bus companies or laundries, there are two key words which sum up practically the entire operation – public service.