HC Deb 11 April 1956 vol 551 cc215-20

The following Question stood upon the Order Paper:

63. MR. KEEGAN: To ask the Postmaster-General what increases in Post Office charges he intends to introduce in order to meet the cost to the Post Office of the recent additional wage awards and railway freight charges.

The Postmaster-General (Dr. Charles Hill)

With your permission, Mr. Speaker, and that of the House, I will answer Question No. 63.

The House will recall that on 31st March it was announced that an immediate general increase in the salaries and wages of civil servants was being given in order to bring them into fair comparison with conditions in outside industry. This, together with other increases in wages and costs since last autumn, has added £20 million a year to the expenses of running the Post Office.

I am seeking to absorb as much of this increase as possible by greater efficiency and economy. I estimate that, after allowing for such saving, and a reduction of the surplus, it will be necessary to raise an additional £15 million this year to meet this bill.

I will now give the House the main changes; a tabulated list will be circulated in the OFFICIAL REPORT.

Telephones

From 1st July, the subscribers' fees for local calls will be increased from 2d. to 2½d. per stage. From 1st January next year the minimum fee for a call from a call office will be increased from 3d. to 4d. From 1st July this year the call office fees for greater distances will become 6d., 9d. and 1s., and the charges for evening trunk calls will become generally about two-thirds of the day rate. It is not proposed to reduce the 100 free calls for residential subscribers or to increase telephone rentals.

Postal

On the postal side the minimum postage rate for printed papers and samples will be changed from 1½d. for 2 ounces to 2d. for 4 ounces. The effect of this will be that printed papers weighing 2 ounces or less will be ½d. more than at present and printed papers weighing over 2 ounces will be ½d. less than at present. For newspapers the rate per copy will be changed to 2d. for the first 6 ounces and then 1d. per 6 ounces.

The registration service costs us so much more than it yields that I propose to raise the minimum inland registration fee from 6d. to 1s. At the same time, I propose to double the maximum compensation paid for loss on letters sent by registered post at the basic fee. The minimum fee for money orders will be raised to 1s. with a consequential addition of 4d. on each subsequent step with parallel changes in the C.O.D. service.

Corresponding to whatever increase is made in railway freight charges to the Post Office, there will be an increase in inland parcel post charges. Except possibly for parcels, the postal changes will take effect from 1st June. No increase will be made in postal orders, in overseas rates, in postcards or in ordinary letters.

Mr. Keegan

Could my right hon. Friend assure the House that the bulk of these increases has been caused by the recent Civil Service wage increases? [HON. MEMBERS: "Oh."] Further, will he say what services have been running at a loss?

Dr. Hill

It is true that the bulk of this additional cost is due to the recent wage awards, and it is also true that almost all the increases are based on those services which have been running at a loss.

Mr. Ness Edwards

Do I take it, Mr. Speaker, that we shall be discussing these matters on warrants and regulations that will be laid before the House later? If so, we can then discuss how this burden has been spread. Is the right hon. Gentleman aware that if these increases were necessary to pay decent wages in the Post Office there would be no opposition on this side of the House? We are not satisfied, however, that this burden has been spread in the right way. Nor are we satisfied that Post Office finances have been handled in such a way as to make these further charges unnecessary. Is the right hon. Gentleman aware that since he and his colleagues have been in charge of the Post Office, the increase in charges has amounted to £100 million a year, and that this is a very bad example to the country of the policy of stabilising prices?

Dr. Hill

The right hon. Gentleman will be aware that the usual opportunities for discussion will obtain now, as they did when he raised charges in 1951. On the right hon. Gentleman's suggestion that £100 million has been added to Post Office tariffs in the last five years, the figure is, in fact, £70 million. [HON. MEMBERS: "Resign."] During that time wage increases have amounted to £67 million. These increased charges stem from the increases given to the Civil Service under the Tomlin formula, which provides that the pay of civil servants shall be related to the pay in comparable industries outside. The £20 million stems almost entirely from those general awards.

Mr. Ness Edwards

Is not the right hon. Gentleman aware that it is only three months ago since he told a similar tale to this House? When he told that tale to the House he provided for £25 million more for the Treasury. Surely he is misleading the country and the House about Post Office finances?

Dr. Hill

The negotiations for the Civil Service award were completed less than a fortnight ago, and these increased charges—not the whole amount—stem from that award. If the right hon. Gentleman is criticising that award, he should say so.

Hon. Members

Answer.

Mr. Speaker

Order, order. Mr. Osborne.

Mr. Osborne

Can my right hon. Friend give the House an assurance that the economies he hopes to effect will not result in a reduction of the services which he now provides, either in scope or quality?

Dr. Hill

I can assure my hon. Friend that the economies proposed do not involve a contraction of the services.

Mr. Hobson

Is the right hon. Gentleman aware that these increases in Post Office charges are becoming an annual curtain-raiser to the Budget. The right hon. Gentleman has endeavoured to spread the charges. Could he say why there have been increases in trunk charges, which are already the most profitable part of the network and making substantial profits?

Dr. Hill

The increase is in respect of the evening trunk calls, the so-called cheaper trunk calls. The difficulty which has arisen there is that the evening traffic has been such as to involve the construction of trunk links which are not needed during the day time.

Dame Irene Ward

Am I correct in understanding that these economies are to meet the additional £15 million to which my right hon. Friend referred?

Dr. Hill

My hon. Friend could not have heard my statement. The full bill which falls on the Post Office as a result of the recent developments I have described is £20 million; and £15 million of that are to be raised by increased tariffs. The rest is to be secured by economies and a modest reduction in the surplus.

Mr. J. Griffiths

Will the Postmaster-General tell us what surplus he is budgeting for? Secondly, will he tell us whether the increase which he has now announced arises from the fact that during the past few years the policy of the Government has led to wage increases all over the country? May I further ask whether the right hon. Gentleman proposes to take an early opportunity of broadcasting to the nation in order to explain these things in the light of the Government's Election pledges?

Dr. Hill

I will take the questions in order. First, there is here involved an estimated surplus of £3 million for the present year. In reply to the right hon. Gentleman's second question, I can hardly add to the answer I have already given, namely, that these increases stern from wage increases.

Several Hon. Members

rose—

Mr. Speaker

Order. There is no Question before the House.

Following is the list:

TELEPHONE TARIFF CHANGES
Subscribers Call-Offices
Present Proposed Present Proposed
Local calls:
Up to 5 miles … … … … 2d. 2½d. 3d. 4d.
From 5 to 7½ miles … … … 4d. 5d. 4d. 6d.
From 7½ to 12½ miles … … … 6d. 7½d. 6d. 9d.
From 12½ to 15 miles … … … 8d. 10d. 8d. 1/-
Trunk calls
Cheap Rate: (6.0 p.m. to 10.30 p.m.)
From 15 to 20 miles … … … 8d. 10d. 9d. 1/1d.
From 20 to 25 miles … … … 8d. 10d. 11d. 1/1d.
From 25 to 35 miles … … … 9d. 1/- 1/- 1/3d.
From 35 to 50 miles … … … 1/2d. 1/3d. 1/5d. 1/6d.
From 50 to 75 miles … … … 1/6d. 1/6d. 1/9d. 1/9d.
From 75 to 125 miles … … … 1/6d. 2/- 1/9d. 2/3d.
Over 125 miles … … … … 1/6d. 2/6d. 1/9d. 2/9d.
Alarm calls … … … … … 6d. 5d. 6d. 6d.
Note 1. Business small user subscribers are at present charged 50 per cent. more than the normal tariff for their first 300 local calls annually; under the new tariff the first 240 calls a year will be so surcharged.
Note 2. Residence rentals include 100 free calls a year, worth 16/8d. under the present tariff and £1 0s. 10d. under the new tariff.
Note 3. The rebate for coin box subscribers will be:—For local calls, ⅛ of the Call Office charge; for trunk calls 1d. per call as at present.
Note 4. All changes will apply from 1st July, 1956, except those in respect of the charge for, and rebate on, calls up to 5 miles made from call offices and coin-boxes which will apply from 1st January, 1957.
POSTAL TARIFF CHANGES
— Present Proposed
Inland printed papers (including those to the Irish Republic) and Samples 1½d. for 2 oz., then 1d. for 2 oz. 2d. for 4 oz., then 1d. for 2 oz
Inland newspapers (including those to the Irish Republic) (per copy). 1½d. for 4 oz., then ½d. for 4 oz. 2d. for 6 oz., then 1d. for 6 oz.
*Inland registration (including service to Irish Republic)—
minimum fee … … … … … 6d., covering compensation up to £5 1/-, covering compensation up to £10.
additional fee covering compensation up to £20 1d. 1d.
additional fee per £20 maximum compensation, up to £400. 1d. 1d.
Inland money orders (including those to the Irish Republic)—
For an amount not exceeding £10 … … 8d. 1/-
For each subsequent £10 or fraction thereof up to £50 2d. 2d.
For the issue of a duplicate money order or the renewal of void order. 1/- 1/4d.
Inland cash on delivery fees—
Fee for trade charge not exceeding £1 … 10d. 1/2d.
Over £1 and not exceeding £2 … … … 1/- 1/4d.
Over £2 and not exceeding £5 … … … 1/2d. 1/6d.
For each subsequent £5 up to £40 … … 2d. 2d.
For the renewal of a void order … … 1/- 1/4d.
Inland parcels … … … … … … Rates to be reviewed in the light of any increase in railway rates.
Parcels to the Irish Republic … … …
* It is also proposed to charge an extra ½d. for registered envelopes sizes F, G and H, and an extra 2d. for size K.