HC Deb 08 March 1961 vol 636 cc641-50

Motion made, and Question proposed, That this House do now adjourn.—[Colonel J. H. Harrison.]

12.9 a.m.

Mr. Tudor Watkins (Brecon and Radnor)

I must apologise to the hon. Lady the Assistant Postmaster-General for having had to keep her up after midnight. I want to raise a very important matter which concerns people living in rural districts, and particularly telephone subscribers who have to pay rentals and who live outside the radial distance of three miles from a telephone exchange. It may be that people living in urban areas are unaware that this anomaly exists in rural districts. Subscribers living three miles from a telephone have to pay an excess charge of 10s. per furlong per quarter or £2 per furlong per year or £16 per mile per year. If the service is shared it is approximately half for each subscriber.

Most of the subscribers are farmers, but there are other people who are concerned. My latest information is that between 3,000 and 3,200 are involved. There is a small holding outside Brecon where the charge was £64 and the widow concerned had to give up the telephone because she could not afford this amount, which was more than the rental of the small holding. A vicar in a district which is well known by my hon. Friend the Member for Aberdare (Mr. Probert) wanted to have the telephone installed, but he lived at the top of the valley, and he could not afford the charge. He discovered that a neighbouring farmer was paying £33 rental for a party line.

The National Farmers' Union has been agitating over this matter hince 1951 and has made continual representations to the G.P.O. Resolutions have appeared on the agendas of annual conferences of the union for three successive years and have been agreed to unanimously. The annual conference of the young farmers has also taken up the matter. The Brecon and Radnor branch of the National Farmers' Union has been considering this matter for years. The Federation of Women's Institutes has been interested and had a resolution on the subject passed at the London conference. Apart from the action which has been taken in my own constituency, my attention has been drawn to cases in Merioneth and Cardigan and also to cases in Devon.

The Postmaster-General's advisory committee has discussed this matter and I am anxious to know what advice has been given to the Minister, as I am told that it is in favour of the abolition of the charge. I have asked Questions in the House, the last as recently as 18th February, but the replies I have received have not been altogether satisfactory. The Report and Commercial Accounts of the Post Office for 1959–60 states, on page 4, under the heading, "Surplus": A public enterprise carries, of course, social obligations which rule out a precisely equal performance". This public enterprise has not been doing its work for these subscribers. For 1959–60, there is an overall surplus for the Post Office of £20.9 million. The telephone service has a surplus of nearly £17 million, double the previous year. Why was there not a levelling up of rentals during that financial year? The income from rentals more than doubled. There was plenty of money to play about with.

Last July, many of us in the House heard the Postmaster-General make a very welcome statement, in which he spoke of "the friendly telephone service." It was also announced in the Press. There was a reduction in the price of local and long-distance calls. Maximum charges for the telephone service were reduced. The estimated cost to the Department was about £2 million. Surely something could have been done then about these extra rentals, which, I understand, bring in only £44,000. If there are more up-to-date figures than the 1958 ones, I should like to hear them. Why could not something have been done about these charges?

Is the hand of friendship not to be held out to subscribers living over three miles from an exchange, or is the hand of friendship merely for urban dwellers? I know that the hand of friendship campaign has gone down well, and that a great deal of publicity has been given to it, but I wonder whether people realise what it is like to live in rural districts and suffer from this great anomaly. The people most concerned are those doing a very useful job for the nation. The public should realise the importance of the work the farmers do in these days. Why should they be subject to this unfair imposition?

The concessions announced last July were good, but my constituents and other people in this position were very disappointed that nothing was done for them. Why differentiate between the services the Post Office renders? I know a farmer who lives nearer to the exchange than where the sub-office is. The sub-office facilities are the same in that village as they are for everybody else in the country, but the telephone rentals are not. It is a great differentiation. Rural kiosks throughout the country are much appreciated. They are very numerous in my constituency. They are red, so that everybody can find them. They are very useful.

I want to draw attention to some cases in my constituency. A constituent of mine who lives at Coedowen, Cwmtaff, between Merthyr and Brecon, was canvassed by the Post Office to have the telephone installed at his farm. The lines are only 30 yards from the farmhouse, but he was asked to pay £78 per annum in rent. If it was a party line he would have to pay £39. He is six miles three furlongs from the Merthyr exchange.

The next two examples are farms at Merthyr Cynog, in Breconshire, which is a lovely spot. One farmer living at Yscirfechan has to pay £48 per annum for a party line. Another farmer living at Cwmpistyll, Merthyr Cynog, has to pay £39 for a party line. Another case is that of a lady living at Libanus, Brecon, who has to pay £24 a year for a party line. I could mention numerous other cases in my constituency, but these are outstanding cases.

The telephone service is an essential requirement for efficient farming. There is no question about that. Farmers and others in rural districts do not have telephones merely so that they can ring up in connection with coffee or cocktail parties. They want it for medical reasons for themselves and for their households, and, in particular, for veterinary service. When there is a prospect of foot and mouth disease—I hope this will not happen in my constituency or in any other—a telephone is very essential.

I would draw the attention of the Assistant Postmaster-General to the replies I have received. They say the telephone service is subsidised, that the charges do not fully cover the cost of these lines, and that it is unreasonable to allow extra cost to fall on telephone users generally. Surely, in a public enterprise of this kind, that ought not to be the case.

The whole contention is that "we in the Post Office cannot do anything about it. We are under the instructions of the Treasury." After next April that will no longer be the position. This is a golden opportunity for the Postmaster-General to put this matter right under the new independent service. Cannot he say now that something will be done? I know that a procedure has to be adopted and that there have to be new regulations, and so on.

It is no good saying that the matter will he considered. It has been considered for some time already. The National Farmers' Union has been pressing this for the last three years, not casually but with vigour, but it cannot get any consideration at all given to the matter.

When the hon. Lady the Assistant Postmaster-General came to my constituency last summer I believe that she had the hand of friendship extended to her by everyone, irrespective of politics. I wonder whether she will come again. I hope that she will, though not in a political sense, so that we can again extend to her the hand of friendship. If she does, I hope that the people who are paying these exorbitant charges for telephone rentals will meet her. They will still extend the hand of friendship, but they will, I know, say something besides and I will not be held accountable for what they will say.

I hope that the hon. Lady will look favourably on my plea for the removal of this anomaly, which is an unfair imposition.

12.23 a.m.

Mr. Raymond Gower (Barry)

I will not detain the House for more than a minute or two, but I should like to say a few words in support of the case put by the hon. Member for Brecon and Radnor (Mr. Watkins). Although we in the British Isles live in a thickly populated country, a great proportion of our people live in rural areas. That is particularly so in Wales. It is largely the case in Scotland, and in other large parts of England, too.

The House has expressed its concern on many occasions about rural depopulation and steps have been taken by the Government to try and counter that trend. Some time ago I made inquiries about this difficulty and I was then informed that in spite of these charges the Post Office was losing money on the telephone service. I appreciate that, but I hope at least that my hon. Friend the Assistant Postmaster-General will be able to say that the question can he re-examined.

It seems that some of the charges cited by the hon. Member for Brecon and Radnor are very high indeed, and my hon. Friend will appreciate that in some of these areas this sort of service is by no means a luxury. It is largely a necessity.

Mr. Roderic Bowen (Cardigan)

The charges are almost prohibitive.

Mr. Gower

As the hon. and learned Member for Cardigan (Mr. Bowen) says, some of these charges are almost prohibitive.

As I say, the telephone in such areas is not a luxury. It is almost a necessity for a person living in a remote place. In these circumstances, while I appreciate the difficulties and understand some of the reasons why the Post Office has had to adopt this policy in the past, I hope that my hon. Friend will be able to say tonight that her Department will look at the matter again and with sympathy.

12.25 a.m.

The Assistant Postmaster-General (Miss Mervyn Pike)

I thank the hon. Member for Brecon and Radnor (Mr. Watkins) for the eloquent, forceful and, if I may say so, friendly way in which he put his case tonight. Both my right hon. Friend and I fully recognise his concern in this matter, and, as he said, he has raised it on several occasions in the House. Also, as he recalled, he and I talked about it when I was in Brecon last summer.

I assure the hon. Gentleman and the House that, as a countrywoman myself, representing a rural constituency with a large farming community, I am particularly sensitive to the special needs and difficulties that he has described. They are difficulties which we encounter in Scotland, in the north of England and in isolated parts of the country, where-ever they may be.

The hon. Gentleman raised the important matter of the obligations which the Post Office has as a public service to rural communities, the social obligations of the Post Office. I assure the House that neither my right hon. Friend nor I have any intention of shirking these obligations. Recently in the House and in Committee, as hon. Members know, the Post Office Bill has been passing through its various stages, and we have had long debates on this aspect of the Post Office's obligation and our responsibilities were stressed on both sides.

We spent a great deal of time elaborating on the dual function of the Post Office as a commercial undertaking, on the one hand, and as a public service, on the other. It has always been our intention, and it will always continue to be, to see that this dual obligation is fulfilled; that is to say, that we shall meet the reasonable demands of the public and, at the same time, ensure that we pay our way so far as we can.

Essentially, our task is to preserve the balance between these twin responsibilities. It may help the hon. Member if, first, I give the commercial justification, as it were, for the extra rental charges which we make on the long lines. I am sure that he would not wish me to comment on the individual cases, hard and difficult though they are, which he cited from his own constituency.

As the House knows, the standard rental charge of £12 a year for residential subscribers covers the provision of service within a radius of three miles from the nearest exchange. This rental takes account of maintenance, depreciation and interest on capital required to provide the subscriber's individual equipment, which we estimate on average to cost £112. Beyond this radius, we charge an additional yearly rental of £2 per furlong.

The case for this is that long lines are much more expensive than ordinary lines both to provide and to maintain. They are particularly vulnerable to weather since the proportion of overhead wires on these routes is greater and, as a result, maintenance work is incurred more frequently and there is a greater risk of our having to make expensive replacements. The long journeys which workmen have to make to isolated locations to repair wires add further expense. Maintenance costs are, in fact, so heavy, averaging about £15 a year per line, that they virtually absorb all the excess mileage charge, leaving little or nothing to offset the heavy capital cost of provision, which we estimate to average about £350 a mile.

Turning from the commercial justification to our social obligation once more, I hope that the hon. Member will bear carefully in mind what I have said, because it is really the crux of the matter. We are already incurring a loss through providing these subscribers with service. We are losing £190,000 a year, an average of about £60 per subscriber. This brings me back to the social obligation and to the fact that our sense of social responsibility to these subscribers is already amply shown by our practice of providing telephones in country districts at well below cost.

The hon. Gentleman raised the question of subsidy, but, of course, we are already subsidising these subscribers heavily. If excess mileage charges were abolished, our loss would immediately go up by about £44,000 to about £234,000 a year. It would certainly stimulate demand for telephone services in remote areas. If, for example, the number of long lines rose by 50 per cent. as a result of our abolishing excess charges, our loss would be increased to £350,000 a year, and we should be involved in additional capital expenditure not far short of £2 million. In practice, with our resources at full stretch, as they are now, we could not undertake this amount of work for some years, and the orders would probably stay on the waiting list until well after 1965.

Mr. Bowen

Does the hon. Lady mean that one of the objects of these charges is to discourage people in these areas from going in for the telephone?

Miss Pike

Oh, no. I am merely pointing out that, if the charge was abolished, not only would we incur a greater loss, but by stimulating demand the loss would continue to increase every year. My figures are very much on the conservative side in pointing out the loss that the service would incur if we abolished these charges.

Mr. William Ross (Kilmarnock)

Can the hon. Lady give any idea of the extent to which these charges are a deterrent by telling us how many people in such areas are on the waiting list?

Miss Pike

We all estimate that it is a considerable deterrent, but I could not give any figure. In practice, our resources are at full stretch and we would be adding to the waiting list.

The Post Office Bill has given us a new sense of financial freedom. It has ended the concept of the Post Office as a revenue department and altered the method of financing capital development. But, in spite of that, the level of capital investment in the Post Office will still be subject to overall control exercised by the Government over spending in the public sector. In this sense, the Post Office will be no freer under the new status to provide the extra capital that would be needed if demand rose as a result of our reducing charges.

A further point about our service to rural communities which the hon. Member for Brecon and Radnor has mentioned is telephone kiosks. I was glad to hear him speak of them in such glowing terms, because those of us who live in the country realise what a tremendously important part they play in the life of the community. As the hon. Member knows, we are losing between £2½ and £3 million a year on kiosks. Of those that do not pay their way, it would be true to say that the great majority are in rural areas, placed there particularly for the purpose of providing public service to remote communities and to fulfil the social obligations of which I have spoken.

As the hon. Member mentioned, we have been progressing somewhat and we are getting better. Although I cannot tonight give the assurances which the hon. Member would like, I should like to say how we have been improving in the last few years. We are continually providing new exchanges, particularly in rural areas; for example, by opening new automatic exchanges to serve eight or more subscribers and by setting up country satellite exchanges where there are even fewer than eight subscribers. This means that more and more of the countryside is being covered by the "free" areas in which there is no excess charge and that the subscribers with long lines are being brought nearer to the exchange—so incurring a reduced rental.

In many cases, the distance for which the subscriber is liable to be charged is measured not to the exchange itself, but to a telephone kiosk wherever this is to the subscriber's advantage. It would be fair to say that the liability of rural subscribers to pay excess charges has been steadily reduced over the years, in the same way that the "free" radius has gradually been extended.

Practically all other telephone administrations in the world charge extra for long lines and some have a "free" radius of only one or two kilometres. Our own gas and electricity undertakings make similar distance charges for the connection of service. Both my right hon. Friend and I feel that our policy is fair taking into account the dual obligations which I have mentioned and recognising that our policy is essentially one of preserving a balance between those two responsibilities of the Post Office.

I assure the hon. Member that I have taken careful note of his arguments. As I have said, over the years we have been steadily reducing the burden on long-line subscribers and we will continue to give every consideration to their needs. The hon. Member mentioned the friendly telephone and the feeling of friendship that we are trying to engender in the service. They are not empty words when I say that we will continue to consider this problem, doing the best we can the whole time.

I have a particular interest in it. I should like to go to Brecon and get, in the glowing terms of the hon. Member, the hand of friendship from his constituents. I know that I shall get that whatever happens, but when I go, I shall go in the sure knowledge that we have given the problem the consideration which is due to it. We shall do our best.

Question put and agreed to.

Adjourned accordingly at twenty-five minutes to One o'clock.