HC Deb 18 July 1957 vol 573 cc1347-63
The Postmaster-General (Mr. Ernest Marples)

With your permission, Mr. Speaker, and that of the House, I wish to make a statement.

The Government have considered Post Office finances. Post Office wages have risen as a result of recent awards by the appropriate machinery. Some of the awards are retrospective and, in the aggregate, they are the largest in the history of the Post Office. The Post Office must increase its income by £42 million a year from 1st October next. This will be after making economies of £3 million a year. Eleven-twelfths of this additional bill is for Post Office wage increases.

The Government had three choices: first, to let the burden fall on the taxpayer; secondly, to drastically reduce Post Office services; or thirdly, to increase charges. The Government are unwilling either to pass the burden to the Exchequer, or to damage the services the Post Office provide for the community. Therefore, there must be increased charges.

To make up the £42 million we must raise £23 million from posts and £19 million from telecommunications. A comprehensive statement of the changes will he circulated in the OFFICIAL REPORT, and for the convenience of Members copies will be available in the Vote Office later this afternoon. Meanwhile, the House would now wish to know the main changes.

The basic inland letter rate will go up from 2½d. to 3d. Other inland postal charges will go up, including the postcard which will go to 2½d, and inland printed papers weighing more than 2 oz. Letters, printed papers and parcels to overseas will bear some increase, but not air mail.

Telecommunications

Telephone rental charges will be standardised all over the country; they will be £14 for business subscribers and £12 for residential subscribers. Free call allowances will be abolished, and the shared service concession will be increased to £2. Other charges, including private branch exchanges, connections and removals must also bear some increase. Ordinary local calls will go up to 3d., but from 1st January next this will be offset by a very big extension of the distance over which this charge will apply.

Overseas telegrams will be increased by about 40 per cent. The Commonwealth Press rate will remain at 1d. a word.

There will be no alteration in inland telegrams, the 4d, telephone call from a public box and long distance trunk charges for home and overseas.

These higher tariffs represent about 11 per cent, of the Post Office income. They are, as I have said before, almost wholly due to increased wages, imposed on the Post Office by wage movements outside.

Mr. Ness Edwards

I wish to ask the right hon. Gentleman one or two questions, but before doing so I should like to draw his attention to the fact that this is an addition to the £68 million increase in charges already imposed by the previous Tory Government and the present Government, and that with the increased charges now provided for, the figure will amount to over £110 million.

I am sure that these charges will cause consternation throughout the country when the full effect of them is realized—[HON. MEMBERS: "What would you do."] May I make it quite clear to the House that so far as increased revenue is required to pay wages, hon. Members on this side will support this? Wages payable in the Post Office ought to be comparable with wages paid outside.

But does not the right hon. Gentleman think that it is showing a very bad example to outside industry, when there is all this talk about inflation, to put the whole of the wage increase on the charges—

Mr. H. Fraser

Come off it.

Mr. Ness Edwards

—instead of trying to absorb some of the increases within his own organisation? We are all being asked to keep prices down, but in this case the whole burden is being placed upon the consumer.

I wish to ask the right hon. Gentleman two questions. First, will he tell the House what is the increase to be imposed on the private subscribers, what is the annual increase in that case, arid secondly, with regard to P.B.X., the private branch exchanges? The P.B.X. is the telephone connection to almost every factory and big business concern and I should like to know whether the rate of increase is likely to he in the region of 300 per cent.

Mr. Marples

That is a rather long series of supplementary questions to answer. Telephones in the provinces cost more to instal than telephones in London and, therefore, it is wrong that people should pay a reduced rental for them. At least, they should pay the same rental as in London from the point of view of economics, because the more we invest in telephones in the provinces the greater is the loss to the Post Office at the present rates. Therefore, in some residential cases there will be a £3 increase in rentals.

We have made economies amounting to £3 million—

Mr. Ness Edwardsrose—

Mr. Marples

If the right hon. Gentleman will be patient I will answer his questions in a shorter time than it took him to ask them.

The P.B.Xs will bear a considerable increase, but that relates mostly to businesses and not to residences. It varies according to whether it is two, three, four or five extensions that they have. I cannot give an average figure, because it would be misleading. The right hon. Gentleman will find details in the statement which I shall circulate. When he was Postmaster-General, the right hon. Gentleman never circulated such a statement.

Sir R. Grimston

Can my right hon. Friend say how these increases are likely to affect the retail price index and, further, how long he expects to be able to hold these charges at this present increased level?

Mr. Marples

The increase in the retail price index is negligible. It will be increased by one-tenth of 1 per cent. If there is reasonable stability in wage levels from now until March, 1959, no further general increases in Post Office tariffs are likely to be required during that time.

Mr. Hobson

For what surplus is the right hon. Gentleman budgeting? Do these increases account for any outstanding wage demands that are in process of negotiation?

Mr. Marples

I budgeted for a cumulative surplus of £5 million by 31st March, 1959. We have estimated that some of the wage awards that will be made in the future will be given on a basis pro rata to those already made in the past.

Mr. Grimond

As both Post Office policy and financial policy are directly under the control of the Government, may I ask how the Minister, in the last sentence of his original statement, can speak as though this highly inflationary increase were something over which the Government have no influence at all and were imposed on the Government by some evil agency entirely outside their control?

Mr. Marples

Wage awards are imposed by the appropriate body. They are not like wage awards recently made in outside industry. The Priestley Royal Commission was appointed in 1953, and, in 1955, said that wages in the Post Office and in the Civil Service should be brought into line with those in outside industry. That is why these increases are not comparable with those that have taken place in outside industry. I see no reason why the Post Office should attempt to hire its labour at a cheaper rate than outside industry.

Mr. Gaitskell

Are not these wage increases bound to take place because of the rise in the cost of living, which is the cause of the increases in the wages in other industries, and does this not show that it is not the fault of the Postmaster-General but the fault of the Government as a whole that we are to have these increased charges?

Mr. Marples

The right hon. Gentleman will probably have an opportunity to deploy that case in full in the debate on the economic situation, but he is entirely wrong in thinking that these wage awards are comparable to those in outside industry. He should realise that they bring the Post Office into line with outside industry for the first time, that it is done by a Conservative Government and that the Socialist Government did not do it. Therefore, he is in error and, in my view, is doing a disservice to the trade unions concerned.

Captain Orr

By how much will the postal charges now be above the pre-war level and how do they compare with the rise in the cost of living generally since before the war? Secondly, in view of this prodigious bill for wages, what arrangements are being made in the Post Office for saving staff?

Mr. Marples

The present letter postage rate was fixed at 2½d. in 1940, when the basic wage of the postman was £3 3s. a week. The wage is now £9 17s. We are paying a postman more than three times what we paid in 1940, while there has been only a 20 per cent. increase in the stamp.

Mechanisation is a very difficult problem. We have in operation the most up-to-date electronic sorting machines in the world, and we have ordered an electronic wages-computer which is the biggest in this country and possibly in the world. But the House ought to realise that we cannot mechanise the job of the postman who delivers the letters. No electronic machine yet invented will walk down the drive and deliver the letters.

Mr. W. R. Williams

Is the Postmaster-General aware that some hon. Members on this side of the House and, I assume, on the Government side, too, have come to the reasonable conclusion that if we are not to subsidise the Post Office and seriously reduce its efficiency and the scope of its services, no alternative is available to the Post Office and to the Postmaster-General?

Is he further aware that Post Office workers have been suffering from low wages for very many years in comparison with outside industry at a time when the Post Office was pumping £100 million into the Treasury in the form of surplus, and that if he had not authorised this increase, recommended by the Royal Commission, and the increases evolving out of the increased cost of living, he would have found it physically impossible to staff and to recruit into the key positions in this big industry?

Mr. Marples

I thank the hon. Gentlemen and I agree with him. Wages ought to be raised to the level of outside industry, both in equity and because we would not otherwise get the men we require.

Mr. J. Rodgers

How do the increased charges compare with the charges borne by our foreign competitors?

Mr. Marples

I could not give all the figures, but our inland post is still cheaper than all European countries except Spain and Portugal. Our new rate will be 3d. per oz.; that for France is 5d. per ¾ oz., and for Italy 3d. per ½ oz. With few exceptions, our overseas rate will still be cheaper than the rest of the world. It will be 6d. per oz. against 8.6d. in France for oz., and 8.2d. in Germany for ¾ oz. Therefore, we shall not be handicapped.

Mr. Usborne

The Postmaster-General said, apparently with some satisfaction, that most of the burden of the increased telephone charges would fall upon industry. If that is so, is it not evident that industry will pass on the added expense in the cost of its goods, which will raise the cost of living and make outside wage demands inevitable, and that industry will then have to pay more wages? Is not this a silly circular process?

Mr. Marples

The hon. Gentleman misunderstood my reply, which referred to the P.B.X.s, which are the exchanges used by industries. The bulk of the increase will come evenly from residential and business telephones. This was a particularly small section in which there is possibly the largest increase of all.

Mr. Nicholson

Is my right hon. Friend aware that no one in his senses accepts that the charges will be the cause of inflation, but that they are rather the consequence of inflation? Will he not fall into the trap of taking lessons in the causes of inflation from the Opposition, whose programme is the most inflationary thing we could imagine?

Mr. Marples

The relation between rises in costs and inflation is very arguable, and I am not sure that economists are all in agreement. We shall no doubt debate that matter later.

Following is the statement:

POST OFFICE FINANCE
PROPOSED TARIFF CHANGES
I.—POSTAL CHARGES
Category of correspondence or service Present charges New charges
INLAND AND TO IRISH REPUBLIC
1. Letters … 2½d. for 2 oz. then 1½d. for 2 oz. 3d. for 1 oz. 4½d. for 2 oz. then 1½d. for 2 oz.
2. Postcards—
Single … 2d. 2½d.
Reply Paid … 4d. 5d.
3. Printed Papers. Samples … 2d. for 4 oz. then 1d. for 2 oz. 2d. for 2 oz. 4d. for 4 oz. then 1d. for 2 oz.
4. Newspapers … 2d. for 6 oz. then 1d. for 6 oz. 2½d. for 6 oz. then 1½d. per 6 oz.
5. Business Reply … ½d. per item 1d. per item
6. Private Boxes and Bags … Various Double Present Charges
Category of correspondence or service Present charges New charges
29. Inland Money Orders—
Advice of payment … 3d. 6d.
30. Inland and Overseas Money Order—
Stop Payment … 6d. 9d.
31. Telegraph Money Order Supplementary Fees—
Inland … 3d. 6d.
Overseas … 6d.,1s. or 75. 8d. (Cuba only) 1s. 6d.
(b) PRIVATE BRANCH EXCHANGE (PBX) AND EXTENSION RENTAL
Present Proposed
£ s. d. £ s. d.
1. Private Manual Branch Exchange Rentals. Fixed annual payment for switching and power equipment—
Capacity not exceeding—
2 exchange lines and 4 extensions 8 0 0
3 exchange lines and 9 extensions 16 0 0
5 exchange lines and 20 extensions Included in 32 0 0
15 exchange lines and 50 extensions Rental for 64 0 0
20 exchange lines and 160 extensions Extensions 100 0 0
Each section of type CB 9 switchboard 100 0 0
Each section of type CB 10 switchboard 100 0 0
Each section of type 1A switchboard 15 0 0 100 0 0
2. Private Automatic Branch Exchange Rentals. Fixed annual payment for switching and power equipment—
Type No. 1—
Capacity not exceeding 30 extensions 200 0 0
Capacity not exceeding 50 extensions £84 (plus share 280 0 0
Type No. 2— of rental of £6
Capacity not exceeding 30 extensions per extension) 240 0 0
Capacity not exceeding 50 extensions 320 0 0
Type No. 3 Various To be assessed
Types other than Nos. 1, 2 and 3—
Capacity not exceeding 30 extensions £84 (plus share of rental of 140 0 0
Capacity not exceeding 50 extensions £3 4s. to £6 per extension) 220 0 0
3. Extension (internal or external) connected to PBXs (manual or automatic) 2 14 to 0 2 14 0
6 0 0
(c) CONNECTION CHARGES—
Note.—Where several items of apparatus are ordered at the same time the connection charges levied will be the highest connection charge for any item concerned plus 50 per cent. of the connection charges for the remaining items.
Present Proposed
£ s. d. £ s. d.
1. Standard exchange line connection charge 3 0 0 5 0 0
2. Transfer charge (exchange line) 7 6 15 0
3. Plan extensions 10 0 2–5 0 0
4. Each extension other than a plan extension 10 0 2 0 0
5. House Exchange System—
For each multiple station 10 0 5 0 0
For each non-multiple station 10 0 2 0 0
For each extension between a HES and a PBX 10 0 2 0 0
6. *Private Manual Branch Exchange (switching and power equipment)—
Capacity not exceeding:—
2 exchange lines and 4 extensions 4 0 0
3 exchange lines and 9 extensions Included 8 0 0
5 exchange lines and 20 extensions in 16 0 0
15 exchange lines and 50 extensions Rental 32 0 0
20 exchange lines and 160 extensions for 50 0 0
Each section of type CB 9 switchboard Exten- 100 0 0
Each section of type CB 10 switchboard sions 100 0 0
Each section of type 1A switchboard 100 0 0

*When a PBX is replaced by one of larger size the connection charge to be levied will normally be 50 per cent. of that for the larger Exchange.

Present Proposed
£ s. d. £ s. d.
7. *Private Automatic Branch Exchange No. 1 (switching and power equipment)—
Capacity not exceeding 30 extensions 200 0 0
Capacity not exceeding 50 extensions 280 0 0
8. *Private Automatic Branch Exchange No. 2 (switching and power equipment)—
Capacity not exceeding 30 extensions Included 240 0 0
Capacity not exceeding 50 extensions in 320 0 0
9. Private Automatic Branch Exchange No. 3 (switching and power equipment)— Rental for
Post Office-owned switching equipment— Extensions
For every 50 extensions or part thereof 180 0 0
For each manual position 100 0 0
Subscriber-owned switching equipment—
For every 50 extensions or part thereof 30 0 0
For each manual position 15 0 0
(d) INTERNAL REMOVAL CHARGES—
Note.—Where the internal removal of several items is ordered at the same time the internal removal charges will be the highest charge for any one item, plus 50 per cent. of the aggregate of the removal charges for the remaining items.
Present Proposed
£ s. d. £ s. d.
1. Exchange line telephone 1 0 0 2 0 0
2. Private Manual Branch Exchange (switching and power equipment)— 15s. per extension
Capacity not exceeding:— (£3 minimum)
2 exchange lines and 4 extensions 2 0 0
3 exchange lines and 9 extensions 4 0 0
5 exchange lines and 20 extensions 8 0 0
15 exchange lines and 50 extensions 16 0 0
20 exchange lines and 160 extensions 25 0 0
Each section of type CB9 switchboard 50 0 0
Each section of type CB10 switchboard 50 0 0
Each section of type 1A switchboard 50 0 0
3. Private Automatic Branch Exchange No. 1 (switching and power equipment)— 15s. per extension (£3 minimum)
Capacity not exceeding 30 extensions 100 0 0
Capacity not exceeding 50 extensions 140 0 0
4. Private Automatic Branch Exchange No. 2 (switching and power equipment)— 15s. per extension (£3 minimum)
Capacity not exceeding 30 extensions 120 0 0
Capacity not exceeding 50 extensions 160 0 0
5. Private Automatic Branch Exchange (switching and power equipment)— 15s. per extension (£3 minimum)
Types other than Nos. 1 and 2:—
Capacity not exceeding 30 extensions 70 0 0
Capacity not exceeding 50 extensions 110 0 0
6. Private Branch Exchange extension—
On telephone 15 0 2 0 0
On socket per telephone
7. Plan extensions 10s. to 30s. or socket
8. Minor miscellaneous apparatus From 10s. to 30s. From £1 to £3

*When a PBX is replaced by one of larger size the connection charge to be levied will normally be 50 per cent. of hat for the larger Exchange.

(e) CHANGES IN CALL CHARGES
Present Proposed
s. d. s. d.
1. Subscribers' local calls
Up to 5 miles 2½ 3
From 5 to 7½ miles 5 6
From 7½ to 12½ miles 7½ 9
From 12½ to 15 miles 10 1 0
2. Subscribers' trunk calls
Full rate—10.30 p.m. to 6 p.m.
15–20 chargeable miles 10 1 0
Cheap rate—6 p.m. to 10.30 p.m.
15–20 chargeable miles 10 1 0
20…25 chargeable miles 10 1 0
3. Call Office local calls
From 5 to 7½ miles 6 8
From 7½ to 12½ miles 9 1 0
From 12½ to 15 miles 1 0 1 3
4. Call Office trunk calls
Full rate—10.30 p.m. to 6 p.m.
15–20 chargeable miles 1 1 1 3
Cheap rate—6 p.m. to 10.30 p.m.
15–20 chargeable miles 1 1 1 3
20–25 chargeable miles 1 1 1 3
5. Coin box Subscribers' local calls (charge to subscriber)
From 5 to 7½ miles 5¼ 7
From 12½ to 12½ miles 7⅞ 10½
From 12½ to 15 miles 10½ 1 1
6. Coin box Subscribers' trunk calls (charge to subscriber)
Full rate—10.30 p.m. to 6 p.m.
15–20 chargeable miles l 0 1 2
Cheap rate—6 p.m. to 10.30 p.m.
15–20 chargeable miles 1 0 1 2
20–25 chargeable miles 1 0 1 2
7. Alarm calls
Ordinary subscriber 5 6
Call Office 6 8
Coin box subscriber 5¼ 7