HC Deb 19 March 1963 vol 674 cc207-17
The Postmaster-General (Mr. Reginald Bevins)

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

In the coming year the Post Office will invest £156 million capital in its ever growing services. This compares with capital expenditure of £105 million in 1960–61 and £133 million in the current year. This increase in investment is essential for improved public services. It will also help to maintain a high level of employment in industries which supply the Post Office. Several of these are in the development districts.

Post Office profits, however, which help to finance its capital investment, fell from £24 million in 1960–61 to £14 million in 1961–62. This year they are estimated at £9 million.

My right hon. Friend the Chancellor of the Exchequer has agreed that Post Office borrowings from the Treasury shall be increased from £35 million in this financial year to double that amount in 1963–64. It is, however, undesirable that the whole of the additional capital should be found by borrowing and I therefore propose to alter certain charges so as to add £14 million net to Post Office revenue in a full year. This represents an increase of only 2.6 per cent. on present income.

Before I come to the tariff increases, I should like to refer to one particular relaxation. It is widely felt that the limitation of an S.T.D. local call to 3 minutes for 2d. is too restrictive. I have, therefore, decided to increase to 6 minutes the time per unit charge during the day period for ordinary subscribers without making any change in the unit charge.

The principal increases in tariffs are:

Posts:

Charges for inland parcels of between 6 lb. and 15 lb. will be increased by between 3d. and Is, a parcel. Charges for overseas parcels, which vary according to destination, will be raised to bring them more into line with costs. There will be no increase in the charges for inland parcels weighing 6 lb. or less.

The charge for registration will be increased by 3d. I hope that this will divert some business to the cheaper Recorded Delivery Service, the growth of which I am anxious to encourage.

Charges for overseas printed papers, which are incurring a heavy loss, will also be increased.

The rates for inland money orders and cash on delivery charges will be increased by 1s. at each step. This service also loses heavily.

Telecommunications:

The time per unit charge on certain S.T.D. trunk calls will be reduced by 17 or 25 per cent.

The charge for certain non-S.T.D. trunk calls will be increased by amounts varying from 3d. to 9d. for each 3 minutes.

The charge for inland telegrams will be increased from 3d. to 5d. a word. The charges for certain overseas telegrams will also be increased. Most of these changes will operate from 29th April.

Full details will be published in the OFFICIAL REPORT and for the convenience of hon. Members copies are now available in the Vote Office.

I am also presenting today a White Paper dealing with Post Office Prospects for 1963–64. There will be an opportunity to debate this White Paper in the debate on the Post Office on Monday next, when I hope to refer to plans for stimulating the use of Post Office services.

Mr. W. R. Williams

Is the Postmaster-General aware that this is quite a disturbing statement in many respects and is quite contrary to what many of us expected that he would be making from the Dispatch Box at this time of the year? It looks like an advance little Budget of his own. We shall, of course, want to weigh up very carefully the pros and cons. Although the right hon. Gentleman has referred to certain charges which are coming down, there are compensating increases in other directions which he has not referred to very much.

I should like to say that, personally, I note with satisfaction the proposed increase in capital investment. We on this side of the House consider that this is essential if the postal and telecommunications services are adequately to meet the requirements of an expanding economy. But is the right hon. Gentleman not in danger of imposing too heavy a burden on the administration and on Post Office customers by his decision to try to find a still higher proportion of capital investment from his own day-to-day Post Office resources? After all, the Post Office is in large part a public service and quite a number of the services cannot possibly, by their very nature, pay dividends. Therefore, this has to he taken into consideration.

May I ask the right hon. Gentleman further whether the increased tariffs on parcels, telegrams and telephones do not, in fact, defeat the very object which he has in mind, that is, to popularise the services to which I have referred? Is he, therefore, not in danger—I ask this quite seriously—of pricing some of these very valuable services completely out of the market? Would it not be a better proposition for him to expand the services instead of contracting them in the form that he has suggested in his statement?

Finally, may I ask the right hon. Gentleman, in view of the seriousness of this statement, and the fact that we are to have a debate on Monday on the whole subject of the Post Office's prospects and its work, whether he will consult his right hon. Friend the Leader of the House with a view to giving us extra time for the debate on Monday so that we can deal with many of the important aspects which have been disclosed in his statement?

Mr. Bevins

I am not sure what the hon. Gentleman means when he refers to the seriousness of my statement. I should have thought that a situtaion in which the Post Office is increasing prices by only 2.6 per cent. overall when our capital investment is rising by 25 per cent. is not too bad. The fact is that the Post Office's proportion of capital financing in 1963–64 at 55 per cent. will be a lower proportion, and not a higher proportion, than it has been during the last two years.

On the question of the increase in prices, it is perfectly true that the tendency in certain spheres will be to reduce public demand, but that is not true all along the line. For example, in the case of the increase in the registration fee we hope to divert business from registration, which is losing money, to the Recorded Delivery Service which is making money.

Mr. Hirst

Is my right hon. Friend aware that we really are rather tired of these consistent and persistent increases in Post Office charges? The hon. Member for Manchester, Openshaw (Mr. Williams) is quite right when he says that they are likely to price some of these services out of the market and that the increase in prices of overseas parcels, telegrams and overseas papers is quite contrary to what was thought to be the essential need of the Government to encourage the export trade.

Mr. Bevins

Whatever my hon. Friend may say, I think that it is a fair comment to make that the increase in prices is not only lower than for any other nationalised industry, but for most private enterprise as well.

Mr. Grimond

Can the right hon. Gentleman give us a few more details of how this programme of investment will assist the development districts, and particularly whether it is likely to benefit Scotland?

Secondly, can he say whether he has estimated the effect on industry of these increased charges, and, thirdly, will be bear in mind that increased postal charges, in particular, and some of the increases in telegram charges will bear particularly heavily upon the remote areas of Scotland and Northern Ireland and on districts that we want to help because their unemployment figures are high?

Mr. Bevins

I do not altogether share the right hon. Member's view that increased postal charges will hit people in rural areas. There are no important changes on the postal side affecting the ordinary man in the street. There is no increase in the stamp or in the rate for the ordinary small parcel. The point about employment in the development districts is certainly important. Many of our largest suppliers have plants and factories in the North-East and on Merseyside and, of course, quite a substantial proportion of postal equipment is purchased from firms which operate in Scotland.

Mr. Vane

Can my right hon. Friend say whether the increased charges on the parcel post service will be matched by improvements in the service? Between the north of England and London the parcel post nowadays takes four, five or six days. This is no encouragement to anyone who wants to set up or develop industries in the north of England at a time when the provision of employment is so important.

Mr. Bevins

I entirely agree with my hon. Friend that the parcels service is not as good at is ought to be, but that is by no means wholly the responsibility of the Post Office. We are at present conducting a road service experiment in East Anglia which I am confident will be successful. If it is, our intention is to apply it more extensively over the country.

Mr. Ross

Can the right hon. Gentleman say whether the whole of this £156 million and the increase in capital investment relates purely to Post Office services to the community? How much is for defence purposes, if any, and how much for television, both I.T.A. and B.B.C.? What does the right hon. Gentleman expect the effect to be of his increase in telegram charges? How much will he save by cutting down the use of this service? Finally, were these proposals discussed by the right hon. Gentleman with the Central Advisory Committee, which last met about two years ago?

Mr. Bevins

No, Sir. These changes have not been discussed with the Central Advisory Committee. The telegram service, as the hon. Member knows, is incurring a loss of about £3 million, and has been incurring it for some years. Quite clearly, it is uneconomic and we ought to do something to put it right.

As for increased capital expenditure, the amounts which refer either to defence or to television are wholly infinitessimal. The lion's share of that £156 million will be devoted to the expansion of the telephone service.

Mr. F. Harris

My right hon. Friend has endeavoured to justify a very unsatisfactory increase in charges by saying that Post Office profitability has fallen from £24 million to £14 million and is estimated to fall this year to £9 million. Can he explain why there have been these dramatic reductions in profitability?

Mr. Bevins

On the income side, it is due to the slower expansion of business. [HON. MEMBERS: "Oh."] Not the decline of business, but a smaller rate of advance, and, of course, a substantial decline in pools traffic owing to the development of certain other forms of gambling. On the expenditure side it is largely due to pay awards which for 1962–63 amount to £21 million.

Mr. W. R. Williams

The right hon. Gentleman expressed some surprise that I thought his statement was disturbing. I should have thought that the comment made by his hon. Friend the Member for Croydon, North-West (Mr. F. Harris) was—

Mr. Speaker

Could we not confine ourselves to questions on the statement, because otherwise we take so long?

Mr. Williams

Very good, Mr. Speaker.

Is it not disturbing that the profits of the Post Office have come down progressively from £24 million to £9 million? Secondly, has the Postmaster-General not failed to "come clean" in his statement about the telegraph service? Not only is the charge per word going up from 3d. to 5d., but the minimum charge for telegrams will now be 5s. If that is not pricing it out of the reach of ordinary men and women, I do not know what is.

Mr. Bevins

I thought that I had largely answered the first point, in reply to my hon.Friend the Member for Croydon, North-West (Mr. F. Harris), when I said that business had expanded less satisfactorily during the last few years than previously, and I had mentioned the great weight of the increased pay awards in 1962–63.

As for telegrams, the fact is that at present a person who sends a telegram

POST OFFICE TARIFFS
PROPOSED CHARGES
(Except where shown otherwise, new charges will take effect from 29th April, 1963)
I.—TELEPHONE SERVICES
1. SUBSCRIBERS' LOCAL CALLS Present Proposed
STD: Time allowed for each 2d. charge unit:
Full rate (6.0 a.m. to 6.0 p.m. Monday-Saturday) 3 mins. 6 mins.
Cheap rate (6.0 p.m. to 6.0 a.m. Monday-Saturday and all day Sunday) 12 mins. Unchanged
2. SUBSCRIBERS'TRUNK CALLS: INLAND
STD: Time allowed for each 2d. charge unit:
Full rate: Up to 35 miles 30 secs. Unchanged
From 35 to 50 miles 20 secs. 15 secs.
Over 50 miles 12 secs. 10 secs.
Cheap rate: Up to 35 miles 45 secs. Unchanged
From 35 to 50 miles 30 secs. 22½ secs.
Over 50 miles 18 secs. 15 secs.
(b) Non-STD: Charge for 3 minutes:
Full rate: Up to 35 miles 1s. 0d. Unchanged
From 35 to 50 miles 1s. 9d. 2s. 0d.
From 50 to 75 miles 2s. 3d. 3s. 0d.
From 75 to 125 miles 3s. 0d. 3s. 6d.
Over 125 miles 3s. 6d. 4s. 0d.
Cheap rate: Up to 35 miles 9d. Unchanged
From 35 to 50 miles 1s. 3d.
From 50 to 75 miles 1s. 6d. 2s. 0d.
Over 75 miles 2s. 0d. 2s. 3d.
3. SUBSCRIBERS' TRUNK CALLS: TO IRISH REPUBLIC
(a) From Great Britain, Channel Islands and Isle of Man
Charge for 3 minutes:
Full rate: From 50 to 75 miles 4s. 6d. 5s. 3d.
From 75 to 125 miles 5s. 3d. 5s. 9d.
From 125 to 200 miles 6s. 0d. 6s. 3d.
From 200 to 300 miles 6s. 9d. Unchanged
Over 300 miles 7s. 6d. 6s. 9d.
Cheap rate: From 50 to 75 miles 2s. 3d. 3s. 6d.
From 75 to 125 miles 2s. 9d. 3s. 9d.
Over 125 miles 3s. 3d. 3s. 9d.
(b) From Northern Ireland
Charge for 3 minutes:
Full rate: Up to 35 miles 1s. 0d. Unchanged
From 35 to 50 miles 2s. 3d. 2s. 0d.
From 50 to 75 miles 3s. 0d. Unchanged
From 75 to 125 miles 3s. 9d. 4s. 0d.
From 125 to 200 miles 4s. 6d. 4s. 0d.
From 200 to 300 miles 5s. 3d. 4s. 0d.
Over 300 miles 6s. 0d. 4s. 0d.
Cheap rate: Up to 35 miles 9d. Unchanged
From 35 to 50 miles 1s. 3d.
From 50 to 75 miles 1s. 6d. 2s. 0d.
Over 75 miles 2s. 0d. 2s. 3d.
4. CALL OFFICE TRUNK CALLS: INLAND
(a) STD: Time allowed for each 3d. charge unit:
Full rate As in 2 (a) above
Cheap rate
(b) Non-STD: Charge for 3 minutes:
Full rate As in 2 (b) above plus 3d. for the first 3 minutes
Cheap rate

is paying only 50 per cent. of the cost of the service.

Several Hon. Members

rose—

Mr. Speaker

We are to debate this subject soon and if the speeches then are short probably everybody will get in.

The following are the details:

5. CALL OFFICE TRUNK CALLS: TO IRISH REPUBLIC Present Proposed
Charge for 3 minutes:
Full rate As in 3 above plus 3d. for the first 3 minutes
Cheap rate
6. COINBOX SUBSCRIBERS' TRUNK CALLS: INLAND
(a) STD: Time allowed for each 2¾d. unit charged to subscriber:
Full rate As in 2 (a) above
Cheap rate
(b) Non-STD: Charge for 3 minutes:
Full rate As in 2 (b) above plus 2d. for the first 3 minutes
Cheap rate
7. COINBOX SUBSCRIBERS' TRUNK CALLS: TO IRISH REPUBLIC
Charge for 3 minutes:
Full rate As in 3 above plus 2d. for the first 3 minutes
Cheap rate
8. SHIP-SHORE RADIOTELEPHONE CALLS
(to take effect from 1st July, 1963)
Charge (for 3 minutes) for calls made through: the medium (MF) or long range (HF) services with ships in Zone A 10s. 6d. 12s. 6d.
the short range (VHF) service 7s. 0d. or 9s. 0d. (according to the distance of the inland subscriber from the coast station)

Zone A at present covers the sea areas within about 250 miles of the coast station. Its limits are being adjusted so that the new charge will apply to calls to and from ships within about 300 miles of the coast station.

II.—TELEGRAPH SERVICES
Present Proposed
9. INLAND TELEGRAMS
Ordinary telegrams … … … 3s. 0d. for 12 words or less 3d. a word thereafter 5s. 0d. for 12 words or less 5d. a word thereafter
Overnight telegrams … … … 1s. 6d. for 12 words or less 1½d. a word thereafter 2s. 6d. for 12 words or less 2½d. a word thereafter
Priority telegrams … … … Ordinary rate plus 1s. 0d. surcharge Ordinary rate plus 2s. 0d. surcharge
Press telegrams:
Day … … … 3s. 0d. for each 60 words 5s. 0d. for each 50 words
Night … … … 3s. 0d. for each 80 words 5s. 0d. for each 65 words

For ordinary and press telegrams to the Irish Republic the surcharge of 6d. will be increased to 1s. 0d. There will also be increases in the charges for certain supplementary services.

10. OVERSEAS TELEGRAMS
Telegrams to Europe (and a few neighbouring countries) Various Increased by about 30 per cent. on average
III.—MAIL SERVICES
11. PARCELS Present Proposed
s. d.
Inland and to Irish Republic* Up to 21b. … 2 0
3 lb. … 2 3
4 lb. … 2 6 Up to 6 lb. unchanged
5 lb. … 2 9
6 lb. … 3 0
7 lb. … 3 3 s. d.
8 1b. … 3 6 Up to 8 lb. … 3 6
10 lb. … 4 0
11 lb. … 3 9
12 lb. … 4 6
15 lb. … 4 0 15 lb. … 5 0
18 lb. … 5 9 Above 15 lb. unchanged
(max.) 22 lb. … 6 6
12. PARCELS: OVERSEAS
(to take effect from 1st July, 1963) Various Increased by about 15 per cent. on average
* The maximum weight for parcels to the Irish Republic is 15 lb.
13. PRINTED PAPERS, ETC.: OVERSEAS (to take effect from 1st July, 1963)
Printed Papers and Samples … 2d. for 2 oz. 2½d. for 2 oz.
… 1d. for each additional 2 oz. 1½d. for each additional 2 oz.
Commercial Papers … 6d. (minimum charge) for 10 oz. 7d. (minimum charge) for 8 oz.
… 1d. for each additional 2 oz. 1½d. for each additional 2 oz.
Small Packets … 10d. (minimum charge) for 10 oz. 1s. 0½d. (minimum charge) for 10 oz.
… 2d. for each additional 2 oz. 2½d. for each additional 2 oz.
Printed Papers (reduced rate) … 1½d. for 2oz. 2d. for 2 oz.
… 1d. for each additional 2 oz. 1½d, for each additional 2 oz.
Printed Papers (bulk). … 8½d. per 1b. 1s. 0½d. per 1b.
Canadian Magazine Post … 1d. up to 6 oz.. As for printed papers (ordinary or reduced or bulk rate.)
1½d. up to 1½ 1b.
… ½d. each additional ½ 1b.

The minimum charges of 7d. for Commercial Papers and 1s. 0½d. for small packets will apply to air mail as well as to surface mail.

14. REGISTRATION FEE
Inland and to Irish Republic 1s. 6d. for compensation up to £20. 1s. 9d. for compensation up to £20.
then then
1d. for each £20 up to £400 1d. for each £20 up to £400
15. REGISTRATION FEE
Overseas (to take effect from 1st July, 1963) 1s. 6d. 1s. 9d.

There will be a consequential increase of 3d. in the charges for all insured items sent overseas.

16. INLAND CASH ON DELIVERY PACKETS
Fees (additional to normal postage and registration charges). 1s. 2d. to 2s. 8d. (according 2s. 2d. to 3s. 8d. to the amount of the Trade Charge).
IV.—REMITTANCE SERVICES
17. INLAND MONEY ORDERS Present Proposed
Ordinary money orders
Poundage:
Up to £10 … … … 1s. 0d. 2s. 0d.
Up to £20 … … … 1s. 2d. 2s. 2d.
Up to £30 … … … 1s. 4d. 2s. 4d.
Up to £40 … … … 1s. 6d. 2s. 6d.
UP to £50 … … … 1s. 8d. 2s. 8d.
Telegraph Money Orders
Supplementary fee 6d. —
Poundage As for inland ordinary money order. As for inland ordinary money order plus 6d.
Official part of telegram of advice 3s. 0d. 5s. 0d.
Words in any private message 3d. a word 5d. a word
Surcharge for telegraph money order to Irish Republic. 6d. 1s. 0d.

The charges for issue of a duplicate money order, for renewal of a void money order and for advice of payment of an overseas money order will also be increased.