POST OFFICE BILL

HC Deb 25 January 1961 vol 633 cc178-285

Order for Second Reading read.

3.45 p.m.

The Postmaster-General (Mr. Reginald Bevins)

I beg to move, That the Bill be now read a Second time.

I have it, Sir, in Command from Her Majesty to acquaint the House that Her Majesty places Her prerogative and interests, so far as concerns the matters dealt with by the Bill, at the disposal of Parliament.

I think I owe it to the House to explain, very briefly, why the consent of Her Majesty the Queen is required for the Bill. The revenues of the Post Office from the posts—and, by extension, from remittance services—have formed part of the hereditary revenues of the Crown ever since they were vested in James II and his successors. That is going back some time—[Interruption.]

Mr. Speaker

Order. Let there be a little less noise, please.

Mr. Bevins

That is going back some time—in fact, to 1685. It has been the custom for these revenues to be surrendered to Parliament at each accession since 1760, for the duration of the reign, in return for the Civil List. Because the Bill sets up the Post Office Fund on a permanent basis it constitutes an obstacle to the resumption of any revenues of the Post Office by the Crown at the beginning of a reign, and, accordingly, the consent of Her Majesty became necessary.

When the business for this week was announced by my right hon. Friend before we rose for the Christmas Recess, the right hon. Member the Leader of the Opposition described it as "singularly dull". I disagree with him. All Parliamentary Bills are as dull as ditch-water, but what matters is not what they say, but what they lead to, and I can assure the House, right at the start, that what this Bill will lead to, within the Post Office and for the British public, will be very far from dull.

Hon. Members may recall that it was public dissatisfaction with the telephone service that led to the setting up of the Bridgeman Committee in 1932. That Committee accepted the principle that the Post Office should cease to be a purely fiscal instrument and should become financially self-contained. For various reasons that principle has never been fully realised. In 1955, however, a fresh start was made, when the Government agreed that the Post Office ought to be responsible for balancing its income and expenditure, and should conduct its business more commercially. So far as those charges went, they were good. The trouble was that they did not go anything like far enough.

May I, at this stage, say that my two predecessors, my right hon. Friend the Chancellor of the Duchy of Lancaster and my right hon. Friend the Minister of Transport, have contributed a great deal to the continuing evolution of the Post Office and I am grateful to them. Being a modest man, I have had a little bit to do with it, but I do not want to dwell upon that.

Most Government Departments are financed by the compulsory levies of taxation. The Post Office is not. We are financed by what our customers choose to spend on our services. It is really quite ridiculous to treat Post Office expenditure as if it were being met out of taxation or, indeed, to treat the Post Office, in the words of Whitaker's Almanack, as: one of the great revenue collecting departments ". The heart of the Bill lies in Clause 1, which marks the new status and greater independence of the Post Office by the establishment of the Post Office Fund. This is exclusively a Post Office account. It has nothing whatever to do with the Consolidated Fund. The significance of this lies less in the formal machinery change which we are making in the Bill than in the underlying intention to give practical recognition to the commercial character of the Post Office.

Although this reform is statutory, it makes no attempt to sketch out the future course of Post Office policy. As I say, the real significance lies in the severance of the Post Office finances from the Consolidated Fund and, flowing from that, the psychological challenge to the Post Office to live up to commercial standards, certainly at least in so far as it ought to live up to them. It is on this, the real theme of the Bill, that the House would expect me to say something today.

This reform will lead—indeed, it is already leading—to a more questioning and a more critical approach to our affairs within the Post Office. What is good within the Post Office—and a great deal is good—I want, and, I am sure, hon. Members on both sides want, to conserve. But just because the garden has been cultivated in a certain way in the past does not mean that everything in the garden is lovely. In an organisation which employs about 350,000 men and women—we are probably the biggest employer of labour in Great Britain—an organisation which has capital assets of about £1,000 million and which has an astronomical turnover of nearly £6,000 million a year, there will always be room for radical and imaginative improvements in the interests of the public.

One of the big practical difficulties which is inherent in State ownership of any kind is to decide how far an industry should be conducted as a social service and how far it should be conducted commercially. As hon. Members know, these two conceptions are often not only different, but in conflict as well. This has nothing to do with any argument about Clause Four, which is essentially a doctrinaire argument. I am referring to the Opposition's Clause Four and not to Clause 4 of the Bill.

This is a severely practical question and to me, therefore, a much more interesting one. [An HON. MEMBER: "What is the difference?"] The doctrinal controversy does not keep me awake at night, because I am an empiricist. I hope that hon. Members will not hold that against me. The Post Office certainly has to consider its social obligations to the public. There is nothing in the Bill which derogates from that, or which weakens our sense of social responsibility. I want to say categorically that we shall continue to honour these obligations.

But, in the main, the Post Office is not a vast, amorphous social service paying out benefits and services financed by the taxpayer. It is very largely a business and I believe that only if it is conducted mainly as a business shall we succeed in giving the public the best value for money. What does this mean? First, it means that we must be quite clear in our minds about our financial policy. Clause 6 of the Bill requires us, taking one year with another, to cover our expenses and to make proper allocation to the General Reserve. That is all right as far as it goes. Naturally, we shall do that. In doing so, however, we must ensure that the capital employed in the Post Office gets an adequate return.

During the last three years, our results have been good. The return on net assets has averaged rather more than 8 per cent. and has resulted in about two-thirds of our capital being provided from within the Post Office. In the same period, the level of tariffs and prices has been stable, and, indeed, there were some reductions which I announced in July last year. That stability in prices has been partly due to a relative price and wage stability throughout the country and within the Post Office and partly due to the buoyancy of trade and of the economy.

In recent times, however, we have made substantial concessions in pay and in hours and in the next full financial year, these and other concessions may cost us as much as £20 million. In these circumstances, it will not be easy to keep all our tariffs at their present level. We may well have to look at the services which are falling short of an adequate return and we shall certainly have to take a critical look at those services on which we are losing money and which, in effect, are being subsidised by other and more profitable services.

Having said that, however, I believe that it is a profound mistake to think that price increases, although sometimes necessary, are the only way, or, for that matter, even the best way for the Post Office to maintain its financial position. For example, we can do that by improving our methods of working. We can earn more simply by promoting profitable custom, by doing more business. That goes both for posts and for telephones. It is, I think, a fact that, at present. the public is curiously ill-informed about many of our facilities and services.

How many people, for example, know about the availability of coloured telephones or the telephone information services, about the range of stamp books, or, perhaps more important still, about high-value postal orders. My guess is that very few know about these things. We need much more publicity and much better public information. I am determined to exploit the publicity value not only of our post offices, but also of our transport fleet of nearly 40,000 vehicles. I say it in sorrow that the Post Office is probably the only retail organisation in Britain whose shop windows are just one glorious blank.

All this is linked with our programme, which is now well under way, to modernise more and more of our offices so that the public find them more attractive to patronise. It is also linked to the new system of counter service whereby men and women behind Crown post office counters dispense all services. I am quite confident that this will lead to speedier and more efficient service and to a 'happier spirit between the two sides of the counter. With the full co-operation of our staff, which I very gladly acknowledge, we shall have this new system in operation in most of our Crown post offices by 'the middle of this year.

This is not pie in the sky. I regard this as probably one of the most important working reforms in the Post Office since the end of the war. Twelve months ago, when my hon. Friend and I came to the Post Office, we made it quite clear that we had made up our minds to get rid of queuing in Crown post offices, and if we do nothing else in our tenure of office than this we shall have done something well worth while, although we shall do a good deal more besides. If the public know about our services, if they are encouraged to use them, if post offices are contemporary and the service is good, we can, I believe, look forward to a continuing growth in our business.

There are innumerable ways in which the more commercial and businesslike attitude implied in Clause 1 of the Bill will help the public and the Post Office. Let me give the House a very simple but what I believe to be a very telling example of where 'this new thinking takes us in a very small sphere. Last year, about 10,000 million items of mail were posted on which postage had to be paid. Now, the sale of 18 separate 3d. stamps costs the Post Office 3d., whereas the cost of selling the same stamp values in a book is precisely¼d. In other words, the costs to the Post Office are one-twelfth in the second case, and so the sale of stamps by books is good business to the Post Office. What we want to do is to produce economies in selling and, at the same time, to make the buying of stamps more convenient to the public.

What we are now doing is to concert a number of measures.clause 25 refers to the formalities connected with licences for the selling of stamps. This is a bit of Victoriana which ought to be chucked out of the window by the House, and, I am sure, will be. Again, since I announced the loosening up of the arrangements for the sale of stamps by shopkeepers last year, and despite the scepticism of one or two of the newspapers, the number has risen to 22,000, and I am now about to provide them with attractive notices which publicise this service to the public.

We are also about to extend our range of stamp books and stimulate their sales so as to cut dawn the number of counter transactions. Up to date stamp machines are now coming forward from the manufacturers, and this year we shall have them in all Crown post offices and at other strategic points like main railway stations. Then, again, there is the franking machine used so extensively in business. Here, we aim to make things easier for our customers by reducing the frequency of returns which these users have to make and by improving facilities for metered mail. These are just some of the ideas we shall be putting into practice. Of course, we have plenty more.

Again, in the next month or two we shall be getting two what I hope will be very valuable reports, both of which stem from the intention of Clause 1 of the Bill. The first will make recommendations for the more efficient transport of mails, and there, I believe, there is very considerable scope for more efficient working. The second will make recommendations for making better use of the buildings and freeholds in the possession of the Post Office. I believe that those buildings and freeholds con-fain very large unexploited values.

I think that I am lucky in all these ventures in that I enjoy the enthusiastic support both of my hon. Friend the Assistant Postmaster-General, whose help I value so much, and, more often than not, of my admirable permanent advisers at the Post Office.

But I should not like the House to think that because of this shift in our thinking the Post Office will degenerate into a soulless, hard-faced organisation. We have no such intention. On the contrary, although we mean to be efficient and businesslike we also want to be warm and human in our relations both with our customers and with all those who work for us.

I have always felt myself that in the Post Office there are so many things which need to be done, some of which may seem to be trivial, but which, taken together, make a very real impression on the public and on the staff alike. Obviously, there ought to be chairs and tables in most of our post offices for elderly customers who patronise us. As telephone bills are usually painful to the recipients, at least they ought to be polite. I recently had my sight tested, and the only print I was unable to read was that in a provincial telephone directory. These are trivialities, but they are of tremendous importance to the public and they affect the reputation of the Post Office in public esteem.

So much for the general underlying significance of Clause 1. Now I should like to say something about some of the important elements in the Bill other than that relating to the new status and severance from the Consolidated Fund. They are Parliamentary control, staff pensions, and borrowing powers.

First, Parliamentary control. Once the Bill becomes law the annual Parliamentary expenditure through Estimates will come to an end, except, of course, for Minister's salaries, pensions—I mean staff pensions, not Ministers' pensions—and, of course, broadcasting. There will still, however, be effective Parliamentary control gas it was sketched out in the White Paper of last year. My hon. Friend and I will still be answerable to Parliament, who, I hope, will vote our salaries. Then again, under Clause 5, there must be an annual Resolution of the House before drawing from the Fund in the ensuing year. That is an important Parliamentary control.

Again, Clauses 16 and 17 provide that our regulations about charges will now be laid before Parliament and subject to annulment by either House. That, too, is important, I think. Fourthly, Clause 12 provides that I shall lay before Parliament each year copies of the Report and Accounts with the Auditor-General's report. I think my hon. Friend the Assistant Postmaster-General may later like to sketch out the sequence of these opportunities we shall enjoy in future for Parliamentary discussion.

Next, I turn to staff and pensions. Our staff, of course, will remain civil servants. Clause 15 makes sure that the pension rights of our staff under the Superannuation Acts are in no way prejudiced by the Bill. The security of Post Office pensions will continue to be State Security, not Post Office security. That, I think, is right. Pension payments will continue to be voted by the House. Of course, we shall finance the pensions by making payment to the Exchequer, just as though we were a private employer making contributions into a private insurance or pensions fund.

Now I should like to turn to Clauses 8, 9 and 10, which refer to borrowing powers. Clause 8 makes it clear that, subject to a limit of £30 million, we shall be entitled to borrow temporarily from the Post Office bankers, the Bank of England, for our short-term needs. I emphasise, our short-term needs. Our experience shows that our working balances may fluctuate by as much as £20 million or so at times and that sudden rises in expenditure may sometimes have to be met before compensatory action can be taken.

Clause 9 provides for Exchequer advances to meet our longer term needs for the purposes of either fixed capital or of working capital. Borrowings will be repayable after a set term of years, a term which would normally correspond to the average life of the assets to be financed. At present we have a period of twenty-five years in mind, but advances for working capital might be for a shorter period.

Clause 10 defines the limits for Exchequer advances in terms of a maximum debt which may be outstanding at any time, whether in respect of past borrowings or of sums advanced under the Bill. The debt at the date of severance from the Treasury is likely to be about £800 million, so that the lower limit, referred to in Clause 10, of £880 million will effectively authorise additional borrowings of about £80 million. Again, the upper limit of £960 million, which may be authorised by a resolution of the House, would allow a further £80 million to he borrowed.

The initial sum of £80 million, to which I have referred, would, I think, provide probably for about two years' needs, and the second amount of £80 million for about a further two years. Capital expenditure in the period which we are envisaging—a period of about four years—including some increase in working capital, might well came to about £500 million. It is probably fair to assume that at least two-thirds of that figure will be provided from our awn income, and that means that about £340 million out of about £500 million will be self-financed, leaving about £160 million to be borrowed from the Exchequer.

How will this capital be used? As the House knows, it is the telephone which needs the lion's share of capital investment in the Post Office. About 88 per cent. of our capital goes on telephone development as compared with about 8 per cent. for posts and about 4 per cent. for telegraphs.

I should like to say something about telephone developments which lie ahead. Last year, we put in about 450,000 new telephones throughout the country-13 per cent. more than in the previous year. At the same time, the rate of demand for telephones is higher today than ever before in the history of this country. I am determined to prevent the number of those waiting for new exchanges or more cables—at present, about 50,000—from rising, and I want to reach the position where those unfortunate enough to have to wait can be within sight of service within twelve months, and where straightforward cases can be provided with a service right away. I stress that that is our minimum aim. I am even less complacent about the telephone waiting list than the Post Office Engineering Union and the Daily Express, and I hope that we shall be able to do better.

Much of the capital expenditure on telephones and telegraphs goes on mechanisation. This is going ahead very well indeed at present. There are now fewer than 900 local manual exchanges and we plan to complete the conversion of these to automatic by 1970. Again, the programme for subscriber trunk dialling is now gaining momentum quite rapidly. By March next we shall have about 250,000 subscribers connected to 69 exchanges on S.T.D. During the coming year we shall be opening S.T.D. at different exchanges throughout the country at the rate of five exchanges a week. By March next year the number of new subscribers with this new service will have increased to about 1¼ million.

I should like to stress that wherever this system has been introduced it has been successful. There can be no question about that. It is quicker—and that is the great thing for subscribers—and the cost of most calls, both trunk and local, is cheaper. That it is popular is demonstrated by the fact that it leads to greater use of the telephone and to more calls, and on top of that it cuts out masses of paper work and simplifies accounting. I am convinced that none of the minor criticisms of the system—and there have been some recently—invalidate its major virtues.

And yet I constantly remind myself that it is what the public wants that matters and not what I want the public to want. There is no doubt that some people dislike timed local calls from their homes, especially the elderly, the lonely, and also, perhaps, the lovelorn. There was a wise and temperate letter in The Guardian about this from a lady on Monday. I should very much like to meet this criticism of S.T.D. and we are at present considering whether it might not be possible to extend the 2d. local call from six minutes to 12 minutes during the evenings and weekends. Perhaps this would go a long way towards allaying this particular criticism.

Having said that, let me again emphasise that, although there may be fringe criticisms of the system, in the main it is a vast improvement on the existing system. It is cheaper and quicker, and that is what the public wants.

There is a major programme for the mechanisation of the inland telex service, a system by which subscribers can exchange printed messages. This eliminates the human operator from the connection and enables an office-to-office connection to be established entirely automatically. At present, we have about 6,000 customers. Not only can they communicate with each other, but also with subscribers in about 40 other countries. Inland automatic telex has paved the way towards international customer dialling. An automatic service to Germany will start next May, and by the end of 1961 businessmen should be able to dial most of their telex calls to the whole of Western Europe.

Capital expenditure on the development of the trunk and junction network will have to be increased to cope with the rapid growth we have had in trunk traffic. Fourteen major schemes, costing about £6 million, have been started in the last two years, and the bulk of the expenditure for this will fall within the next two years. A further seven schemes, costing about £3 million, will be started in the next financial year. We shall also double the capacity of many of our existing coaxial cable systems by providing additional terminal equipment and intermediate amplifiers.

I hope that I have said sufficient to indicate not only that the Bill is soundly conceived, but, what is more important, that the spirit behind it is already colouring our thinking within the Post Office. But of course, thinking is easy; it is action which is the more difficult. But I assure the House that my hon. Friend and I will do the action as well as the thinking so long as we remain in our present assignments.

It is because I believe that the Bill will help to shape the Post Office into a more vigorous and progressive organisation, more conscious than ever before to serve our 50 million customers as they would wish to be served, that I commend it with confidence to the House.

Mr. A. E. Hunter (Feltham)

Before the right hon. Gentleman sits down, could he say something about the Post Office Savings Bank? Is there to be an alteration in that service?

Mr. Bevins

The Post Office Savings Bank, which celebrates a certain anniversary in the near future, will carry on very much on its present basis.

4.20 p.m.

Mr. Douglas Houghton (Sowerby)

I am sure that the House would wish to congratulate the Minister on the wide range of information which he has given about future developments and activities of the Post Office. I suppose that in the atmosphere of commercial and trading activity which has been generated by his speech we ought to call this an extraordinary general meeting convened to pass resolutions which will fundamentally alter the status and financial arrangements of this gigantic organisation. We in the House do not own all the shares, but we do hold all the proxies, and I have no doubt that the Whips have seen to it that the right hon. Gentleman will have the majority of them in his pocket.

It is a mistake to over-emphasise—and, I would say, exaggerate—the commercial character of the Post Office. I was glad to notice that the right hon. Gentleman stressed the social service of the Post Office and asked how far it was to be a social service and how far a commercial service. We must not lose sight of the fact that the Post Office is mainly the provider of services which, by Statute, are reserved exclusively to the Post Office—letter-carriers, telephones and telegraphs are services which Parliament has entrusted exclusively to the Post Office. It has a monopoly. While those activities of the Post Office can be described as commercial, nevertheless they are essentially public services.

The Post Office owes a great deal of its success and the esteem in which it is held by the public—which I believe to be high at present—to the sense of public service which has been built up in the Post Office over many years. This is not entirely unfamiliar ground to me. If I may be permitted a personal reference, I began my working life in the Post Office as a temporary, registered boy clerk at 15s. a week. I helped to sustain the Accountant-General in his onerous duties of dealing with the accounts of the Post Office in those far-off days. I was a contemporary of Field Marshal Lord Harding, who started his working life in the same Department and in the same capacity. I hope that when the Bill goes to another place the noble Lord, Field Marshal Harding, will turn up and say a good word for his old Department. I am very glad to do so myself this afternoon.

I think that this sense of public service has shown itself in staff relationships in the Post Office—in the Whitley Council system and in the whole spirit of the Post Office staff. That is what we wish to preserve and to over-emphasise the commercial or business character of the Post Office will not do anything to maintain it.

I notice that in the White Paper published in March, last year, and entitled The Status of the Post Office, there were no fewer than thirteen references to the commercial nature of the Post Office—"commercial activities", "immense national trading organisation", "trading activities", "commercial freedom", self-contained business "business mind". After 300 years of the Post Office, we are told: If, after allowing for its social responsibilities, it fails to approach the problems of management and organisation with a business mind it will quickly become inefficient. The Postmaster-General told us that he wanted the Post Office to live up to commercial standards. I am not sure that all commercial standards are something which anyone ought to live up to. The Minister should have stressed the high standard of public service which we wish the Post Office to continue to live up to.

The Post Office is not selling washing machines or detergents. I do not know what the Postmaster-General has in mind when he speaks of the future development of trading activities of the Post Office outside the interesting range which he mentioned. However, so far as I know, the Post Office does not propose to manufacture convenient tables to put telephones on, or convenient chairs in which to hold these 6-minute or 12-minute conversations in the evening in the new system. So far as I understand it, the trading activities will continue to be strictly within the reasonable definition of the functions of the Post Office. The right hon. Gentleman will soon hear about it if he treads on the corns of other commercial concerns, other organisations, other trading activities.

If it comes to the point, I would say that in this year of the celebration of the centenary of the Post Office Savings Bank there is no section of the public service which as been more cramped and confined by commercial jealousy and restriction than the Post Office in its savings and annuity business. The right hon. Gentleman will find that he will be confronted with some very strong rivals if he goes outside the framework of traditional Post Office activity.

In Clause 2, we find an interesting, but quite unnecessary, charade, presumably mounted in the interests of maintaining the new commercial character of the Post Office. The Post Office is now to pay Income Tax and Profits Tax. Has the House ever heard of such nonsense? Why on earth should the State tax itself in this way? I call it window-dressing. At best, it is a book-keeping entry and it may be a form of indirect taxation of the Post Office user which could amount to nothing more than the Post Office user paying taxes to himself as a taxpayer. A highly skilled principal inspector of taxes is no doubt to be drawn from duties much more remunerative and much more urgent in stopping tax evasion activities and other irregularities so that he can arrive at a notional assessment of the tax liability of the Post Office.

What if the Postmaster-General and the Treasury do not agree about what that tax liability should be? Will the right hon. Gentleman have a right of appeal to the Commissioners of Income Tax for the City of London, or is the Post Office to be the only taxpayer in the country without a right of appeal? It is a strange introduction of this new freedom that the Postmaster-General is apparently to saddle himself with a tax liability without any right of appeal against an assessment which he might dispute.

However, the heart of the Bill is the creation of the new Post Office Fund. What the Minister told us about future activities of the Post Office was not dependent on its new status. I am not saying that the new status is not desirable. I do not say for a moment that the new status will not be advantageous. But nothing the right hon. Gentleman said, and none of the range of additional activities and expansion of existing services which he mentioned, would be cramped if the financial structure of the Post Office remained what it is. At any rate, he did not convey to the House the sense of urgency and indispensability of the new structure to the expansion of the services that he was describing.

But having said that, I do not deny that this new status will be of great convenience to the Post Office. It will introduce a great deal more elasticity and flexibility internally. The right hon. Gentleman will not be hidebound by the items in the Estimates, as he is at present. There will not be the difficulty of transferring expenditure saved on one item to desirable expenditure on another item; of transferring it from one subhead of the Estimates to another, all of which we understand are tiresome hindrances to the work and expenditure of the Post Office.

Is it really necessary to have an annual resolution before the Postmaster-General can begin to spend out of the Post Office Fund in each year? It does not seem to me to be a very striking blow for commercial freedom if the Postmaster-General has to get a resolution from the House each year before he can continue his business. I thought that we had scrapped the ancient tradition whereby Her Majesty could not keep a standing Army unless this House annually voted the necessary sum to maintain it. Now, apparently, an annual resolution of this House will be necessary to save the Postmaster-General from going out of business.

The right hon. Gentleman said that his hon. Friend would tell the House something about the occasions for discussion of Post Office business at, or very near to, the time of the annual resolution. Shall we have the Post Office accounts available when the resolution is brought before the House for debate? Or will it be one of those things taken literally on the nod at about a quarter to twelve one night and a debate on the Post Office Report saved for another occasion? I do not think that we have so far lost control over the Leader of the House, or he over the House, that we have to impose this severe discipline on ourselves and pass a resolution each year before the Postmaster-General can carry on his business.

Clause 9 deals with the borrowing powers of the Post Office. The House will notice that when the Postmaster-General wishes to borrow from the Treasury—and that is the only place from which he can borrow on a longterm basis—it is the Treasury alone which will fix the terms on which he can borrow. There is commercial freedom for you! The Treasury will decide the rate of interest. The Treasury will decide the conditions under which the money will be lent. It will decide the terms of repayment, and the period of repayment. It will decide everything.

Mr. William Shepherd (Cheadle)

Would not the hon. Gentleman regard it as add if the borrowing terms were left to the Post Office to decide?

Mr. Houghton

I will not comment on that. I am not suggesting that the Post Office should look elsewhere for its capital requirements when it comes to borrowing, but it is strange that, while in other parts of the Bill, certain things are subject to agreement between the Postmaster-General and other authorities, when it is a matter in which the Treasury is interested the Treasury will determine all the conditions under which the Post Office shall borrow from it.

Another point which we hoped the right hon. Gentleman would deal with was the limit of indebtedness provided for in Clause 10. We wish to be certain that the Post Office will be able, without unnecessary difficulties, to get capital requirements from the Treasury in addition to the capital it will generate from its own activities, because, notwithstanding what the right hon. Gentleman said, there is no sign in the Bill that the Post Office will get any more money under the Bill than it would have got otherwise.

There seems to be nothing in the Bill. and nothing in the right hon. Gentleman's expectations, which leads us to believe that the Post Office will use more capital, or, indeed, get it to use. The expansion of its services will surely require that. If Post Office queues are to be abolished, if the waiting list for telephones is to be abolished, and if the expansion of other services is to go ahead as the right hon. Gentleman hopes, considerable additional capital will be needed.

What has been wrong with the Post Office over the years has been a lack of capital. It has been starved of capital. It has taken a secondary place to a good deal of other capital development. That could lead one to an economic argument, whether the services provided by the Post Office were more important than Governments of the day from time to time decided. The Post Office has been badly treated in the matter of capital provision in the last ten years, and there is no sign that under the Bill it will be treated better.

If we are to assume that the indebtedness of the Post Office at the present is approximately £800 million, with the maximum indebtedness of £880 million which is permitted under Clause 10, subject to a further extension by resolution of the House, it will have a capital provision of less than the amount it requires per annum now from borrowing to give it the total capital provision which it requires. There seems to be nothing there which gives us any confidence that the Post Office will have a new burst of activity.

I also think that the time limits provided in Clause 10 are unnecessarily severe; perhaps not so much the time limits as the maximum sum, the £880 million to which the Post Office can go without fresh authority from the House. To go beyond £880 million to £960 million will require a resolution of the House and the Bill provides for nothing more than about four years' capital provision from borrowing. Could not a more satisfactory statutory provision be made for borrowings over a longer period? I ask that because the Minister says that these capital resources are likely to be taken up in the next four or five years. It would not be unreasonable to provide for a longer period.

There is a reference in Clause 12—this is perhaps a facetious point—to the accounts of the Post Office being in accord with the best commercial standards. What an extraordinary provision to put in a Bill, that the accounts shall conform to the best commercial standards.

Mr. Charles Pannell (Leeds, West)

That is not saying much.

Mr. Houghton

I thought that one of the weaknesses of "best commercial standards" was that they seemed to conceal more than they revealed to the shareholders and other interested parties.

Should not the wording be "the best accountancy standards"? We have had one Royal Commission on company law, and there is now another sitting. One of the purposes of Royal Commissions is to ensure that the best commercial standards are made even [better. Perhaps the Postmaster-General might write into the Bill a rather boastful phrase—" shall conform to the best Post Office standards ". That might help the right hon. Gentleman a little.

I should examine for a moment the all-important question of what the Post Office owes. Here I come back to the £800 million. This is a very important point. This is the amount which the Post Office must repay by 25 yearly instalments. The Postmaster-General described what was in his mind about repayment, but he did not draw the attention of the House to the fact that it is not in the Bill. His intentions and plans are not written into the Bill. One must look at the Financial Memorandum to see what is intended under Clause 13.

Why should it be provided that the Post Office must repay all this indebtedness which it has had for so long? Is it essential to saddle the Post Office with the whole of this indebtedness, especially bearing in mind that in the years since I became a boy clerk in the Post Office the Exchequer has grabbed well over £525 million in surpluses, has lent the money back to the Post Office and it is now written into its indebtedness of £800 million. Now the Treasury insists on a one-twenty-fifth repayment each year. If the Post Office wishes to reborrow the loan it must do so at current rates of interest. Commercial freedom forsooth! This is literally a swindle.

The Postmaster-General has given away far too much as a financial hostage to the Treasury having regard to the Treasury's shameful behaviour to the Post Office throughout the last thirty or forty years. Why twenty-five years and why one-twenty-fifth each year? It is assumed that that is the life of the assets concerned, but surely a good deal of the indebtedness of the Post Office is in fixed assets which have a life very much longer than twenty-five years. This is not really a repayment scheme at all. It is a sort of debenture device to ensure that as the years go by the Post Office will have to pay the current rate of interest for the use of its capital.

Another point in connection with the capital liabilities of the Post Office which has not been cleared up concerns the £533 million which has been advanced to the Post Office under the Money Acts.

As I understand it, Clause 14 provides that the Post Office will be relieved of the liability to pay interest and repayment of capital on money advanced to it under the Money Acts. In future, those loans will be serviced by the Treasury. Presumably, the £533 million is part of the £800 million, the total indebtedness of the Post Office, which must now be repaid on the basis described by the Postmaster-General. We should like to be clear abqut the relationship between those two very large sums.

During the past year the Post Office repaid £27 million in principal and £22 million in interest on the loans made under the Money Acts. It will be relieved of £49 million, but presumably that liability will be replaced by the new ones which the Postmaster-General will assume under the Clause. We estimate that the liability of the Post Office for capital repayment and interest will be increased from £49 million to about £67 million inclusive of the amount to be repaid on capital account under the plan outlined by the Postmaster-General.

I now come to the yield on the total capital employed in the Post Office. The Postmaster-General said that at present the Postmaster-General is getting a net yield of about 8 per cent. on the total capital employed after providing for interest and other charges against Post Office revenue and, presumably, taking into account the addition to capital account provided from internal sources. The basis of the 8 per cent, is not certain. I believe that it has been said that it is about half (of the percentage yield on the capital employed in private industry. I think that it is suggested that perhaps the lower figure in the Post Office takes account of the social service element in its activities.

That brings me to the next point. What is to be the basis of charging other Government Departments for services under Clause 19? The Bill provides that the basis of these charges is to be agreed between the several Ministers concerned and the Postmaster-General. Suppose they cannot reach agreement. These services are to be provided by the Post Office to a number of other Government Departments under Statute. As far as I know, the Ministry of Pensions and National Insurance cannot ask Little-woods Pools to pay retirement pensions.

If must go to the Post Office. This is an essential service which the Postmaster-General renders, and all we see in the Bill is that it shall be paid for by "such amounts as may be" agreed between us. Will a referee be called in to decide the matter in the event of disagreement?

I am seeking to protect the Postmaster-General, because I believe that in charging for these services he ought not only to charge the cost of the services themselves but a proportion of depreciation and of interest on capital and, indeed, a contribution to the yield on the total capital employed. After all, if the Post Office is to be a business organisation, business is business even when dealing with the Minister of Pensions and National Insurance. There is no reason why other Government Departments should get their services for less than an adequate payment if a hidden subsidy means that the Post Office user is being indirectly taxed to provide services at less than cost to other Government Departments.

In Clause 18 there is a dash for freedom, because we are to repeal Section 5 (2) of the Post Office Act, 1953, which, apparently provides that the inland letter rate shall not be less than one penny. At least, we can say that the Bill will give the Post Office freedom to introduce a ½d. inland letter rate and that, I think, is something to look forward to.

The Postmaster-General has told us many of the things which the Post Office hope and intends to do when the Bill becomes law. The Post Office was intending to do them anyway, but the Bill will give greater freedom to get on with the job, as I am sure the House will concede. We can let businessmen call it a business if they like, but hon. Members on these benches wish the Post Office to continue to render the maximum public service in all directions. Public service is not confined just to paying pensions. It can be imaginative. It can be bold and show initiative, especially when it has a monopoly; indeed, then that is a duty, because it is not under commercial competition. The services about which the Postmaster-General told us are quite exciting. After repudiating the definition of the Post Office in Whitaker's Almanack the Minister turned over the pages of Old Moore's Almanack, and we found that a very agreeable part of his speech.

The commercial freedom gained by the Post Office will not be great, but it will be free of the crudest commercial instincts in an acquisitive society. There will be no inflated salaries. Post Office staffs will be paid under Civil Service conditions, which we believe to be right. That will save a good deal of difficulty while still maintaining the present harmonious relations between the Postmaster-General and the Post Office staff. There will be no expense accounts; there will be no misuse of the Post Office monopoly as commercial monopolies can be misused. There will not be high dividends and bonus shares for shareholders. The resources will go back into improved services after whatever rapacity the Treasury shows in its dealings with the Postmaster-General on the money which is lent to him has been satisfied.

The only new freedom which the Post Office has, which is perhaps an undesirable one in my view, is a temptation to "fiddle" its Income Tax liability. That is a new freedom, but I am sure that it is one which the Post Office will not use. I should like to see that feature taken out of the Bill. This so-called "business mind" which is referred to in the White Paper has, in fact, been present all the time. A business mind in its most acceptable sense to those of us on these benches is an imaginative mind which reveals a desire to do better and not one which believes that no man will do anything unless he can get something out of it for personal reward or gain.

We hope to see drive and imagination in the Post Office in the future based on its traditions of public service. While I do not think that the Minister told the House anything which proved the indispensability of the Bill to his plans for future expansion, we recognise that it will add a great deal to his room for manoeuvre and will facilitate the work of his Department. I think that that should give a rewarding return for the freedom which he is asking the House to give. Anyhow, I am sure that it is the hope of the whole House—certainly, it is the hope of my right hon. and hon. Friends—that the Postmaster-General will make full use of this opportunity; that he will have the whole-hearted and enthusiastic support of the staff, and then I am quite sure that the people of Britain will be even prouder of their Post Office than they are today.

4.55 p.m.

Mr. Edwin Taylor (Bolton, East)

I was delighted to listen to the speech of my right hon. Friend the Postmaster-General and his explanation of the Bill, which is an ambitious Measure. Certainly, it is not a dull one. The fact that Post Office operations will be more modern and efficient has been stressed and that, of course, is a very fine thing.

My right hon. Friend mentioned the new mechanisation of the telephone system. I have a personal interest in this matter, because in Bolton this wonderful new installation has been constructed. I saw the foundations laid and as I watched its progress through the window of the mayor's parlour in the town hall I little thought that this afternoon I should be in a position to express my thanks in this House. I was present when the change-over took place and when the Postmaster-General pulled a cord which set this fine installation in operation. I am not a technician and I do not understand the mechanism of this new system, but I know that the operation was carried out in such a way that the only time that the telephone service was out of commission in Bolton was for 49 seconds, during the changeover from one building to another.

We thought there might have been a good deal of teething trouble, but we are not experiencing that. We find that the S.T.D. certainly works. It has many advantages. It is simple to operate and time is saved. At the outset, over 10,000 subscribers were able to dial their own calls to 535 exchanges, which is a great thing for our town, where we have suffered a little in the past from an out-of-date manual system. That is why we appreciate this change. It gives dialling facilities for over 2½ million telephones throughout the country.

But there is another side to this matter. I have noticed a great change of attitude at Bolton, where the Post Office staged two exhibitions which have been well attended; over 600 people have visited them each day. Visitors have been treated with great courtesy and a tribute is due to the staff. There seems to be a great human feeling and a desire to help. I detected an urge to discover what the customer wants, which is a great thing, and the whole approach is businesslike and efficient.

As I said at the outset, we in Bolton seem to have the full benefit of this system. Much has been done in this sphere, but much has still to be done and I feel sure that the Postmaster-General, with all the facilities at his disposal, will prove big enough for the task. Many changes will have to be made, but I am quite sure that the Post Office may look forward to a very promising future.

5.0 p.m.

Mr. Tom Brown (Ince)

I wish, first, to extend My congratulations to the hon. Member for Bolton, East (Mr. E. Taylor) upon his maiden speech. One thing among many for which I admire him is his brevity. He has done very well, and I think that the whole House congratulates him on a very effective maiden speech, delivered with clarity and with a profound confidence which, I am sure, is born of the fact that he had a long experience as an alderman of the Bolton Town Council. Therefore, I hope that the hon. Gentleman will not keep us waiting too long before he makes his next contribution to the House.

I also want to congratulate the Postmaster-General not so much on the Bill as on the very effective White Paper published in March last year. I have often complained about White Papers being confusing, confounding and perplexing, but on this occasion there is a vastly different story to tell. This White Paper, which has been in our possession since March, 1960, is concise and full of clear exposition of what the Bill seeks to do. In the past I have often condemned Government Departments for presenting White Papers which we were at a loss to understand, but on this occasion the Postmaster-General and his Department receive my compliments and my gratitude.

I feel sure that the right hon. Gentleman and the Assistant Postmaster-General are two happy persons today in that they have been provided with an opportunity of presenting to the House a Bill which, to a very large extent, liberates the Department from the shackles of the Treasury that have bound it for very many years. That is what I like about the Bill. If there is one Department that I like to help it is the Post Office, because it does so much to help people, to clarify lots of things which they do not understand until they consult the Post Office. In my opinion, no other Government Department does as much to help people to understand the many problems with which they are confronted.

It is quite true to say that the Post Office brings us good news and bad news. It brings us cheques and it brings us bills for the payment of which we can use those cheques. All sorts of facilities come through the medium of the Post Office. I was particularly struck by the first paragraph of the White Paper. It gives the public some idea of what the Post Office does. It states: The Post Office is an immense national trading organisation. The public spend more than £400 million annually on its postal, telephone and telegraph services. But more than twelve times that amount passes over its counters; indeed, the other facilities it offers—for the remittance of money, for savings, the payment of pensions, and a host of public transactions—involve the handling of more than £5,000 million year by year. The Post Office is a colossal undertaking which is successfully run despite the shackles of the Treasury. It is run in such a manner that it commands the gratitude, with few exceptions, of all members of the public.

In my judgment—I may be wrong—the Bill now before us is fifty years too late. Despite the cabin'd cribb'd and confin'd atmosphere in which the Post Office has been working for 120 years, it has still made progress, progress which it would take me all the afternoon to relate. It has made this progress because it has won the confidence of the public. I hope that when the Bill reaches the Statute Book the confidence which has been manifested by the public in the Post Office will become intensified. There is no reason why it should not.

I said a moment or two ago that the Bill is fifty years too late, but in my judgment it is never too late to seek to secure legislation which will improve a Government Department. As I think my hon. Friend the Member for Sowerby (Mr. Houghton) indicated, the Bill does not give the Postmaster-General 100 per cent. freedom because, according to Cmnd. 989 from which I have just quoted, the Treasury maintains some responsibility, to which I do not take exception. Treasury responsibility is confined to three points set out on the last page of the White Paper, as follows:

1. "(a) pay, grading and conditions of service of staff;
2. (b) investment control, including control of borrowing for the purpose of financing it (as for the public sector generally);
3. (c) foreign exchange control."

I have no quarrel with that, but, transcending it all, the postal worker will retain his status as a civil servant. That is what I want to continue. If the Treasury, with the limited powers which it now has under the Bill, begins to overstep the boundary or the confines in which it has been placed there will be trouble, and it will be trouble made by hon. and right hon. Members of the House. We shall have to say to the Treasury, "Thus far and no farther must you go." A certain amount of liberty must be given to the Postmaster-General and to his Department which hitherto has been denied to them. They have been shackled by the hand of the Treasury. I have always maintained—sometimes supported by my hon. Friend the Member for Feltham (Mr. Hunter) —that the Treasury is the nigger in the woodpile. I hope that the Bill will relieve the Treasury of this designation and that the Treasury will not overstep the province or the boundary in which the Bill places it.

If one takes the trouble to read the history of the Post Office one realises how remarkable it is. As a boy of 12—that is going back a long time—I was captivated when I read the history of the introduction of the ld. post in 1840. The pioneer of the ld. post was Rowland Hill, who eventually became Sir Rowland Hill. That was in 1840, when the first Post Office reform was placed on the Statute Book.

History also records that, after he had published his first postal reform pamphlet in 1837, he became a Member of this House. He promoted the Bill of 1840 and worked for its passing. Then he was found a job in the Treasury, which was a rather remarkable thing.

As was only likely, being a man possessed of enthusiasm for improved postal facilities, he continued to work for them in that Department. In two years' time, so strong and persistent was his advocacy of improved postal services, the Treasury kicked him out. There was a great wave of public indignation from one end of the country to the other because the Treasury sacked a man who was trying to improve postal facilities for the people.

They expressed their feeling for this man by raising a public testimonial, which amounted to £13,000, and presented it to Sir Rowland Hill for his services in trying to reform the Post Office—and, incidentally, trying to reform the Treasury. Then the Government of the day, feeling that an injustice had been done, gave him a pension of £2,000 a year. So he did not do so badly. The most significant thing, which has always appealed to me as a student of social history, is that the man who wanted to help a Department of the Government and help the people should be treated in such a manner because of his ardent advocacy and persistence in trying to improve the postal system.

By this Bill the Post Office will be removed from the shackles of the Treasury to a large extent. I hope that the Post Office will make good use of the Bill. Many things urgently require to be done to reform the postal services. I do not want to be misunderstood. I am not blaming the postal worker. I am not blaming the Postmaster-General. Ninety-nine per cent. of responsibility for things that have been neglected is due to lack of foresight, enthusiasm and business initiative by the Treasury. It has withheld from the Postmaster-General and his Department money required to carry out reforms.

I want to make it perfectly clear that I have great admiration, as I know many in this Chamber have, for the village postmaster. I have a great admiration for those people in post offices who respond so well to the difficult questions put to them. They perform their job with a profound desire to help and not to retard the general public in dealing with problems which confront them. Better facilities ought to be provided in sub-post offices. Anyone who goes into sub- post offices in the countryside will find that many desirable changes are necessary. I hope that some improvement will be made and that this will be a first priority for the Postmaster-General.

Again, I do not want to be misunderstood. Some of the sub-postmasters and sub-postmistresses do their very best, but many of them work in premises which are occupied by other businesses. That makes it extremely difficult for these business people, who are part-time sub-postmasters and sub-postmistresses. It is difficult for them to find money in order to raise the standard of their premises to that essential for a Government Department such as a general post office. I could not advocate with any justification a Crown post office in every village. That would be foolish, but I shall continue to be an ardent advocate of improved sub-post offices throughout the land. Some of them do exceedingly well and some are fortunate because their business premises are adaptable for postal business.

I went into a sub-post office a few days ago and in my mind's eye I measured the size of the aperture of the desk upon which old-age pensioners have to sign their forms. It was half a yard wide and 9 inches deep. Imagine an old-age pensioner with difficulty in being able to read having to sign a form on an aperture of that kind. When one talks to sub-postmasters one gets the reply, "This is a grocery business"—or it is a mixed business—" and the customer has to be considered ". Some of the facilities provided in sub-post offices are far from adequate to meet ordinary standards. I hope that the Postmaster-General will pay some attention to that aspect of the problem.

Urgent attention should be given to the building of Crown post offices. It is that factor which has brought me to my feet in considering what to my mind is a grave injustice in one or two places in my constituency. In Ashton-in-Makerfield thirty years ago a piece of land was bought in Gerard Street for the erection of a Crown post office. It was determined that the Crown post office should be built there, but thirty years have gone by since that piece of land was purchased and it is still not built. I agree that there have been two world wars; but, when application was made for the money required for the building, the Treasury refused. The public of that township, which has a population of more than 20,000, have waited thirty years.

I have discussed this matter with the hon. Lady the Assistant Postmaster-General. I have discussed it with the region and with the Postmaster of Wigan under whose control this comes. Every time the reply has been, "I agree that a Crown post office is essential, but we cannot get the money to provide the facilities." Those facilities should be provided for the ordinary public whose revenues assist the postal service.

I was talking to a postmaster on Sunday night. We discussed the problems with which he is confronted. I asked him what his turnover of postal business was. That was a fair question. He told me that it was £5.000 a week, which is a quarter of a million pounds a year. It is of paramount importance that proper facilities should be provided in sub-offices. I hope that the right hon. Gentleman will give attention to that aspect.

I ask him also to provide better facilities in those Crown offices where facilities can be improved. In some post offices, despite the fact that the counter space is allocated to various branches of business, there are still long queues, particularly on certain days. Some improvement could be made there.

Delving back into history I found that the Crown post office in Wallgate, Wigan, was started in 1874. There has been very little improvement. It is dull, dreary, dark and dismal—not because the people behind the counter are dull, dark, dreary and dismal, but because the building is. Post office buildings need brightening up. They should be made cheerful and attractive so that people will enjoy doing postal business or drawing their pensions in them.

In 1959 I had the pleasure of attending the opening of a new sorting office. It is a wonderful place. The postmaster there decided that, coupled with the improved postal facilities, there should be improved canteen arrangements. A very fine canteen was built. The postal workers there are very appreciative of that action by the postmaster, Mr. Fleming.

During the Christmas Recess I took the opportunity of going to watch Christmas mail being sorted there. I stood in the new sorting office in well ventilated, spacious surroundings. Everything was attractive. My mind went back to the previous year when everything was cramped and confined. I could not help wondering how the officials managed to perform the wonderful service they did back in 1874 and even earlier. There has been a remarkable transformation.

My grouse is that the head postmaster and his predecessor constantly had to prod the General Post Office, which in turn constantly had to prod the Treasury to give it the brass to do the job. In this enlightened age, when it is claimed that standards have been raised to a high level—wages, living conditions, etc.—it should not be necessary for the Postmaster-General to go cap in hand to the Treasury and ask for money to do something which should be done without any prodding. The right hon. Gentleman now has a great opportunity, which I hope he will seize with both hands.

If any workers deserve a pat on the back, it is the post office workers. For too long we have treated them in this manner. For too long they have been cinderellas. Now we should bring them to the forefront, where they are entitled to be, because they perform a very useful service. It is no use introducing new machines and better facilities at counters unless at the same time amenities for the workers are improved. The two things must go together. The Postmaster-General now has an opportunity to take action in that direction.

I want to refer to another part of my constituency, namely, Up Holland. It is not a Crown office that we want there, but better sub-office facilities. This matter has been discussed between myself, the postmaster at Wigan, the Assistant Postmaster-General, and the regional officer. All the facts that I could get hold of have been brought out in an effort to bring about some improvement in facilities for old people.

Anyone who knows the district of Up Holland knows that in the main it lies in the valley. Development during the post-war period has been at the top of the plain on a plateau. About 500 new houses have been built there. The road up to where the housing estates are on the hill, strangely enough, is called Parliament Street. It is as far from Parliament consideration as I am from the moon. The gradient is 1 in 7. It is a climb of one and a half miles. The sub-office is at the bottom of the hill. I have tried to have the sub-office brought nearer to the people that live on the new council estates on the plateau. I have failed. This is an opportunity for the Postmaster-General to do something about it in the months that lie head.

I have explained the problems with which I am confronted, but other hon. Members may be faced with similar problems. I hope that improvements will be made. Where Crown offices have been neglected or their building has been delayed, immediate action should be taken. Improvements should be made in sub-offices wherever possible. If the Postmaster-General and his Department attach the same importance to the Bill as I do, as I am sure they do, in the near future we shall see a remarkable advance in the standard of postal facilities for our people.

The public is entitled to the Bill. We on this side will help, because that is our duty. Never let it be said that we put the business or commercial side of the Post Office before the social side. The two things must go together, not one at the expense of the other. I wish the right hon. Gentleman and his Department good luck in getting the Bill on to the Statute Book and carrying on with the work which he has been desirous of doing for many years.

All over the country people are crying out for improved postal facilities. Between now and when the Bill becomes an Act the regions should make a survey of the worst offices, and they should be given priority. Good luck to the Bill and to the Post Office. May their efforts be rewarded by improved postal facilities in the very near future for the people of this country.

5.30 p.m.

Mr. J. A. Stodart (Edinburgh, West)

Like every other hon. Member who has spoken so far, I hope that my right hon. Friend and his hon. Friend, will find their new freedoms stimulating. In my experience of the Post Office in the past I have found that it has spared no effort to try to meet the convenience of the public. I particularly refer to the provision of sub-offices in the new housing schemes. I have met with the greatest possible co-operation. I pay tribute to the Post Office for its efforts in the past to meet the convenience of the public in that way.

I listened with great interest to my right hon. Friend's speech when he said, among other things, that there must be a more practical approach to things in the Post Office in the future. I have toured the General Post Office in Edinburgh and, like everybody else who has visited it, I was remarkably impressed with what I saw, particularly at the rush times when mail deliveries are at their peak. One sees there a quite remarkable machine which, more or less, automatically sorts letters. One appreciates the inconvenience, and I dare say delays, caused by wrongly or badly addressed letters.

I have come to the conclusion as a result of these visits to the Post Office that what might be described as the internal arrangements within the General Post Office are remarkably good. Once the letters reach the General Post Office in, for instance, Edinburgh, they do not spend a very long time there. It seems that it is between the centres of distribution that the trouble begins.

The Postmaster-General said that the additional wage costs, allied with possibly shorter hours, might mean a bill of extra costs amounting to £20 million. I do not think the public would grudge that provided that they got first-class service in return.

I feel that the expeditious delivery of mails is what would most impress the public. To give one example, it should be exceptional for mail posted at 4 p.m. or 5 p.m. in London not to reach Edinburgh the following morning. As it is, very genuine and appreciable dislocation is caused to business firms in the capital city of Scotland through their being unable to rely on a prompt and rapid mail connection between London and Edinburgh.

The hon. Member for Sowerby (Mr. Houghton), in the course of his speech, said that the Postmaster-General would now have room to manoeuvre and the Postmaster-General himself said that he hoped to have something to say about a more efficient means of transporting mail. There should be more room to mance[...]vre and there should be flexible arrangements for sending mail to the North. At a time when the railways are engaged in a vast programmeof modernisation on the west coast route it seems to me that there should be enough mancruvreability, even temporarily, to move he mail train from the west coast route 10 the east.

I do not blame the railways for the fact that the trains between Carlisle and London are running late. It seems quite inevitable that they should do so when electrification of the line is going on and the passage of trains is continuing. While this work is going on, is it impossible for the mail train to the North to run from King's Cross to Edinburgh and, if necessary, straight through to Glasgow? Glasgow is 45 or 50 minutes further on and it is a straight run from Edinburgh. The times of departure from London are remarkably similar. The mail train leaves Euston at about 8.30 p.m. and the train from King's Cross—upon which some mail but, curiously enough, not the Edinburgh mail, travels—leaves at 8.20 p.m. Therefore, it will not cause much dislocation so far as sorting is concerned.

Mr. Deputy-Speaker (Sir Gordon Touche)

I am sorry to interrupt the hon. Member, but I find it difficult to bring his argument within the scope of the Second Reading of the Bill.

Mr. Stodart

I am sorry. I was venturing to comment hopefully on what the Postmaster-General said in the course of his speech concerning improvements in the means of transporting mail. I will leave that with the comment that I hope we shall have the more efficient means of transport to which the Postmaster-General referred. The possibility of an airmail service should not be forgotten. It works remarkably well in the northern part of the British Isles—from Edinburgh to the Shetland Islands—and I can see no reason why as efficient an airmail service from London to the North should not operate as well.

The only other question upon which I wish to comment is that of the telephone service. That was mentioned by the Minister, too. In these days of automation and the automatic making up of telephone accounts—which is increasing all the time with the introduction of most remarkable accounting machines—I hope that the Post Office will be tolerant in examining the complaints of people when they receive their telephone accounts. Even the best machines can make mistakes. I found that out with my own telephone account. About six months ago I was rendered an account for two calls, totalling 30s., from a cottage with a telephone in it but which had been unoccupied at the time the calls were made. It was not until I pointed that out and gave evidence of the emptiness of the cottage, that I was allowed release from my obligation to pay the bill.

Having said that, I join with other hon. Members in saying good luck to the Post Office. May its future be much brighter than its past.

5.59 p.m.

Mr. Harry Randall (Gateshead, West)

I suppose that hon. Members will appreciate the invitation which has been given to voice some of their complaints against the Post Office.

While I do not propose to deal at any length with the comments of the hon. Member for Edinburgh, West (Mr. Stodart) on the delays and the occasions on which letters posted in the evening are not delivered the following morning, may I put the facts to the hon. Member. The afternoon collection produces hundreds of millions of letters. Nearly all those are delivered by the first delivery the following morning. But that is not news. It is news only when a few hundred or a few thousand fail to make that connection on the first delivery. Those are the facts.

On New Year's Eve I posted some correspondence, and after I had put it in the letter box I remembered that the next morning I was to appear at a place at which one of the letters was due to be delivered. I was travelling overnight. I had posted the letter at 4 p.m. on Sunday and about 8 p.m. I started on the same journey as that which the letter had to make. I arrived in Gateshead the following morning at the same time as the letter was delivered. I reckon that that is excellent service, because it was on New Year's Eve, at a time of considerable pressure on the Post Office. It arrived on time, and it is worth while remembering the general excellence of the service which is given when things sometimes go awry and there are difficulties here and there. We should not exaggerate the difficulties. In the main, an excellent service is given.

The hon. Member referred to the new freedoms which the Postmaster-General will have and expressed the hope that they would be stimulating. As I go through the Bill I will deal with one or two things which I feel will not give the Postmaster-General all the freedom which I think he ought to have. It is true that we are to get rid of an irksome burden and almost of the dead hand of the Treasury which we have had for so many years, but I am not at all sure that the Postmaster-General will be without any limitations or that he will have freedom without the hurdles and the toll gates being set up. I am not at all sure that in the course of the years following the passage of the Bill he will not find some rather severe limitations on the work which the Postmaster-General undertakes.

The Postmaster-General made it clear today that he was unable to indicate what will be his future policy arising from the Bill. Of course not. All that he could tell us this afternoon was of plans which have already been made and clearly set down over a period of three or four years. Beyond that, he was unable to give any clear indication of a policy moving towards greater services and the other improvements which are necessary. It is quite impossible, and I am one of those who believe that he will be inhibited a good deal in the course of his work in the years that lie ahead because of some restrictions which are inevitable.

It is a major Bill, and undoubtedly it deals with one of the country's oldest nationalised industries. Hon. Members have wanted to pay their compliments to the Post Office staff and the administration this afternoon. When I was reading the commercial accounts for 1959–60 I saw under "Publications", a reference to a booklet which was called "Our Post Office". I wrote to the right hon. Gentleman and asked him whether he would be good enough to let me have a copy.

It is a very interesting booklet, which I believe was written for school children to encourage them to take an interest in this nationalised industry. It is written in narrative form, and I will quote presently words which are supposed to have been spoken by an imaginary postman. As I am certain that the publication has the full authority of the Postmaster-General, although it is an imaginary postman who is speaking these words, I am sure that the Postmaster-General will underline them.

On page 56 we read: You may believe now that the Post Office is one of the biggest businesses in the world. It has always looked after the country's trade and communications, and for three hundred years has tried to improve them. The Second World War made its task difficult, but since then it has gone ahead quickly, and is still doing so. The postman, answering a question from one of the children, then says, talking about the keenness of Post Office workers: You see, the keen ones have a sense of tradition—that is, they want to carry on and improve the work that others have started. We are proud to belong to a team. I'm sure that the Post Office has more to do with just ordinary folk, like you and me, than any other branch of the Civil Service …And its great aim is to serve the public as well, and with as little expense, as possible. I am sure that the Postmaster-General will underline those words. Of course, the Post Office has made a great contribution to commerce and the community. Of course, it faced difficulties from the war, and, of course, if has gone quickly ahead.

If I must declare an interest, it is that I was a postman for a number of years and I am a great enthusiast for the Post Office and its administration. There is nothing like it in the country. I go as far as to say—and I hope that it is not an exaggeration—that there is nothing like it in the world. Last April in a letter to one of the Joint Advisory Committees, the Postmaster-General came very near to how I feel about the Post Office, because he wrote: Too few people reflect on the skills and the organisation deployed to keep this ' public face' of the Post Office a pleasing face. But the skills and organisation behind it all are as progressive and up to date as they are in any section of private enterprise. These are the Postmaster-General's own words. He continued: They call for, and reflect, a keen commercial sense, keen commercial practice, readiness to adopt modern ideas and good human relations. When I read that I asked myself immediately, why the Bill? Of course, I looked at the Bill and immediately looked at the White Paper—and I congratulate the right hon. Gentleman on the excellence of the White Paper which was issued, because there I found why the Bill was being introduced. Presently. I will say that I think that it has nothing to do with commercialism and commercial enterprise. All that happens under the Bill—and this is brought out in the White Paper—is that it seeks to make the Post Office a self-contained business which will trade as nearly as possible like any other commercial enterprise, but it will remain a Government Department and its staff will remain civil servants.

There is nothing very new in that, because from Bridgeman, in 1932, the Post Office organisation became, in a sense, commercial. It was recognised by Bridgeman himself, and the adoption of that Report went towards it. Of course, the war broke out and there was a halt to the developments which might have taken place from Bridgeman, but the fact is that nearly thirty years ago the idea was accepted of the Post Office as a commercial organisation. At least that idea was recognised, but thirty years have been lost through not developing the Post Office's control over its own finances.

Until 1939 we had a sort of emasculated Post Office Fund, but the fixed contribution then imposed on it was far too large, and my researches show that the then Assistant Postmaster-General, Sir Walter Womersley, agreed that the fixed contribution to the Exchequer was too high. He is reported in the Nottingham Evening Post of 12th April, 1939, as saying: Next year we shall have a chance of an adjustment with the Treasury about certain contributions from the Post Office to the national Exchequer, and I am hoping we shall be able to make a much better bargain than we made five years ago. If we do, it means that many of the restrictions will come off, and there will he a much better chance to get on with the work we are all so keen to see perfected. That was in 1939. Then the Second World War came and the Fund was terminated. That meant a great loss of surpluses to the Post Office, and adds point to what has been said by my hon. Friend the Member for Sowerby (Mr. Houghton). The loss of those surpluses ought to be taken into account when discussing the assets and liabilities of the Post Office as at 31st March, 1961.

It could be argued that the additional revenue was required for the war effort, but that is only partially true. When the war was over, that Fund was not reinstituted, and the Post Office, as was the case with many industries, was burdened by restrictions on development and by not being able to raise its charges sufficiently early to meet the new costs, which was a serious disability. The need to export equipment abroad also deprived the Post Office of a good deal. Having those points in mind, we shall have to be extremely careful when we look at the assets and liabilities of the Post Office.

The really significant point that the Bill introduces is the treatment of the Post Office revenue. This Measure provides for a statutory trading fund. That will be established under the control of the Postmaster-General and the Treasury will have no authority over it at all, although it is true that there will be a contribution to the Treasury in lieu of taxation, as well as a contribution in respect of certain other miscellaneous items.

As I see it, all the changes merely add up to a matter of financial change and adjustment, and I am not too much influenced by the blandishments of such terms as "commercial basis", "commercial footing", and "greater commercial freedom." I believe those to be quite extravagant terms, and probably represent a sop by the right hon. Gentleman to his back benchers. I do not for a moment believe that the setting up of this trading fund has anything whatsoever to do with commercialism, and I certainly reject any implication that the financial adjustments now proposed reflect an inefficient and unimaginative approach in the past, or that the Post Office has failed through not having commercial status.

There is continuing reference in the White Paper to the new status and to commercial freedom. All the emphasis is on the commercial aspect, but that must not be allowed to detract from the obligations of the Post Office to the community. We have already heard of some of the social responsibilities that rest upon the Post Office, but it is abundantly clear that its future financial arrangements are to be linked, as the White Paper says, with …those that apply generally to nationalised industries. It seems to me that the whole thing has been mapped out on the basis of, "Never mind the Post Office's social functions; we are in future expecting a return of something not dissimilar from the returns generally to be found in the nationalised industries." It looks very much as though the Post Office has in mind that as outside industry can get a return on its capital of about 16 per cent., the Post Office should expect a return of 8 per cent. There is the underlying suggestion that perhaps 50 per cent. of the Post Office services are social obligations, but that the rest are strictly commercial, and I feel that we will drive a very hard bargain in the Post Office.

When we look at the returns of some of the nationalised industries for 1958 and 1959 we find that not one comes up to as much as 8 per cent.; electricity returned 6 per cent.; gas, 3½ per cent.; coal, 2½ per cent.; and British Transport only 2 per cent. Together with the continual stress on commercialism there seems to emerge from this Bill an emphasis on commercial practice much stronger than the Post Office can possibly bear.

The very nature of the all-embracing services of the Post Office makes it quite impossible to rule out these social services from consideration. We all know what those services are. One is the delivery of letters in the rural areas. Those deliveries do not pay, and they never will pay. Perhaps some hon. Members do not know that in some parts of the country the person who is to receive the letter is paid for "delivering" it to himself—the allowance delivery. A man 'way out in the Highlands will collect his own letters down the road from his farm and be paid for doing so, because it is cheaper to do that than it would be for the Post Office to provide its own delivery service. That is a social obligation.

There is a loss on most telephone call offices, and the telegraph service is not economically sound. However, I want to direct attention to another service to whose economies I am sure the public give very little thought but, at the same time, would never give up. I refer to the first delivery, about which I spoke a little earlier. That first delivery is traditional. We all expect to have our letters on the breakfast table.

There is something more than tradition involved. That delivery is of vital interest to our business and commercial life. I was a postman in the City of London, and I know how much it meant to London businessmen to get their letters at 8.30 or 9 o'clock in the morning. The whole office machinery was geared to it; the opening of the letters, their attachment to the previous correspondence, the filing, the dictation and typing of replies, the signing of the letters, the addressing and sealing of the envelopes for despatch by the later afternoon collection.

The whole thing is most important to the commercial life of London, and it is equally important to the rest of our towns. Nevertheless, that is a very costly service. How many hon. Members appreciate that the early morning delivery and the late afternoon collection represent the Post Office's two peaks—the maximum staffing in the morning and the maximum staffing late in the afternoon? In other words, a period less than eight hours is involved.

The middle of the day is the plateau when there is perhaps not a great deal to do. Problems of staffing arise. In the old days it was easy to deal with the problem. Postmen were given split attendances. I remember the time when there were five attendances a day. There is a park just outside St. Martin's-leGrand known as "Postmen's park". It got its name because of the split attendances that the postmen got in the City of London. They were off duty for an hour, or an hour and a half; they could not go home in the time available, and so they went into the park which is known to this day as "Postmen's park".

We have got rid of that system of split attendances, and nobody wants to see it back again. It would be simple to look at this matter commercially and introduce a later first delivery. This might save some money. Incidentally, we could improve the attendances of the staff. But there would be an outcry throughout the country if that were done.

When we talk of these social obligations of the Post Office, and decide whether they can be measured in terms of a percentage, I should not be surprised if the social obligations of the Post Office were found to be greater than the commercial business that it undertakes. Certainly, if I am fortunate enough to serve on the Committee when this Bill goes to its Committee stage, I shall look at it in that way. In looking at the Post Office from a commercial point of view, we must be very careful indeed not to interfere with these social obligations which are so important. I urge that every effort should be made to ensure that nothing is done to interfere with the social benefits which the Post Office provides to the community, especially in the form of communications.

I now want to come to the question of Parliamentary control. I am extremely pleased to see that Parliamentary control is to continue. It seems to me that it is likely to be very effective, and certainly not less effective than it has been over the years. It would probably be true to say that there will be greater discussion in this House of Post Office affairs as a result of the Bill, a fact which I welcome very much. Parliament will be more informed and will not be so confused by all the old accounting procedures.

However, I still urge that the Postmaster-General should make another effort to see that the commercial accounts are more clear. Because of my service in the Post Office I am able to find my way about the various departments; I think I have an understanding of the administrative set-up of the Post Office, but I still find difficulties on the financial side, and I should like a special effort made to secure more clarity in Post Office finances. Even the 1959–60 commercial accounts that have been issued are a mystery. In the interests of the House, they ought to be comprehensible.

I notice the hon. Member for Cheadle (Mr. Shepherd) in his place. I know that he directed the attention of the House to this matter, I believe in 1955, and I join with him in urging the desirability of having these accounts presented as clearly and as comprehensibly as possible. This would be all to the good of the Post Office and would add to the understanding of Post Office matters in the House. It would lead to an informed House on matters connected with this great nationalised industry.

I now come to the status of the staff. As I understand, the staff are to retain their full status as civil servants. In this connection, Treasury control will be retained. I should like to be assured that this has been discussed with the associations concerned and that acceptable assurances have been given to the staff associations. I raise this question because to some extent a contradiction appears to be revealed in the new system. On the one hand, the Post Office is free to be commercially-minded so far as services are concerned, but, on the other hand, it remains tied to the Government on questions of pay.

Whilst this arrangement has the advantage of ensuring that any wage increases which current negotiating machinery reveals to be appropriate are not withheld because of the state of Post Office finances, it has the disadvantage that, whilst management and customers will benefit from future surpluses, Treasury control over pay would preclude the possibility of incentives being given in the field of earnings.

That is a weakness which ought to be studied. I do no more than make the point. I know of the negotiating machinery in the Post Office; I am aware of the excellence of the representations that are made by the trade unions. I know how much Whitleyism has been developed. I am sure that on the staff side there will be every willingness to discuss this matter. But I want the staff to enjoy the fruits of their labour.

It may well be that, enjoying Civil Service status, something can be done in the way of increased welfare and training facilities. My hon. Friend the Member for Ince (Mr. T. Brown) has referred to Post Office buildings, and, believe me, many are in a sad state. But for the war —and let us remember the surpluses that were paid into the Treasury—many post offices and sorting offices throughout the country would have been rebuilt. It is necessary that the conditions under which the staff operate should be improved.

The Postmaster-General is well aware of the back log in this respect, and the result is frustrating to the staff as well as to the public.

I know that a lot of effort has been made to overtake the arrears. I am not being critical; I am not unaware of the efforts that have been made, but what worries me is whether there is enough in the trading fund. The Postmaster-General is surely aware of the vast amount of money that is required to develop the building and rebuilding programmes. I do not think it is an exaggeration to say that the problem contributes a great deal to the discomfort experienced by the staff; it impairs the economy of the services and gives annoyance to the customers.

The right hon. Gentleman the present Minister of Transport, when he was Postmaster-General, spoke at a meeting of the Design and Industries Association in London on 21st April, 1958, and he said: The recent Post Office buildings, designed forty or fifty years ago, resemble idle, gloomy warehouses, or brown-tiled public lavatories. There is a lot of truth in that. There will have to be a great deal of money spent to give our people the conditions to which they are entitled.

I apologise for having taken the time I have. Because of my interest in the Post Office, I am extremely anxious that we should have as full a picture as possible of this great industry.

The Bill deals with a number of matters to which I have not referred—methods of fixing tariffs, payments to the Treasury, agency services, how the surplus is to be spent, capital investment, borrowing, the repayment of loans, and so on.

My hon. Friends and and colleagues of ours outside the House, too, are, I know, very pleased that my hon. Friend the Member for Openshaw (Mr. W. R. Williams) is working from the Opposition Front Bench. I understand that he is to wind up the debate for us tonight, and I am particularly proud that a colleague whom I have known well and with whom I have worked for many years has been given by his hon. Friends on this side of the House an opportunity to speak from the front bench.

My attitude and approach to the Bill, like that of my hon. Friend, comes from a background of experience and knowledge of the Post Office. More than anything else, we desire to see emerge from this Measure every opportunity to permit the Post Office to develop its services and usefulness to the community and commerce. It has ambitious plans, some of which are to be put into effect, involving automation and mechanisation on a large scale, and, as I have said, its building programme is very large indeed.

I am not at all sure, however, that it is right to say, as one newspaper did the other day, that the Post Office is going into big business free from Whitehall's purse-strings. I do not believe that there will be all that amount of freedom for the Postmaster-General. It would be quite wrong to read into the Bill that, with the hand of the Treasury removed, an unrestrained Postmaster-GeneralI am paraphrasing the White Paper—will be free to make quick decisions …free to use the criteria applied in the world of commerce for gauging efficiency …free to innovate and develop his business, seeking to meet and anticipate his customers' demands. The Bill contains limitations which will prevent the Post Office from having that freedom.

Most of us believe that, if the Post Office is in need of an injection of new spirit, a renewed spur to enterprise, then some of the measures projected in the Bill could make a contribution to that end. Others, on the other hand, are restrictive. I shall support the Bill. I wish it well. When we reach the Committee stage, however, we shall wish to examine and analyse some of the restrictions here provided with a view to giving the Postmaster-General an opportunity to have the freedom which I think he desires.

6.13 p.m.

Mr. William Shepherd (Cheadle)

I suppose there is room for the argument that the Bill will not make so profound a change in the structure and outlook of the Post Office as some hon. Members have contended. Indeed, I believe that some people have expected too much of it, like the hon. Member for Ince (Mr. T. Brown), who thought that he would get that Crown post office built after thirty years. It will probably be still surrounded by a hoarding in another twenty years. The hon. Member for Sowerby (Mr. Houghton), on the other hand, adopted a surprisingly churlish attitude towards the Bill. In my view, we have reason to congratulate ourselves upon having made the change, and I propose now to examine the matter in perhaps, a more objective fashion.

No enterprise is really free unless it can have access to capital. The real security of the Post Office in ordering its own affairs is the prospect, mentioned by my right hon. Friend in his opening speech, that at least two-thirds of the capital would come from its own resources. It may well be possible, by prudent management, by reducing costs and, perhaps, by adjusting certain charges, to raise a higher proportion of the capital needed for the Post Office from indigenous resources. If this were so, the Post Office would indeed enjoy the kind of untrammelled freedom which so many of its enthusiastic supporters would like to see. Then my hon. Friend the Member for Abingdon (Mr. Neave) might have his satellite programme launched at very short notice, without any consent on the part of the Treasury.

This is for me a welcome day. I have been pushing this idea for years. I first started by trying to push Mr. Attlee, as he then was, to do it. It was very difficult to push Mr. Attlee, because he said either "Yes" or "No"—usually "No". He certainly said "No" to me on several occasions. I am very gratified that, at long last, after fifteen years as far as I am concerned at least, we now see being established what I have thought to be the logical plan of Post Office organisation.

Mr. Houghton

When the hon. Member was trying to push Mr. Attlee, was that when Mr. Attlee was Postmaster-General or when he was Prime Minister?

Mr. Shepherd

I thought that the hon. Gentleman would know that I meant when he was Prime Minister. I tried to push him to accept the full implications of the Bridgeman Report, and he gave answers as evasive as Prime Ministers usually give when they are pressed to do something against which they have no particular case but which, for reasons best known to themselves, they do not want to do.

Several hon. Members opposite have entirely mistaken what my right hon. Friend meant by his use of the word " commercial ". I do not think that the hon. Member for Sowerby really mistook it. He is terrified by anything commercial. The thought of anything commercial horrifies the hon. Gentleman; he always thinks he is back in the tax office with all the wicked industrialists and businessmen on the other side of the fence. He really must take himself out of the tax office and realise that all businessmen are not to be looked at through the eyes of the tax collector. Probably, that is the worst possible vision of businessmen that one can have.

I am sure that my right hon. Friend did not mean what several hon. Members said they thought he meant, that the Post Office would abandon social services in order to become more commercial. My right hon. Friend did not intend that to be conveyed in any way at all. I think that the Post Office is, in a sense, too inclined to give social services where they are not necessary. The hon. Member for Gateshead, West (Mr. Randall) talked about a letter being carted 400 or 500 miles up to Scotland and then having to be carried half a mile up the farm drive to be delivered through the door.

That is really absolute nonsense in 1961, with labour costs as they are. I would make people have boxes at the end of their drives. I would not deliver the letters up to the letter boxes in those circumstances. If there is any complaint against the Post Office, it is really that it persists in rendering social services which are not strictly necessary and which are not really justifiable in present economic circumstances.

No one in the House is a greater enthusiast for the British Post Office than I am. In my view, a business which can be highly systematised and which is a monopoly is a natural business for State organisation, and I think that the British Post Office is without doubt the best Post Office in the world. Moreover, despite all shortcomings—and labour problems are not easy for the Post Office today—I believe that the British postman is easily the best kind of postal servant in the whole world. I hope that the occasional comment will not persuade anybody to believe that any other country in the world has a better postal service, or better postmen, than we have. I happen to have conducted some mail order business in various countries, and I have real reasons for believing that Britain has the best service.

The Post Office must run on a basic concept of public service. That is its mainspring. It is not a mere phrase, or a figure of speech, when a postman talks about "going on duty". He really means that he is going on duty. But it is not enough for the Post Office to be motivated entirely by a sense of public service; it needs some other kind of stimulus, especially as a monopoly. The Post Office has made tremendous strides in my lifetime. As a boy I was frightened to go into a post 'office, because I knew that the wretched women behind the counter would be rude and miserable to me. Now men are mixed up with them, natural harmony is restored and a much more agreeable state of affairs is created.

The Post Office has made tremendous progress, but in a monopoly there is always a danger of things getting rather slack and it is highly desirable for a commercial element to be injected. The Post Office telephone service is a good service, but how much better it would be, and how much more it would be on its toes, if its members were out selling it—if, instead of having to tell people, "We cannot supply you with a telephone", they were out trying to get business. That would alter the whole outlook of those engaged in the service.

Mr. W. R. Williams (Manchester, Openshaw)

What purpose is there in trying to sell goods that cannot be delivered?

Mr. Shepherd

The hon. Member is not taking my point. I am saying that one reason why I want to see this change is that it will give the Post Office freedom, on the capital side, not only to provide a telephone service to those who need it now, and ask for it, but also to try to induce people to take it although they do not want it now. If we can inject that attitude into the Post Office it will be a good stimulus to all those working in it. That is what I mean —and what I am sure my right hon. Friend means—by being commercial. It does not mean abandoning the essential social service aspects of Post Office work. It means going out and getting business, inducing more people to come into post offices, and making them more welcome when they do come in. It means thinking out new means of making the Post Office service more acceptable to the public.

Those concepts of commercialism are very loathsome to the hon. Member for Sowerby, but to most of us they represent the kind of sound concepts on which a business should be run.

Mr. Houghton

The hon. Member first described my speech, or parts of it, as churlish. Now he is speaking about something which he says must be loathsome to me. I must repudiate both those charges. What he has just been talking about is not loathsome to me. I merely make the point that what he has said, and a good deal more, could well be done without over-exaggerating the commercial nature of the Post Office.

Mr. Shepherd

I am sure that the hon. Member did not intend his speech to sound as churlish as it did. I suppose he has to put up a show when speaking at the Dispatch Box, and when a Member is put in a position of having to oppose something that he is not really against he is driven to say things that he regrets when he reads them in HANSARD. But his attitude to my right hon. Friend's proposals were a litle less kind than would have been acceptable.

I repeat that he looks upon commercialism with the greatest possible suspicion. I, on the other hand, although realising that public service must be the foundation of Post Office operations, want to see a strong sense of progressive commercialism in the Post Office. I welcome what my right hon. Friend says about making post office windows do some work for the Post Office. The fact that we have had Post Office vans running around for years with no Post Office advertising on them is a grave reflection upon all those who have been running the service for so long. We should be pursuing all these possibilities of making the service better known and accepted, and I believe that we can give the Post Office yet another fillip by doing so.

It has had a few fillips since the war, and it is a vastly improved service, despite all difficulties involved in recruiting labour. It is easy to get men to work from 8 a.m. to 5 p.m. but it is very difficult to get them to work all night, at weekends and on Bank Holidays. In those circumstances, I believe that what my right hon. Friend is now attempting, although long overdue, is most welcome, and that it will be one more milestone in the honourable progress of the British Post Office.

6.27 p.m.

Mr. Ness Edwards (Caerphilly)

Having relegated myself to the back benches I should like to congratulate my hon. Friend the Member for Manchester, Openshaw (Mr. W. R. Williams), who has taken my place. I wish him as much joy and pleasure in looking after Post Office matters as I had.

The hon. Member for Cheadle (Mr. Shepherd) has, I believe, taken part in every Post Office debate that we have had as far back as I can remember, which is for at least the last twelve years. Like him, I welcome the Bill. It is the end of a road and the beginning of a new chapter. I had not been Postmaster-General for very long before I had a long talk with one of the most able trade union secretaries that I have ever met —Charles Geddes, now Lord Geddes—about things in the Post Office. He described what ought to be done and what he thought were the things that should have priority.

This was one of them. I said, "Where are we to get the money? We have none; the Treasury has taken the lot". He wanted changed conditions for typists, which would have cost money, and a number of other things. I asked whether he thought it would be right to take the Post Office completely away from Treasury control, and free it in exactly the same way as any other nationalised industry. He said that he did not mind that so long as Post Office workers retained their Civil Service status. I came to the conclusion that that was a very difficult anomaly to justify.

Reference has been made to Lord Attlee. I discussed with him the question of how far the Post Office could work for itself instead of for the Treasury, so as to enable it to give some reward to its own organisation for the initiative it showed. Unfortunately, we had a General Election. We were out, and my official responsibility for the Post Office ended. I had to speak from the Opposition Dispatch Box instead of from the Government one.

The first speech I made in 1952 was a speech in which I attacked the Treasury for treating the Post Office as a milch cow. That is what has happened. We have to recognise the tremendous change which has taken place. At every Budget period, under the old arrangements, as the Minister knows, the Chancellor of the Exchequer would send the Financial Secretary across to the Post Office, or ask the Postmaster-General to come to the Treasury so that he could tell him how much he wanted from the Post Office to help make up his Budget. The charges very often had to be increased, not for serving the purposes of the Post Office, but to bolster the Budget. All the time there have been these conflicts between the Treasury and the Post Office. Thus, the charges in the old days consisted of two elements, a charge for the service and an element of taxation imposed by the Treasury. I could never understand why that situation was accepted by everybody whilst the Post Office workers were some of the lowest paid people in the country.

This struggle between the Post Office and the Treasury, between the Postmaster-General and the Chancellor of the Exchequer, went on ever since the beginning of the war. As an indication, to add to the figures given by my hon. Friend the Member for Sowerby (Mr. Houghton), from 1945 to 1955, when we had some change, the Treasury took £100 million which had been earned by the Post Office. Then, in 1955, after many attacks from this side of the House, and by the hon. Member for Cheadle, too, we managed to get a change of attitude on the part of the Government. The then Postmaster-General brought in the White Paper dealing with the finances of the Post Office. There, we had the establishment of the new Post Office Fund. We had the obligation imposed upon the Post Office to pay £5 million a year to the Treasury in lieu of taxation. I take it that the provisions in the present Bill are in lieu of the old provision of the payment of £5 million a year in lieu of taxation.

Mr. Bevins indicated assent.

Mr. Ness Edwards

At the same time, there was imposed upon the Post Office the obligation to change its form of depreciation. Instead of having depreciation on the historic cost, it was to be on the replacement cost, which meant a difference of £14 million a year in the revenue that the Post Office had to earn. The amazing thing was that for the previous ten years, the Treasury had taken the earnings of the capital that had to be replaced to the tune of £100 million. The capital that had entered into that £100 million had to be found again by replacement costs by the Post Office charges. That was supposed to be the basis for those tremendous, swingeing increases in telephone charges that the Postmaster-General then introduced. The Postmaster-General got some freedom, however, but all his money still went to the Treasury. That was the situation as it was left in 1955.

Now, we have had the new White Paper. It seems as if the draft of the White Paper must have been done by the Minister's predecessor. It does not sound like the modest approach that one associates with the right hon. Gentleman. Whether it was done to placate his hon. Friends behind him, I do not know, but I should have thought it would have been far better had the emphasis been not upon commercialism, but upon efficiency. Efficiency and social service are not enemies. Unless an institution is efficient, it cannot serve a social purpose to the maximum. It would have been far better if entirely new nomenclature had been used in this regard. Like my hon. Friend the Member for Gateshead, West (Mr. Randall), I think that the use of the term "commercialism" was very much overdone and does not come up to the standards of address that we usually get from the right hon. Gentleman.

Now, we have the Bill. I regard it as the end of the road. Once and for all, it relieves the Post Office of the obligation or duty to consult the Treasury as to the rate of charges to be made for Post Office services. It lays down that in the charges for Post Office services, there will be no elements of taxation. Therefore, the whole of the proceeds that the Postmaster-General is able to earn by the services rendered by the Post Office will remain with the Post Office. I welcome that very much. It means that at last the Treasury will not be able at Budget time to come to the Postmaster-General and say, Instead of having a 2d. stamp postal rate, let us make it 3d. Increase the telephone charges." All that has gone by the board. In that sense, the Bill is very much to be welcomed.

Even, now, however, the Treasury cannot let the Post Office go with decency. My hon. Friend the Member for Sowerby has raised the question of repayment of capital. This mean needs close examination. Is it the repayment of the unpaid capital, as shown in the commercial accounts, something like £300 million—I fancy that that is somewhere about the figure—rather than the £800 million? Whichever it is, I hope that this will be cleared up. There is, however, something more significant in this. We are told in the White Paper that the Post Office is now to be treated like any other nationalised industry. Is the rate of depreciation to be the same? Is the coal mining industry to have the basis of historic cost, but the Post Office that of replacement cost?

Let us take the matter one step further. Is the repayment over twenty-five years in accordince with the practice in the other nationalised industries? The shorter the period over which the money is to be repaid, the higher have to be the charges inside the Post Office. I understand that in the case of coal mining, repayment is on a sixty years' basis. Why is it twenty-five years for the Posit Office? If my hon. Friend's figures are right, this means that 'the Post Office must find £32 million a year for the Treasury for the next twenty-five years.

Has the Postmaster-General really got his teeth into the problem? Here is a financial burden that he ought not to be bearing. Has he purchased his freedom at too high a price? This is what has happened with the Treasury, which has extorted a price for every step taken away from it. If this is right, it means that for the next twenty-five years the right hon. Gentleman and his successors must bear this burden.

We are entitled to know much more about this. I hope that, in Committee, my hon. Friends will pay close attention to this side of the matter, because it is extremely important. The greater the amount: of fat in the Post Office, the more decently it can proceed with its capital investment.

Mr. Shepherd

It is true that the annual repayment of capital would be larger if the period were short, but is not the right hon. Gentleman ignoring that if the Post Office were required to carry this liability and to pay it back over sixty years, its burden in terms of interest would be very much higher? If the revenue capacity of the Post Office is sufficient to repay this capital liability in twenty-five years, it is surely in the interest of the Post Office to do so.

Mr. W. R. Williams

It ought to be considered that it would be necessary for the Post Office to get new capital in respect of the capital lost for which repayment is now being made.

Mr. Ness Edwards

I quite agree, but if the point of the hon. Member for Cheadle is right, that it is better to do it over a shorter period, why twenty-five years? Why not five? Why not twelve months?

Mr. Shepherd

It cannot afford it.

Mr. Ness Edwards

All right. The longer the period is stretched the lighter is the burden. Anybody who has bought a house on hire purchase knows that.

There are two other points I want to make. One is on the question of Parliamentary accountability. My hon. Friend the Member for Gateshead, West expressed his pleasure that the Parliamentary accountability of the Post Office is not to be less than it has been. Quite frankly, there are different views on both sides of, the House about this matter. My own view is that, apart from Question Time, the amount of Parliamentary accountability by the Post Office is far too small. Indeed, I take the view that this House ought to be exercising far more supervision over the nationalised industries, including the Post Office, than it now exercises.

I do not think that we have had a debate on the Post Office for two years. The provision of an annual report does not necessarily mean the provision of an annual debate, and an annual debate very often is not the right form which supervision of Post Office administration should take. It becomes a time when hon. Members talk about their corn plaints—about a sub-post office here, a sub-post office there; hon. Gentlemen on this side taking the Postmaster-General for a walk up the hill. That is not supervising the administration; that is not accountability.

We must look at this again, and I hope that my hon. Friends, in Committee on the Bill, will see how far we can improve the methods whereby the House shall be more fully informed of what takes place in the Post Office, and may create better opportunities for the Postmaster-General to inform Members of what is taking place, and in that way bring to bear that supervision of the administration which is the only check against abuse outside the House.

There is one other thing I would refer to, and that is this problem of Civil Service status, which is to be preserved. It is quite possible, as a result of these new arrangements, that the Post Office will be able to build up a very substantial surplus. During the last ten years of its experience it earned a surplus, as I said, of over £100 million to its credit. The people who are working in the Post Office could say to the Postmaster-General, "There is plenty of money. We are entitled to a reward for our labours." But what would the Postmaster-General have to reply? "I am very sorry, but this is a matter for the Civil Service Commission. It is not a matter of the financial health of the Post Office. It is a matter of the economy of the country." Therefore, those who are engaged in the Post Office will not be able to get the financial consequences of their efforts.

I know that it is a difficult problem. When discussing this with Lord Geddes I found that he was very anxious to maintain the security of the Civil Service, and sacrificed all the possibilities of keeping up with the ordinary industrial workers. We have this situation, that we have one nationalised undertaking governed by the Civil Service Commission and other nationalised industries governed entirely by the economic circumstances in the outside world.

Those were the things I wanted to say about the Bill. I want generally to give it a welcome. I regard it, as I said before, as the end of the road. It frees the Post Office from Treasury control in the size of the charges it makes. It means that in future the customers will be paying for the services and not be paying for the services plus a given amount of tax. That is all over. However, I hope there will be much closer examination of the price the Post Office is paying for this freedom from the Treasury, and that there will be regard to its financial obligations to the Treasury in the next twenty-five years as provided for in the Bill.

This is probably the last speech that I shall make on the Post Office. I have been associated with it, as I have said, for twelve years. I now speak from the touchline, but I felt that, as this was the end of what I regarded as a progressive struggle to get freedom for the Post Office, this was a debate in which I could properly take part without derogating from the position of my hon. Friend on the Opposition Front Bench.

6.46 p.m.

Mr. Philip Holland (Acton)

I welcome the Bill, but I shall do so only briefly. I welcome it for two reasons, and first for its general content. As I understand the implication of the rather technical Clauses—and I think that most hon. Members, if one may judge from what they have said tonight, also understand their implication to be this—the Bill offers the Post Office a greater degree of autonomy, and therefore greater freedom from the restrictive hand of the Treasury, to operate as a commercial undertaking; yet, at the same time, there is a measure of Parliamentary control. I do not want to offend the susceptibilities of hon. Members opposite who do not like the term "commercial", but I think that the Bill does offer a neat compromise between, on the one hand, the physical needs of an organisation which is tackling a business problem and, on the other, the requirement of the country's elected representatives to exercise rather more control than a shareholder normally gets in a business—so that this is not quite commercial—over what is certainly and still remains a public service.

In any structural change such as this there is, of course, bound to be a certain amount of anxiety among the members of the staff about the possibility of the change affecting their status, affecting their conditions of service and pension rights. Indeed, such fears were expressed by several representatives from whom I sought a reaction shortly after the Bill was announced. I welcome the provisions in the Bill which now clearly indicate that the staff are to remain as civil servants and that their pension rights will not be affected, but I should like a concrete assurance from my hon. Friend when she winds up the debate that no detrimental change of any kind will occur in any of the conditions of service of any of the grades of Post Office staff, that no such change will be possible either as the direct or as an indirect result of the passing of this Measure through the House.

I said that one of the two reasons why I welcome the Bill was its general content, but I also welcome it for its timing. We are today on the threshhold of tremendous and exciting changes in industrial and commercial life based on the realisation of new techniques and the growing development of automation. These changes will be nowhere more marked than in communications. For example, we heard in an Adjournment debate on 21st December, initiated by my hon. Friend the Member for Abingdon (Mr. Neave), that communications satellites are now a practical proposition. In a few years they will revolutionise international telecommunications. In any attempt to be early in this field, the freer swinging stride of the Post Office, run on commercial lines as now but with the greater freedom that this Bill offers, should outstrip the slow, deliberate march of Government consultation and deliberation.

I hope that my hon. Friend the Assistant Postmaster-General will tell us whether her right hon. Friend has yet reached any conclusions on his studies of communications satellites and research. As the House has heard from my right hon. Friend and from other hon. Members, in a more modest way the Post Office is already on the threshold of revolutionary changes both in postal and telephone services. Hon. Members who, like the hon. Member for Manchester, Openshaw (Mr. W. R. Williams) and myself, have been to Tulsa Hill Research Station in recent months will be well aware of the rising tide of automation that is already 'beginning to submerge what one might call the outer reefs of manual operation.

In this context I would remind the House, as other hon. Members have done, of the nine ELSIEs at Norwich, the fully mechanised parcels sorting office at Leeds, "GRACE" and the S.T.D.s at Bristol, at Bolton—as we heard from my hon. Friend the Member for Bolton, East (Mr. E. Taylor)—and elsewhere. I do not propose to list all the many exciting new innovations that are at various stages of introduction in different parts of the country, but I would add in parenthesis that when my right hon. Friend does enjoy a greater degree of autonomy I shall expect to have all the latest improvements, including a bright new modern post office, in Ao[...]ton. A number of other hon. Members have put in pleas for their constituencies and I see no reason why I should not do so.

We have in this Bill a promising innovation. It may be, as the hon. Member for Ince (Mr. T. Brown) suggested, that it should have been introduced much earlier. I content myself by saying that it is in time to be fully effective in developing the improvements in the services that are already becoming apparent. It may sound trite, but it is true that the Bill marks a beginning of a new era in the postal service. I congratulate my right hon. Friend on it and I support it.

6.54 p.m.

Mr. Arthur Skeffington (Hayes and Harlington)

I shall not detain the House long, but I want to refer specifically to some of the current problems in relation to sub-post offices, as did my hon. Friend the Member for Ince (Mr. T. Brown). Before doing so, however, I want to state my own great appreciation of the outstanding service which is given by all sections of this great organisation to the community. The Post Office is a little like one's digestion; no one pays any attention to it so long as things are working normally, but as soon as something goes wrong very great concern is expressed. If we gave it a little more attention when things were going well, greater progress would be made.

Considering the volume of its transactions, I am always astounded by the efficiency with which the Post Office does its work. An American friend of mine, resident here for many years, told me that he thought the two most efficient types of organisations in the United Kingdom, having regard to the quantity of the work involved in a very strictly limited time, were those concerned in the production of a national newspaper and the General Post Office. On the whole, he took the view, which I share, that the national newspaper made more mistakes than the Post Office. At any rate, I always try to show my appreciation by visiting at Christmas time the postal workers in my constituency, and I come away greatly impressed and grateful for their work.

Before coming to the few positive suggestions I want to make about sub-offices, I want to refer to a constituency point. Some time ago I initiated an Adjournment debate about telephone facilities in Hayes. We were promised that when the new Viking exchange was opened it would relieve the problems. It has done so, but the demand for telephones locally has continued to rise here as it has elsewhere. We still have a large number of people waiting to be connected with the telephone, and I hope that, particularly where commercial or professional users are concerned, every help will be given to connect them as quickly as possible.

Another problem is that of shared lines. One fully understands that a shared line is better than none, but it does create problems. My political agent has to share a line. I do not think that we have any secrets in Hayes to keep from the opposition, but it is symptomatic of the kind of embarrassment that does arise from time to time, and I again make a plea that as soon as possible shared lines will also be done away with in Hayes and elsewhere.

In referring to the problems of sub-offices I make it clear that I am in no way opposed to the establishment and improvement of Crown post offices wherever the volume of business justifies it. This seems to be the most economical and effective way of dealing with the volume of traffic. In this connection, I hope that representations which have been made from Hayes about a Crown post office in the Uxbridge Road area will be sympathetically considered on their merits. There is a very strong case.

Having said that, one must go back to the fact that more than 50 per cent. of the volume of Post Office work is transacted through the 23,000 sub-offices. It is clear that very often the facilities in these offices are, for various reasons, inadequate. We want, of course, as many as practicable, having regard to the work involved, because, on the social service side of the Post Office's work—which it discharges so well—availability is a very important factor. These sub-offices must be situated where the public can easily reach them, and particularly should they be convenient to old-age pensioners.

The Postmaster-General recently announced—I suppose that it is part and parcel of the present development—that about £300,000 a year is to be set aside for eight years to improve Crown post offices. I am glad of that. We all know of post offices where the facilities, both for the staff and the public, are very poor. Indeed, like my hon. Friend the Member for Sowerby (Mr. Houghton), I was at one time employed by the Post Office, but, unlike him, only in a temporary capacity during Christmas—I was very glad of the money at the time, and would be glad of it even now.

When I saw the conditions in which the public had to do business and in which the staff had to take their meals I was astounded—yet this was in a salubrious suburb of London only a comparatively few years ago. Obviously there is considerable need for money to be spent, but that is equally true in relation to the 23,000 sub-offices. Examples have been given, which I will not elaborate further, to show that sub-postmasters should be encouraged to improve and expand the facilities which they offer to the public. I am told that they are sometimes discouraged, because whenever there is a new building the developer often tries, for example with a row of shops, to get one of the shops let as a sub-post office. This greatly increases the rental value of the rent of the shops. I entirely agree with having more sub-offices when the work justifies them, but if the remuneration of existing sub-offices is cut down too substantially, then we shall not get the improvements in facilities which the public ought to have, and which I believe most sub-postmasters want to give.

Over recent years the public has become increasingly concerned about the number of robberies and the amount of violence which post offices, particularly sub-offices, have attracted, with consequent risk and often injury to the staff. I think two changes ought to be made. First, where appropriate, alarms and telephone extensions to bedrooms should be installed in cases of sub-postmasters who live over the office premises, as is often the case. I am told that there is a reluctance for this to be done. Whether that is because the Post Office will not meet the charge, or does not make it worth while for sub-postmasters to do this, I do not know, but the cost is trifling. The fact that one can be linked by telephone to get help during any possibility of entry at night can be reassuring and will also prevent some incidents from happening. I should like to know that that trifling improvement will not be held up by parsimony or some administrative excuse.

The second change is in connection with the insurance of the staff. It is clear that some Post Office workers in sub-offices are now subject to personal attack as a kind of occupational hazard. One of the things which should be done to reassure them is to see that they do not suffer financially through their occupation. I am told that the Post Office is reluctant to undertake insurance of this kind. I know that there is a tradition that in the normal way Government Departments do not engage in this kind of cover, but in this case some arrangements should be made. I believe that the Federation of Sub-Postmasters has already insured many sub-postmasters and their staff for the small sum of £800 a year. If that is the figure involved, and it is very small, I hope that the Postmaster-General will feel that it is a responsibility which he should accept, so that elementary justice can be given to those who, while carrying out their daily work, may be subject to attack and may be permanently injured or incapacitated. It is mean of him to refuse to do so.

In recent years, the Post Office has centralised and mechanised in the Crown offices some of the work which was previously done by the sub-offices. That has probably been right and efficient and I do not criticise it. I hope, however, that the Bill will give an opportunity for the Post Office to consider what new useful tasks on behalf of the public might be performed at both Crown offices and sub-offices. That would help to make up remuneration in sub-offices where it has been lost and would also add to the commercial vigour of the Post Office itself.

Various suggestions have been made. For example, the Post Office might deal with the purchase of unit trust shares by the public. I do not know whether that is a good thing, but there are one or two obvious services which the Post Office could provide. As an example, one small but important service for many individuals would be this. Until recently, pensioners of the National Coal Board have been able to draw their pensions only from an office of the Board, which has sometimes been some miles away from the pensioners' homes. Yet the pensioners have also had to go to the local post office to collect their old-age pensions. Why should they not be able to draw both pensions from the one place on payment by the National Coal Board of a small fee to cover the cost? I believe that arrangements have now been made whereby co-operatives may pay some of the pensions. That is excellent and I would not want to stop it, but that sort of service could be provided by the Post Office, especially when the pensioner already has to go to the local post office to obtain his State pension.

There is also the new simplified passport. I know that it can be obtained from the local employment exchange, but in rural districts that may be fifteen or twenty miles away, whereas there is bound to be a post office in the village, a mile or two away at the most. There is no reason why the local post offices should not deal with these passports, because they deal with far more complicated matters. There are many more examples, one being the motor vehicle licence. Why is it that only certain offices can deal with these licences? Why cannot these licences be available at all post offices?

My last suggestion proposes a much more important development. On several occasions the Postmaster-General has promised that he would report on the possibilities of introducing into the British postal service the GIRO system of transfer of payments. As hon. Members will know, this has the elements of a simple banking system which is well known on the Continent. Firms have a number and one simply makes a cash transfer to a number in any post office. In some countries individuals, too, can have numbers and a whole range of simple banking transfers is then possible. The system saves time and money and possibilities of loss. It also encourages thrift. Incidentally, in Belgium no charge is made for the service because it is found that the balances which are held by the Post Office more than pay for the service provided by the Post Office personnel.

That is an excellent development which would give a great deal of new work and new opportunities to the Post Office, and I hope that the hon. Lady will say something about it tonight. I should like the system expanded even further. I have always believed that the joint stock banks have resolutely opposed in various ways, open and subtle, the introduction of any kind of cheque system in the Post Office. I hope, however, that with the new freedom given by the Bill such a step will be considered. Many Continental countries have a cheque banking system through the Post Office, with adequate safeguards. I know that the limit, on cash demand has been raised with the Post Office Savings Bank, but it is still a very long-winded procedure for drawing out money. Why could not banking facilities be made available to the public through the majority of the 23,000 sub-offices?

During our Committee discussions upstairs of the Payments of Wages Bill, we moved an Amendment to the Schedule to include post offices as places where cheques could be paid. We desisted from pressing 'that Amendment because the Minister of Labour said that the Post Office was considering all aspects about banking and would report. I hope that we shall get a statement about the possibilities, at some time if not tonight.

It is now clear that millions of workers can elect to be paid by cheque, and if that system develops on a large scale it will be impossible for the banks to cope with the work, because their hours and their staffs are restricted. This seems to be a wonderful new opportunity for the Post Office and I hope that it is something that will be seriously considered. The Government say that they believe in competition and the Postmaster-General wants to shake up the Post Office. Here is a great now opportunity to do so which should be welcomed by everybody.

I am sure that we all wish the Post Office well. It has a great tradition and a great record of public service. I hope that the Bill will give it new opportunities for serving the public even more widely in future than it has in the past.

7.10 p.m.

Mr. A. E. Hunter (Feltham)

I am pleased to be able to take part in the debate. The White Paper made four points which, I understand, will be implemented when the Bill becomes law. First, the separation of Post Office finances from the Exchequer; secondly, the abolition of the annual Parliamentary Estimates procedure and the Treasury control that goes with it; thirdly, its replacement by effective, but, nevertheless, flexible Parliamentary control; fourthly, Post Office staff will remain civil servants.

There have been suggestions for improving Post Office services. I cannot speak with the expert knowledge of my hon. Friend the Member for Gateshead, West (Mr. Randall), but I believe that, although the Post Office has given such good service, it can be improved. The Postmaster;General is keen on bringing it up-to-date and making its outlook modern. I hope that the Bill will give him power to direct his keenness and energy to achieving that end.

The Post Office is connected with the everyday life of the people. It was started 300 years ago, and during all that time it has maintained its great tradition of service to the public. When the Post Office was started there were no social and welfare services, but today it is allied to those services. The old-age pensioner goes to the Post Office for his retirement pension. Widows' pensions, children's allowances, ex-Service men's pensions and National Assistance benefits are paid at post offices. In our towns, cities and villages we can see the great service given by the Post Office to our social services. If separate offices had to be set up to pay these benefits the cost would be very heavy indeed. We therefore believe that, apart from its ordinary postal duties, the Post Office plays a most important part in the everyday life of Britain.

I have on occasions written to the Postmaster-General about speeding up the installation of telephones, and I have always had courteous replies. The war has now been over for fifteen years and, like my hon. Friend the Member for Hayes and Harlington (Mr. Skeffington), I have received complaints from people who have waited six, nine, and sometimes more than twelve months for a telephone. One person waited nearly two years. The reason for the delay in installing telephones is, that the region concerned has exhausted the money allotted by the Treasury for new plant for this purpose and is, therefore, unable to provide more telephones. I hope that the Bill will give the Postmaster-General the green light to go ahead.

The facilities in many post offices are out of date. The Postmaster-General spoke about providing chairs and tables. These facilities are necessary not only for the old-age pensioners who go to the Post Office to draw their pension and to sign their books, but for those who fill in forms to buy Premium Savings Bonds, National Savings Certificates, and to apply for licences, etc. I hope that the right hon. Gentleman will go ahead with his plans to improve facilities in all post offices.

I would like to see more automatic machines provided in post offices, in sub-offices and also in ordinary shops. There is no reason why ordinary shops should not have an automatic machine from which people could buy stamps. The provision of such machines would avoid the necessity of people having to join long queues in busy post offices. I hope that the right hon. Gentleman will go ahead with the provision of automatic machines, not only for selling id., ld. and 3d. stamps, but also for stamps of larger denominations. I visited the modern Post Office in Lincolns Inn Fields, about which the right hon. Gentleman told me. One can buy postal orders from automatic machines in that office. I hope that the Bill will give the right hon. Gentleman power to press on with such facilities.

The Post Office owns many valuable freehold sites, not only in London, but in many large cities. The price of land has risen, and we know that people are prepared to buy a cinema, pull it down, and build in its place a block of offices.

There is no reason why the Post Office should not build modern blocks of offices on the freehold sites that belong to them, use the ground floor to provide postal facilities, and let the upstairs offices to business firms and thus provide an additional source of revenue. Such revenue could then be used to provide additional services for the public.

This year the Savings Bank movement celebrates its centenary. It was started by Mr. Gladstone's Government. I agree with my hon. Friend the Member for Hayes and Harlington that the decision on payment by cheque is long overdue. There are millions of small depositors who do not have an account with a joint stock bank. If they were able 'a pay their electricity and gas bills and other small accounts by cheque that would be of great assistance to them. As we are celebrating the centenary of the Post Office Savings Bank, I hope 'that part of the celebrations will include the introduction of the cheque system.

Having referred to the centenary celebrations, there is another point which I should like to mention, although it is not the direct responsibility of the right hon. Gentleman. Nevertheless, perhaps he could have a chat with his right hon. Friend the Chancellor of the Exchequer about it. The Post Office Savings Bank pays 2½ per cent. interest on deposits. Although the Bank was started nearly 100 years ago, and the value of money has changed considerably in the interval, the rate of interest is still 2½ per cent. It is probably not worth a ¼per cent. of its original value. Perhaps the right hon. Gentleman could persuade the Chancellor of the Exchequer to increase that figure. If it were increased by only ½per cent., or even a ¼per cent., that would be a good way to mark the centenary celebrations, and would encourage small savers.

The right hon. Gentleman referred to the fleet of vans owned by the Post Office. I think that there are 40,000 of them. I suggest that the Government use them also for advertising National Savings Certificates and similar advertisements. If they were used for such advertising, that would provide yet another source of income. We are moving into a new age. The old Victorian post offices must go. We must have new buildings not only for the public, but also for the Post Office staff. I know that the welfare facilities provided by the Post Office for its staff are good. There are some very good canteens, and so on, but many of the buildings are out of date, and I hope that, with freedom from Treasury control, the Postmaster-General will press forward with the new building programme as quickly as possible. The Post Office today serves nearly 48 million people, and it employs a staff of 350,000. It is a great' public service with a great tradition.

Hon. Members on both sides of the House have welcomed the Bill. We wish the right hon. Gentleman and the Assistant Postmaster-General success in getting the Bill through, and hope that they will be able to carry out the suggestions which have been made by hon. Members to improve even further Post Office services for the public and the staff.

7.21 p.m.

Mr. James Boyden (Bishop Auckland)

I agree with many of the ideas of my hon. Friend the Member for Feltham (Mr. Hunter). We all welcome that part of the Bill which clears away anomalies, but there is a very considerable danger that in clearing away some of the anomalies and in stressing the commercial aspect of the Post Office some things of value may be lost. I have never been able to understand why so many hon. Members opposite consider that making a profit is more honourable than serving the community. I do not think that I am churlish in saying that. I think that I am being realistic. In all sorts of aspects of running the Post Office there is a very grave danger that to lay too much stress on the commercial aspect may blunt the cause of doing good to the community.

Paragraph 23 of the White Paper, headed "Obligations to the Community", states: Emphasis on the commercial aspects of Post Office business must not be allowed to subtract from its obligations to the community as a whole, though this may mean giving some services below cost. For example, the daily delivery of letters to scattered communities, and in some cases the provision of telephone service for them is very expensive. Moreover, losses on inland telegrams are universal. When we have debates on the Post Office and its annual report, I hope that we shall be able to hold the Postmaster-General to this theme. I hope that we shall be given an account of the way in which these particular services are maintained, despite the commercial emphasis which is now being introduced. In a large part of my constituency, which is rural, there has been a steady flight from the countryside. All over Great Britain the output of agriculture is being maintained by the increased efficiency in farming. However, the population steadily drifts away. This is particularly so in my constituency.

There should be more telephone kiosks in outlandish places and the parcel and letter service should be maintained at an even higher level. I should like to see in the general report of the Post Office a forward-looking plan setting out geographically where these services are being improved. I visualise that if commercialism takes the place of serving the community we may have the sort of losses in the Post Office which are occurring with British Railways. I am engaged at the moment in a battle to try to stop a railway line being closed. It appears to me that the powers of darkness, if I may so describe the recommendation, are likely to win. I hope that they will not win. The closure of railway lines and the gradual cutting off of bus services are just two instances of the way in which the commercial aspect is put before the good of the community. It cannot be said that it is in the country's interests that the countryside should be denuded of these services. I do not like to make comparisons between town and country, because I represent both, but there is a quality about country people which it is highly desirable should be preserved, and some of the things which may well come about with the passing of this Bill and the new attitude in the Post Office might be disadvantageous to the country as a whole.

The social services which the Post Office provides, in particular across the counter, may become a battleground between different Government Departments. I think that if would be a great pity if the service which the Post Office renders in its various administrative ways became a matter of bargaining. Are the services which the Post Office renders now to be added to the social service burden? People are rather reluctant to pay for social services. They pay more readily for things like tobacco, drink and entertainment generally than for rates and taxes. I think that most hon. Members would agree that the public get more value from their rates and taxes than they do from their extravagant expenditure on the sort of things which I have mentioned. It is very difficult to maintain public spirit in this sphere of expenditure. It is certain that the £1.6 million which the Post Office spent last year on sites and buildings is not adequate to produce the sort of service to the public and the necessary atmosphere in that service which the public deserve. I very much hope that the right hon. Gentleman will have another look at that figure. For a rich country like England this expenditure is reasonable, but it ought to be very much greater.

If too much stress is laid on the commercial side of the Post Office it is conceivable that the wrong sort of people will gain promotion. If the Postmaster-General drives commercialisation to its logical conclusion, personal qualities in serving the public may well be sacrificed to people who can economise and produce a favourable balance sheet. It seems that the way to success on British Railways and to get a statue in Darlington Market Place is to close half-a-dozen branch lines. That is against the interests of the public and the railways.

I should like to join with my hon. Friends, including my hon. Friend the Member for Gateshead, West (Mr. Randall), in paying tribute to the morale and efficiency of the Post Office service. Postmen deliver the mail in spite of snow, dogs, rain, inadequate letter boxes and come what may. The telephone girls are nearly always co-operative. They are far more polite than discourteous. I can recall a number of occasions when the telephone service has shown remarkable initiative and help to me. I think that that is universal. I very much hope that the present morale will be maintained, despite profit being put before good will.

It is stated in the Annual Report of the Postmaster-General that 6,000 suggestions have been made by joint production committees for improving the postal and other services. It would be appropriate if rather more was made of that in the Annual Report. I am sure that some of these suggestions have come from humble members of the Post Office staff and are the result of the excellent relationship which exists between the staff. I think that it is only right that tribute should be paid where it is due. In my constituency there is a family whose ancestors have lived in Upper Teesdale for 200 years. For a large part of that period they have maintained the local postal service. The generation is dying out now because the little Post Office in Forest-in-Teesdale is run by two maiden ladies. It is that tradition of service in the Post Office at large which we must try to retain.

I should like to see a brighter and more attractive Post Office report. Surely some pictures and maps can be incorporated in it. I can find no reference in the Report to the Activities of the International Postal Union. I always thought that this country made a historic contribution to the Union. It is one of the very few international organisations which is a wonderful success and in which people manage to get on very well. Mention should be made of it in the Post Office Report, particularly the part which we play in it. I can see nothing except a reference to overseas visitors. There is no reference to the part which we are playing in the development of postal services in our dependencies and Colonial Territories. May I also suggest that some claim be made for the part we are playing in helping the underdeveloped territories to build up their postal and telegraphic services?

I feel some sympathy with the plea of the Postmaster-General for proper letter boxes, code addresses, adequate addressing of letters and the proper tying up of parcels. I know that the Post Office has these things very much in mind, and we could all do something by using our influence to persuade the public that it would get a better service if it cooperated with the Post Office in this way. Since it is mentioned in one Report, I hope that the Postmaster-General will indicate what success has attended his campaign for lower and bigger letter boxes in houses.

I hope that there will be a more vigorous attitude in the Post Office towards the need to attract people into the service. Again I am not being churlish, but I hope that training will never suffer as a result of an emphasis on profits. In the last Report there was a reference to the shortage of graduates and a drive for graduate recruitment. Yet there were only twenty apprenticeships in engineering grades and 584 applications. I should have thought that in that direction there was much which could be done. There should be more apprenticeships and more encouragement.

The Postmaster-General made play with the fact that 59 per cent. of his employees under 18 years of age were attending day release courses. I should have thought the figure would he nearer 100 per cent. The Report also refers to the interchange of postal workers in industry and the number so exchanged was two. While that is better than nothing, I hope that more drive and vision will be displayed in promoting Post Office workers to responsible jobs, and giving them an opportunity to train for them. I hope that the emphasis placed by the Government on commercial practice will not result in them losing sight of the good will which exists between the public and the Post Office but rather that they will strengthen both that good will and the morale of postal workers—which is already high—and not overlook the common touch in all the vast operations which they undertake.

7.33 p.m.

Sir Barnett Janner (Leicester, North-West)

I agree with most of what has been said in this debate and I think that the Postmaster-General will feel pleased with the major portion of it. There is no question at all that our postal services rank very high indeed, particularly when compared with similar services in other parts of the world. I have had experience of the postal service in the United States of America, for example. There the process of delivering letters took days, but with our postal service the letters would have been received in a matter of hours.

Everyone who has paid tribute to our postal service did so with sincerity and in the belief that its standard is high. But that does not entirely meet the circumstances which prevail in our community today. Considerable change is taking place owing to the movement of people because of bad housing conditions, the spreading out of our towns and the creation of new residential areas. There is the general effect of the creation of the Welfare State in which we on this side of the House can claim to have taken the most effective part.

From time to time I have been concerned about the balance between the commercial aspect of the Post Office and its utilisation as a social service. On the commercial side of this undertaking there are two aspects to consider. It is a monopoly and also something which everyone understands as part of their own business. It is not purely a kind of industrial undertaking which is providing a service and I think that the social aspect of its existence is one of tremendous importance. The community has set up this industrial concern for its own benefit.

Last year the Treasury took nearly £21 million of surplus obtained by the Post Office after allowing for the interest on the capital utilised in the postal services, and that is not a small sum. The actual figure for 1959–60 was £20,900,000. Yet there are occasions when we feel ourselves frustrated by the lack of response to rightful and proper requests for facilities to be provided which, in my view, are essential not only to serve the community but also for its health and general welfare—

Mr. Bevins

With respect, I think that the hon. Gentleman has got his facts wrong. It is untrue to say that a surplus of £21 million was taken by the Treasury. It was not.

Sir B. Janner

If it was not taken by the Treasury, and if it was a surplus retained by the right hon. Gentleman's Department, my next comments are even more appropriate.

When I asked for the provision of a telephone kiosk for the use of a community of aged people who, because they are aged people, are housed in bungalows in a certain area in my constituency, I received a letter from the Assistant Postmaster-General saying: We do try to provide good public telephone facilities in urban areas, but I must consider the financial aspect most carefully because we are already losing over £3 million a year on public call offices, and this loss has to be made good by the general body of telephone users. Generally speaking, we put up a new kiosk only where we are satisfied it will pay its way. What an absurd answer from a concern which is making £20 million or £21 million profit. It is not prepared to provide a social service in an area where there are aged persons who at any moment may need to use the telephone. Of course, it is true that they do not rush to the telephone every five minutes in order to ring up their friends. We should not expect that sort of thing to happen. But this is a social service of a highly important nature and should be provided in the district to which I refer. The Post Office says, "All right, we will let you have that service, but we shall take away one of the kiosks existing in an adjoining district, on the New Parks estate, where there are young married people with families." I assume that that kiosk was provided because it was essential for that area. The Post Office says, "We will change our mind now. We do not think that it is essential. Let the people come down to the kiosk which we propose to move to the place where the aged persons are living in bungalows."

That is a cheeseparing policy. One of the most essential needs is to provide for those who have been shifted into these areas and also to ensure that the other areas are not deprived of facilities which already exist by shifting a kiosk from one place to another, thus saving a small sum.

Another letter from the Ministry in my possession says that it costs £60 to keep a kiosk for a year, including repairing and painting. Even if it does, in view of what is paid for telephone calls from the kiosk, is it not worth having it there for persons who need it for purposes of health, etc.? Is not the State called upon to provide such a service? Is not a monopoly run by the State called upon to ensure that such amenities are provided?

I speak with some heat because, time after time, I have endeavoured to bring this home to the authorities and to the Postmaster-General. I have always felt, perhaps with justification, that he has been under the influence of the Treasury. I am prepared to concede that the Treasury may have been the villain of the piece. Somebody referred to the shackling of the Department by the Treasury. That may be a somewhat strong expression to use, but I may say something about that later.

The fact is that £21 million is available as a surplus. That should and must be used for the benefit of the cornmunity as a whole. The services should be advertised. People should be encouraged to use the telephone service more. This is crucial. People should be made telephone conscious. Telephone kiosks should be used more. The Post Office, as a good commercial undertaking, should make people realise that the use of the telephone is valuable to them for their own business and to private relationships. There is no reason why it should not be.

I am sorry that the public in this country does not use the telephone on anything like the scale which prevails in many other countries. I do not know the figures, but I am sure that the right hon. Gentleman would agree with me in this contention. That is a commercial aspect which the Postmaster-General will now be in a position to underline and emphasise.

Aged people who are shifted into an area have to draw their pensions. The Assistant Postmaster-General accompanied me on a walk at Mowmacre Hill, Leicester. We walked up a hill. Perhaps she could not walk comfortably, because she was shackled by the Exchequer. Somebody asked the hon. Lady to push a perambulator containing twins up the hill. She refused. I quite understood her refusing on moral grounds, but I am sure that in any case she would have refused on physical grounds. It was far from easy for the mother who had to come down from the top of the hill to the bottom to draw from the sub-post office what was due in respect of the two youngsters to push the perambulator containing them up the hill again.

People there are agitating all the time. I do not believe that the average Englishman or Englishwoman keeps on protesting for the sake of protesting. People are entitled to grumble, but they do not keep this up indefinitely. People there have protested at meeting after meeting. Aged persons have been taken to their beds, because they have slipped on this steep hill. They keep on pro- testing to their Member of Parliament, quite rightly. I see the Postmaster-General smiling, but I think that they are right to protest. These people want a sub-office at the top of a hill so that they do not have to come down the hill to draw their pensions. It is difficult for them in bad weather, especially as the hill is slippery. Where is the sense of it when there is £21 million to play with? The Minister says that there must not be another sub-office. Why not?

I emphasise these points because I have experience of the difficulties which have been created because of the failure of the Minister to take action. I make an appeal to the Postmaster-General and all concerned with him. They should ensure that they have power in the Bill to do what they want to do. In that event, we can put the blame fairly and squarely on their shoulders if action is not taken. However, I believe that action will be taken if the Postmaster-General is not prevented from taking it because of other Departments stepping in.

Tributes have been paid. I am objective in these matters. The Assistant Postmaster-General knows full well that, whenever any improvements in the postal services have been made in my constituency, I have gone out of my way to attend the various opening ceremonies or functions, because I believe that the Pest Office should be encouraged to do things which bring benefit to the community.

The right hon. Gentleman said that he does not know where the 'balance lies between commercialism and services. This business can be made a paying one. In fact it is already a paying business. I did not understand the hon. Member opposite when be spoke about commercialising and profit making, because a profit is being made already. As a profit is being made, it should be ploughed back into the industry for the benefit of the consumers. Every person in the land is a consumer. Everyone is a customer of the Post Office. It is not only Members of Parliament and industrial people who are consumers. Men and women in the street are consumers. Old-age pensioners are consumers. They pay for their postal services as well as everyone else. So does the person with young children whom I mentioned.

It is good business policy to admit that the customer is right, even if only occasionally—not that the customer is always wrong or that these customers are wrong. I do not speak in a carping spirit. The right hon. Gentleman must weigh these matters up and reach a conclusion. He should take a broad view about the further noble service the Post Office can render. It is not necessarily the big things that count. The small things count also. What counts is that a person is uncomfortable having to go down a hill to draw his pension. If such small matters as that are put right, it will bring happiness to the lives of those who unfortunately are not as well gifted with the necessities of life as some of us are. I believe that both the Postmaster-General and the Assistant Postmaster-General are convinced that the human aspect of these matters is tremendously important.

I, also, say good luck to the Bill. It is a very important Bill. If it is properly put into effect, as he wishes it to be, it will serve the purposes to which I have referred even better than has been done in the past. It is in that spirit that appeal to him. I am sure that other hon. Members have had similar experiences in their own constituencies, but I appeal to the Postmaster-General to look upon that aspect as being of extreme importance to the happiness and welfare of the community.

7.52 p.m.

Mr. Charles Pannell (Leeds, West)

I will not detain the House very long, but I wish to refer to a specific case in which the interests of aged people are rather neglected. I refer particularly to that anachronism to which my hon. Friend referred in Clause 12, where it says: …with the anoroval of the Treasury, determine, being a form which shall conform to the best commercial standards. Bearing in mind that my hon. Friend the Member for Leicester, North-West (Sir Barnett Janner) has addressed himself to all the elementary virtues that should be in the Post Office, I wish to refer to a specific case. This is certainly known to the hon. Lady, who, I think, is to reply. Leeds Corporation is building very big blocks of flats around the city which are 15 storeys high. They have the pleasant custom, in the six Parliamentary divisions of Leeds, that the local Member of Parliament opens these housing projects in various parts of the city.

In planning these blocks of flats in municipal estates as neighbourhood units attention has been paid to the question of small children and elderly people crossing roads. To this end the Corporation has put a block of eight shops quite near to these 15-storey blocks of flats. I refer to one block that I opened near Armley Heights. To make that neighbourhood unit self-contained and road-safety-conscious it has everything except a sub-post office. The occupants, in the main, are people who have been decanted, if that is the word, from back-to-back houses on to new housing estates. They have been used to having small distances to walk, because, obviously, there has been a great density of population in the areas from which they have come.

I wrote, in the normal way, to the hon. Lady and she sent the sort of civil reply, which one would expect, and which, no doubt, was the Departmental case, referring to the proximity of other post offices. As I have walked over the territory I can tell the Postmaster-General that there is all the difference between planning a case on paper and actually walking over the ground. There is all the difference between knowing what you are talking about and understanding what you are talking about. His Department does not know or understand what it is talking about when it tells me that other sub-post offices are near enough. In one case it involves the crossing of two main roads and in the other the crossing of another main road. That is just the situation which we are seeking to avoid. The Post Office is a service which has to be integrated into the needs of the community and where one has municipal housing estates one has to plan the post offices in a civilised manner.

I think that the hon. Lady is to visit this site before long, but it will not be enough for her simply to look at a map. It will be necessary for her to put herself in the position of those old people who have old-age pension books—and young people as well—and to walk over the main roads. This has to be put in its right setting. It has not to be the normal commercial standards, but has to be judged from the criterion of what the old and young people have been used to. It is rather a reflection, when we have a first-class piece of municipal planning, that the oldest nationalised industry should even appear to fall down on the job.

The hon. Lady knows all about the position at the Armley Heights. I hope that it will be taken into consideration. I hope that she will be able to walk over the territory and to visualise what we are trying to do. She must not consider the post offices in the City of Leeds simply on the basis of the number of people who are going to this or that post office, and whether, by the best commercial standards, these offices are justified. There are other standards on which they must be judged.

I hope that when the hon. Lady visits my constituency she will bring her natural sympathy to bear on her local officers, who, I believe, are the niggers in the woodpile here. There are certain things up with which the people of West Leeds are not prepared to put.

7.55 p.m.

Mr. W. R. Williams (Manchester, Openshaw)

I have listened with great interest to this very lengthy debate lengthy in a relative form, of course. I was rather afraid, having regard to the fact that it was the second day back after the Recess, that this very important matter would pass through a poorly attended House with not too many hon. Members taking part in the debate. That would have been a very serious thing. I believe that the House of Commons should be watchful of the interests of all its services in the best possible way. I believe it is healthy for the services that they should know that the matters that are concerning them are also matters of concern to this House. I am, therefore, very pleased—as I am sure the right hon. Gentleman and Assistant Postmaster-General will be—that so many Members have taken part in the debate today and that so many useful contributions have been made.

The debate has ranged over a wide field. I am not blaming anybody for that, and I think it is all to the good.

It is better that these things should be brought out into the open and for the Post Office to know exactly what people are thinking about its service; its good points and its bad, its achievements and its failures. Speaking broadly, I think that the right hon. Gentleman and his administration should feel very pleased with the general tone of the House towards the Post Office as a public service.

I digress to express my appreciation to my hon. Friend the Member for Gateshead, West (Mr. Randall) and to my right hon. Friend the Member for Caerphilly (Mr. Ness Edwards) for some very generous references that they made to me. I know my right hon. Friend will appreciate that the fact that I am standing here today is not due to any great ambition on my part. I regret—and did regret at the time—that my appearance at this Box was due to the fact that my right hon. Friend felt he could no longer carry on the work which he had done with great distinction over many years. I appreciate those references very much indeed, and the good wishes. The good Lord knows I can do with all the good wishes that come from every quarter. I can assure the House that that is the case. I hope I shall be able to work with the right hon. Gentleman and his administration in the same way as my right hon. Friend has been able to do and that, with a little experience of the Post Office, I may be of some use from time to time in considering the problems.

I remember that when forty years ago I was on the telegraph staff of the Post Office in Liverpool we had a telegraph instrument called the Baudot, an excellent but a very delicate instrument, which depended for its efficiency on complete synchronisation. A great deal of care and attention was required in its maintenance, and in the early stages it was not unusual for it to have stoppages. Sometimes the circuit stopped. I remember an incident of that kind. We knew that special staff would have to be trained to look after it. I said to the man concerned, "What is the matter, Harry? What has caused the stoppage?" He replied, "Nothing at all". I asked him why he had stopped the instrument, and he said, "I just wanted to find out why it was going so well".

I cannot help but think that in this debate we have tried to stop the machine for a few minutes in order to prove to one another and to the Minister that there is nothing wrong with it, that everything is going on all right and that we have satisfied our curiosity to know what is going on.

Of course it is going well. Any business which produces a surplus of £20.9 million, even in these days, is going well. It has dealt with considerably more traffic during the last twelve months and at a substantially reduced cost, and all this, apparently, without the aid of the mysterious private master mind, whom everybody seems to think is essential to any industry. It was those master minds who allowed those defective engines to go on to the Glasgow railway system and some of the London systems. We have to be careful how we talk about these commercial brains and the commercial disposition, but I do not think that there is a great deal in it.

It is very significant that in the debate today no speaker has criticised the nationalised industries in the House. That in itself is significant. None of the vituperation which is hurled against other nationalised concerns has been used today. That, I think, is further proof that things are going pretty well in the Post Office.

The changes in the Post Office administration which we are seeking to put into statutory form in the Bill took place in the Post Office at least 20 years ago. I have been connected with the Post Office for many years, and during that time I have negotiated with generation after generation at Post Office headquarters and regional headquarters. I have not been blind during those periods of negotiation. I have seen the changes which have taken place in the direction of being more businesslike, if that is the word, than they were in the old days. Those changes have taken place, and all that we are doing in the Bill is to give them the statutory blessing of the House. That is all that I can see in it.

When I heard about the Bill I confess that I felt some apprehension about what it might contain. I was not quite sure what would be the basic urge and impulse behind it. Since then I have read the most informative document about the Post Office that I have read for a long time—this very informative document in good English, good style and plain language which everybody could understand. I have also read the Appropriation Accounts, but I could make nothing out of them, because when I thought that I had found the fish I discovered that it was not the same kind of fish as I wanted or the same kind as I had found in the commercial accounts. I went through them night after night. Indeed, I have done more homework in connection with the reconciliation of these accounts than I have done since I tried to obtain a Central Welsh Board Certificate fifty years ago.

At the end of it all I confess to being no wiser about the reconciliation of these figures than I was at the beginning. If the Postmaster-General were honest with the House, he would confess to being as ignorant on these things as I am because it is almost impossible to understand them, and the wrangle on both sides of the House about the meaning of these figures has amazed me.

I sincerely hope that the Postmaster-General will take serious note not of the speech made by the hon. Member for Cheadle (Mr. Shepherd) today—I did not think very much of that—but of the speech which the hon. Member made five years ago, which in my opinion was an excellent speech and which showed that he had given serious consideration to the matters about which he intended to speak. In the course of that speech the hon. Member for Cheadle asked the Postmaster-General to bring before the House accounts and balance sheets which would be clearly understandable to hon. Members. I agreed entirely with him, because if we are to get people in the House interested in the affairs of our oldest nationalised industry, they must know what we are talking about and writing about and they must understand these things.

I am a little surprised that the right hon. Gentleman did not produce a White Paper, before he produced the Bill, giving the House some idea of what he had in mind about the presentation of accounts and balance sheets. Even at this late stage it would not be a bad idea for him to consider the matter.

Mr. Bevins

It was referred to in the White Paper "Status of the Post Office", which made it clear that once the Bill became law there would be a set of commercial accounts, not a cash account.

This awful headache of reconciliation to which the hon. Member refers will no longer be necessary. This question of reconciliation, in fact, is quite simple, and I shall be happy to have a word with him on the subject.

Mr. Williams

I am very pleased indeed to hear that and will certainly avail myself of the offer, although if the right lion. Gentleman intends to change the whole system I shall be wasting my time in learning about a dead piece of work. We will talk about that later.

I have discussed the Bill with many of my old colleagues in the Post Office trade unions and with other colleagues outside the House who have indirect connections with the service, and I listened to the Minister's very able speech. I mean "able" in that he talked extremely well on what I regarded as the least fundarnental points before the House today and cleverly drew the House away from an examination of the subjects which really matter in connection with the transfer from the Treasury to the Post Office. I listened to him with great interest. As a result of my reading it and of the talks that I have had, I can support the Second Reading of this Bill, although when I first looked at it I thought that I would not be able to do so.

The right hon. Gentleman referred to the new buildings that he had in mind, and I am glad that he is taking a personal interest in this subject. Nowadays, factories and offices and all that type of buildings are being put up in the most modern style, yet there are thousands of Post Office people who, for twenty Orr thirty years, have been working in pretty awful dens—that is about the only word for them. My hon. Friend the Member for Ince (Mr. T. Brown) said that the Post Office building there went back to 1874. It is a pity that Hitler did not deal with it. Seriously, it is a shame that such buildings should be occupied by a public service that last year provided a surplus of £20.9 million. Indeed, it is quite inexcusable, and I am very glad that the Postmaster-General is tackling the matter in a very serious way. He may find some little difficulty in getting the money, and for that reason I want to deal with one or two aspects that will rather interfere with that sense of freedom about which so much has been so glibly said this afternoon.

The right hon. Gentleman made a slanting reference to the examination of Post Office sites. That will be a very uesful inquiry. There has been a good deal of waste of valuable land, and we might as well confess it. I can understand that a good deal of it has resulted from a sense of never wanting to let the side down. For instance, when a new sorting office was being built, one never knew what its rate of development would be, and one had to go on the assumption that one would want to expand within the next twenty years. Nobody ever wants to fall down on the job and find that a building's expectation of life has been reduced because the forecast of needs has not been made with sufficient care.

The examination that is envisaged will be very profitable, but I hope that the Postmaster-General will bear in mind that it is very important that the Post Office itself should have good buildings and good sites. In my Liverpool days—and the right hon. Gentleman knows something of that city—nothing used to annoy me more than to find every tinpot little bank in Liverpool, every trustee savings bank, every new shop that opened getting some of the finest sites in the city, white the Post Office had to go round the back streets where nobody could find the building and there were no direction signs to assist them.

I hope that the Postmaster-General will not fall into that error when looking at the sites, and at their freehold value and the cash return that will accrue to the Department as a result. I hope that he will resolve "As the political head of the Post Office, I shall get sites that are in accordance with the status and dignity of the Post Office as an administration, and of the staff as its servants".

I took the right hon. Gentleman's reference to certain discussions now going on to be in connection with road services. Here, again, I am fully behind him. After long experience in the Post Office, I believe that there is a good deal that the Department itself can do in connection with the transit of its mails in certain parts of the country—work that has hitherto been sublet to other agents. The major schemes of reconstruction now taking place on the railways, the closing of branch lines and so on, provide an opportunity for the right hon. Gentleman's Post Office administration to investigate the possibilities of different forms of transport of the mails in certain areas.

I am sure that the Postmaster-General, my hon. Friends and hon. Members opposite who have contributed to this debate will excuse me if I do not follow the very useful, interesting and valid points they have made, but I should be failing in courtesy were I not now to offer my congratulations to the hon. Member for Bolton, East (Mr. E. Taylor) on his maiden speech. I am very pleased that he chose his first occasion on which to address the House to praise the service with which I was so long associated, but I should like him to remember, when we give further consideration to this Measure, that what is good for Bolton ought to be good enough for other parts of the country in much less time than the ten years envisaged for the materialisation of the scheme.

I agree with the three main proposals in the Bill. I believe that the Post Office should remain a Government Department. That is an important decision. During my period of service, there was a good deal of quibbling and vacillation on this issue. I am glad that the Government and the right hon. Gentleman have definitely decided to accept the conclusions of the Bridgeman Committee of 1932 which said: …the public have a right to the influence which Parliamentary discussion and control alone can give. I hope that this House will accept the obligation contained in that declaration that it will accept that responsibility to discuss the achievements and the failures of this great service.

I am also glad, and this view is shared by most of those with whom I have been associated, that the telecommunications and postal services are to remain together in a single organisation. We should not break up this grand service into segments. The country is too small. We are too close together. We rely so much, one service on the other, that in my opinion it would have been a fatal mistake to have taken any other decision on this issue.

I am pleased to note that, if anything, there is to be more direct accountability to Parliament. That is a very healthy sign. Here I must be careful how I put things. I only wish that some other concerns of which I have a little knowledge had been as accountable to this House as the Post Office will be under the new arrangements. If, as I have said, the accounts are presented in clearer and more attractive form, I am sure that there can be generated among hon. Members a desire to understand what is happening in the Post Office, how it is using its money and carrying out its social obligations and how the country is reacting to the way in which it is doing all those things.

I assume that we shall have two Post Office debates in the course of a year. Perhaps the hon. Lady the Assistant Postmaster-General will be able to tell us something about that. At least, we have got to pass a Motion in order to pay the salaries. Moreover, no money will be available to buy stamps unless we give the authority by means of a Resolution of this House. Therefore, I am assuming that we shall have that opportunity of saying what we think of these matters. Secondly, I am hoping that when the accounts are before us, together with the comments of the Comptroller and Auditor General and the Report thereon, there will be an opportunity for the House to have a first-class debate.

I am in full agreement with the proposal that Post Office staff shall remain civil servants and enjoy all the rights and privileges of the Civil Service. The Civil Service has made a unique contribution to the life of this country. I believe that India recognised. above all things, when she was separated from us, that it was the Civil Service which was becoming the basis of her new life, hopes and aspirations.

There is something about the Civil Service that can never be properly understood by people who have never been in the service. I know that there is a good deal of talk about it being pedestrian and deliberate, but there is a tremendous amount of integrity and hard work in carrying out the duties involved. I think that we have built up an esprit de corps which has been sustained in the Civil Service. I do not know what conversations my right hon. Friend the Member for Caerphilly had with my old friend Lord Geddes. Perhaps I had better not delve too deeply into that, because I might disagree with him. But I believe I understand the views of the Post Office people when they say that they wish to remain as civil servants.

I agree with the separation of the Post Office finances from the Exchequer. I agree also that the trading fund should be established separate from the Exchequer and free from Treasury control, although, as I said before, "freedom" is a relative term. I hope that it will be controlled wisely and directed by the Postmaster-General who will be responsible directly to Parliament.

Much has been said about the Treasury from time to time. A very good friend of mine, a former Member of this House, hated the Treasury as the devil hates holy water. I refer to Harry Wallace. He had every reason to hate the Treasury, as indeed I had in my early days. We had to deal with wage claims in arbitration courts and fight the Treasury. Believe me, those Treasury boys took an awful lot of beating. The Post Office was referred to as the mulch cow of the Treasury, and that was quite right twenty-five years ago. I remember being in an arbitration court for thirty-eight days. I am referring now to the Irishman's rise. However, in the last ten years I have never believed that the Treasury was quite so bad as it has been painted. There are some good points about the Treasury, although it is not for me to refer to them tonight.

I should like to comment on paragraph 4 of the White Paper on The Status of the Post Office. First, however, I should like to join with those hon. Members on both sides of the House, including the hon. Member for Cheadle, who have said that it would be very sad if the Post Office departed from having as its primary and basic function that of performing a public service and undertaking its social obligations. I believe that it would be a bad day for the Post Office staff if we were to create a hybrid administration which would ask for integrity on the one hand and slickness on the other, which would expect honesty on the one hand and then try to follow the sort of tactics which have sent thousands of financiers to Dartmoor and other places. I hope we shall not change the basic approach of the Post Office. Traditionally the first thing that the British people expect from the Post Office is that it should look after the social obligations of the community, to which reference has been made in this debate.

I have a fear about paragraph 4 of this White Paper, although I think that fear is relaxed a little when I read another document to which I shall refer in my peroration. There is a better climate about the other paragraph. In fact, I think this paragraph 4 is a bit of fluff. It has been put in to please the boys. I do not think that the administration or even the Postmaster-General or his Assistant could possibly believe some of the things that are in this paragraph.

In the latter half of the paragraph there are some reflections which I am bound to challenge. Nobody fought the administration in a period of thirty-five years more than I have done. I have fought them pretty hard and I have found them pretty tough. But I am not prepared to accept the reflections which appear in this paragraph, that these people are a lot of nincompoops who have not marched with the times but have remained static for thirty-five years. The paragraph says: If, after allowing for its social responsibilities, it fails to approach the problems of management and organisation with a business mind it will quickly become inefficient… it must be free to use the criteria applied in the world of commerce for gauging efficiency: it must be free to innovate and develop as a business seeking to meet and anticipate its customers' demands. I think that is a libel on good men and women, and I want the House to be aware of my feeling. This paragraph could have been written in a very different way, as I shall be able to show later when I refer the right hon. Gentleman to a paragraph in another document.

When I look at some of the evidence before me relating to the achievements of the Post Office, I say without fear of contradiction that there is not a business in this country that has a better record in meeting legitimate demands, in trying to foreshadow what those might be and in trying to introduce new services, making use of the best scientific devices available. I have a list here which, if I had time to read it, would impress hon. Members with the way in which customers' demands in every conceivable form have been anticipated, with great speed and efficiency.

If these good men and women have failed in any way, I contend that the Postmaster-General must look elsewhere for the basic causes of their failure. In most cases, they have failed because they have been refused the wherewithal to do the things they wanted to do and knew that they ought to do.

I am not opposed to Treasury control in principle. No Government, of whatever colour, can throw overboard control of its finances. I think that the Treasury must have the right of ultimate control; otherwise, all sorts of things could follow. I accept it in regard to pay and grading and conditions for the staff. I think that the Treasury will look after them in the same way as it looks after the rest of the Civil Service. Nevertheless, I invite the hon. Lady to give me two assurances about that control over pay, grading and conditions. First, will she assure us that this arrangement in no way adversely affects direct negotiations on wages and conditions issues between the administration and the various Post Office trade unions recognised by the Post Office? I hope I have made that clear. There have been suggestions that the Postmaster-General will not be able, under the new conditions, to consider claims on their merits without consultation in the first place with the Treasury. I assume that that is not so and that the hon. Lady will give me the quite specific assurance for which I ask.

I wish to be assured also that the Post Office will be free to determine its own establishment force and that it will be able to deal with the number of people it wants in the various grades strictly in accordance with the needs of the service and the availability of suitable applicants for the jobs. In simple terms, I hope that the Postmaster-General, in the new conditions, will decide the number of people he will have in the Post Office, not the Treasury, as has been the case very largely until now.

I accept the provisions regarding investment control, including control of borrowing, up to a point, with certain reservations. I accept the principle, but, like my hon. Friends, I think that there ought to be a good deal of elasticity and flexibility in Treasury control of borrowing and so forth. I accept the foreign exchange control without comment. I accept the minimum obligation of the Post Office to pay its way and to make proper allocation to general reserve. I accept that unreservedly, but I have strong doubts about the new financial policy about which I have been reading in one of the documents, which seems to go a good deal beyond the terms of Clause 6 of the Bill. I shall return to that if I have time later on.

I come now to three or four aspects of the matter which seem to me to merit consideration and which have been exercising the minds of many hon. Members during the debate. The first is the point about freedom. I believe that a good deal more freedom will be given to the Postmaster-General under the Bill, freedom which, I think, Postmasters-General should have had many years ago. I agree entirely with my right hon. Friend the Member for Caerphilly on that aspect.

I must say, however, that the old-age pensioner has freedom of a kind, freedom to spend his £2 15s., freedom to go to any of the Manchester stores, the biggest of them if he likes, and have a look round. But he will not be able to buy. There is that element also in this freedom for the Postmaster-General. He can go only so far, and, after that, his freedom disappears under the overriding control and direction of the Treasury. The cold hand of the Treasury is still on his shoulder and, as I see it, even under the terms of the Bill, the only time when he can have complete freedom will be when he relies entirely on internal financing for all his capital investment for development and so forth.

I come now to investment. As I see it, the crux of the whole problem in the Post Office is the problem of investment. It is the responsibility of the House of Commons to ensure that the Treasury is not permitted to fix an unreasonably low ceiling of capital expenditure and then wash its hands of the whole business. It is the responsibility not only of the Postmaster-General but of this House too to see that that does not happen.

I believe, as many people in the service and outside believe, that there is urgent need for greater investment in the Post Office, to complete projects already commenced and to put under way many others which are desirable or essential, projects which will benefit a large section of the British community. In my opinion, there is a need to move very much faster in supplying telephones to would-be subscribers. Every hon. Member, if he is honest, will have to admit that almost every week he receives complaints from someone or other who has been waiting a long time for a telephone. Like my hon. Friend the Member for Leicester, North-East (Sir B. Janner), I believe that we should be travelling much taster in this matter.

I know that there has been a fairly substantial increase in the last year or two, but I do not think it has been fast enough. In December, 1960, The Times, which is no great friend of mine, said that it was below that of any other of the fifteen major industrial countries. I do not know whether that is true, but if it is it is not very much to the credit of the British Post Office. Apparently we are behind at least fifteen of the major industrial countries in supplying people with telephones, which are one of the normal requirements of a civilised industrial nation. I understand that in the United Kingdom there is only one telephone for every seven members of the population. In the U.S.A. the figure is one in three; in Canada it is one in three; in Switzerland and Denmark it is one in four, and Western Germany has twice or three times as many telephones as Great Britain. Those are the statistics which have been given to me. I understand that there are now 150,000 people waiting for telephones.

Not only is the installation of these individual telephones required; more capital is required in order to strengthen the trunk network, so as to accommodate these additional demands. After discussing these matters with people in the trade unions concerned, I am satisfied that the telephone service does not lack technical knowledge, research or skilled staff. The major reason for the slow progress has been the control over capital resources made available to the Post Office. I now want to say a word about the S.T.D., to which the right hon. Gentleman referred. He said that it was an excellent system, and all the information that I can gather about it confirms the view that it will be one of the best systems ever introduced into the telephone system of this country. To use the words of an old Post Office employee, this could be a money spinner. It could speed up telephone communications and it could also be run very economically.

As I understand the programme, it appears that by the end of March, 1961, there will be 72 exchanges and about 250,000 subscribers using S.T.D. facilities. By the end of March, 1962, there will be 340 such exchanges, with 11 million subscribers, and by 1970 the S.T.D. service will be available to 90 per cent, of the subscribers. My only submission is that, in relation to an efficient, modern, well-tried and profitable system, a period of ten years is far too long. It should be reduced substantially, to about five or six years.

I now want to refer to the automatic Telex network. Since I have been on this job I have been reading dutifully everything published in connection with the Post Office, and I find that the first two years of the automatic Telex network programme has been completed; that in Fleet Building has been set up the largest automatic Telex exchange in the world, and that it has been completed jointly by the Post Office telecommunication and engineering departments and equipped at a cost of £1 million. It is to cater for London and some of the Home Counties. But what is that? It is only a small proportion of the whole country.

I hope that the Postmaster-General will not fall into the error into which certain other Ministers have fallen, of laying out a large amount of capital in order to start a large and expensive scheme and then vacillating and reversing the policy and wasting millions of pounds when it would have been cheaper in the long run to have carried on more rapidly with the development. One tragedy of the British Transport Commission is that it has spent millions of pounds in preparation for the electrification of the railway from Manchester to London, and the Government are now vacillating, doubting and cancelling. The Government must make up their minds that once they embrace a large scheme which will bring great benefits to the people they will not turn their back on it and waste capital, and money.

This automatic Telex exchange is a wonderful thing. Our business people will jump at it wherever it is offered to them. It is calling aloud for expansion.

On the postal side, there is the automatic letter-sorting machine. I have seen two of these machines and I should have seen more except for the pressure of Parliamentary business. Here again is an excellent opportunity to introduce a new scientific machine and one which, in due course, will have wonderful results. I understand that it is in the experimental working stage. Those responsible should not be long in making up their minds concerning its final form and I hope that money will be available to the Postmaster-General to continue the development of this letter-sorting machine, too.

A point to which the hon. Member for Cheadle slantingly referred is satellite communications. Hon. Members who were here on 21st December will remember that the hon. Member for Abingdon (Mr. Neave) raised the question of a British satellite communications programme as one of momentous importance to the country. Some countries are going on with research. We want the United Kingdom to be in the forefront of research and development in this modern conception of space communication. I have deliberately included this item because it is most important that we should be looking forward, as we have been doing in the past, towards some of these great possibilities of development.

I should like to draw the attention of the right hon. Gentleman to an article in the Evening Standard of Monday, 23rd January, which stated: The Government has begun an intensive drive to persuade British industry to automate more quickly. Government money is to be plunged into the development of a new breed of computers which will bring automation within the reach of the small man as well as the big combine. The article goes on like this: Ministers will ram home, in conversations with industrialists, two things that will happen if automation is delayed: Progressive worsening of Britain's trading position as competitors beat us. Certain defeat in the cold war with Russia. Soviet industry is automating—regardless of need—under Kremlin policy. The fruits of this are expected to pour out in five to ten years. Ministers are asked to ram those thoughts into our industrialists. I ask them to ram them down the throat of the Chancellor of the Exchequer, too, inasmuch as it concerns the Post Office, because there is no excuse at this stage why the money should not be made available to meet the needs of our people and to give the best possible services to the community.

I intended to deal with two or three other matters, but I have probably said enough. I therefore conclude by saying this. I have referred to the paragraph in the White Paper on "The Status of the Post Office". I now refer to two paragraphs on page 15 of the Post Office Report and Commercial Accounts. I quote: Plans for the future envisage a steady expansion of services both in scope and quality. Such developments as Subscriber Trunk Dialling, designed to speed and to render more flexible the service which the Post Office can give, will be extended as quickly as resources permit. The last paragraph states: The Post Office is a great business. The change in its traditional relationship with the Exchequer announced in March, 1960, will ensure greater emphasis on a commercial outlook. This is the one I specially like: The sense of enterprise associated with the commercial approach will be fostered, without being allowed to prejudice the sense of public service to the community as a whole which has been a dominant feature of Post Office policy for three centuries. I sincerely hope, in supporting the Second Reading of the Bill, that that will be the predominant motive. Let us make the Post Office as efficient as we can and use all the resources we can get hold of, but remember that in essence it is the greatest social service that we have in this country, and that it cannot be replaced. I think I am in a position to say on behalf of the workers in this great industry that they will be with us in the future as they have been over many, many years in the past.

8.50 p.m.

The Assistant Postmaster-General (Miss Mervyn Pike)

We have had a most interesting and constructive debate, and I think that all of us were heartened by the friendly remarks we heard about the Post Office. Certainly, they were a heartwarming experience to those who have a very high regard for this great organisation.

We have listened to a maiden speech, and I was particularly interested, if I may say so, as a Yorkshire woman, to hear a contribution from a Lancashire Member of Parliament. We have all listened with tremendous interest to what my hon. Friend the Member for Bolton, East (Mr. E. Taylor) had to say. It was an excellent bonus in that it was a speech by a satisfied customer of the Post Office as well. We shall look forward to listening to him on future occasions.

You, Mr. Deputy-Speaker, in particular, will he well aware of the fact that tonight is Burns' Night, and, therefore, it is most appropriate that in this debate hon. Members should the giftie gie us To see oursels as ithers see us! This has sometimes been a salutary experience, but none of us has any doubt at all as to the very real value of this searching scrutiny.

The Bill now before the House ensures that Parliament will have plenty of opportunity to examine Post Office affairs and management in general. Indeed, the information to be put before Parliament should give it a much clearer picture of what happens than it gets now. For instance, at the beginning of each year, about March, the Postmaster-General will present a White Paper dealing with the prospects for the ensuing year, the staff employed, the investment programme and plans for financing it. By 31st March, Parliament will be asked to pass an affirmative Resolution authorising the Postmaster-General to make payments out of the Post Office Fund. That is in Clause 5.

About June the House will deal with Votes for Post Office Ministers' salaries and the broadcasting Vote—that is in Claus,: 1—and by 31st December the Postmaster-General will present the Report and Accounts to Parliament, and these, of course, fall within the purview of the Public Accounts Committee. In addition, after about two years the House will be asked to pass an affirmative Resolution autho-ising borrowing up to the higher limit of Clause 10, and after a further two years new Post Office borrowing legislation will be required.

In other words, there will be a continuing cycle at about two-yearly intervals of Resolution, new Bill, Resolution, and so on. Finally, under Clauses 16 and 17, the Statutory Instruments authorising the fixing of tariffs will be subject to the negative Resolution procedure, and there will be always Questions and Adjournment debates. Hon. Members will, therefore, have every opportunity of satisfying themselves about the management and development of Post Office affairs.

But the Bill, of course, is one of the most important milestones in the long history of the Post Office's development, and I think that this debate has shown that the House in general is agreed on what we are seeking to do. There has been a general recognition that the Post Office, existing as it does to give the service that is demanded at a fair price and with all possible efficiency, must continue to be a highly organised commercial undertaking. It must measure its achievements by normal commercial standards. It must be free to make quick and often adventurous decisions. Above all, it must be free to innovate and develop as a business seeking to meet and anticipate customers' commands.

Some hon. Members have asked, "Why have a Bill?" Everybody is so satisfied with the Post Office that as an hon. Member, I think it was the hon. Member for Gateshead, West (Mr. Randall), asked, "Why have a Bill in these circumstances?". The present system of financial control which we are seeking to change neither helps the management of the Post Office nor provides Parliament and the public with full understanding of its policies and problems. This Bill, however, is designed to clear away all the confusion and to give full scope for business enterprise—business enterprise, as always, consistent with the public's wishes expressed through customer relations and through Parliament.

The hon. Member for Sowerby (Mr. Houghton), in a stimulating speech, said he felt that we have no more freedom coming to us than we have at present. He also—I thought rather unexpectedly for an ex-tax collector—" cribbed "at the Post Office making a contribution in taxation. I would remind him that to make a fair contribution to the services of the State is a normal thing in our national industries and that the amount we pay will be agreed.

The hon. Member was rather worried about what would happen when there was disagreement in settling our taxation accounts. It must be agreed between the Post Office and the Inland Revenue, and, at the end of the day, it is Ministers who must settle it. I do not think that he need have any qualms in that respect.

The hon. Member seemed to have greater difficulty over the repayment of our debt. Although we shall be going into these matters much more fully in Committee, I assure him that there is no catch in the arrangement for borrowing and reborrowing. We believe that we have come to a very good bargain with the Treasury. We have, in effect, bought the Post Office from the Treasury at the valuation in the present balance sheet, and we believe that the bargain we have made, and the arrangements for borrowing, repaying our debt and paying the interest on that debt, are in the best interests of the Post Office and of the country as a whole.

These things will be argued out in Committee, but I can assure the House that if it comes to a question of arbitration then, of course, these matters will be settled, in the final analysis, in the Cabinet by Ministers arguing and standing up for their own Departments. The House may be well assured that my right hon. Friend will always make certain that the Post Office comes as well out of all these arrangements as it possibly can.

Mr. C. Pannell

We find it rather intriguing that the hon. Lady should come to the Dispatch Box and say that she and her right hon. Friend have made a good bargain and have bought the Post Office. From whom has it been bought and to whom is it to be given?

Miss Pike

That is fair enough. I was trying to draw the sort of simple analogy which people like myself, who are not very good at high finance, can understand when looking at this kind of arrangement. This Bill is, in effect, a means whereby we are transferring our accounting from one convention to another. It is a means of clearing away many of the old traditional difficulties which people like myself found so difficult when trying to understand the position at the present time. I apologise if I oversimplified and thereby muddled the hon. Gentleman.

Mr. C. Pannell

And got a bit muddled yourself.

Miss Pike

Hon. Members have rightly asked what we are trying to do. Clause 6 confirms the principle, that has always been implicit in Post Office policy, that for the most pant prices must be such as to cover at least the average cost of the services rendered and ensure an adequate return on the very considerable amount of capital employed. At the same time, there will be no weakening of that sense of responsibility which we are proud to bring to the discharge of the social obligations of our service. Our success will be judged by the triple yardsticks of sound finance, social obligation and quality of service.

My right hon. Friend has already described in some detail both the financial proposals of the Bill and our plans for expansion. Judged by the yardstick of sound finance, I think that we can look forward with confidence. We accept wholeheartedly our social obligations, about which I shall have more to say later in my speech.

To maintain the quality of our services presents many real problems with which the House is all too familiar, and it is to some of those that I would now like to turn, because, although we have had many compliments in the debate, I would not wish it to be thought that in the Post Office we were in any way complacent. We are glad of the compliments we get, but we want also to face some of the shortcomings in the quality of the services that we give.

My hon. Friend the Member for Edinburgh, West (Mr. Stodart) mentioned delays in the post to Edinburgh. If he had been less generous, he could also have mentioned some things which he had brought to my notice and delays in things like the parcel post as well. The House will realise that the poor quality of the parcel post, for example, even more than the letter post, has been a source of concern to us for some time. It is certainly slower than pre-war and seemingly inexplicable delays so often happen in transit.

Much, of course, depends on the punctual running of trains, and British Railways are always co-operating with us in improving both their handling of the mails and their time-keeping; because good time-keeping is of the utmost importance in the handling of letter mails.

We, for our part, are tackling the problem of staff shortages which in recent months have contributed to the delays. We have set up the study group, which my right hon. Friend mentioned, to examine the whole question of the handing and conveyance of mails between post offices. As the hon. Member for Manchester, Openshaw (Mr. W. R. Williams) knows, a great deal can be done in this way to measure up to the requirement; and the standards of our service. At the same time, we are pressing forward with our mechanisation plans to improve efficiency and to reduce handling costs and save tedious and irksome work in the handing of our mails.

If it does not weary the House, I would like to give some examples of the new machines which we are now developing. There is a new machine which can take the mail brought in by the postmen from the collections and separate packets from letters and then prepare the letters for sorting. These are being manufactured and will be in service in three of our largest offices sometime this year. Seventeen of our new letter sorting machines are already in use. At Leeds, we have the most up-to-date "push-button" parcel sorting equipment in Europe. This equipment can handle more than 10,000 parcels an hour. New methods of sorting parcels mechanically are also being developed and will shortly be having their first field trials.

Other important developments are under way, particularly that at Luton, where a new technique for sorting letters entirely automatically is being tried out. Letters are marked at the first sorting stage with a pattern of phosphorescent spots representing the address written on the envelope. These are code marks which a machine can "read". The code marked letters can then be sorted and re-sorted as often as may be necessary by automatic sorting machines which do not need operators.

If this technique can be developed successfully, it could enable a great deal of the sorting work now being carried out manually to be done in future by machines. It would, in fact, be a significant leap forward of tremendous value in the field of postal mechanisation; and I remind hon. Members that in this field we still lead the world in spite of tremendous competition from Russia and from America.

The hon. Member for Hayes and Harlington (Mr. Skeffington) mentioned security in post offices. In recent times all of us have been worried about the attacks that have been made on post offices and on the mails in general. We have made a most searching review of our security arrangements in all fields and we are co-operating closely with my right hon. Friend the Minister of Transport, the British Transport Commission and the police. We have also drawn on other outside expert opinion.

A number of new security measures are being introduced. The House will, naturally, not expect me to give precise details of those, but they improve additional protective devices on many of our vans and also on railway vans carrying mails. For Post Offices we have increased controls and we are putting in many more alarm devices. I can assure the House that we shall continue to do all we possibly can to defeat these criminal attacks on Post Offices and to consider any suggestions that hon. Members may bring forward in this respect.

All these measures are aimed at ensuring the safe, speedy and efficient handling and transportation of mails, and can help us in future to overcome many of our problems. In recent months recruitment difficulties, particularly in Central London, have contributed to the delays. However, in common with most of the non-industrial Civil Service, the Post Office manipulative staff had a rise of 4 per cent. from 1st January, and they will also participate in the settlement reached this week in the National Whitley Council for an increase in the allowance paid to staff employed in the London area.

There is an increase for staff employed within a 16-mile radius, and a greater increase for those working within three miles, of Charing Cross. For telephone girls working in Central London the pay increases from the beginning of this year, and, taking account of the last stage of equal pay, range up to 30s., and for postmen in Central London up to 23s. 6d. All these changes should be of material benefit in enabling us to recruit and to retain staff, particularly in Central London where, as hon. Members know, we have had so much difficulty in recent times.

I am sure that the House will recognise that we are concerned not only to maintain and wherever possible to improve our existing services. We are equally anxious to reflect changing public need by introducing new services, services such as the Recorded Delivery service, which comes into operation on 1st February, and a Postage Forward parcel service which we hope to introduce about the middle of the year. As hon. Members may remember, the recorded delivery service is intended to provide a cheaper alternative to registration where proof of posting and delivery are the primary requirements. The postage forward parcel service should be of particular value to the mail order firms. So much for what we are trying to do on the mail side. I hope that I have answered some of the shortcomings of which we are guilty from time to time.

My right hon. Friend has already described in some detail the expansion and mechanisation of our telephone and Telex services, to which the hon. Member for Openshaw referred, and I think that we can be justly proud of the progress that we are making. Nevertheless, there again we are very well aware of our shortcomings.

There has been a decline in the quality of the service at some telephone exchanges, particularly in Central London, the Continental Exchange and the Overseas Telegraph Station. This has been largely due to an exceptionally heavy increase in traffic, staff shortages, and also to an overloading of the system. There is no easy way out of these difficulties.

Where staff shortages are the main cause of trouble, everything possible is being done to overcome them. The rates of pay of telephone operators generally have been increased, and as I have already said, improved language allowances have also been given to the Continental telephonists. Staff for London exchanges are being borrowed, and are also being recruited from the provinces. A shorter working week and new conditions of service, which should help to make a telephonist's job more attractive, are being introduced. New training and supervision arrangements in telephone exchanges are on trial in nearly 30 exchanges. As hon. Members know, operating procedures have been reviewed to give more freedom and discretion to felephonists and so provide the customer with a service as helpful and as pleasing as possible.

We are seeking not only to improve the quality of our service, but to meet the needs of our customers. We are introducing such things as a telephone answering set, and a hearing aid telephone, which, I think, some hon. Members have already come across. It is of particular value to deaf people, and I know at least one hon. Member who has found it of particular value; but I had better not say who it is. We are introducing a loud speaking telephone which will be of use to businessmen, and of course our telecommunications advice service is doing valuable work in helping our customers to take the greatest advantage of the facilities available. We are also seeking to improve our repair services.

Possibly the worst thing about the telephone—anyway, for me—is having to pay for it. The telephone credit cards which we introduced last year can help us whenever we find ourselves without money in our pockets. They can be used to make calls or to send telegrams anywhere in the world, and also for calls from 51 countries abroad. Perhaps one of the most welcome things, particularly for those of us who do a great deal of talking, is the reintroduction of quarterly bills. I am glad to say that we hope that we shall have completed the changeover to quarterly accounting by 1964.

I have tried to answer some of the questions in hon. Members' minds about the way we are facing up to our responsibilities of providing the type of service which the public needs. I hope that I have answered those questions which hon. Members have put and explained some of the causes behind our occasional failures. But, as hon. Members are well aware, in spite of our increasing mechanisation, much of our work is and always will be performed manually. By the very nature of our service we are constantly in close personal touch with the public, and, whilst l would not wish to excuse any of our shortcomings, we all know that many of the problems about which I have been speaking and so often have to speak about in this House are human problems. We must not forget that the Post Office is made up of a large cross-section of our community and human error is universal. May I remind the House of one more quotation from Burns: What's done we partly may compute. But, know not what's resisted. I am constantly impressed by the keenness and conscientiousness which I find in the Post Office. I believe that, in general, our management, our unions and staff as individuals have learnt to work together in an unusually effective way. I should like to pay tribute to the quality of the staff relations in the Post Office. Many hon. Members who have spoken have personal experience of working in the Post Office and personal experience of these relations. It is something of which we can be justly proud. In no other organisation can good staff relations and good management be a more essential ingredient for development and achievement. It is small wonder, therefore, that we seek to recruit the best type of men and women. To do this we must offer not only a reasonable present, but also an attractive future, for what man or woman worth his or her salt does not want to get on in the world? We do not believe in dead end jobs.

The hon. Member for Bishop Auckland (Mr. Boyden) was particularly interested in our recruitment and training and opportunities for promotion. I should like to say something about our recruitment and training programmes. If we are to be the vital, energetic organisation which we must be in future we must recruit the right sort of men and women in the Post Office. For the present, we recruit at all educational levels—from the secondary modern school level to the honours graduate. Progressive promotion schemes provide a path of opportunity from the lowest level to the Post Office Board. and it is a path which more than once has been followed.

There is a further aid to providing technologists to meet the challenging needs of the Post Office in future. Last year, we started the scheme for student apprenticeships, to which the hon. Member for Bishop Auckland referred. These are open to sixth form pupils of high potential and provide for a university course and systematic technical training to equip them for professional engineering posts with us. As the hon. Member said, this scheme has met with an enthusiastic response and there were, as he said, 600 applicants for the 20 apprenticeships offered. The first 20 apprentices started last autumn and we are about to embark on the selection of a further 20 this year.

The needs of our own staff are not ignored either. Internal bursary awards provide for university courses for those with the ability to become graduate engineers or scientists. At higher levels we provide systematic management training both within the Post Office and by the use of such opportunities of contact with other organisations as the Administrative Staff Training College course and our recent successful interchange of senior staff with I.C.I. and Unilever.

I think that hon. Members are not so much interested in the quality of the service, which is already high—indeed, as has been said, we can claim to have the best record of any postal administration in the world—as in the part played by the Post Office in present-day life. On the wall of my room at St. Martin'sle-Grand I have a copy of the Act which established the Post Office as a Government Department. It is a proclamation issued by Charles II in 1660 to "Quieten the Postmaster-General in the execution of his office." It is a far cry from that event to the stage in the evolution of the Post Office at which we have arrived today. Several hon. Members have said that at the inception of the Post Office it was never thought that it would become the social welfare department that it now is in the eyes of many people.

Perhaps the first thing that most of us learn about the British Post Office is that in 1840 we issued the first postage stamp, the famous Penny Black, showing the head of the young Queen Victoria. Recently, our £1 stamp won the gold medal awarded for the most beautiful stamp in the world and, again, it is a black stamp and it shows the head of our young Queen. I think that hon. Members would wish to congratulate the designer, the engravers and all concerned with the production of this very beautiful stamp.

Although postage stamps are perhaps the first thing about which we learn in connection with the Post Office, as hon. Members have reminded me tonight, to many people "the post office" means the sub-office down the road, where they collect their pension or their allowance. There are over 23,000 sub-offices and it is scarcely to be wondered at, in a community like ours, that it is the provision of sub-post offices which seems to loom largest in my life.

Hon. Members have asked about the balance between our commercial enterprise and our social obligations. Naturally, hon. Members wish to advance the claims of their own constituents, but I must remind them that the Post Office has to keep a national balance in this respect. I will not weary the House with all the many arguments which I so frequently have to advance in this context, but I should like to say that each case is very carefully examined. It is never a question of officials just sitting at their desks and looking at a map.

In every instance Post Office officials have actually walked the ground themselves, and, as same hon. Members know, I sometimes walk the ground myself as well. I do not wish to enter the battle again with the hon. Member for Leicester, North-West (Sir B. Janner), but in the case he quoted the twins and the old people did not have to go down the hill, because there is a post office at the top of the hill to which they could go.

We weigh these things as finely as we possibly can. Our policy governing the provision of new sub-post offices is designed to meet the public need while keeping, overhead costs within reasonable limits. As hon. Members will be aware we recently liberalised this policy. The distance standards have been retained, but they are being applied more flexibly wherever special circumstances justify the provision of an office, such as self-contained housing estates and difficult geographical positions. The hon. Mem- ber for Leeds, West (Mr. C. Pannell) will know that I am shortly going to Leeds to look at the matters which he raised, and I assure hon. Members, once again, that such matters are looked at very carefully.

It is not only sub-offices with which hon. Members are concerned, but also the provision of Crown offices and conditions in Crown offices.

I cannot give the hon. Member for Ince (Mr. T. Brown) any assurances about the Ashton-in-Makerfield Post Office tonight or even about the Up Holland Post Office, which we have discussed so often. I assure the hon. Gentleman that we are pressing ahead with the building of new Crown offices and new sorting offices. The House has, quite rightly, welcomed more than perhaps anything the fact that we are looking at older 'buildings and doing what we can to bring them up to modern standards.

The right hon. Member for Caerphilly (Mr. Ness Edwards) said that we last debated this subject two years ago, but the hon. Member for Openshaw and I know that it was only a year ago. On that occasion we both appeared at the Dispatch Box for the first time. It was on that occasion that my right hon. Friend said that he wanted to get rid of all the aspidistra elements of our Post Office buildings.

Plans have been going ahead to carry out the pledge my right hon. Friend then made. He has already announced a plan to modernise all public offices over the next seven or eight years. We expect that about 1,000 offices will need treatment and we expect to spend, on an average, £2,000 on each office. This means that we shall be spending up to £300,000 a year and modernising between 100 and 150 offices each year. At the same time that we are modernising the front of the offices we are modernisiing the staff accommodation, which is not seen. We take the view that it is most important that our staff should have the best and the most up Ito date accommodation in which to work.

The provision of public telephones is another service which we judge by the yardstick of social need rather than financial considerations alone. As the hon. Member for Leicester, North-West pointed out, we are at present incurring a considerable loss on public telephones.

There are 74,000 of them and the loss on them is considerable. This year we expect to lose well over £2½ million.

But we try to meet public need in this respect. Although I do not want to enter into a discussion on individual cases tonight, I want to remind the hon. Member for Leicester, North-West that he did not give the full picture when he talked about the telephone kiosk on the housing estate. Some time before Christmas I went to that estate and walked out the distance very slowly from the position of the telephone kiosk which had been moved to the nearest kiosk. I found that nobody, walking as slowly as possible, need walk more than five to six minutes to get to a telephone.

What happened in that case was that we moved a telephone nearer to the old people so that they would not have to walk at all. We took the view that it would be easier for the younger people living in the other part of the estate to walk for a maximum of five minutes to get to a telephone. I say that to hon. Members to show that we do look very carefully into the provision of these services.

Not only do we want to provide public telephones. We want to provide public telephone kiosks of contemporary design, because they are very much a part of our British scene. A new telephone kiosk of contemporary design is being produced and a new coin box which is simpler to operate has been developed. This will he used in areas where there is Subscriber Trunk dialling. Trunk calls can be dialled from this coin box, which uses 3d. pieces instead of pennies. This coin box should also help to remove queues at busy times, because it times all calls made. Hon. Members will agree with me that sometimes one of the great difficulties is that somebody is in the telephone box holding what seems to the people outside to be a quite unnecessary conversation for about an hour. It is usually men who are doing this.

One of the other Things which I have not mentioned in connection with services to the public is that we are, as my right hon. Friend said, doing all we can to get rid of queues in public offices, because we take the view that if we are to give the best possible service to the public we must give it as quickly and as efficiently as possible.

While I am on the question of queues I want to point out once more to hon. Members that these, so often happen at lunch time. Post Office staff have to eat at lunch time just like anyone else. It is a very difficult time for us. We are looking at the canteen arrangements as carefully as we can, but I am sure that no one would wish to suggest that Post Office employees should not have an adequate lunch time, even though at times it means some difficulties in busy places. I will not weary the House with any more points on that aspect of our service.

My right hon. Friend mentioned, as did the hon. Member for Openshaw, the great developments in our automatic Telex service. I remind the House that apart from the conventional uses of this service there is a growing interest in using Telex to transmit data for centralised processing by machines and computers. There is also a growing awareness of the advantages of teleprinter working, in particular by public authorities, and networks are being provided and modernised for many police, ambulance and fire authorities. New techniques, including the use of electronic devices, are being developed and a new teleprinter, which is considerably lighter and smaller, is also being designed.

Electronics are also coming into the telephone field. In conjunction with leading manufacturers we are going ahead with the development of electronic telephone exchanges. Progress has been encouraging, and the first exchange—an experimental one—is expected to be completed early next year at Highgate Wood. This will be among the first electronic telephone exchanges to be brought into service in the world.

No mention has been made in the debate of the very important part played by our overseas telecommunications, but it is worth while drawing the attention of the House to the developments which have been going on here because in the overseas field technical developments are perhaps even more striking than in the inland service. We realise that what we can do here will be of great value to the export trade of this country. Overseas facilities are being rapidly increased. A telephone cable between the United Kingdom and Sweden was opened in the autumn of last year. New cables with the Continent are being planned and another trans-Atlantic cable, which will carry 128 telephone conversations simultaneously, will be, laid between the United Kingdom and the United States in 1963.

In partnership with Cable and Wireless Ltd., the Post Office is strengthening communications with Commonwealth countries; a new cable between Canada and the United Kingdom will be completed in 1961; and a cable linking Australia with New Zealand and Canada will be laid between 1962 and 1964. Other cable links between Commonwealth countries are being planned.

While we are pressing on with these plans so that we may fulfil the overseas communications requirements of the present and the immediate future, it is, as the hon. Members for Acton (Mr. Holland) and Openshaw have reminded us, the possibility of satellite communications which perhaps presents the most exciting prospects. The Post Office is keenly interested in this development. We firmly believe that the technical problems will be solved and that satellite communications will play a great part in the future development of international communications.

Nevertheless, I think that a word of caution is necessary about the economics of satellite communications. There can be little doubt that a successful satellite system would make possible a great increase in the capacity available for international communications; 600 simultaneous telephone conversations would probably be well within its capabilities, compared with fewer than 100 on existing types of transoceanic cable. But it is one thing to say this and quite another to say that traffic even at reduced rates of charge, may be expected to increase sufficiently to use this large capacity to the full.

It is considerations of this kind, together with the uncertainties about the cost of a satellite system, and not least the uncertainties about the life of satellites and the frequency with which they will have to be replaced, which make it difficult to estimate the economics of this type of system. As I said, the prospects are exciting, but I think that we should all be well advised to keep our feet firmly on the ground when we talk about economics.

I hope that I have answered most of the queries raised by hon. Members, al- though I am conscious that I have not gone into the detailed points raised in particular by the hon. Member for Sowerby. As the hour is getting late I felt that, possibly, it would be better if we dealt with most of these in Committee.

I would like to say one more thing about the debt which we have been incurring. Some other hon. Members have queried twenty-five years as not being a reasonable time in which to pay off this debt. I believe that, on the whole, twenty-five years represents the life of assets, but there is nothing fixed about this twenty-five-year period. At the end of twenty-five years we reborrow. That is the same sort of practice as the nationalised industries have and, at the end, one simply gets a fair average rate of interest, taking the higher interest rates with the low interest rate. These are matters which we shall be going into more fully in Committee.

One other question which was very much in the minds of hon. Members was the Civil Service status of our staff, and whether any changes would be made in that respect. I can assure hon. Members. particularly the hon. Member who asked me whether the staff had been consulted, that the staff have been in full consultation, so I believe, and are in full agree-men with our proposals. At least, there has been no significant comment on this particular score.

The hon. Member for Openshaw asked me whether the Bill would make it possible to have clearer accounts. I am glad, as my hon. Friend has already indicated, that it will make it possible in the future for us to have accounts which both he and I can understand. The Civil Service status of our staff in no way affects the present wage negotiation position. In fact, the position will be exactly the same after status as it was before. After status we shall be free to establish our own labour force and shall not be subject to Treasury control as to the number of staff employed, as we are at present.

I hope that I have covered most of the questions asked by right hon. and hon. Members. I would like to thank hon. Members for the constructive approach that they have made to our problems, even when it comes to asking me to walk up and down hills to look at sub-post offices.

In conclusion, our main objective in everything we undertake must be to satisfy our customers. We must give them a good service and be ready to innovate for their benefit. I have tried to show how the Post Office is facing up to the demands made on it by the complex and increasing needs of modern society. We are already a vigorous and progressive organisation, but we cannot perform a full efficiency while we are weighed down by the present traditional procedures and controls which obscure the true basis of Post Office operations. I believe that they are inappropriate to a commercial status.

The Bill aims to remove these handicaps and I commend it to the House as a Measure which will bring to the Post Office both opportunity and incentive and which will bring to the public an even higher standard of service.

Mr. T. Brown

Before the Question is put, may I ask the hon. Lady one question? It is not my intention to strike a discordant note in what has been a very harmonious debate. Could the hon. Lady give the people of Ashton-in-Makerfield some assurance that in the near future the Crown Post Office, for which they have been waiting thirty years, will be conceded, or are they to be asked to be like Dante to Beatrice and to abandon all hope of a Crown Post Office?

Miss Pike

I hope that I have said enough tonight to assure hon. Members how very closely and carefully these matters are gone into. I am sure that hon. Members will not expect me to give any categorical assurances tonight as to when we expect to do things. All I can say is that it is our desire and wish to give the public the best possible service that we can. Within that concept of service we believe the right sort of provision for Post Offices and sub-post offices should be one of the most important things that we should consider.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills).