HC Deb 24 July 1961 vol 645 cc36-51
The Postmaster-General (Mr. Reginald Bevins)

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

Since the last general increase in Post Office tariffs took place in 1957, wage and price increases have added £55 million to the Post Office bill; no less than £25 million will fall in the current year. This consists mainly of increases in wage rates. I expect to absorb about two-fifths of this £25 million.

Even so, I must raise a further £25 million in a full year in order to maintain the financial soundness of the Post Office and to prevent a sharp increase in its dependence upon the Exchequer for capital.

This means that I must increase charges. I have decided to raise £16½ million from the telecommunications services and £8½ million from the postal services.

The tariff increases I am proposing apply either to services running at a loss, or to services which produce an inadequate return on capital and where there is a high investment demand.

The principal increases are:

Telephones

  1. 1. Rentals for telephone exchange lines will be increased by £2 per annum.
  2. 2. Connection charges for exchange lines will be doubled.
  3. 3. Rentals for private switchboards, extensions and private circuits will be increased.

I also propose to change the basis of charging for telephones more than three miles from the exchange. The excess mileage rental for existing and new subscribers will be abolished, but new subscribers will pay an increased initial connection charge related to distance and new construction.

Inland Postage

  1. 1. The basic printed paper rate will be increased from 2d. to 2½d. with rebates for large users.
  2. 2. The basic charge for newspapers will be increased from 2½d. to 3d.
  3. 3. The charges for parcels will be increased by 6d. all round.

Details of the changes will be circulated in the OFFICIAL REPORT and for the convenience of Members copies will be available in the Vote Office later this afternoon.

Increases in connection charges, the abolition of the excess mileage rental, and two other minor changes will take effect as from 26th July. The remaining telephone changes will become operative on 1st November. The postal changes will take effect as from 1st October.

These proposals are consistent with the Government's aim of putting the finances of the nationalised industries on a sound basis and of reducing borrowing from the Exchequer.

Mr. A. Lewis

On a point of order, Mr. Speaker. May I ask for your guidance? On may occasions I have raised with you the fact that we are now getting the practice on the part of the Government of giving out what are obviously inspired leaks to the Press and then coming to the House and making a statement.

Today, in both the mid-day newspapers, there is almost a verbatim report. I quote from one, under the signature of Mr. Robert Carvel, that the Postmaster-General is to make a statement announcing an increase in Post Office charges.

You will recollect, Mr. Speaker, that this is not the first occasion when this has happened. It is now happening on almost every conceivable occasion when, as is the case, the Government so frequently increase charges. I am asking you, Mr. Speaker, whether it is not an abuse of your position and that of the House for the Government to ask for a statement to be made in Parliament when, obviously, in view of the fact that both mid-day newspapers had this, the Government had already made their announcement outside the House, and are thus abusing hon. Members of the House.

Mr. Speaker

There most certainly is no insult to me in any way, or to my office in any way. I understand perfectly what the hon. Member has in mind, but I do not quite understand how it raises any matter for me.

Mr. W. R. Williams

The first question that one is tempted to ask, of course, is whether this is the rehearsal for tomorrow. Is this the "Purchase Tax" which the Government are proposing to apply to the Post Office? If this is any pointer to what is to happen tomorrow, then the people are in for a very grim time when the Chancellor's announcement is made.

I should like to ask the Postmaster-General one or two questions about his statement. First, how does he reconcile the statement with two statements which he made during the passage of the Post Office Bill? The first statement was that he was anticipating that a £20 million surplus would be made this year, the same as was made last year. The question I should like him to answer now is: what changes in circumstances have taken place to justify these increases in postal and telephone charges?

I should also like to ask him about the other statement that he made during the passage of the Post Office Bill. He said that it is a profound mistake to think that price increases, although sometimes necessary, are the only way, or, indeed, the best way, for the Post Office to maintain its financial position. He said that we can earn more simply by promoting profitable custom and doing more business. Why has he gone away from that very wise declaration to us, and why is he imposing further charges upon the public at a time when he ought to be encouraging the sales and the business of the Post Office to an extent which he has not done in the past?

Is this not, in fact—I should like the Postmaster-General to be specific on this—going back to the old position before the Post Office Bill, of making the Post Office an instrument of taxation for the Government? Is there, therefore, no basis at all for his contention during the passage of that Bill that the Post Office is now to be a free agency, with independence and freedom?

I should just like to put one or two minor points now. Does not the right hon. Gentleman feel that his decision to increase the telecommunications charges will dissuade people, paradoxically enough, from doing what he is asking of them in another direction—encouraging the S.T.D. scheme? Was he not boasting during the Committee stage of the Bill that this was his main objective? How, therefore, does he reconcile his statement with this paradoxical situation?

Coming now to the question of the charges on inland postage, does not the right hon. Gentleman think that he will kill the parcel post service by increasing the charges by 6d? Is it his intention to see that the whole of the traffic is diverted either to private enterprise or to some other form of public enterprise? Is he not ashamed that so soon after the Post Office Bill he comes to the House with this shocking announcement about Post Office charges?

Mr. Bevins

The hon. Gentleman has asked a number of questions. I will try to answer them in order.

First, I think that he will wish to await the statement by my right hon. and learned Friend the Chancellor of the Exchequer tomorrow afternoon.

I want to make it absolutely clear, with regard to my statement to the House, that this is a Post Office operation conceived by me, and that it will be put through by me in the interests of the Post Office and of the public.

The hon. Gentleman went on to ask me whether it was not a fact that last year the Post Office earned a surplus of £21 million. That is perfectly true. It is equally true that we expected to earn a good surplus this year without very substantial increases in charges, but since that anticipation was expressed we have had very large increases in wage rates and, of course, the shorter working week for the Post Office, and these have added to our outgoings in the present financial year to the extent of £21 million, which represents 8 per cent. of our total wages bill. That is a fact which it is quite impossible to laugh off. But I have already made it clear that two-fifths of this increase in prices and wages will be absorbed by the Post Office through greater efficiency.

I can tell the hon. Gentleman and the House that the rate of installation of telephones next year will be as high as this year's, and that this year's figure is almost 50 per cent. higher than the figure for 1950.

Mr. Stodart

Will my right hon. Friend be a little more specific about the effects of the charges on those who live in country districts outside three-mile territorial waters, as it were?

Mr. Bevins

Yes, Sir. The position is that existing subscribers—people already on the telephone—will no longer pay an excess amount of £2 per furlong, but in future will pay the same rentals as anybody else. New subscribers will pay the new single connection charge of £5 for each furlong of new wiring in excess of three miles from the exchange. The effect of the change is that existing subscribers in country districts will benefit, and that new subscribers will also find that over a period of about three or four years the charges will be lower than at the present time.

Mr. Snow

Is the right hon. Gentleman aware that what he has said about the distinction to be drawn between his proposed measures and what the Government may have in mind tomorrow does not carry very much conviction? To us, it seems part and parcel of the same thing. Is he aware that this news that new subscribers in the countryside will be charged more will cause acute distress in the rural areas? Is he aware that already people in the overspill areas are complaining most bitterly about the failure of the Post Office to provide a decent service, or to provide connections?

Mr. Bevins

No, Sir. I think that the hon. Gentleman has misunderstood the position. Existing subscribers in country districts will profit by these changes, and subscribers over a period of two and a half years will also be better off.

Mr. Holland

My right hon. Friend said that he anticipated that the number of telephone installations next year would be as high as this year. Can he tell us how many telephones he expects to install next year?

Mr. Bevins

Yes, Sir; about 470,000. This is the same figure as this year, as I said before, and it is a record in the history of the Post Office.

Mr. G. Brown

Since the Postmaster-General has said that after two and a half years new subscrbers will benefit on connection to country telephone services, do I understand him aright when he says that before a telephone is connected in a country district the would-be owner of the telephone will now have to pay a charge of £40 per mile as an initial connection charge?

Mr. Bevins

I think that I said in my statement that connection charges would be doubled for new subscribers. What I should like to make perfectly clear is that for existing subscribers, who pay £2 per furlong in excess of three miles from the exchange, that charge is abolished. New subscribers, those who would pay, ordinarily, £2 per furlong in excess of three miles, will, in future, pay a once-and-for-all charge of £5 per furlong.

Mr. G. Brown

Is not £5 per furlong £40 per mile? Is the right hon. Gentleman aware that a mile is a very easily covered distance in a country district? Does he really expect to install very many telephones when there is an initial charge of £40 per mile? Does he persist in his statement that this is a Post Office operation, and not one dictated by his right hon. and learned Friend the Chancellor of the Exchequer?

Mr. Bevins

Most certainly. The fact is that for new subscribers, though they will have to pay £40 per mile, after a period of two and a half years, this will be advantageous to them.

Sir J. Duncan

Is my right hon. Friend aware that the abolition of the £2 per furlong charge every year for telephone connections will be widely welcomed, and that in any new proposal about a contribution towards the capital charge he will be following the procedure of all the electricity boards?

Mr. Holt

The Postmaster-General has given a figure of £25 million as being due to increased wages and prices. Can he give us these two items separately, and say how much was due to increased wages?

Mr. Bevins

I can give the figure for the coming financial year, which is probably what the hon Gentleman has in mind. The figure of £21 million refers to increases in wage rates, and that of £21 million refers to increases in prices.

Mr. H. Wilson

For the benefit of those who find it a little difficult to understand, can the right hon. Gentleman tell us exactly how this is to help to get export costs down?

Mr. Bevins

There is nothing whatever in my statement which will be prejudicial to our export trade, but it is my responsibility, and I mean to discharge it, to see that the Post Office generally charges economic prices, and that, far from becoming a drain on the Exchequer for capital, we should undertake the lion's share of our capital development. I think that this is right, and I do not think that my hon. Friends on this side of the House would be prepared to see me adopt a weak and wishy-washy policy in the Post Office.

Mr. Gurden

In view of these increases, can my right hon. Friend say whether he will continue to give such good value for money, and give a better service to the general public?

Mr. Bevins

I have, in the course of the present financial year, been spending about £5 million more specifically on the improvement of services, and we shall have at least 90 per cent. of all Crown Post Offices on an all-service counter basis within the next three weeks. I am taking on very large numbers of telephonists to give better service in manual exchanges, and I am also taking on a large number of staff to improve weekend deliveries, but I wish to repeat that the public will never get the services to which it is entitled unless it is prepared to pay economic prices.

Mr. A. Lewis

May I ask the Postmaster-General whether either he himself or anyone in his Department issued any statement to the Press prior to making his statement to the House? If so, may I ask him why, and if not, will he have an investigation made into how all this was in the mid-day Press prior to his coming to the House?

Mr. Bevins

I can tell the House with complete candour that I have made no statement of any sort to the Press or anybody else, prior to rising at about 3.40 p.m. this afternoon.

Mr. Lewis

Will the right hon. Gentleman have an investigation made?

Hon. Members

Answer.

Mr. G. Brown

May I repeat the last part of my hon. Friend's question? Will the Minister cause an inquiry to be made into how the newspapers were able to carry such an extensive account of what was coming?

Secondly, may I ask him whether it is seriously his case that telephone subscribers will benefit by paying £40 cash down instead of paying over a period, and how he then expects to raise more money by these charges if consumers are to pay less?

Thirdly, is it not fast becoming a fact that it would be rather cheaper for everybody if he would employ his hon. Friend the Member for Lewisham, North (Mr. Chataway) to run the messages himself into the country districts?

Mr. Bevins

Before the hon. Member for West Ham, North (Mr. A. Lewis) produced a copy of the newspaper this afternoon, I had no knowledge—

I. TELECOMMUNICATIONS CHARGES
1. Changes to operate forthwith
(a) Connection Charges Present Proposed
£ s. d. £ s. d.
Maximum exchange line connection charge … … … … 5 0 0 10 0 0
Note: Connection charges for temporary telephone service will be increased proportionately subject to a maximum of £15.
2. Changes to operate from 1st November, 1961
Present Proposed
(a) Exchange Line Rentals £ s. d. £ s. d.
Business lines (per quarter) (per quarter)
Exclusive 3 10 0 4 0 0
Shared 3 0 0 3 10 0
Residence lines
Exclusive 3 0 0 3 10 0
Shared 2 10 0 3 0 0
Exchange lines connected to a PBX owned and maintained by subscriber 3 5 0 3 15 0
Mr. Lewis

It was on the one o'clock news.

Mr. Bevins

I did not hear the one o'clock news, because I was rather busy, but I did not divulge any part of this statement to the Press or anybody else. I am perfectly prepared, as I am sure the House would wish me to do, to make inquiries as to how this came about.

In reply to the right hon. Gentleman's second question, I think that the House is getting a little wearied of the economics of long line transmission.

Several Hon. Members

rose—

Mr. Speaker

Order. We cannot debate this matter further now. There is no Question before the House.

Following are the details of the charges:

Present Proposed
On exchange lines On PBXs On all installations
s. d. s. d. s. d.
(b) Internal Extension Rentals (per qtr.) (per qtr.) (per qtr.)
Plan 1, 1A, 1B, 1C 7 0 14 0 10 0
Plan 3 14 0 19 0 16 0
Plan 4
each additional socket 2 6 2 6 2 0
each additional plug-in telephone 7 0 14 0 9 0
Plan 5 and 5A 28 0 32 0 40 0
Plan 7 and 7A 14 0 14 0 25 0
Plan 8 14 0 19 0 16 0
Plan8A 21 0 not available 36 0
Plan 9 not available from to 28 0 20 0
to 49 6
Plan 10
including apparatus for intercepting one exchange line not available from 25 0 26 0
to 39 0
apparatus for each additional line intercepted not available 1 6 6 0
Plan 11 14 0 28 0 20 0
Plan 12 and 12A 14 0 19 0 16 0
Extension terminated on a socket not available 9 0 8 0
plug-in telephone for use with extension terminated on a socket not available 5 6 9 0
Any other internal extension not available 13 6 15 0

Note: Certain types of extensions are appropriate for PBXs but not for exchange lines, or vice versa.

(c) EXTERNAL EXTENSION RENTALS
Present Proposed
Mileage charge £ s. d. £ s. d.
(per quarter) (per quarter)
Each furlong or part up to 4 furlongs … 7 6 Each furlong or part up to 4 furlongs 15 0
Over 4 up to 6 furlongs … 2 0 6 Over 4 up to 6 furlongs 4 10 0
to 2 11 0
And so on by furlong steps … And so on by 10s. 6d. steps And so on by ¼ mile steps And so on by £1 10s. steps
Over 3 up to 3½ miles … 12 10 6 Over 3 up to 3½ miles 21 0 0
to 14 2 0
And so on by furlong steps … And so on by 10s. 6d. steps And so on by ½ mile steps And so on by £3 steps
Over 4½ miles up to 5 miles … 18 16 6 Over 4½ up to 5 miles 30 0 0
to 20 8 0
Over 5 up to 6 miles … 20 18 6 Over 5 up to 6 miles 35 0 0
to 24 12 0
And so on by furlong steps … And so on by 10s. 6d. steps And so on by 1 mile steps And so on by £5 steps
Over 30 up to 35 miles … 125 18 6 Over 30 up to 35 miles 175 0 0
to 146 8 0
And so on by furlong steps … And so on by 10s. 6d. steps And so on by 5 mile steps And so on by £20 steps
Over 50 up to 60 miles … 209 18 6 Over 50 up to 60 miles 262 10 0
to 251 8 0
And so on by furlong steps … And so on by 10s. 6d. steps And so on by 10 mile steps And so on by £25 steps
Over 150 up to 175 miles … 629 18 6 Over 190 up to 200 miles 612 10 0
to 734 8 0
Over 175 up to 200 miles … 734 18 6 And so on by 10 mile steps And so on by £20 steps
to 839 8 0
Over 200 up to 250 miles … 839 18 6 Over 290 up to 300 miles 812 10 0
… to 1,049 8 0
Over 250 up to 300 miles … 1,049 18 6 Over 300 up to 325 miles 837 10 0
… to 1,259 8 0
Over 300 miles … 1,259 18 6 Over 325 up to 350 miles 862 10 0
plus 10s. 6d. a furlong
Over 350 up to 375 miles 887 10 0
Over 375 up to 400 miles 912 10 0
Over 400 miles 937 10 0
(These rates are doubled for Plan 1A, 1C and Plan 9 extensions.) (These rates will be doubled for Plan 9 extensions.)
Present Proposed
Termination charge
£ s. d. £ s. d.
(per quarter) (per quarter)
For all external extensions (other than plan extensions and extensions between PBXs) 13 6 For all external extensions (other than plan extensions, extensions between PBXs owned and maintained by subscriber, and extensions more than four furlongs in length) 15 0

NOTE 1: For plan extensions, the rental appropriate to a comparable internal plan extension is payable in addition.

NOTE 2: The present higher rental payable when the extension is provided by special methods of construction will be abolished.

(d) Private Manual Branch Exchange (PMBX) Rentals Present Proposed
Other than a multiple type: £ s. d. £ s. d.
Size: per quarter per quarter
1+3 … 2 0 0 2 10 0
2+4 … 2 0 0 3 0 0
2+6 … 3 10 0 4 10 0
3+7 and 3+9 … 4 0 0 6 0 0
3 + 10 and 5 + 20 … 8 0 0 12 0 0
10 + 30 … 16 0 0 18 0 0
10+50 … 16 0 0 22 0 0
10+60 … 25 0 0 25 0 0
Multiple type: for each section … 25 0 0 33 0 0
(e) House Exchange System (HES) Rentals
Each internal or external station, or special extension
HES1 (1+5 size) … 1 10 0 2 0 0
HES 2 (2+10 size) … 1 10 0 2 10 0
Additional apparatus for second main station … 14 0 1 5 0
(f) Coin-Box Rental … 11 3 1 0 0
(g) Answering Machine Rental … 10 0 0 8 0 0
(h) Out-of-Area Exchange Line Rentals
(i) Inland Private Circuit Rentals
Present Proposed
£ s. d. £ s. d.
(per annum) (per annum)
Internal private circuits … … … … … … … 3 0 0 5 0 0
External private circuits (a termination charge of £3 will be payable in addition on external private circuits up to 4 furlongs in length).
Present Proposed
£ s. d. £ s. d.
(charge per annum) (rate of charge per annum)
Up to 1 furlong 5 8 0 Up to ½ mile, in furlong steps £24 per mile
Over 1 up to 2 furlongs 6 6 0 From ½ mile to 1 mile, in ¼ mile steps £24 per mile
Over 2 up to 3 furlongs 7 10 0
And so on by 1 furlong steps And so on by £1 10s. steps From 1 mile to 3 miles, in ¼ mile steps £16 per additional mile
Over 2 up to 2¼ miles 28 10 0 From 3 miles to 5 miles, in ½ mile steps £16 per additional mile
And so on by ¼ mile steps And so on by £3 or £1 10s. steps
Over 3 up to 3¼ miles 39 0 0 From 5 miles to 30 miles, in 1 mile steps £16 per additional mile
And so on by ¼ mile steps And so on by £3 or £1 10s. steps From 30 miles to 35 miles in one 5 mile step £12 8s. 0d. per additional mile
Over 5 up to 5¼ miles 60 0 0
And so on by ¼ mile steps And so on by £3 or £1 10s. steps From 35 to 50 miles in 5 mile steps £10 per additional mile
Present Proposed
£ s. d. £ s. d.
(charge per annum) (rate of charge per annum)
Over 10 up to 10½ miles 116 5 0 From 50 miles to 200 miles, in 10 mile steps £10 per additional mile
And so on by ½ mile steps And so on by £5 5s. steps
Over 24 up to 25 miles 270 0 0
And so on by 1 mile steps And so on by £12 steps From 200 miles to 300 miles, in 10 mile steps £8 per additional mile
Over 30 up to 32 miles 352 10 0 From 300 miles to 400 miles, in 25 mile steps £4 per additional mile
And so on by 2 mile steps And so on by £22 10s. steps
Over 50 up to 53 miles 592 10 0 Over 400 miles £3,500
And so on by 3 mile steps And so on by £37 10s. steps
Over 80 up to 85 miles 990 0 0
And so on by 5 mile steps And so on by £60 steps
Over 150 up to 175 miles 1,830 0 0
to 2,070 0 0
Over 175 up to 200 miles 2,130 0 0
to 2,370 0 0
Over 200 up to 250 miles 2,430 0 0
to 2,970 0 0
Over 250 up to 300 miles 3,030 0 0
to 3,570 0 0
Over 300 miles 3,630 0 0
to 4,770 0 0
(at 400 miles)

(J) Special Services

Other services, such as telegraph circuits and apparatus and circuits suitable for music transmission, subject to individual agreements, will be increased after due notice.

(k) Connection Charges
(other than exchange lines) Present Proposed
£ s. d. £ s. d.
from 5 0 0
External extension … … … 2 0 0 to 50 0 0
(according to distance)
House exchange systems: each station … … … 5 0 0 8 0 0
Private manual branch exchanges (PMBXs)
Size:
1+3 … … … 2 0 0 5 0 0
2+4 … … … 4 0 0 6 0 0
2+6 … … … 7 0 0 9 0 0
3+7 and 3+9 … … … 8 0 0 12 0 0
3+10 and 5+20 … … … 16 0 0 24 0 0
10+30 … … … 32 0 0 36 0 0
10+50 … … … 32 0 0 44 0 0
10+60 … … … 50 0 0 50 0 0
Multiple type (each section) … … … 100 0 0 132 0 0

(The internal removal charges for private manual branch exchanges will be increased in proportion to the increase in the appropriate connection charges.)

Coin box … … … … … … Nil 4 0 0
Internal private circuit … … … … … … Nil 2 0 0
External private circuit … … … … … … Nil from 5 0 0
to 50 0 0
(according to distance)
II. POSTAL CHARGES
Changes to operate from 1st October, 1961
1. INLAND AND TO IRISH REPUBLIC
Present Proposed
(a) (i) Printed Papers and Samples 2d. for 2 oz. 2½d. for 2 oz.
Maximum weight printed papers—2 lb. 4d. for 4 oz. then 4d. for 4 oz. then
Maximum weight samples—8 oz. (Sample service not available to Irish Republic.) 1d. per 2 oz. 1d. per 2 oz.
(ii) Printed Papers and Samples Posted in Bulk, and complying with special conditions in regard to method and times of posting and delivery. (Arrangement not applicable to items for the Irish Republic.) As in (a) (i) but rebates will be given. Basically the rebates will be 10 per cent. of the total postage for postings of 5,000–24,999 and 20 per cent. of the total postage for postings of 25,000 and above.
(b) Newspapers (per Copy) (Maximum weight—2 lb.) … … … … 2½d. for 6 oz. then 3d. for 6oz. then
1½d. per 6 oz. 1½d. per 6 oz.
(c) Parcels:— s. d. s. d.
Up to 2 lb. … … … … 1 6 2 0
3 lb. … … … … 1 9 2 3
4 1b. … … … … 2 0 2 6
51b. … … … … 2 3 2 9
61b. … … … … 2 6 3 0
7 lb. … … … … 2 9 3 3
8 1b. … … … … 3 0 3 6
11 lb. … … … … 3 3 3 9
15 lb. … … … … 3 6 4 0
2. GENERAL
(d) Stamping of Paper for use as Postcards, Wrappers and Envelopes:—
Postcards and wrappers … … … Nil Various: from 10s. to 25s. for the first 1,000 or part of 1,000 stamps impressed depending on type of paper and number of stamps impressed per sheet. For each additional 100 or part of 100 stamps impressed one tenth of the above fees.
Envelopes … … … Nil 15s. for the first 1,000 or part of 1,000 stamps impressed. For each additional 100 or part of 100 stamps impressed one tenth of the above fee.