POST OFFICE (CAPITAL INVESTMENT AND TARIFF INCREASES)

HC Deb 25 March 1963 vol 674 cc990-1084

5.24 p.m.

The Postmaster-General (Mr. Reginald Bevins)

I beg to move, That the Postmaster-General be authorised, as provided for in section 5 of the Post Office Act, 1961, to make payments out of the Post Office Fund for the financial year ending with the 31st March. 1964. If, Mr. Deputy-Speaker, you feel that it would be proper, it might be for the convenience of the House to discuss this Motion with the following Motion: That the limit of the Postmaster-General's indebtedness to the Exchequer under subsection (2) of section 10 of the Post Office Act, 1961, be increased from eight hundred and eighty million pounds to nine hundred and sixty million pounds.

Mr. Deputy-Speaker (Sir William Anstruther-Gray)

If it be for the convenience of the House, so be it.

Mr. Bevins

I am obliged.

Since our debate is limited, I do not propose to make a long speech. I had thought of saying that I was sure that many hon. Members would be eager to participate in the debate; but there is not much evidence in that sense at the moment. I hope that the House will not think that I am unmindful of the postal side of our organisation if, for the most part, I leave it to my hon. Friend the Assistant Postmaster-General to refer to that important side of our activities when he winds up the debate.

At the start, however, I should like once more publicly to express my thanks and the thanks of the Post Office for the fine work of our postmen and our engineers, in particular, during the recent spell of very bad weather. All of them, and perhaps particularly those who labour in rural areas, did a great job of work under very trying conditions. I realise from the correspondence I have received from members of the public that their efforts have been very highly appreciated.

I want, next, to plunge into the question of the finances of the Post Office. As hon. Members know, it has recently been necessary to increase the prices in order to produce an additional income of about £14 million in a full year. Perhaps there may have been some slight misunderstanding as to why this has been necessary. First, why have Post Office profits fallen to £9 million in the present financial year? There are two reasons.

The first is that in the last two years the pace of growth has slackened. That, of course, has applied to many of our industries and services. A number of Post Office services have been adversely affected—inland letters, postal orders, parcels, local calls and even trunk calls. Although the number of trunk calls has risen, the income for each call on the average has been less than it was previously.

By the way, I thought that the other day I detected a note of surprise in the Chamber when I referred to a drop in football pools traffic as an important contributory factor. I should like to reiterate that this is so. Our income from pools—postage and postal orders—has fallen from £13 million in 1960 to £8.9 million in 1962. That is, indeed, quite a severe drop.

The second important factor is, of course, higher rates of pay and other improvements in conditions of service which have cost the Post Office about £21 million. I sometimes wonder whether those who express indignation whenever prices are raised, however modestly, or who protest that wage increases are irrelevant, have any real understanding of what has been happening since the end of the war. I should like to give the House one or two figures which I think will indicate the pattern of experience during the last ten or fifteen years.

During the last ten years, Post Office expenditure has increased by no less than £270 million. Increased expenditure to cope with business expansion I put at £90 million. The balance of £180 million, which is two-thirds of the total increase in expenditure, has been due to improvements in pay and in conditions of service, together with higher prices for goods and services. The major element, undeniably, has been improvements in pay and conditions of service.

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

I want this position to be made perfectly clear. Can the right hon. Gentleman break down this figure? Does the sum of £21 million include only increases in pay, superannuation, and any reduction in hours, or does it also include higher prices for goods and services?

Mr. Bevins

No, the figure of £21 million refers to improvements in pay, the effect of the shorter working week, the consequential increase in pensions, and so forth, but it does not include any element for increased prices.

I was saying that during the last ten years our total expenditure has gone up by £270 million, the increased expenditure to cope with increasing business by £90 million, and the balance of £180 million, or two-thirds of the total, has been due to improvements in pay and conditions of service and, to a limited extent, increased prices far goods and services.

Perhaps, as an illustration of this, I may say that in 1950 the basic wage of a postman employed in the provinces was £5 15s. a week. That was his pay, without overtime or anything of that kind. Today, the basic figure is £11 3s. It is no good, with respect to hon. Members opposite, pretending that this is bagatelle. Indeed, in a high labour cost industry like the Post Office, it is a highly important factor.

On the other side of the account, there was increased income from business expansion over the last ten years amounting to over £120 million, and the difference between the increase in expenditure and the increase in income, which amounted to £150 million, has been made up by increased charges. These are the hard and incontrovertible facts of the present situation.

When cost increases vastly exceed any possible growth in net income these can be met only either by severe working economics, or by increased charges. I may well be asked whether the future offers any prospect other than the periodic repetition of this story. Primarily, the answer depends on the solutions which have yet to be found to the problems now facing the Government and the National Economic Development Council. Nothing would suit the Post Office better than a much more rapid rate of national economic growth together with less rapidly rising costs.

The studies which have been made in connection with the N.E.D.C. suggest that the Post Office as a whole could play its full part in contributing to the 4 per cent. national growth target while maintaining overall stability of its charges, provided—and this is the crux of the matter—that rates of pay and prices did not increase by more than half the average rate of increase in the past ten years.

I am bound to confess—and I do it quite freely—that I myself heartily dislike the idea of putting up prices. I do not for one moment attempt to conceal that for months past I have considered, with my advisers, in very great detail the possibility of making economies designed to avoid any price increases at all. That is what, by temperament, I should like to have done, but temperament, of course, sometimes is a bad guide.

To have saved anything like £14 million—that is the amount of the recent price increases—would have meant such things as the elimination of second postal deliveries, the discontinuance of the use of air services for taking mails from London to Scotland and Northern Ireland; it would have meant cutting down severely on staff recruitment and so delaying both the installation and the repair of telephones; and, perhaps above all, it would have led to a lengthier time taken by operators to answer subscribers' calls.

I concluded that this game was not worth the candle. I believe that in the long run, as opposed to the short run, the public would have resented these cuts in Post Office services even more than they dislike the price increases that I announced last week.

As I have said, the scale of our proposals is very modest. They raise the total revenue of the Post Office by about 2.6 per cent. in a full year. I am sure that the extended time for S.T.D. local calls will be very generally welcomed, especially by the ladies, even though it costs £3½ million which has to be found from somewhere.

For the additional sums required I am relying, to the extent of £10½ million, upon trunk calls. Quite true, these are profitable, but they also call for more and more investment, and I do not expect the increases to lead to any real effective reduction in the demand for trunk calling. There is the further factor that the in- crease which we have put on S.T.D. rates simply means that we shall be giving away rather less than we have been doing under our original plan, which I am inclined to think now was too generous.

The inland telegram increase should bring in about £1¼ million a year, and it will reduce the prospective loss on this service from nearly £3½ million to just over £2 million. That, I think, is an ample subsidy to that service.

On the postal side, we are seeking about £5¾ million, notably £1½ million from parcels, £1¾ million from overseas printed papers, £1 million from registration and £1½ million from money orders. All of these services are losing money more or less heavily, and even after these increases they will still be subsidised by other Post Office customers I can see nothing in their nature which reasonably entitles their users to anything like the present degree of assistance from other Post Office customers.

Hon. Members on both sides of the House may well ask during the course of the debate, "But why not at least help to bridge the gap by stimulating Post Office business where it can be transacted on a profitable basis?" That is a view which I understand and sympathise with. In fact, we have already done a good deal and we shall do a good deal more. For example, during the last year or two we have introduced the system of recorded delivery which, unlike registration, is paying its way. We have introduced postage forward parcels, bulk rates for printed papers and higher weight parcels. The development of S.T.D. and publicity for cheap rate trunk traffic has given a great stimulus to trunk telephone calls.

I agree that we must not stop there, and we are now planning an audacious large-scale publicity campaign to attract more business. This will mean making much more effective use than we have so far done of our own offices and our own motor transport, as well as newspapers and possibly television. What I want to do is to encourage trunk traffic in the off-peak periods so that plant which has to be provided anyway to meet the peak demand will be more fully used during off-peak periods. We also want to encourage local calls, and there the extension of the day rate to 6 minutes should be of quite a lot of help.

On the postal side, I think that we must now exploit, which we have not done before, the simple psychological fact that most people enjoy receiving letters. I do not mean bills or writs; I mean letters. The Post Office enjoys handling letters because they pay. If every man and woman in this country were to write only two more letters every year we should earn another £1 million at very little cost. But I am satisfied that we can do far better than that.

Still on the topic of doing more business, we have, during the past three years, had the experimental car telephone service in the South Lancashire area. It has not paid, but, at least, it has demonstrated that there is a demand of sorts in South Lancashire for a service which has proved itself to be operationally and technically feasible. I believe that there is a big potential demand for this kind of service in the Greater London area, and we propose to establish one and have it in actual operation before the end of next year.

I am planning, also, to extend the telephone information services and to publicise them more widely and more intelligently. I must tell the House that there is not a great deal of money in these services. But that is not the point; the point of the telephone information services is that they encourage the habit of using the telephone, and that is what we want.

On the postal side, I am planning to put on sale pictorial air letter forms, and I intend to introduce facilities to give a better service to the large number of philatelists, and, incidentally, to sell them more stamps for their collections.

I turn now to the question of investment and borrowing, to which the second Motion relates. We reckon that we shall, next year, earn a profit of about £18 million. As hon. Members know, our profits are used to help to finance our capital needs, which will rise from £125 million in the present financial year to £155 million in the next.

There are some people who never tire of giving the impression that the Post Office is a stagnant organisation and, in particular, that the telephone service is static. This really is an outstanding nonsense. In 1950–51, the capital investment of the Post Office amounted to only £41 million. Next year, it will be £156 million. In 1951, the waiting list for telephones was as great as 418,000. Today, it is down to 45,000, one-tenth of what it was in 1951. Next year, our capital investment will be 50 per cent. greater than it was in 1960–61, only three or four years ago.

I do not stand at this Box to apologise for the activities or the performance of the Post Office. I see no reason why I should when there is more development in Post Office services than there has ever been in the whole history of the G.P.O. Of course, we must have this greater investment if we are to improve and expand our services, especially on the telephone side.

In a few days—here I come to the borrowing powers—we shall be approaching the limit of borrowing set out in Section 10 of the 1961 Act. In 1961–62, we borrowed £40 million from the Exchequer. This year, our borrowing has been limited to £35 million. Borrowing in these two years will bring our liability to the Exchequer up to £866 million. Since the limit laid down in the 1961 Act is £880 million, we seek by the Motion to raise the limit to £960 million. This ought to see us through the next financial year, and, perhaps, several months beyond. Next year's borrowing, incidentally, at about £70 million will increase the total liability to about £935 million.

Looking ahead, it is quite clear that we shall need more and more investment. We believe in expansion. In our submission to the National Economic Development Council we postulated that investment would rise to more than £200 million in 1966–67, most of which, of course, would go on the expansion of the telephone service. I see the coming twelve months as the first in a phase of extensive build-up in the telephone service which we really must have if we are to provide for the big increase in calls and if we are to give people a telephone more or less on demand.

The position today is better than it has been for many years. Next year, we shall spend £18 million more than this year on putting in trunk and junction plant, on putting in more exchange equipment and expanding the local cable network. This is a very big job, of course, and it is necessary partly as a result of the continuing rise in trunk calling. Part of the additional trunk circuits will be provided by radio links, and the House may be interested to know that we shall be starting on new microwave links for the distribution of the B.B.C.'s second programme, which will be integrated with the G.P.O.'s own trunk network.

We have connected about 415,000 telephones this year, and I expect next year's figures to be about 510,000. As I have said, the waiting list has fallen to 45,000. It is a fact that, for nearly 90 per cent. of the requests we receive for telephones, equipment is immediately available.

Mr. W. R. Williams

What was the waiting list last year?

Mr. Bevins

I cannot give the hon. Gentleman the figure without notice. Speaking "off the cuff", I think that it was between 50,000 and 55,000. It has fallen to 45,000 in the current year.

The House may like to know, also, that we mean to go over to electronic exchanges rather than simple automatic exchanges as soon as we can. These exchanges have the twin advantages of giving greater speed to the subscriber and of being cheaper and more economic to house. Both the Post Office and the principal manufacturing firms feel that there exists a big potential export market for these exchanges, although, of course, we shall not have it all our own way because other countries are developing their own types of electronic exchange.

Now a few words about overseas communications. Since March, many London subscribers have been able themselves to dial Paris numbers. Within the next few days, operators in London and New York will start to dial calls direct across the Atlantic. In the autumn, London operators will be able to dial numbers in Australia. By the end of this year, another telephone cable to America will be opened, and the Pacific cable will give us, for the first time in our experience, a reliable telephone service between here and Australia and New Zealand. The first direct cable to Germany will be opened in about a year. This is the first of six new cables to be laid under the North Sea during the next few years. We hope that subscribers will be able to get their own calls to most parts of Western Europe.

This leads me to the exciting business of satellite communications. My hon. Friend the Member for Watford (Mr. Farey-Jones) is to open a debate on this subject on Friday of this week, I believe, I do not wish to anticipate that debate in any way, but there are some elementary facts concerning the Post Office in this connection which are worth stating quite shortly this evening.

It is now quite firmly established by the success of Telstar and Relay that telecommunications through satellites are technically feasible. The Post Office held a conference on this subject in London last spring, with representatives from most of the Commonwealth countries. Since then we have had exploratory discussions at official level with the American Administration and also the Administrations of most of the Western European countries.

The first question, I think, that interests the House is this: why do we need satellite communications at all? It is because, of course, of the very rapid increase in international telephoning and the increased capacity that is required to handle it. At present, so far as one can judge, this can probably be provided more cheaply by satellite than by cable. This is not to say that submarine cables are becoming obsolete, or will become obsolete in the near future. Indeed, it is the view both of the Americans and my specialists within the Post Office that both submarine cables and satellites will be complementary systems for many years to come.

The second question—and, I confess, perhaps the most difficult—is how far international co-operation ought to extend in this field. There are those who say that because the United States of America is more advanced than other nations, then the United States is bound to take the leading part in the development of a world system. There are others who feel strongly and with deep conviction that our country ought to take its own initiative in co-operation with the Commonwealth. There is yet a third school which says that the initiative ought to be linked not only with the Commonwealth, but also with the countries of Western Europe.

Whichever of these schools of thought is right—I have no doubt that there will be much argument about this later this week—there is, nevertheless, one consilderation which none of us can afford to ignore. The idea that Britain can "go it alone" without any co-operation from other nations is wholly unrealistic, because we simply cannot establish a satellite system unless others are prepared to put down ground stations on their own territories and are also prepared to put traffic over the system.

Nor must we turn a blind eye to the hard reality that at present—I am not speculating about the future—80 per cent. of the inter-continental traffic passes across the Atlantic Ocean between North America and Europe and this is likely to continue for many years to come.

That leads me to the conclusion that if a satellite system is to pay it must draw to a certain extent—I put it no higher than that—on trans-Atlantic traffic. I want to make very clear to the House that the Post Office, at all levels, political, administrative and scientific, has been putting a great deal of work into the problems associated with all this. It is certainly our ambition to take an important part in these exciting developments in the future.

Mr. William Warbey (Ashfield)

Will the right hon. Gentleman give an estimate of the cost to the Post Office of this experiment in research in space communications during the coming financial year?

Mr. Bevins

The amount of money which at present is allocated for Post Office research as such is between £1 million and £2 million. That does not cover all the research upon which the Government have decided to embark.

In conclusion, may I say that I hope that the Post Office is seen more and more by our customers, by the public at large, and by the House of Commons as an organisation which is in tune with the times and which is seeking to be modern and efficient in the interests of the public and the nation.

5.55 p.m.

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

I congratulate the Postmaster-General upon a very substantial speech which he put across with great clarity. The fact that I do not agree with everything he said should not detract from my approbation of some of the things that he said. I do not know whether I can promise to be as brief as the right hon. Gentleman, because it is much easier to start throwing bricks than it is to start building an edifice, but I hope to help in the building by constructive criticism.

I should like to deal with one or two points that have emerged from the right hon. Gentleman's speech. I shall leave my hon. Friend the Member for Barnsley (Mr. Mason) to deal with matters arising out of the statement of last week and to ask for any more information that may be required on it. I shall also leave it to him to deal in the main with bulk agreements, satellite communications and so on. There are, however, one or two points which I think I ought to put to the right hon. Gentleman.

We know that wages and conditions have improved substantially in the Post Office, as everywhere else. One would have to be very stupid indeed not to appreciate and acknowledge that. But I must say to the right hon. Gentleman that since the Government have been in power, the bulk of the wage increases have been to meet the very steady and substantial rise in the cost of living. There can be no doubt that this is a major contributory factor. Any increase for value of work forms rather a small proportion of the increase. The point that I am making is that the substantial increases have been due to the rising cost of living. We are not responsible for that. The Government are, to a point, responsible for it.

Another point that I want to deal with is the deterioration, the decrease, in a good deal of work concerning the Post Office. This again is a national question, and it is due to the fact that the economy has not been running at top gear. We on this side of the House have been complaining for many years that the Government have not been expanding the national potential to the degree that they ought to have done, with the result that the Post Office, like other industries, has suffered. An additional reason is the uncertainty about the Common Market and what has happened at Brussels. That has had quite a serious effect on Post Office development in the same way that it has had quite a substantial effect upon development in that part of Lancashire which the right hon. Gentleman and I are both privileged to represent. I think that I have said enough about the deterioration in work, but I shall be dealing with some other aspects of it later.

I was glad to note that the right hon. Gentleman made the point that there is real need seriously to consider the expansion of Post Office business. He will not be surprised if later I chide him for losing certain opportunities to create new services and to expand other services in order to do exactly what he is doing now. I and, I think, most of my right hon. and hon. Friends believe that the better way to develop the Post Office is to expand the service rather than to make these continuous increases in charges. That is our basic view, and we hope that the Postmaster-General will pay serious attention to it.

The right hon. Gentleman referred to a number of projects which he has introduced recently in an effort to expand the services. I think that he will agree that, when we look at the general overall work of the Post Office, these are very small projects. If the Post Office is to expand, we shall have to tackle the matter in a much bigger way. I shall refer to that later.

I am glad to note that the right hon. Gentleman has decided substantially to increase investment. I think that the figure concerned is about £23 million. That is a substantial sum, and I should like later to relate it to what the National Economic Development Council feels is the response necessary from the Post Office in order to meet the general national increase of 4 per cent. that is required to get the country's standards on a reasonable level.

I am glad to hear that everyone in the Post Office—those on the political side, those concerned with the administration, the scientists and everyone else—has come to the conclusion that the development of satellite communications is inevitable. I am sure that the right hon. Gentleman will not mind very much if I chide him in this respect. About four or five years ago—perhaps it is less than that—I was trying to get statements about how fast and in what direction the Post Office was going in the development of satellites. The Minister said that we had not got to that stage and that he did not know that there was anything in this. I am glad that in 1963 he shares the view which some of us held in about 1958 on the possibilities of satellite communications. I do not pretend to speak for my party here—this is off the cuff in reply to some of the points which the Postmaster-General made—but my view is that we should have been starting on the basis of a Commonwealth telecommunications system closely associated with the United States, because of the amount of inter-continental traffic involved. However, if the right hon. Gentleman proposes to extend the scope and to have other European nations participating, I do not quibble about that. As I say, I do not speak officially on this matter, because we on this side have not had the opportunity to discuss it.

I should like to be associated with the tribute which the Postmaster-General paid to the Post Office staff, especially to those on the outdoor services, for the magnificent way in which they tackled the very hard and onerous duties which the severe winter imposed on them. [HON. MEMBERS: "Hear, hear."] In view of the unprecedented weather which we have had since about December of last year, it is almost miraculous that the lines of communication have been kept open and the transport of mails has been carried out with very little interruption. Men and women have shown great courage and great endurance in trying to meet their obligations to the State and to the Post Office.

May I say this in appreciation of the Postmaster-General? I am most grateful to him for breaking away from the tradition of expressing his approbation and appreciation only in official journals and in the old, official jargon and for publishing his congratulations, thanks and appreciation in the national newspaper, The Times. That was worthy of the occasion and of the right hon. Gentleman.

We always have statements which are full of hope, optimism and promises. Some of our hopes are fulfilled; others remain unfulfilled. There is an obligation on me, speaking from this side of the House, to draw attention to some of the failures in reaching the objectives which we had in mind. To do that, I must briefly analyse the forecasts and prophecies in the White Paper of 1962–63 and the achievements. I promise the Postmaster-General that I shall not go back as far as 1951–52 in order to choose grounds which may be favourable for comparisons. I shall be strictly fair and accurate and merely take 1962–63 and 1963–64. I then propose to comment briefly on the White Paper dealing with 1963–64 and finally to say a few words about the statement made last week by the right hon. Gentleman and about the new tariffs which he proposes.

I do not think there is any need for me to remind hon. Members that no one has defended the Post Office more stubbornly, more vigorously and most persistently than I have done since 1945. This is because of my long experience of the Post Office and of my personal pride in its achievements over many years and because its varied facilities have been a contributory factor in developing the social lives of our people.

I have always believed that the British Post Office is unchallengeably the best in the world, and I hope that that is still the case today. I have said that in this House before, and I hope it is right that I should say it again. With the coming of automation and mechanisation, we expected that there would be still greater efficiency, still greater progress and still greater expansion. In many directions, our expectations have been fulfilled, but I am bound to confess—and I do not do so with any pleasure; I have said this outside to some people—that in some directions the service is not quite so good and is inclined to be slipping.

Take the letter and parcel post services. I should not care to try to defend a delay of two days in the delivery of letters from, say, Oxford or Warwickshire to the Home Counties. I do not think it would be reasonable to try to defend a service of that sort. Many hon. Members on both sides come and discuss these matters with me from time to time, and I should find it very difficult, even with my background, to defend a service like that.

Nor could I possibly defend a parcel post system in which there is a delay of three or four days in the delivery of parcels. We must be very fair and practical in our approach to these questions. I am aware that there are factors over which the right hon. Gentleman and the Administration have no control. I believe that railway electrification and reorganisation and the review which is being conducted are all major contribu- tory factors. My point, however, is that, whatever the causes, we cannot stand for a postal service which is deteriorating to that extent. Whoever is responsible for the fault, we must get down to rock bottom to ensure that the causes are removed.

There are, however, other causes of failure over which the Administration and the Postmaster-General have control. I refer to services like telegrams, money orders, telegraph money orders, registration and the cash on delivery services, all of which seem to be contracting. What is much more serious is that they seem to be allowed to contract. It looks to me as if, in some cases, the Post Office is quite willing to see them contract.

I remind the right hon. Gentleman and the House that many of these services have never shown a profit almost since their introduction. Strangely enough, nobody expected them to show a marked profit. They were regarded as the trimmings of a big public service which were essential and desirable on their own merit. Whether they actually contributed to the profit of the Post Office, they were services that, we felt, should be carried on. They were services which, in the main, appealed to and catered for the requirements of ordinary people who do not have the financial facilities that a small proportion of the community possesses. In my opinion, the Post Office must seriously reconsider its approach to these matters and see what it can do.

I sincerely asked the right hon. Gentleman to consider again whether it is one of his functions to ensure that about 60 or 70 per cent. of the financing of fixed investment should come out of day-to-day revenue. I regard that as too high a proportion. I do not know whether I have understood this correctly, but it may be that by the terms of the White Paper the figure is being reduced to 55 per cent. If that is so, I am not prepared to argue that it is unreasonable. I hope, however, that the Postmaster-General will make it a matter of study to ensure that the social obligations of the Post Office to the people are such that profit is not the paramount consideration and that the social needs of the people are given their rightful place.

The White Paper, Post Office Prospects 1963–64, makes interesting reading. It is full of hope and optimism, as other White Papers have been, and yet, somehow, I have to approach it in the knowledge that my enthusiasm and credence are somewhat clouded by the acid test of how past forecasts and estimates have matched up to achievements.

Because of the time factor, I shall deal with only a few matters. I must, however, refer to the expansion of the telephone service, S.T.D. development, the number of exchange connections which have been made, the waiting lists and waiting periods for connection, and new buildings and programmes, on both the postal and the telecommunications sides. I do not think that the progress in these directions has been anything like as speedy or as good as some of us expected.

Let us consider, for example, exchange connections. In the White Paper Post Office Prospects 1961–62, it was estimated that the increase in the number of exchange connections would be about 220,000, and for the current year, 1962–63, the estimate was about 200,000. The present White Paper shows, however, that by 1st April, 1963, the increase will be about 132,000, or 68,000 below the estimate given in the previous White Paper. There may be good reasons for this, but they are not forthcoming in any of the White Papers. Therefore, we must find out something about them. In replying to the debate, the Assistant Postmaster-General may wish to say something about the causes of these discrepancies.

My next point, which is a corollary of the one I have just made, is that the failure to reach what we call the physical targets has meant that the financial surplus also has been lower than was estimated. The estimated financial surplus for this year was £17 million on telecommunications alone and £34 million on the combined revenue account for the Post Office service as a whole. We see from the White Paper, however, that the figure has come down from £34 million to £9 million.

I said the other day, when questioning the right hon. Gentleman on his statement, that this was a disturbing factor. I thought that I had made my point, although I rather worried you, Mr. Speaker, and I apologise for having developed it at length. It is, however, a serious matter that we are down to £9 million from an estimated £34 million.

I should like to deal briefly with the estimated speed at which subscriber trunk dialling was to be introduced and the number of local calls that were expected. In both cases, the estimates have proved unreliable. I say this deliberately, and I am willing to be corrected, but it seems to me that the Post Office is failing to maintain the planned rate of growth of S.T.D.

The original plan provided that one-quarter of all telephones should have S.T.D. facilities by the end of March, 1962, and that 40 per cent. of all telephones would have them a year later. It was estimated that by March, 1962, we would have about 300 exchanges serving 11 million subscribers. By the end of March, 1962, however, the number of these exchanges was only 250, representing an increase, not of 25 per cent., but of 18 per cent. My parting word on S.T.D. is that, in short, the programme is running exactly a year behind schedule. We are entitled to an explanation of this.

I had intended to deal with the question of the waiting lists but possibly this will be dealt with by my hon. Friend the Member for Barnsley. As to the sharing of lines, however, I understand that over I million subscribers still have shared lines. The bulk of them would be very pleased if they were able to get private lines of their own. To put it mildly, it seems to me that in the past 12 months, there has been no substantial progress in regard to the number of people who are waiting for telephones. According to my information, the number who have been waiting for two years has increased from 2,996 to 3,280.

I leave that and come to my third general observation. This is not put forward in an ultra critical sense at all. It is part of my constructive approach to this debate today. I ask myself and I ask the right hon. Gentleman this question. Is there any lack of drive and enterprise in going after new traffic? In other words, when some of the old seams seem to be played out, is the right hon. Gentleman as the political head of the administration going out to find new seams? I listened with great interest to his opening statement when he referred to some of the small services, but I want something very much bigger than that.

The Postmaster-General rather surprised me, as, I am sure, he surprised my hon. Friends, when he gave us the actual figures of the decrease in the pools traffic in the last twelve months. I knew it had gone down, but I am surprised to learn it has gone down to the extent the right hon. Gentleman indicated today. If that is so, here is a decline of what has been one of the biggest revenue sources on the postal side of the Post Office in the last twenty-five years. There is a serious weakness coming. Not that I am in favour of the pools as such. The right hon. Gentleman knows my views about that, but I happened to be in charge of the trade union side in Liverpool when the pools traffic started and I was in on the ground floor and I know something about it, and I know that it has contributed tremendously to the revenues of the Post Office during the last twenty-five years. If that is going, we cannot afford to sit on the touchline watching it go without making an effort to get something in its place.

I am going to suggest something very seriously. I am sure that my hon. Friends and hon. Members on the other side of the House will have noticed the number of men and women, scores of them, who are tramping the streets every day delivering stuff which in my young days the Post Office exclusively delivered—bills, notices, rates notices from local authorities, notices from private commercial firms, from insurance firms, and all the rest. They are all making use of this form of delivery. Why should the Post Office allow all this business to go away from it without a real fight and without a real effort? I ask the right hon. Gentleman, will he seriously consider whether we can do something to open a new seam there?

The Postmaster-General tells us we are losing money on money orders, telegraph money orders, registration services and so on. Now he is missing a grand opportunity, in my opinion, as I said in an Adjournment debate, of developing a new service which has been a great success an the Continent and which is proving financially sound and is being developed on the Continent. I refer to the Giro system. I hope the right hon. Gentleman will listen to me about this. I hope he will pay attention to this, because I am not the only one who believes in the possibilities and the potentialities of this system. I have had more correspondence about the reply given by his hon. Friend in my Adjournment debate about this than on almost any other subject—apart from overseas rates.

There is one fellow—I am not going to give the House his name—who wants to set up an organisation in support of the Giro system. He will be charging for membership. The House may be interested to know that I was invited to become its first president. I am not falling for that. Nevertheless, I feel quite sure that it is about time we took this in earnest. Some of my old colleagues thought the reply of the Assistant Postmaster-General—I do not blame him, because he was thrown into the pool that night—was rather cynically dismissing it. The general view is, and I repeat it, that this is a sell-out on the part of the Government to the joint stock banks, and that if the banks had not had already plenty of time to formulate their own policy the thing would have been naturally devolving on the Post Office, as something which could better be worked by the Post Office than any other of the finance houses in this country. We have agencies in every little village, in every town, and we are essentially well qualified to deal with this.

There is one further question I want to ask in these general observations. What plans has the Postmaster-General and the administration in mind in regard to the parcels post traffic? It is going down all the time, and yet there is plenty of parcels post traffic to be had if we go about it in the right way. The Postmaster-General proposes to increase the charges here also. I am certain that is not the right way. I am rather surprised that, just at the time we have been discussing Statutory Instruments in this House and extending the weight of parcels up to 22 lb., trying to recover some of the traffic which has been diverted to the railways and to road transport, just at that time when I thought we were in earnest in trying to recover some of that traffic, I find he is putting a spoke in the wheel straightaway by increasing the charges in certain of the ranges of the parcels post.

There is wanted in the Post Office now a drive similar to that in the early 'thirties when we had imperial cables and the Post Office staff went out in the spirit of dedicated salesmanship to make that imperial cables system the success which it turned out to be. Then we took seriously enough the effect of constant publicity, constant advertising. I am rather glad the right hon. Gentleman has changed his mind and that the Post Office has changed its mind on the question of advertising. A few years ago they would not look at it. One Assistant Postmaster-General said that the Post Office was not a suitable business in which to advertise, but his own study group which went to the United States of America came back enthusiastically of the opinion that the Post Office here ought to be changing its ideas and advertising its goods and services.

I leave that point because I should just like to have a look at Post Office Prospects for 1963–64. On the postal side, I note, there is going to be some development in connection with buildings. I am gad to note that that progress is to be made. I am not in a position to assess whether it is sufficient or whether it is all that the Post Office is capable of doing, but it is a step in the right direction, and so far as it is that, it has my support.

Another paragraph in the White Paper deals with mechanisation. I do not know whether I am speaking for my hon. and right hon. Friends on this. This is just thinking aloud from my experience, but here we are talking about mechanisation, more advanced models, trials of new machines and so on. I consider and agree that it is essential that the right sort of finished product should be found, and that research and trials and pilot schemes are necessary for this purpose. In 1936 I was watching a transformer sorting machine in Brighton. I think it was 1936. Perhaps it was 1935. However, somewhere about that time we were looking at a transformer sorting machine in Brighton. I have looked at scores of machines of all sorts since then in many offices. I am grateful for the facilities given me to see these great developments. But I seriously ask when the Postmaster-General is going to make a decision about them. We are talking about expenditure on investment, and we are spending a tremendous amount of money on research and development and experimentation, and I ask these simple questions, thinking out loud: when do we call it a day? When do the experiments and pilot schemes emerge into a nationally adopted system of letter sortation and parcel treatment and the rest?" I often wonder whether in these schemes of research and experimentation the best is not becoming the enemy of the very good. I leave that point there because I am not in the position to deal with it very much further.

Another paragraph in the White Paper which intrigues me is that dealing with the East Anglia experiment. I was under the impression—one of my hon. riends from Norfolk has been talking to me about it for a while—that the experiment has been under way for some time. But I find that it has not started. One cannot deal with modern transport problems by giving notice in 1962 that one is to have an experiment if it is then to be discovered in 1964 that nothing happened beyond the preparation or assembly of blueprints, papers, graphs and ideas. It is about time we knew something more about the experiment.

We are face to face with a much bigger issue than the East Anglia experiment, and that is what the Post Office is to do about the general delivery and transportation of its mails when Dr. Beeching has finished with the railways. Because of the way Dr. Beeching and the Minister of Transport are rushing into these matters, we must have something from the Post. Office very soon about the alternative methods to be adopted. Branch lines are being closed, we are using diesel trains which have nothing like the accommadotion neccessary for post office mail bags and Dr. Beeching is concentrating on main lines and profitable lines. What will the Post Office do in the face of all this? My view is that unless it has some scheme well in hand we shall have about a year of delay, and the result of that will be that the Post Office will come under the hammer, as the railways have done, when the cause is not really of its own making and merely because it has been slow in trying to deal with the problem.

I understand—I think the Postmaster-General himself told me—that there is a high-level joint committee of the British Transport Commission and the Posit Office dealing with this matter. It has been sitting for a very long time now, and yet, as far I can see, there is no record in the reports we are getting of anything substantial having been done.

I turn to the Postmaster-General's recent statement and the tariffs. I am glad to note that capital expenditure is to be increased from £133 million in the current year to £156 million in 1963–64. I agree with him that this is essential for improved public services and for helping to maintain a high level of employment in the industries which supply the Post Office, and I also agree that these developments must proceed with speed and purpose if we are to give any substantial and timely aid to the development areas. At the moment we have more than 700,000 people unemployed. I know that in the light industries in my area of Manchester there are redundancies, short time working and no overtime. We are not making use of people available in Scotland, the North-East and elsewhere by giving them work which the Post Office ought urgently to be carrying out. We are losing opportunities in that skilled people are available but work is not provided for them. I sincerely hope that the Postmaster-General will get on with this as quickly as possible.

I am glad that the borrowings from the Treasury are to be doubled. I assume—I think that the Postmaster-General has more or less assured me on this point—that this makes a contribution of about 55 per cent. from Post Office revenues. In the light of the increase of £23 million in capital investment, which is substantial by any standard, I almost hesitate to press that the sum is inadequate. I do not know whether I shall be able to prove that, but I have to try, and I do so by praying in aid the first Report of the N.E.D.C.

Table 93 of that Report, which deals with fixed investment, shows that the present plans of the Post Office reach a total of £148.3 million in 1963–64 and £185.4 million in 1966–67. It is there stated that if we are to have an increase of 4 per cent. in national effort, the £148.3 million should be £151.8 million and the £185.4 million should be £202.9 million. In other words, the N.E.D.C. is in effect saying to the Post Office "If you are to be a suitable vehicle to bear the new weight of communications which can flow from a 4 per cent. increase in national effort, you must spend more money on your fixed investment".

What emerges from Table 94 in that Report is "If you are to spend more money, you must get more staff, and there is no doubt that a substantial increase in staff will be required." Today one cannot just get staff by asking for them. With his experience in industry, the Assistant Postmaster-General will know that if the Post Office is to get the skilled technicians required for the development and expansion of the telephone service in particular, it will have to recruit and train them on an unprecedented scale. All I ask at this point is whether he will comment on the different targets set by the Post Office and the N.E.D.C. and whether he will recommend to his right hon. Friend that the trade unions concerned with the matter of recruitment and training should be brought into very early consultation with him on this subject.

I turn now to the Postmaster-General's proposals in regard to tariffs. I am sorry, Mr. Speaker, for taking such a long time, but I have had many representations made to me from many quarters, and I was not sure how many hon. Members would be here to put the points, and so I have taken upon myself the obligation of trying to ventilate some of them here today.

The Postmaster General's proposal that the charge for a local telephone call should be 2d. for six minutes instead of for three is a step in the right direction. However, I am sure that all hon. Members would agree that there has been an outcry about the basic charges for the new S.T.D. service. The question is whether the time of six minutes is adequate. I do not think that housewives will regard it as reasonable. Housewives would reckon on eternity as being a reasonable time to be on the phone. We have to find a reasonable compromise between time and eternity, and perhaps eight or ten minutes would be better.

I have dealt with the increases in the parcel post and the registration fee, and I now come to a matter upon which I have had a great deal of correspondence in the last few days, and no doubt other hon. Members have had the same experience. I refer to the proposed increases in the overseas printed matter rates. When I read the original statement of the proposed increases, it did not dawn on me that there was anything wrong with them, but I am now satisfied that there is a strong case for reconsideration of this decision.

I have had a letter, dated 20th March, from the Periodical Proprietors' Association which says: A most serious consequence is the effect on circulation of British general, trade, technical business and specialised publications abroad. Because of their very great potentiality to further the export trade of this country, the drive to increase overseas circulation of these journals is an established feature of government policy and publishers have been exhorted to co-operate in their schemes to increase overseas circulation even in unprofitable territories; they have given their unstinted support. This is a case not only for the Postmaster-General but for the Government as a whole to consider, and it should be referred to Cabinet level, or at least to a Minister responsible for more than one Government Department.

For two years the Board of Trade has been exhorting and encouraging all these firms and businesses to try to portray our way of life and our culture to people in all parts of the world. I have a copy of a statement from no less a person than the former Chancellor of the Duchy of Lancaster, the right hon. Member for Luton (Dr. Hill), not merely exhorting people to do this sort of thing, but placing the agency of his Overseas Information Service at their disposal. The President of the Board of Trade has been doing his utmost through his agencies and by co-operation with these firms.

Publishers have had to meet competition from overseas publishers who in many instances enjoy' cheaper overseas rates. This increased levy at a time when there is a need for an all-out drive to increase exports is incomprehensible to the publishers in membership of this Association and no doubt to the vast number of manufacturers who know the value of a specialised trade and technical journal as a shop window for their goods. I ask the Government seriously to consider whether, although they may gain a few £s, they will not lose more in prestige and influence and in the ability to portray our way of life and our business requirements, and I ask them seriously to consider the new charges.

The present weekly overseas charge of 10½d. is to be increased to 1s. 3½d., weekly increase of 5d. per copy. The annual rate is to go up from 45s. 6d. to 67s. 2d., an annual increase of 21s. 8d. The increase for publications going to Canada is 1s. 2d. per copy, from 1½d. to 1s. 312d. and for some sorts of journals the annual increase is 60s. 8d., from 6s. 6d. to 67s. 2d. Some important journals are affected, including the Engineer, Engineering, Electronic Engineer, British Rate and Data, Mechanical Handling, The Motor Ship, British Plastics, Shipbuilder. The net result will be that the Americans will take over the Canadian market, for their production costs are lower, and if our publishers are penalised to the extent foreshadowed by the proposed increase, they might as well say, "Good-bye" to the Canadian market.

The other increase from 3d. to 9d. in the S.T.D. ranges is psychologically bad, as is the increase in the parcel post rate. We have been trying to sell the S. C.D. system to telephone subscribers for the better part of 25 years. They were coming to understand that the result of all the developments which had taken place would be a cheaper telephone service. Many people had not accepted that view and were finding that they were paying more for their telephone calls, that the new system was more costly.

When we have to deal with changes from 17½ to 18 seconds, the complexity of the accountancy is such that the ordinary person feels that the Post Office is trying to blind him with science. Let the Postmaster-General not be guilty of bad timing. Let the scheme get under way. Let the original charges, plus the concession to six minutes, be continued. Let the scheme take its own weight, I am sure that it will produce the goods in the long run. I ask the right hon. Gentleman not to muck about with it at the very moment when people are beginning to understand what it all means.

Finally, and I apologise for having spoken for so long, I come to the decision to increase the minimum charge for telegrams from 3s. to 5s. The Postmaster-General must have been almost ashamed to put that to the House, because all he said in his statement was that there would be an increase from 3d. to 5d. per word. There was nothing in his statement about the basic minimum charge for a telegram going up from 3s. to 5s. This is bordering on dishonesty. It is bordering on not being fair to the House.

If the right hon. Gentleman was going to refer to the telegraphic service at all, he should have made it clear that not only was the rate per word to go up from 3d. to 5d., but that the basic minimum charge was to rise from 3s. to 5s. Does the right hon. Gentleman want to cut the throat of this service, which is very dear to me? I have spent the happiest years of my life in it. If the right hon. Gentleman wants to cut its throat, I ask him to do it properly and not play with it like this, because this is the only telecommunications service available to millions of people in this country who cannot afford to pay these high rates.

I ask the right hon. Gentleman seriously to consider where he is going, because there is another point which we ought to consider. If there were a national emergency again, this House and the Post Office would rue the day when they so depleted the telegraphic side of the Post Office that it was not able to fulfil its responsibilities in the dangerous and evil times that would then exist.

6.52 p.m.

Mr. John Farr (Harborough)

I take this opportunity of congratulating my right hon. Friend, my hon. Friend the Parliamentary Secretary, and my hon. Friend's predecessor on the buoyant picture which the Post Office presents for 1963–64. I think that hon. Members on both sides of the House will agree that this is one nationalised service which runs efficiently, and I am sure that hon. Members will agree with the congratulations which have been offered to the postal services for the way in which they carried on during the recent spell of unprecedented cold weather.

My words of congratulation are rather tinged with dismay, because I have here the White Paper relating to the increases in Post Office tariffs and this evening I want to touch on one aspect of those increases, namely, their effect on our export trade. I refer in particular to overseas telegrams—it is proposed to raise the charge by 30 per cent.—to the proposed increase for printed papers, and to the overseas parcels rate which it is proposed to increase by 15 per cent.

Each of those three categories of Post Office business is in its own way essential to the well-being of our export trade. Let us consider first the printed paper rate. Most firms send advertisement literature abroad to advertise their goods. Dealing next with the parcel post, many firms, especially those dealing with bulk orders, send samples abroad, and I shall explain in a moment how a number of firms endeavour to carry on their export trade, which is substantial, by parcel post only. Thirdly, the sending of telegrams and cables overseas is an essential part of the complicated mechanism of any effective export network.

The hon. Member for Manchester, Openshaw (Mr. W. R. Williams), who has had many years' experience of this service, said that the Post Office was a service of which he was very proud and that it was the best in the world. I do not think that anyone would disagree with that, but I have one proviso to that statement. Our postal services are the best in the world, but they do not provide the best facilities for customers who wish to export by parcel post.

The hon. Member said that the maximum weight which could go abroad by parcel post was 22 lb. I think that the figure is actually 15 lb.

Mr. W. R. Williams

If the hon. Gentleman had been in the House two or three weeks ago when we were dealing with the Statutory Instrument dealing with this point, he would have realised that sanction had been given for the weight to be increased to 22 lb.

Mr. Farr

I was not aware of that. I understood that the figure I gave was correct, but I accept what the hon. Gentleman says.

About two years ago I raised with my right hon. Friend the Postmaster-General the question of the maximum size of parcels being sent abroad. There are a number of countries from which it is possible to export by parcel and send parcels of a much larger size than we are able to export. For instance, our maximum weight is 22 lb. The maximum dimensions, and we work on the basis of the length and girth combined, is 72 ins. The Germans have a maximum weight of 20 kilograms, and a maximum size of 2 metres in length and 2 metres in width.

Perhaps I might give the House an example of the adverse effect this limitation on size is having on our export trade. Although it may not be known to many hon. Members, there is in this country the largest drum manufacturer in Europe. This firm exports about 65 per cent. of its total products, to a total value of over £250,000. It has the distinction of supplying not only the Royal Marines with its drums, but the United States Marines, and, to complete the hat trick, it supplies the Bolshoi Ballet Company with its drums.

This firm wrote to me pointing out the severe disadvantage it is suffering. The letter reads: Stockists of our products abroad need to give their customers a quick service, and this can only be done by sending from England through the parcel post services, which eliminates the time-consuming documentation, and delays that are part of the usual shipping procedure. There are just hundreds of customers abroad who buy through the 'no-trouble' postal method, where the postman collects the import duty at the time of delivery. It goes on to say that the Germans and Japanese are using this system and have built up big businesses in the U.S.A.

I hope that my hon. Friend will give me an answer to this point. I first raised it two years ago. I would not care to hazard a guess as to the amount of export business that has been lost—not by this firm alone but by hundreds of firms who indulge in export trade by parcel post. The Germans and Japanese can export parcels of a much greater size and weight than we can, and we are losing trade to them. Incidentally, I should like to know if it would be possible for the Post Office, B.O.A.C. and B.E.A. to get together in order to try to work out an airmail parcel post service.

7.0 p.m.

Mr. William Warbey (Ashfield)

We all agree that the Post Office is a shining example of nationalised industry, and that it performs a public service which everybody needs. Indeed, it supplies some of the basic necessities of life. It must therefore be provided, maintained and financed by the State. I was interested to note that in two years' time we shall probably have devoted no less a sum than £1,000 million to capital investment in the Post Office. That represents a substantial proportion of the National Debt, but I doubt whether anybody would begrudge it, because it is recognised as correct that the capital investment of the Post Office should be provided mainly by the Exchequer out of general public borrowing and should not be raised at the expense of the consumers of the service.

Nevertheless, we now find that we are beginning to depart from that very important principle. Under the present Government we have a new approach to public services, which lays down that above all they must be commercial propositions, paying their way and raising finance from the consumers for their public investment. We are beginning to find that instead of thinking in terms of a general service, provided to meet the needs of all the people on a reasonable and inexpensive basis, the Post Office is now thinking in terms of making each branch of its service pay its way, and make some contribution towards capital investment.

If this had been the approach of Rowland Hill we would never have had a Penny Post. We cannot deal with these public matters in the same way that a bookmaker's clerk deals with his employer's affairs. We must think in terms of spreading costs over the service as a whole and drawing in revenue in accordance not only with the cost of each service but with people's ability to pay. It is because that principle has been completely abandoned in the new scale of charges which the Postmaster-General has brought forward that I oppose them. I wish it were possible to oppose them by way of a Division.

I regard the increased charge for inland telegrams as a scandal. There will be an increase of 66⅔ per cent. in the charge for a service which is of importance to millions of people, above all at times of emergency. The Postmaster-General says that the charge is being increased because this service is a burden on Post Office revenue. In order to save £1¼ million a year millions of ordinary people who have no telephones in their homes—and that is the majority of people—will be put to great expense when they want to deal urgently with those little problems that arise from time to time.

In a Written Reply to a Question I put down to the Postmaster-General today—asking what would have been the cost of reducing the charge for this service from 3d. a word to 2d. a word with a minimum of 2s.—the right hon. Gentleman said: I estimate that income would he reduced by £0.6 million, and that the loss on the service would increase to more than £4 million. That is a paltry sum of money, compared with the amounts which the right hon. Gentleman is apparently prepared simultaneously to give away to people who like to indulge in long telephone calls. He told us that the cost of increasing the time limit—or the charge unit, as it is called—of the S.T.D. local call from three to six minutes would be £3½ million. That is nearly double the present loss on the inland telegram service, and not much more than what the loss would be if the charge for inland telegrams were reduced to 2d. a word with a minimum of 2s.

It is all very well that middle-class housewives who want to ring up their relatives and have a gossip should now be able to do so for six minutes instead of only three minutes for 2d. It is all very well that they should be able to ring up their grocers and place their orders for delivery and find that if they cannot say all that they want to in three minutes they will be able to speak for six minutes for 2d. instead of paying 4d. But has it ever occurred to the Postmaster-General that the majority of our people are not middle-class housewives with telephones in their own homes? The majority have no telephones. When they want to get goods from the grocer they have to go to him themselves, and have to pay, perhaps, 4d. in bus fares each way. In other words, although the working-class housewife may spend as much as 8d. in getting her goods from the grocers, middle-class housewives will now be able to order their goods by telephone for a charge of 2d.

A much more serious matter is the fact that people will now have to pay far more to use the telegram service. I think of the family visits paid by people in my constituency at week-ends. A young married couple may visit their parents on Saturday or Sunday afternoon. It may be that one day the baby has a cold, or there is some other minor crisis, and their only means of urgent communication with their relatives is by telegram. Even though there may be a telephone kiosk at the corner of their street they cannot make use of it, because their relatives do not have a telephone.

My constituency is not unusual in this respect. There may be a higher proportion of working-class population among the electors, but the constituency is fairly typical and it is possible to find whole streets of houses without a telephone in any house. Most of the people cannot afford a telephone, even though they may have a washing machine, which they have acquired because they get a return from a washing machine which they do not get from a telephone. We all wish to see a substantial expansion of the telephone service, and we look forward to the day when every home in the country will be connected by telephone. But that day is a long way ahead. In the meantime, we must recognise the facts of life and appreciate that the majority of working-class people, and retired people who have to live on small fixed incomes, cannot afford a telephone. The telegram service is vital to them in an emergency, and so I appeal to the Assistant Postmaster-General to tell his right hon. Friend that this matter must be looked at again from the point of view of social justice rather than of narrow pettifogging finance.

There is another aspect of the public services performed by the Post Office on which more money should be spent even though less revenue may be derived from them. I refer to those ancillary services which the Post Office is able to perform extremely well because of its many agencies throughout the country. This is particularly the case regarding the provision of information about where to apply for National Assistance and similar information, and, above all, the paying of pensions and family allowances. I am appalled at the queues one finds in post offices on Fridays when people have to wait for a long time in order to get their small pensions or family allowances. An increase in staff is necessary to deal with this work.

Only today I received a letter from the clerk to the Parish Council of Selsdon, in my constituency. He has been trying to arrange for a shopkeeper who is licensed to sell postage stamps to be allowed to operate a sub-post office so that pensions and family allowances may be paid to recipients who live in the district. This has been refused because there are other post offices within a distance of two miles or less. I am told that this decision represents the policy of the Post Office and that old-age pensioners, widowers and others are expected to walk three or four miles, or pay bus fares of up to a 1s. return, in order to collect their pensions every week. Is this really the case? Are we putting people to this kind of expense so that they may draw a small and often inadequate pension? If so, I think that it is time the Post Office looked at the matter again and increased services in areas where they are needed—not so that the Post Office may get a little additional revenue but in order to satisfy the needs of the ordinary people, which is what the Post Office primarily exists to do.

7.18 p. m.

Mr. Henry Clark (Antrim, North)

I contgratulate my right hon. Friend on the first-class report which he has given the House and the indication of progress and imagination revealed in a picture of the British Post Office, which has kept up with the rest of the world in scientific advances as well as with the every day main street affairs of British towns.

I wish particularly to welcome S.T.D., about which there has been a change of attitude since a year ago when it was regarded as a bogy designed to increase telephone bills. Now people ask when they will be connected to the system. I ask that some less terrible noise be thought of to replace the frenetic squeaks at the beginning of a S.T.D. call from a call box. I am told by doctors that hearing a telephone bell when no bell is ringing is a fairly common form of mental illness. It will be only a matter of time before people will report hearing the "burble-burble-burble" of a S.T.D. call when no call is being made. Surely a better noise could be used than this extremely unpleasant one.

I have had a large number of letters and representations from my constituency about the parcel post. I apologise for not being present to hear the first part of the speech of my right hon. Friend, but I do not believe that he dealt very much with this question. This is one of the most important services supplied by the Post Office. Not long ago the predecessor of the present Assistant Postmaster-General admitted to me in answer to a Question that the parcel post was not entirely satisfactory. In my constituency people can think of much stronger language with which to describe it. They say that it is reliable only because one can always rely on a parcel taking more than a week to arrive.

I emphasise that, in speaking about complaints in relation to the parcel post, I am not referring to people like myself who live in London and complain about the time that it takes to get one's washing back from home. The parcel post is of immense importance to all commercial enterprises which are out of reach of van delivery systems such as those in London and Birmingham. Virtually all the small components which many factories need in a hurry have to be sent by post. These factories rely on the parcel post, but many of them have now given it up. Every time I travel from London to Belfast and vice versa I meet what in the newspapers are normally called "top executives" of business firms carrying a parcel. When one asks what they are carrying they say that it is a parcel they want delivered in a hurry. I also find managers and others around the air freight distribution centres waiting for parcels to come in. Firms are quite prepared to pay additional costs, but they do want the service. It is rather hard on them that the Postmaster-General has put up the cost without offering a better service when the service is not very good.

It is common for a light engineering firm to have to hold in stock 1,000 different components used for manufactured goods. The size of those stocks depends on the amount used every week, and also on the delay there is likely to be if the firm wants to replace the stock. The cost of holding stocks is being put beyond an economic level. This happens not only in light engineering but also in relation to small components of very heavy machinery.

I ask my right hon. Friend to look at this question to see if he can make some announcement about improving the postal services as quickly as possible. Could he not apply to the parcels post some of the enterprise which is shown in relation to Telstar and radio communications and the enterprise which put S.T.D. through so quickly? Are we always tied to British Railways for the delivery of parcels? Fifty years ago when there was a row between the Post Office and the railways the Post Office decided that it would not pay the rates which the railways charged, and throughout the Home Counties up to 1910 parcels were delivered by stagecoach. This was not a technical advance, but it showed enterprise. Perhaps there cannot be a wonderful new means of delivering parcels, but we want someone with a little drive to see that they are delivered more quickly.

As an alternative to using British Railways, there are several contractors who could carry parcels in the United Kingdom, namely, container services. Industry is using those containers more and more regularly. What industry is prepared to do Government Departments should follow. I ask the Postmaster-General to see if he can improve this service. Can he aim at a regular three-day parcel delivery throughout the United Kingdom and go on working on the problem until we get that? That could do a great deal for the more outlying parts of the country.

I believe that the Post Office has a contract with B.E.A. to take letters to Scotland and Northern Ireland every day on the last plane. The air Corporation books only a certain number of seats on the last plane until the weight of the letters going on it is known in London. Day after day one can get a seat on that plane because the Post Office has not filled its booked space. Could not the Postmaster-General make a new arrangement so that space which is not taken up by letters could be used for parcels? Perhaps in that way a 24- or a 48-hour service could be relied on. I am sure there is an opening for an internal air parcel service.

It is generally agreed that the Post Office has done a good job. S.T.D. has done a great deal to bring London much closer to the outlying parts of the United Kingdom, but at present the parcels service is falling down on the job. There is a terriffic need to integrate the outlying parts of the United Kingdom with London and Birmingham. A better parcels service can help to do this.

7.25 p.m.

Mr. Tom Brown (Ince)

I wish strongly to support the Motion, because I had something to say when the Act of 1961 passed through this House. At that time I raised a question which I want to raise again very strongly. It deals with the financial regulations of the General Post Office. On that occasion I praised the G.P.O., as I do tonight, because if there is one Department which wins my admiration, it is the G.P.O., not only on the administrative side, but on the distribution side in villages and towns.

I wish to make a plea this evening, as I did in 1961, that in his consideration of expenditure from the Post Office Fund the Postmaster-General should have regard to an application made from my constituency 33 years ago. We have been agitating all that time for a Crown post office in the town of Ashton-in-Makerfield, which has a population of approximately 20,000. On the former occasion I pleaded, as I do now, that consideration should be given to the erection and provision of a Crown post office there. Representations have been made locally and regionally. I met the former Assistant Postmaster-General and discussed the matter with that hon. Lady. She was very sympathetically inclined, but money was the question. When I have met the regional officers and the postmaster in Wigan, whose jurisdiction it comes under, they have never denied that a Crown post office is needed. The land was purchased. It has been in the possession of the G.P.O. for over 33 years, and we are still awaiting the building of a Crown post office.

Another point I stressed in 1961 was the need to improve some of our sub-offices. At the end of the row where I live there is a sub-office which is partly a grocer's shop. Believe it or not, the people who go there to draw their pensions and other entitlements have 18 ins. by 18 ins. upon which to sign forms. The old people are greatly inconvenienced, as are other people who have to sign postal orders and similar documents. The place is in a shocking state from the point of view of postal convenience. It can be improved, and I know that it will not cost too much.

I repeat the two points I want to bring out. First, a serious, genuine and honest attempt should be made by the G.P.O. to provide a Crown office in Ashton-in-Makerfield, land for which was bought 33 years ago. Secondly, some improvement should be made to the amenities offered in the sub-office to which I have referred.

I do not want to be misunderstood. I am not finding fault with the G.P.O. or the sub-postmasters. However, the G.P.O. does not know all these things; neither do the regional offices. I have said before—I repeat it—that some of the regional officers from Manchester should come down and see for themselves the conditions existing in post offices. Then perhaps they could make suggestions for providing better facilities at less expense. Expense is no obstacle. They could provide more facilities and better conveniences, and this should be done.

If I do nothing else, I am determined to keep the reputation of the G.P.O. at the peak at which it now stands. I know that it has its faults, failings and shortcomings, but they are not so many or so great that they cannot be overcome.

In 1961 my hon. Friend the Member for Manchester, Openshaw (Mr. W. R. Williams) heard me plead for a Crown post office for over 20,000 people who have waited 33 years for it. We are still waiting. Nothing has been done. It is no use the Postmaster-General asking for permission to do certain things if he does not intend to do what we want done in our constituencies. I know that there are difficulties, but the land is already there. There are 6 per cent. unemployed in Ashton-in-Makerfield. If the right hon. Gentleman would give permission for the building of a Crown office, that figure could be reduced. I plead with the right hon. Gentleman to give us a Crown post office. Give us better facilities in our sub-offices. If he does, he will get our support in the future as we have given it in the past so that the facilities of the G.P.O. can be improved and the standard maintained.

7.33 p.m.

Dr. Donald Johnson (Carlisle)

I intervene to ask my right hon. Friend if, in particular, he will reconsider his decision on one item of these charges. I shall confine my remarks to this point, though there is a fair amount to be said about it. I refer to the item an page 4 of the White Paper on Post Office Tariffs—bulk overseas rate. There is a rise of about 50 per cent. from 8½d. per 1b. to 1s. 0½d. per 1b. I want to devote my remarks to explaining what that means to the trade in which I have a minor interest, which I wish to declare, namely, the publishing trade.

The publishing trade, as I shall explain later, has a very substantial and valuable export business. No less than 50 per cent. of this business goes by this form of post, namely, by bulk post. If I may explain the background, the publishing trade's exports have been a very substantial success story since the war. In 1939, the last pre-war year, the value of books exported was £6,700,000. In 1946, the first post-war year, it was £3 million. By 1956 it had increased to £20,800,000. The most recent figure, that for 1961, is £31,738,057. This trade now constitutes about 50 per cent. of our book production as opposed to about 30 per cent. before the war.

It is not only a question of the value as such. We in the trade like to say that books are different, and they are different from the average product. It is not only their value. It is also the knowledge of British traditions and the British way of life which they spread throughout the world and which the Government in their other manifestations acknowledge by the assistance which they are at the moment giving to exports of cheap books, by the activities of the British Council, and by the promotion which is being undertaken by other Government agencies.

The trade will be seriously affected by this substantial rise of postage rates. The increase in the export trade to which I have referred has not been achieved without competition. The English-speaking world is divided into two main markets, being supplied from London, on the one hand, and New York, on the other. In London, we publishers are something of an anachronism, perhaps, but a rather pleasant type of anachronism, because we still have what we term the British Empire market, a term still in common use in the publishing world. The definition of the British Empire market is that of the original British Empire, which we maintain as our market from London, in competition with the other maintained from New York, the American market, which is confined, as far as we can confine it, to the United States of America with Canada as a sort of in-between proposition.

Naturally our American competitors are not entirely satisfied with this distribution in these days. They are competing very heavily in the Commonwealth market, in Australia in particular, but at any rate right through what we term the British Empire market.

The competition between British and American publishers is essentially based on price. We have been helped in that we have been able to compete overseas on price with American books, and we have been helped to a substantial extent by this admittedly reasonable rate of 8½d. per lb. If my right hon. Friend's proposal goes through, however, an extra 4d. will be added to the rate and this will mean that the 4d. will have to be added to the price of every book of average size exported from this country. The average weight of a bound book costing 18s. to 20s. is 1 lb. and there are no margins whatever in the publishing trade whereby that extra 4d. can be absorbed. The present margins are extremely narrow, particularly in the export trade where it is an old custom to give an increased discount. Books are sold at a discount of 331 per cent. to booksellers in the home market, but the discount goes up to 40 per cent, and sometimes even to 50 per cent. in the overseas market.

It is obvious, therefore, that the 4d. will have to be added to the price of the book to the buyer overseas, and probably the increase in price by the time it reaches the retail customer will be 1s. Many hon. Members may deplore that, but it is something which is completely outside the control of this House. The extra price will fall on the overseas bookseller who will be forced to mark up his book accordingly. It is, therefore, on behalf of the trade and on account of the value of these exports and their nature that I ask my right hon. Friend to give serious consideration to this matter.

We hear a great deal about other Government Departments doing what they can to encourage exports, but by this increase my right hon. Friend is putting a substantial tax on this important export. I have figures showing that in other directions the Government are spending £500,000 a year to assist book exports through the cheap books scheme. My right hon. Friend's present proposal is an operation in the entirely opposite direction, and in fact the Government will be penalising themselves because many Government publications are also exported.

It is on these accounts that I ask my right hon. Friend to look at this item in particular. He should also consider the other smaller charges for the conveyance of printed matter overseas, because under these charges important promotional material is sent out. My right hon. Friend, as he may know, is up against a curious type of competition against the Post Office itself in an international trade. I have not had occasion to go into the matter, but I imagine that if I did it might pay me, even with my small firm distributing 5,000 to 6,000 catalogues to the trade throughout the world, to go to Paris or Amsterdam—even having the material printed there—and use the cheaper postage rates which are available for printed paper in those cities.

This is being done by certain American magazine publishers. I frequently receive an American magazine bearing a Dutch stamp. The publishers save substantial sums by using this method, and there is nothing to prevent British publishers and others who distribute promotional materials from doing exactly the same thing. Once they use the post for this purpose it is only another step to having the material itself printed in other countries. I hope, therefore, that my right hon. Friend will look carefully at the full implications of what he is doing and will be kind enough to give these matters his further consideration.

7.45 p.m.

Mir. A. V. Hilton (Norfolk, South-West)

I am sure that the whole House was interested in the Postmaster-General's speech today and in his statement a few days ago. I should like to apologise for not having been present to hear the whole of the long-winded oration by my hon. Friend the Member for Manchester, Openshaw (Mr. W. R. Williams). I went out to eat and we had arranged that my hon. Friend should refer to the East Anglian experiment, to which the Postmaster-General has referred on more than one occasion in the House.

I should like to know a little more about this experiment, because I represent a constituency in East Anglia and obviously the people in that area are anxious to know what it is all about. It is not that we object to being guinea pigs, but that in a couple of days' time we shall know something more about Dr. Beeching's proposals for East Anglia and particularly for Norfolk. If the guesses of a good many people are correct and if more of our branch lines and stations are to be closed, changes will have to be made in the parcels and postal services.

I hope that the Assistant Postmaster-General will be able to give us, in reply to the debate, some information about what the Postmaster-General has in mind in this East Anglian experiment. Up to the present the postal services in East Anglia have compared pretty favourably with those in other parts of the country. Tributes have already been paid to the magnificent work done by postmen during the hard winter spell through which we have passed. In Norfolk and East Anglia we had our fair share of snow and ice, but the postal service was magnificent. Some other services might have broken down, but the postmen turned up regularly day after day. We cannot speak too highly of the services they gave in our area, and indeed throughout the country, during that difficult period.

The Postmaster-General referred in his statement two or three days ago to pending changes. As far as I can understand, there will be some slight reductions in telephone charges. These, of course, are welcome, but I was concerned that the right hon. Gentleman now proposes to increase considerably the cost of telegrams, from 3d. to 5d. a word, with a minimum charge of 5s. I represent a truly rural constituency, and I fear for many of the older people who live in my area because—and we cannot blame them for this—they simply cannot use a telephone. I know it is much cheaper to use the telephone than to send a telegram, but they just cannot do it. Some of them did not have much education, and in some villages the telephone has not been installed for very many years. However, although these old people cannot use the telephone, they have become accustomed to sending telegrams. They can go to the post office where the assistant is so helpful; they can give their messages verbally over the counter if need be, and the assistant can make the necessary translation.

The minimum charge for sending a telegram is already 3s., which is a large cut out of an old-age pensioner's weekly budget. I am not saying that old-age pensioners send telegrams every week, but certain emergencies arise when messages have to be sent quickly, and when an old person is unable to use the telephone he resorts to sending a telegram. This increase from 3s. to a minimum of 5s. for a telegram is far too high, and I believe it will price many old people out of the market and that they will not be able to send an emergency message when the need arises.

I hope the Postmaster-General will take another look at this proposal. I quite agree with the sentiments expressed by the hon. Member for Ashfield (Mr. Warbey) when he made a plea for elderly people living in remote areas who rely so much upon the telegram. After all, in the latter part of May we hope there will be an increase of 10s. a week in the old-age pension. If 2s. is to be added to the price of a telegram, it will make a big hole in this meagre increase.

I was interested in what was said about subscriber trunk dialling. This is, of course, a wonderful innovation. I should like to think that we shall have it in my part of Norfolk soon. I do not know whether the Assistant Postmaster-General can say when we shall have this service in rural Norfolk. I can assure him that when it comes it will be much appreciated. From time to time I talk to Members living in Scotland. They go away and then they return in a very short time and say, "I have just been speaking to my wife." They have only been away for a minute or two, but they have managed to pass their messages.

Mr. William Ross (Kilmarnock)

Less than that. Two minutes is too expensive.

Mr. Hilton

Well, that is the voice of authority. My hon. Friend the Member for Kilmarnock (Mr. Ross) represents a Scottish constituency, and he takes advantage of this innovation. The point is that these Members tell me that they have been talking to their wives and that it has cost them only a few coppers—3d. I believe.

Mr. Ross

They get only a short call for 3d.

Mr. Hilton

The point is that if old-age pensioners in my constituency want to send a message, not to Scotland, but to the next village, by telegram it is going to cost them 5s. in a few weeks time, and this increase is far too steep.

I was interested in what the Postmaster-General said about the new experiments which are taking place and the progress that is being made in laying cables which will make communication with other countries so much easier. He also said something about the development of satellite telecommunications. I agree that this is a great and exciting experiment which should be encouraged. But I also agree with a remark made by my hon. Friend the Member for Openshaw to the effect that the best way to make progress in the Post Office would be to expand the services rather than to increase the charges. Undoubtedly, as has been said by hon. Members on both sides of the House, there is a great opportunity for expansion in the parcels service, but I am sure it will not come about by increasing steeply the rates as the Postmaster-General proposes. I can never understand why profit should always be the criterion for hon. Members opposite. It is the service that matters.

One other matter to which I should like to refer is the great service rendered to the community by postmasters and sub-postmasters. I have many of them in my own area because I have something like 110 different villages and three small towns. The service that these very good servants render is well and truly appreciated, especially in the smaller villages where they are such a fund of information. Most people go to them if they want information on practically any subject.

There is one matter that concerns me regarding these men and women. I con- sider that many of these sub-postmasters are grossly underpaid, and I hope that at some time, in the near future, in view of the splendid service that they render to the community, this matter will be looked into seriously and that the Postmaster-General will agree that, in view of their splendid service, it is time that they got the salary to which they are entitled.

I should like, in conclusion, to revert to the increase in telegram charges. This is the worst proposal contained in the right hon. Gentleman's statement. I hope he will have another look at it and see whether he can make it possible for the "old faithfuls", especially those living in rural areas, still to enjoy the facility of sending a telegram.

7.59 p.m.

Mr. Forbes Hendry (Aberdeenshire, West)

I should like to associate myself with the hon. Member for Norfolk, South-West (Mr. Hilton) in his tribute to sub-postmasters. Like him, I represent a rural community where there are many of these extremely valuable public servants. I do not think I have quite so many as he has, but I have had every opportunity of watching their service to the community, and I cannot say too much for them. Like the hon. Gentleman, I express regret about the level of their remuneration.

The other day, I was horrified to learn from my right hon. Friend that more than 5,000 sub-postmasters earn less than £5 a week. My right hon. Friend told me that none actually earns less than £4 a week, but, after going into this, I find that a great many of those who earn under £5 a week have to pay staff and meet certain necessary expenses out of their miserable £5 a week or less, so that, in effect, a great many do earn less than £4 at the end of the week.

It is absolutely scandalous that any public servant nowadays should earn less than £4 or even less than £5 a week. It may be that the amount of money passing through the hands of these public servants is comparatively small, but there is a basic amount of work to be done. I have looked into the amount of work which a sub-postmaster must do, and I am quite convinced that no sub-postmaster would be over-paid if his salary were £7 a week. I regard that as the minimum which should be paid to any of them, no matter how part-time they may be. Admittedly, they are part-time, but there is a great deal of work to be done and a great deal of responsibility is carried. In the eyes of very many people in the country today, the sub-postmasters are the visible embodiment of the Post Office. I appeal to my right hon. Friend to look into the matter very carefully and sympathetically to see what can be done to recognise the services of these men and women who serve the Post Office so well.

It is not my purpose tonight to criticise the Post Office so much as to try to help it in the very great task which it does so well. I am sorry that, inevitably, I missed the first part of the debate, but I understand that the Post Office has come in for a good many hard knocks, particularly on the subject of telegrams. I want to change the tenor of the debate and say, "Thank you very much" to the Post Office for the wonderful work it has done. In particular, I have in mind the telephone service, to which the hon. Member for Norfolk, South-West referred. I do not think that anyone can give it too high praise. However, miraculous though the telephone service is, and wonderful though the letter service is, too, I feel that the Post Office may today be trying to do a little too much. It seems that the modern Post Office tries to live in the tradition of the Post Office of fifty years ago when wages were low and labour was cheap. Today, it could, perhaps, by a little thought and reorganisation, give a universally good service and an especially good service where it was most needed.

This afternoon, I put into the post no fewer than 29 letters. I have considered these 29 letters carefully. Only one of them was really urgent. However, the Post Office, following its tradition, will deliver every one of those 29 letters by the first post tomorrow morning, or, at least, it will do its very best to see that that is done, in various scattered parts of the United Kingdom. I do not regard this as necessary for all these letters. It is necessary for one of them, but if two days were taken to deliver the remaining 28 no harm would be done to me, to the recipients or to anyone else.

There is at present in this country a first-class mail and a second-class mail. For some reason which I have never been able to discover, second-class mail must be unsealed. I imagine that this must a great nuisance to the sorter rather than anything else. If I send an ordinary letter, I must put it in a sealed envelope and pay the full rate of postage. The full rate of 3d. strikes me as being a very good bargain. It is certainly a very reasonable price to pay. However, for the letter which must arrive by first post tomorrow morning, I consider that a very reasonable charge would be 1s. The others could be deferred.

All the letters which go into a pillar box at about 5 o'clock in the afternoon must put an intolerable burden on the postal staff who, by superhuman effort, must sort them, convey them and deliver them early the next morning. No other business in the country could possibly work in this way. If the Post Office could deal with the bulk of non-urgent letters by deferred delivery, 3d. would certainly be extremely profitable, and it might even be able to do it for 2d. There is no need for a night shift to have to labour at great cost to deal with the mass of letters throughout the night, at a time when other people—except us—are enjoying their leisure, so that they may all be delivered first thing the next morning.

I ask my right hon. Friend to consider the possibility of, on the one hand, first-class express mail at an increased charge being dealt with overnight according to the tradition of the Post Office, the bulk of present first-class mail, on the other hand, being deferred and delivered within, say, two days. I do not think that anyone would suffer any harm, and the organisation of the Posit Office itself would, I believe, benefit greatly by such a system.

Mr. Ross

Does the hon. Gentleman appreciate how dangerous is the path he is treading? It would not be welcomed in Aberdeen if, by an extension of that proposal, we had varying rates for distance.

Mr. Hendry

With respect to the hon. Gentleman, I do not think that he listened to what I said. I have not suggested varying rates for distance. I have suggested varying rates for speed, which is very different. I know that, if I post a letter in this building at 5 o'clock in the afternoon, it will be delivered in the wilds of Aberdeenshire by the first post the next morning. All praise to the Post Office for doing it, but it is not necessary that a vast number of people should have to work throughout the night doing something which could very well be done the next day in ordinary business hours at vastly less cost. I believe that this is a scheme well worth consideration.

Much the same could be said of the parcels service. A great many parcels are not urgent. On the other hand, a great many parcels are urgent. I was sorry to have to complain last summer to my right hon. Friend about certain parcels of meat coming from my constituency in Aberdeenshire to London. The summer was hot, and the meat, as Aberdeenshire meat always is, was well hung before it was put into the hands of the Post Office at all. Unfortunately, some consignments of meat did not arrive in good time. There is a good deal of this business between Aberdeenshire and the south of England. By the time the meat arrived in Essex or London, or wherever it was, very often the postman did not need to do anything except guide it into the door as it moved by itself.

There could well be some sort of differentiation between urgent parcels and non-urgent parcels. I am sure that many people who have urgent parcels to send would very willingly pay a little more for express delivery if they knew that quick delivery was certain. Non-urgent parcels could, so to speak, take their time, and could go for less than the present rate. Possibly, this might be difficult to arrange in the running, of the Post Office, but my suggestions represent the thoughts of someone who is a customer and who believes that new ideas are worthy of consideration.

I use the analogy of the railways. If one sends a parcel by passenger train, one has every expectation of very prompt delivery. Transit by goods train is slow but is very much cheaper. I think that the Post Office might in its sphere think along those lines, with possible profit both to itself and to its customers.

We have heard a good deal about telegrams today, and enough has been said about the cost of a telegram, but it seems to me that a very large part of the cost must be attributable to the labour in handling and, particularly, in delivering it. It seems to me that 5s. for the handling and delivery of a telegram is not unreasonable. I am being perfectly candid about this. On the other hand, I think it unreasonable that the 5s. should be related to the number of words in a telegram. I cannot see why the 5s. charge should be tied to 12 words, because every word over the 12 certainly does not cost 5d. The Press gets very reasonable rates for its telegrams; the night telegram is very much cheaper, although, perhaps, still too dear.

I suggest to my right hon. Friend that, instead of allowing 12 words for 5s., he might very well, without additional cost to himself, allow 20 or 40 or even 60 words for 5s. The extra cost to the Post Office would be negligible because all the overheads would be borne anyway.

I have given a good deal of thought to the charge for telegrams. At present, this must include delivery, and I make the very tentative suggestion that there might well be a delivery charge. If a telegram is to be delivered with the ordinary mail, as an express letter is at the moment, then obviously the charge of 5s. is quite extortionate. If it can be delivered within a very short distance of the delivery office, then the charge of 5s., is extortionate, but if a person chooses, as I do, to live three miles from the nearest post office, I do not see why he should not pay a little extra for it. It seems to me that a delivery charge of, say, 1s. a mile after the first would not be unreasonable. I feel that far too many of the Post Office charges are based upon the traditional way of doing things. So much per word is charged for a telegram. If we think these things out afresh, not only in regard to telegrams but also parcels and letters, I believe that the Post Office might make very much better use of its resources and we should still get a very adequate service. Those people who wish it ought to be prepared and willing to pay for the extra service they get.

Mr. Ross

Who is to pay for the delivery service? Is it the person who receives the telegram or the one who sends it?

Mr. Hendry

That is not for me to answer. I put the proposition to the Post Office. These are things which I consider ought to be thought about seriously by the people running the Post Office and who understand the difficulties that it meets in practice.

8.12 p.m.

Mr. E. G. Willis (Edinburgh, East)

The hon. Member for Aberdeenshire, West (Mr. Hendry) made a number of interesting suggestions. So far as I followed them, they seemed to come to this, that the richer the man the better the service he can buy from the Post Office. I think that applies to his suggestions about letters, telephones, telegrams and the rest. That seems to me to be a very wrong principle for us to apply to the postal service—that the man who has the longest purse should be able to obtain the most efficient service from the Post Office and the person not so fortunate should have to wait. That is what the hon. Member is really propounding. In other words, we are to have first- and second-class citizenship; those who can afford the best postal service and those who cannot afford it. That does not appeal to me very much.

I was interested, however, in other remarks made by the hon. Member. I hope that the next time he is talking about nationalisation he will recall some of the eulogies which he has just delivered on the postal service. I suggest that it would not be a bad idea if he printed some of those tributes and circularised them in his constituency. It might help to counteract the other leaflets which he will be sending out condemning nationalisation. It is very interesting when hon. Members are called upon to comment on the postal service, because they sometimes find themselves in the peculiar position of having to pay tribute to something, the principles of which they do not accept.

My hon. Friend the Member for Manchester, Openshaw (Mr. W. R. Williams) made a very useful and constructive speech in which he managed to compress an enormous amount of constructive criticism and also suggestions, as well as putting a large number of questions to the right hon. Gentleman. I was interested in his remarks about the possible effects of Dr. Beeching's proposals for our transport services in relation to the postal services in the remoter areas. This seems to me to be a problem, and I think that the Postmaster-General ought to give some assurances that the Post Office is in fact prepared for whatever Dr. Beeching might have in store for us. This is particularly important in Scotland where a great number of remote areas are dependent to a very large extent upon our railway services.

Mention has also been made of the changes in telephone charges. My hon. Friend the Member for Openshaw said that he did not think that the increase of subscribers' local calls on S.T.D. from three to six minutes was sufficient. I disagree with that. I think that six minutes is quite sufficient when I bear in mind that the charges in respect of longer distances have all gone up. I cannot see why we should be increasing the length of time of the local calls and cutting down the length of time for the long-distance calls.

The person who has a long-distance call to make is usually not the person who is doing it just to fill in time. He is doing it because he has to do it or because he wants to do it, perhaps because he has not heard from someone for a long time and wants to find out how he is getting on. Everyone knows that quite a lot of local calls are made just because someone has time to fill in, Most women with telephones in their houses are guilty of this. I know that in my own house this goes on and it goes on in other peoples' houses, too. Nevertheless, I do not see why we should make it increasingly easy for people to spend an hour on the telephone just because they want to have a gossip. Good luck to them in their gossip but it does not seem reasonable to ask us to make it easier for them and more difficult for the person who has a long-distance call to make.

I should have thought that the thing to do was to try to get the telephone service more or less on the lines of the postal service. I can send a letter from the House of Commons to Thurso for the same price that I send a letter to Regent Street. I should have thought that it ought to have been the aim to make it equally easy for people to communicate wherever they might live and not necessarily to give priority to people who live nearest to each other and incidentally are able to visit each other more easily.

That seems to me to be a sound principle but one from which the Post Office is departing. People in the same town can visit each other without a great deal of difficulty, but people separated by 300 or 400 miles cannot do so. Therefore, the telephone, which becomes increasingly important to the people 200 or 300 miles apart, is possibly not as important for people living in the same town. The same argument, I think, has a degree of relevance to business calls. Business people within a town frequently meet each other for lunch or meetings of one kind or another, but people living 200 or 300 miles apart do not meet each other very frequently. Therefore, the principle arising from this consideration ought to be to try to bring these charges closer together instead of widening them. Because of that, if am sorry to see the proposals of the Postmaster-General.

I do not wish to say anything about telegrams, which have been commented upon at length, except to agree with the criticism that 5s. for 12 words is a bit steep. This is a form of communication between people without telephones for all sorts of necessary purposes—to send word that someone is seriously ill, and that sort of thing.

I agree with what has been said about overseas rates. We should not make it more difficult to send papers abroad, especially commercial papers which are likely to do us good in our export trade.

I rose to speak primarily on a question which has not been raised so far. I understand from the White Paper, Post Office Prospects, 1963–64 that the Post Office is increasing its capital expenditure by £23 million this year. I wish to ask the Assistant Postmaster-General what proportion of this £23 million he thinks will be spent in Scotland. I know that this might raise a smile, but it is relevant to the economic situation of the country as a whole. This is a massive increase in Government purchasing power. It will create employment in the areas in which it is spent. If the bulk of it is spent in areas where there is not a high level of unemployment, it will create more employment in areas where it is not necessary and not in areas where it is desperately needed. Quite a large part of this sum is in respect of the telecommunications services, and I take it that a great deal of it must be in respect of equipment for these services.

Surely something should be done to ensure that this money is spread over areas of high unemployment. I refer not simply to Scotland; the argument is relevant to north-east England and to other areas of high unemployment. It seems to me that unless we ensure that the areas in which this money is spent are widely spread we shall increase the attraction of areas in which there is already full employment, and, very frequently, over-full employment, which is a bad thing nationally from the point of view of planning, the development of local services, and so on. In other words, we shall increase the magnetic power of London to attract population from the rest of the country. If London and the Home Counties get the vast hulk of this increase, the power of attraction of these areas becomes increasingly greater and they will draw men from the north of Scotland and from Land's End. That is most undesirable.

I was exceedingly disappointed that the Post Office, instead of transferring its research station from Dollis Hill to Harrow, did not site it out of London altogether. I see no reason why it needs to be in London. While it was at Dollis Hill, I should not have thought of shifting it; but, since it was decided to remove it to another area, some development district which needed expansion should have been considered. Instead of being shifted to Harrow, it could have gone to Durham, Northumberland or Scotland. A fine site for it could have been found in the lowland belt of Scotland, in Edinburgh or on the West Coast. If the Government will not do these things, they cannot expect private enterprise to do them. They should set an example, even if it means spending a few million pounds more, because many millions would be saved in the long run.

Why cannot the Post Office step up the installation of telephones and the creation of new post offices in areas of high unemployment? Thousands of people in Scotland are waiting for telephones. Many new cables need to be laid and post offices need to be built. Surely these jobs should be done when unemployment is high. The same arguments apply to other areas in which unemployment is such a big problem.

I should like to raise one or two local points. The first concerns telephone booths, Unfortunately, in my constituency—I do not suppose my constituency is alone in this—the Post Office has had to remove telephone boxes because of the damage done to them. Vandalism has resulted in damage being done to boxes over and over again, and the Post Office has finally taken them away. I am not criticising the Post Office. It is obvious that it cannot go on paying out large sums of money for telephone boxes which are deliberately destroyed, but, when telephone boxes are erected in areas where it knows vandalism is prevalent, could it not consult organisations in those areas—churches, schools, clubs, and bodies like that—about siting the boxes in a place where they will be under some sort of supervision?

I have in mind one box which, I should have thought, could have been taken from the public roadway and conveniently put in a community centre or at least close to it where it would, more or less, have been under supervision and less liable to damage. It is unfortunate that people in areas where boxes subject to vandalism are sited should have to suffer, because sometimes it is not even the people living in the area who damage the boxes. I put forward the suggestion, because it seems to me to offer an approach to the problem, that in siting telephone kiosks the Post Office should consuit people—it might be a school, a church, a community centre or the police station, for example—with a view to locating the boxes in areas where they are not likely to receive the same damage.

I do not want to speak too much about my constituency, but I should like in one sentence to remind the Postmaster-General that in the Craigmillar area of my constituency we badly need a Crown post office. I have written to the right hon. Gentleman about this and I venture to mention it again. Having done so, I leave it at that.

I end my few remarks by expressing my appreciation, as other hon. Members have done, of the postal service and of the manner in which the people in its service do their work cheerfully, ungrudgingly and certainly in a manner which calls for the respect and admiration of most people.

8.30 p.m.

Mr. W. M. F. Vane (Westmorland)

As I have not heard the whole of the debate, I do not wish, nor would it be right, to make a long speech. I wish, however, to reinforce a plea which I made to my right hon. Friend at Question Time the other day to see whether he cannot overcome the delays which are becoming almost universal in both the letter and the parcel post services between London and the more distant parts of the country.

I hope that my right hon. Friend will not regard this as merely a personal grouse of mine, but since I asked the Question the other day I have had numerous letters from the North-West of England, from Manchester to the Border, and all of them supporting my plea and saying that the deterioration has become so marked that improvement is overdue.

It is not out of the ordinary for parcels to take up to six days or for letters to take two or three days. The other day, I discovered in the Library that the times for the mails between Carlisle and London were shorter in the days of horse traffic and the stage coach than they are today, although I am not prepared to say that in those days the charges were not a good deal higher. Nevertheless, it is a sorry reflection that by 1963, in the timings for mails between distant parts of England and London, we have not moved forward hut, possibly, have even slipped back.

In making this criticism, I do not want it to appear as levelled at the local staffs, who do their best and always maintain a wonderful standard of courtesy with the local public, whom they not only serve but whom they make it their business to know. That is appreciated throughout the country.

In his reply the other day, my right hon. Friend hinted that possibly the larger part of the blame for the delays ought to be borne by the railways, who, it seems, do not handle post office traffic in the same efficient way as they did in the past. I know that in public, Ministers are like other animals—dog does not like eating dog; none the less, if the fault is that of the railways, my right hon. Friend should come straight out and say so. I am told that the railways are no longer prepared to take mails for transport by each and every train, as was formerly the practice, but insist upon mails being sent only by certain trains. I hear too that on the line to the North-West, where mail may have to change trains at Crewe or Preston, endless delays can result. I wish that my right hon. Friend would say where the blame really lies. It would do nothing but good.

I do not wish to go back on my undertaking not to make a long speech, but I do want my right hon. Friend to realise that this is a real grievance, and I hope that he can assure us that we will see an early and substantial improvement.

8.34 p.m.

Mr. Emrys Hughes (South Ayrshire)

I have a criticism to make of the Post Office, and I want also to be helpful. My criticism of the Post Office is that there is too much conservatism at the top. I am glad that the Assistant Postmaster-General has gone from the Chamber and that the Postmaster-General is present, because I would once again make the Assistant Postmaster-General blush if he were here. In a supplementary question the other day, I said that the occasion of a bona fide working man from the Electrical Trades Union arriving as a Minister at the Dispatch Box was worthy of the issue of a special stamp. That suggestion is perfectly reasonable. We do not often get the phenomenon of a working man appearing at the Dispatch Box, and I should have been delighted if a special stamp of the hon. Gentleman had been printed for the occasion.

Mr. W. R. Williams

The first stamp of that kind would have to go to the late Mr. Vernon Hartshorn.

Mr. Hughes

I was talking of Conservative Ministers. I am sorry if I did not refer to the former Postmaster-General. Of course, I remember the late Mr. Vernon Hartshorn, who happened to be a member, not of the Electrical Trades Union, but of the Miners' Federation.

I want to be helpful to the Postmaster-General, and I suggest to him that the time has come to abandon this conservative policy of his in regard to stamps. Public opinion is ready for, and would welcome, a change in the rigid doctrinaire, old-fashioned Victorian policy of raising every obstacle to a much greater variety of stamps.

I have with me what the Postmaster-General might not consider to be an envelope at all, but a coat of many colours. It happens to be a letter which I have received from one of the great literary figures of the U.S.S.R., who always sends me the latest variety of stamps printed by the Russians. These stamps indicate a policy which is followed not only by the U.S.S.R. but by the U.S.A. as well. In this matter, we are one of the least progressive and most unimaginative of nations, and I want to see a change.

I have taken part in an agitation for a special stamp to commemorate the 200th anniversary of the birthday of Robert Burns. That was not a partisan demand but was expressed by an all-party delegation from both Houses of Parliament. We summoned the clans. We had the hon. Member for Ayr (Sir T. Moore), with whom I am not usually associated in any revolutionary agitation. We had various Members of the other House and we had prominent leaders of the Burns Federation. I shall never forget the time when we of that all-party deputation went to the Prime Minister's room at the back of the Chair. I believe that it was the first and only time I have been there in the history of the present Government.

The Prime Minister is a Scotsman and we expected that he would overrule the rather reactionary viewpoint of the former Postmaster-General, who has since become Minister of Transport, and we thought that we were making an impression. We had the late Mr. Kevin MacDowall, one of the great figures in the Burns literary events of his time, and we had the president of the Burns Federation, who, I believe, is a constituent of my hon. Friend the Member for Central Ayrshire (Mr. Manuel) at Irvine and who gloried in the name of MacMillan. We brought him because we thought that he would make an extra impression.

Mr. Kevin MacDowell recited two of the poems of Burns in a way which, I thought, brought tears to the eyes of the Prime Minister, who, after all, was a Scotsman listening to a Scotsman We thought we had made an impression. He said, "I will take this carefully into consideration and I will write to you personally when I have come to my decision." As we went out into the Lobby Mr. MacMillan and Kevin MacDowall, with tears in their eyes, said, "We have made an impression on the Prime Minister at last and we will get our stamp." I said, "Do not be such—adjectivefools." Of course we did not get anything. Only sympathy. We did not even get sympathy when the letter came. We got a long, wordy letter which could have been put in one word, "No"—the eternal negative. And that is what we have had since, and I suggest that the time has come for the Postmaster-General, who, in many ways, is regarded as enterprising and progressive, to start this innovation and to yield to public opinion all over Scotland.

We did not demand very much. The Burns Federation did not demand very much. It did not demand that the Queen's head should be taken off the stamp and Robert Burns's head be put on instead. We did not even suggest that the two of them should be on the same stamp. Our very modest request was that the old cottage in Ayr, known throughout the whole of the literary world, should be on one of those oblong stamps; that the Queen's head should be in the corner and that the background should be of the cottage. That moderate, modest request from overwhelming public opinion in Scotland was ruthlessly turned down from the Prime Minister to the Postmaster-General and the permanent officials of the Post Office. So today we have yet no Burns stamp.

I remember being in Moscow on the 200th anniversary of the birthday of Robert Burns. After I had made a speech along came a gentleman who said to me, "When are you going to get your Burns stamp in Britain?" I said, "I do not know." "Oh," he said, "we had our Burns stamp," and he offered me a few. I said, "Who are you?" He said, "I am the Postmaster-General for the Soviet Union. We wonder why Great Britain does not honour its great literary figures the way the U.S.S.R. does." I bought about a dozen stamps and slipped them as a present to the Prime Minister, hoping he would use one of them in a postcard of instructions to the Postmaster-General at home. But no response.

I suggest that the time has come for the Postmaster-General to realise that this is an expression of opinion of all parties and all different people in Scot- land, that we should have this stamp, in the modest way I have described. Then why not imitate the U.S.S.R. in some other ways? The U.S.S.R. has its heroes, its Gagarins and Titovs, who are commemorated after every occasion of their historic efforts. I see no reason why we should not do the same. We have our great scientists, our people who have made contributions to the arts and literature and science, and I believe we should follow the example of the U.S.S.R. My hon. Friend the Member for Ince (Mr. T. Brown), who had rather gathered I was going to raise this subject, said, "Ask the Postmaster-General if they are going to imitate the Russians and do something about the one hundred and fiftieth anniversary of Charles Dickens." And what about Shakespeare next year? The right hon. Gentleman may not have heard of Burns but surely he has heard of Shakespeare.

Mr. Cyril Bence (Dunbartonshire, East)

And what about Owen Glendower?

Mr. Hughes

I suggest we should take note of the fact that the Russians commemorate Shakespeare, Fielding, Darwen and Dickens and so on. Those are the only ones I can remember at the moment, but there are many more, and we should take a step away from tradition and precedents and issue stamps of this kind.

I know there was a special stamp being issued for the War on Want. When I tried to raise the question of Robert Burns, Mr. Speaker said, "No, Robert Burns is a long way from the War on Want." But Burns was one of the pioneers in the war on want, and this would have been a suitable occasion.

We have had various tentative yieldings to pressure groups, like the Inter-Parliamentary Association. We had a special stamp to commemorate that, but there was a definite political and Parliamentary pressure group on that occasion. In view of all the stamps there have been celebrating certain events in the Commonwealth, we feel that people who can pull the strings can change Post Office policy. A great event is held in Edinburgh every year. If the Edinburgh Festival had been held in Chicago, Texas, Leningrad or Moscow, it would have had a special stamp. It takes place in August, and the Postmaster-General now has an opportunity to turn over a new leaf.

I believe that this would bring in extra revenue. It would attract revenue from all parts of the world, from people who collect stamps, and they are very many. Last week a mistake was made with a small series of stamps; the Queen's head was, unfortunately, omitted. We would not object if the Postmaster-General wanted to make some money and left the Queen's head off the Burns' stamp. We should be prepared to compromise on that. I believe that my hon. Friends from Scotland endorse the plea that I make that the Post Office should have imagination and live up to the times.

I am glad that there has been very little criticism of the Post Office as a nationalised institution. What has become of the hon. Member for Kidderminster (Sir G. Nabarro)? I thought he would have been here to denounce the nasty, smelly Post Office as he denounced the nasty, smelly National Coal Board. But one cannot say that about the Post Office, because it has been respectable. Not even the most Conservative of Conservative hon. Members opposite have come forward to argue that the Post Office should be denationalised.

I have been inspired by some stamps which make allusion to the output of certain classes of workers. The Postmaster-General must know that this year the miners have increased their output. Why should we not have a miner's head on a stamp? Why should there not be tributes to the people who do the hard work of the world and who deserve some recognition of this kind?

I hope that my few words will not have escaped the Postmaster-General. We do not want him to rush in and commit us to anything desperate tonight, but I hope that my words will have an effect and that in due time we shall have something like what I have suggested passing through our post offices.

8.47 p.m.

Mr. Archie Manuel (Central Ayrshire)

I do not want to follow my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) in his plea for stamps, though I certainly support him. There is complete unanimity in Scotland on this subject. Ultimately we shall get the stamps that we have been asking for, especially the one to commemorate our national bard, Robert Burns.

Mr. Ross

We would rather have jobs.

Mr. Manuel

Yes, but jobs and stamps can go together. Perhaps one cannot get one without the other. One has to write to tell people about jobs, and if it could be done with a Burns' stamp it might do the Scottish black spots some good.

I take it that any alteration to the postal services should be of great concern to hon. Members. I completely endorse the very high tributes paid by the hon. Member for Aberdeenshire, West (Mr. Hendry) to this nationalised service. It is the first time I have heard him be so complimentary to a publicly-owned service. He is coming on very well, and I hope he will continue in this way. The Post Office is an admirable service, and we should do all we can to increase its prestige and make it more efficient in every way.

I deplore the increase in telegram charges. The minimum charge of 5s. is a shocking imposition. The Postmaster-General may well be able to show that this Post Office service is losing money, but he must not isolate one service and say that it must show a clear profit by itself, as he did last week when announcing the charges.

Mr. Bevins

The hon. Member is quite wrong. I said nothing of the kind. I said that the increase in the charges would lessen by about one-third the loss which the Post Office sustains on its telegram service.

Mr. Manuel

That is exactly what I am saying.

The Assistant Postmaster-General (Mr. Ray Mawby) indicated dissent.

Mr. Manuel

The trade union branch secretary on the Government Front Bench need not start shaking his head. I am not dealing with him yet. I am dealing with the Postmaster-General, and one member of the Government Front Bench is enough for a back bencher to tackle at one time.

I was saying that the excuse for increasing the telegram charge was that there was a heavy loss in this service. I am saying that that is no justification and that the Post Office as a whole has to carry a loss on one service. If this argument is taken to its logical conclusion, the Postmaster-General will charge more for letters going from London to West Aberdeen than for letters going to Central Ayrshire.

I particularly deplore the harsh injustice which is done to poorer sections of the community who do not have telephones, especially to the increased number of unemployed and those receiving National Assistance, whose only medium of communication in times of death or illness or other emergency is the telegram. For such people the charge is extortionate.

The increase from three minutes to six minutes for local telephone calls is also to be deplored. It is a liberty at this time. When I use the telephone, it is seldom that I speak for more than three minutes. The Postmaster-General must appreciate that he is increasing the time to six minutes when many people are being forced to share lines and when they may be unable to make a call, regardless of the necessity to do so, because the line is engaged by the other party. I should like him to consider reducing the number of calls which could be made in certain areas—because of the extension to six minutes—so long as lines have to be shared.

The number of shared lines is increasing alarmingly, and no excuse is now taken for not sharing. Even someone who has enjoyed having his own line for many years may suddenly be told that the Post Office has decided that he must have a shared line. How many shared lines are there where one person can occupy the phone to the exclusion of someone else?

Will he also tell us how many people are waiting for telephones and what he is doing about the waiting list? The position is worse in some areas than in others, and in some cases people are complaining about not getting facilities for which they are paying, when they want them. I hope that the Postmaster-General will be able to give us some information on the points that I have raised.

8.55 p.m.

Mr. William Ross (Kilmarnock)

I do not think that this has been a very happy day for the Postmaster-General. Not long ago he announced with a flourish that the Post Office was to gain commercial freedom and that great developments would flow from it. We can see now how that freedom has been used.

I do not worry about the fact that the profit of the Post Office has gone down from what it expected to what it calls the dangerously low figure of £9 million. I am worried about the promised developments that were to flow from commercial freedom. The Post Office, like every other nationalised industry, is being hit by the Government, and this factor is more important than stamps. Electricity charges are being put up for the simple reason that the Government have told the electricity boards to find more money for their capital development from their customers out of revenue. This edict has been issued to the South of Scotland Electricity Board, and to all the boards in England and Wales. The same comment applies to the Post Office. It has been told that to finance future developments it must find more money from revenue, and, whether we like it or not, that means raising charges.

The additional charges will provide £14 million. However one considers this sum in relation to the overall income of the Post Office, it will remain an increase of £14 million, and when this figure is related to the increase in the cost of trunk calls and telegrams we see that it is a very much higher proportionate figure than the one which the Postmaster-General used in answer to questions when he made his statement.

I question the desirability of making customers pay for the services which people will get 20 years hence. In other words, I question the wisdom of the way in which we are financing our nationalised industries. The present system is unfair to the Post Office and to all those who work so hard to build up the service, and who earn praise from unexpected quarters on the other side of the House which we seldom hear when we are dealing with the nationalised industries.

The Post Office has, deservedly, earned a tremendous amount of good will in the country. The Postmaster-General, too, deserves some praise for the way in which he has carried out some modernisation of this industry. The quality of the service has been greatly improved by making every person behind the counter handle not merely one specialised piece of business, but all forms of business. This procedure has cut down queues and has been praised by everyone.

One aspect of Post Office finance has not been mentioned. There was a time when the profits from the letter service paid for developments in the Post Office. This is not so today. It is the telephone service now. Within that service we can discount residential telephones and kiosks, because they do not pay. What pay are the business telephone service and the trunk service. Yet those services are being further hit.

There is no doubt about the success of the S.T.D. system in encouraging people to make telephone calls. We have had our little fun about the Scotsman making telephone calls home—but there are considerable savings, provided that the caller knows what he has to say, and is not prepared to listen to a long harangue from the other end, for which he has to pay. I could make a telephone call to Scotland tonight for 6d. The result is that I am liable to make two or three whereas I made only one before. That is the psychology of the S.T.D. system. But it does not work with local calls, because a different set of circumstances arises.

I feel that some hon. Members have been rather hard on the Postmaster-General in reference to the extension of the time limit of three minutes. Many people are living fairly lonely lives, and their only link with the rest of the world is the telephone. It was a hardship when local calls were limited to three minutes. I do not think that six minutes is too bad. However, we must appreciate, as my hon. Friend the Member for Central Ayrshire (Mr. Manuel) pointed out, that many people are sharing party lines, but even they are a little better off than they were a year ago, when there was no limit to these conversations.

But we are undoubtedly hitting the people who make trunk calls, and who are farthest away from London. Week in and week out, year in and year out, Scottish Members have been pressing the Government to realise, in everything they do, the effect upon Scotland and areas of high unemployment, which tend to be some distance away from London. Anyone who settles in London and carries on business in Scotland will be at a decided disadvantage, whereas the person whose connections are already in the London area will have a tremendous range of telephone calls for the local call charge. The Postmaster-General has been unwise in making this increase in trunk call charges, and I hope that he will have second thoughts in the matter.

My other point concerns capital development. Here we are to have an increase of about £23 million. Two points arise in this connection. How much of that development will take place in Scotland and, even more important, how much will take place in Kilmarnock? What Scotland requires is houses, both privately built and local authority built. The Kilmarnock Town Council decided that there should be private housing development in part of the town, and in order to help it they said, "If people want houses to buy we will build them in the Grange Estate". Houses have been built for sale there.

The right hon. Gentleman knows how many telephones there are there. In these new houses we cannot supply anyone with a telephone. Until recently the waiting time was about two years. It has been reduced by about six months since I have been in correspondence with the Postmaster-General on the matter. I have had a letter from a person who says that he is a managing director of an American firm, within reach of the Kilmarnock area. He is living in a house in Scotland, and the Postmaster-General cannot provide him with a telephone. The managing director of the Co-operative Society in Kilmarnock—which also covers Ayr—cannot get a telephone in the new housing area in which he lives. The thing is ridiculous. The Postmaster-General has been in the process of supplying a new telephone exchange for a long time and I am wondering to what extent there has been a holding back within the Post Office in the last year in relation to capital development. Is there to be an increase this year in order to catch up with what has been held back in the previous year?

Mr. Bevins indicated dissent.

Mr. Ross

I am glad to note that the right hon. Gentleman is shaking his head, but we have to be convinced about this. In my constituency the advertising of its services by the Post Office has become a bit of a joke, because the services are not available. I agree that the Post Office should advertise, providing that the services which are being advertised are given.

How much is to be done in respect of Scotland? Where is the money to be spent? Of the equipment, the lines, the actual telephones and all the other things, how much will be manufactured in the development districts? I should like to know how much will be made in Scotland. The most satisfactory answer which we have received to this question related to the number of telephone kiosks to be made in Scotland. But do not let us applaud too quickly, because telephone kiosks are not being replaced rapidly. When they are, we have new ones which I do not think are made in Scotland. They are certainly not of the Falkirk type which I should prefer.

I wish to know whether the Postmaster-General is using his influence to press spending Departments to ensure that contracts are placed bearing in mind the needs of the development districts. If the right hon. Gentleman has £156 million to spend, he has an immense power of employment. If he and other Ministers with the power of industrial patronage in their hands would exercise it in relation to a location of industry policy which was sensible, and brought a fair share to the development districts, there would be less moaning from hon. Members on both sides of the House about unemployment in the North-East, in Scotland and elsewhere.

Like other hon. Members, I wish the Post Office well. I hope that after Dr. Beeching has finished with the railways he will not descend on the Post Office. The former Postmaster-General, now the Minister of Transport, may not have forgotten what probably he would like to have done about telegrams but had not the courage to do when he was Postmaster-General. The problem was handed on to the present Minister. The 5s. charge has long been "on the plate" of the Postmaster-General. It presents an insoluble problem. The more telegrams are despatched, the bigger the loss, and all that can be done is to make the charge as prohibitive as the Minister dares in order to cut down the loss. As the right hon. Gentleman told my hon. Friend the Member for Central Ayrshire in an intervention, he is reducing the loss by one-third.

The right hon. Gentleman is aware that a Committee was set up to study the matter and if the Minister of Transport, when he was Postmaster-General, had acted on the advice which he sought and received, the problem would have been dealt with a long time ago. I wish that the Minister would ignore the commercial considerations in respect of this service and realise its value in those areas of the country where people have no hope of getting a telephone. In such areas the telegram service is essential and it is an imposition that the minimum charge should be 5s. I hope that the right hon. Gentleman will think about this again. We want a little more than pure commercialism from the Post Office. It provides a wonderful service. But do not let us have panic decisions regarding a problem which requires, not attention, but a decision. To my mind the decision should be to retain this service as a public service.

I certainly hope that the Post Office will have a better year this year than last year. It may be that during this year I shall be called to another of those rare meetings of the Post Office Advisory Council. I have been a distinguished member of that Council, but, like the rest, an absent member for a long time. During the tenure of office of the right hon. Gentleman we have met about twice. Perhaps one of these years we shall have another meeting.

9.11 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

With the announcement of the new Post Office charges I can understand why the Conservative vote in the Colne Valley by-election was so low. In the eleven years I have been a member for this House how often have I heard from the benches opposite, when a nationalised industry has been up against economic circumstances and its revenue was falling, that one of the worst things to do was to raise its charges?

How often have we heard that in such circumstances it was necessary to increase the efficiency of the industry? That was said of the Coal Board and of British Railways. It has always been said about those industries. It was said that the railways by putting up fares found no solution to economic difficulties. Is this not true of the Post Office? Do the Government imagine that they can build the Post Office into an efficient service in the interests of the economy of the country by merely putting up its charges?

We have nearly one million unemployed. There is slack in the economy and productivity is not rising. If productivity does not rise, industrial costs rise. Yet this is the Government's contribution to stimulating the economy. No worse time could be selected to impose these charges on the Post Office. These charges in many cases constitute a rising cost to industry. Surely this is the wrong thing to do.

The White Paper Post Office Prospects, 1963–64 talks about the growth of business, but is this the way to stimulate growth in business? We have been told that the greater the expansion in the telephone service the greater the loss entailed. Surely there is something inefficient there. The cost of a telegram used to be 3s. 6d. One went into a post office filled in a form and handed it in. Then a fellow would go out on a motor-bike and deliver the telegram. Where in that chain of activity can economies be made to make the telegram service profitable? Is there a fair allocation of time of the operator in the post office? What is the allocation of time in his duties attributed to the service of a particular telegram? The Post Office should get some chartered accountants to analyse this, to find why this particular service is selected and why it is said to be unprofitable.

We hear that a traditional service which has been functioning for many years has become unprofitable in the last few years. Those of us on this side of the House may be thankful that this did not happen when the Labour Government were in power. The present Government have been in office for eleven years and the economy is stagnating. If the economy is stagnating and trade and business activities fall, the Post Office obviously suffers with the rest.

We read in the Press that we are to have a give-away Budget and relief of taxation to stimulate the economy. Parallel to that, the same Government impose more commercial charges on industry. This is a complete conflict of ideas on the part of the Government. Last year's profit of £9 million seems a small figure in comparison with the vast turnover. The profit for 1963–64 is estimated at about £20 million, I think. This is an assumption which may not materialise.

The increased charges may curtail the services. Fewer people may use the telegram service, the telephone service, or the parcels service. There may be a decline in these services. Some other institution—the railways or road carriers—may take up some of the parcels service. With a smaller turnover the profit may fall. In my view, it is a rake's progress to try to solve the economics of the Post Office or any other large-scale industry by continually increasing the charges. We know that this is happening everywhere. Private enterprise is doing it through the trade associations. Instead of industries in the private sector analysing themselves with a view to making themselves competitive and cutting out the dead wood and waste, there is a recourse by agreement to increasing charges for the services provided. This leads to inflation. This is another step in the inflationary progress in which the Government have been indulging for eleven years. The cost of everything increases under this Government—coal, railways, the Post Office. Expenditure on the Civil Service and the Departments of State is greater than it ever was. It is at an all-time level. This is the easy way out. It is the way out adopted by complacent, apathetic people, people who are too lazy to examine the details of their administration. Twice in this Parliament Post Office charges have been increased. It last happened in 1961.

I want to support the plea for Scotland made by my hon. Friend the Member for Kilmarnock (Mr. Ross). In my constituency, at a foundry in Kirkintilloch we used to cast the pressings for kiosks. A visitor to Lisbon will see telephone kiosks—they are red—which were cast in that famous factory at Kirkintilloch. They are to be seen throughout Portugal, but they are disappearing from the United Kingdom. They are done with pressings now in aluminium alloys. Different types of kiosks are now being made, so the factory at Kirkintilloch is losing a great deal of its work. There must be technical advances, but we in Scotland still think that we should get a bigger share of some of the work being done for the Post Office.

There are development plans to the tune of £156 million for 1963–64. We hope that a very large slice of this £156 million will be spent in Scotland. We have the industries there. We have many of the newer industries. Recently I visited a firm in the burgh of Kirkintilloch, a very progressive burgh. I visited a small factory there employing about 700 men. It makes electrical switch-gear. It is in an excellent position to manufacture for the Post Office.

Mr. Dan Jones (Burnley)

Is it in the ring?

Mr. Bence

I do not know. It has not been knocked out yet. If it gets into the ring it will account for itself very well indeed. It will go the full fifteen rounds and come out the winner. I went round the plant. It is an excellent plant. It is wonderfully well organised. It is in a position to provide the Post Office with a good deal of the hardware that goes into the communications system.

I recommend the Postmaster-General to make inquiries. Some of these small factories in Scotland have been established for many years but they move with the times. They have good development departments and able young men. I have met some of these energetic young men who are prepared to go out to find work and to manufacture what the customer wants. I hope that the Postmaster-General will forget some of the traditional sources in the Midlands and the South and will look farther afield for his suppliers.

My hon. Friend the Member for Central Ayrshire (Mr. Manuel) spoke about telephone and letter charges and the attempt to differentiate between services and to make each profitable and able to stand on its own feet. The Assistant Postmaster-General may be able to justify the charges for telegrams, local and trunk telephone calls, and the parcel deliveries, but I hope that this is not the thin end of the wedge of a suggestion that the mail service to places like Stornoway, Wick, or Lerwick, to the Shetlands, or to Campbeltown in Argyll, a very awkward place to get to, should be based like trunk telephone charges on mileage. I hope that we shall never have letter postage based on the distance over which the letter has to be delivered. If we are going to talk in terms of breaking the Post Office service up and analysing the profitability of each little department, a latter posted in Westminster for Stornoway or Benbecula will cost a great deal more than the present 3d.

In the second half of the 20th century the Post Office services surely should be such that the Government should be able to equalise things out over this vast network in the same way as charges for letters are now evened out. We in Scotland admit that it is to our benefit to have flat rates. Any tapering charges are always expensive for us. At present we are hoping by various means to encourage industries to move up to Scotland from the Midlands and the South. Many of these industries, if they come to Scotland, will be branches of parent industries in the Midlands and the South. If telephone charges are increased this will prevent industrial expansion in this sense and will be an encouragement to concentration at the centre.

I should like to know from the Assistant Postmaster-General how many shared party lines still exist. I have been a subscriber on a shared line since 1951. I never complain. Once I leave the Palace of Westminster I am an ordinary citizen like anybody else and I do not want any privilege, though I would give a privilege in this respect to a doctor. I am not grumbling, but many people who share a party line complain of the tremendous inconvenience this causes. I have to put up with it. It does not worry me, although it is a nuisance, My hon. Friend the Member for Central Ayrshire spoke of how a constituent might ring up a Member of Parliament and might occupy the line for six minutes. I should have thought that one would be very lucky to be delayed for only six minutes by one's constituents. I have had them on the telephone for an hour and could not get rid of them.

It is a good job that I am not sharing a party line with another Member of Parliament, for we would be in some difficulty. I was in a part of my constituency last week when one of the members of my party was kept speaking on the telephone for 48 minutes. She just could not get rid of the person who was on the other end of the line. With party lines, when this sort of thing goes on life becomes very difficult indeed. I do not suffer from this sort of thing very often. I have arranged for my wife to call out in a loud voice that I am wanted; I make sure that she can be heard on the other end of the telephone and I am able to make my excuses.

I should, however, like the Assistant Postmaster-General to make a survey of party lines throughout the country. Some people do not like to complain and grumble. They will put up with inconvenience. They will abuse a service, but they will not take the necessary action to remedy the situation. I feel that there must be a lot of friction and frustration in households as a result of this sharing system. Surely, eighteen years after the war has ended, with all the development that has been going on, something could be done to improve the situation. We have telecommunications around the world. We can bounce messages off the moon and can send messages from New York to Tokio or Melbourne or Sydney; yet I find it difficult to speak by telephone from my house to a friend in Kirkintilloch 15 miles away because I am on a party line.

9.27 p.m.

Mr. Roy Mason (Barnsley)

We have had a long and wide-ranging debate. What has been most commendable has been the number of Members who have paid tributes to the Post Office workers for their unstinting efforts during the long and arduous winter—engineers, linesmen, postmen and postwomen who have been tested severely during the past few months. They have had to rise early in the morning and, besides going through the snow and ice to get to work, have continued going on their morning rounds. The right hon. Gentleman the Postmaster-General, in paying tribute to the postal workers, could no doubt have given numerous examples of their conscientious endeavours during the winter. All of them have been a credit to the General Post Office.

My hon. Friend the Member for Manchester, Openshaw (Mr. W. R. Williams) rightly referred to the fact that during the past twelve months to two years the economy has been slack. There has been a great deal of hesitancy and anxiety among industrialists mainly because of the Common Market talks, and this has had its effect on the general services and a particularly bad effect on the Post Office returns. There has been a lower turnover than the Postmaster-General planned for, a lower sale of postal orders, stamps, etc.

Allied to this has been the legal recognition of betting shops and their growth. There has also been a growth in fixed betting on the pools. Consequently, fewer postal orders and stamps have been sold, and, no doubt, this has had its effect on other Post Office services.

In addition, we have recently had to suffer a very long and freezing winter. Consequently, there has been no soccer for some time. There was no league football, and for a period there were no football pools. It is a sad reflection, but nevertheless it is true, that the state of our nation is such that some services within the General Post Office almost live or die according to the amount of gambling that takes place in the country. A considerable amount of Post Office business depends upon Littlewoods, Vernons and other pool promoters. According to the figures which the Postmaster-General gave today, we have lost £4.1 million in the last two years. This virtually means that we have lost it in two winters, during the two football seasons, and it amounts to the fact that in ten active football months in the last two years we have lost more than £4 million. This makes one wonder whether, if we have another cold spell next winter and the pools are again affected, the Postmaster-General will come to the Box to ask sanction for another rise in telephone charges. Is it not a ridiculous and disgraceful situation that the cost, or even the life, of some of our essential services should have to depend to this extent on the amount of gambling which takes place?

The Postmaster-General has asked today for his extra £14 million. I contend that, for some time now, his estimates have been completely wrong and his judgment on where the burden should fall has been just as bad. Generally speaking, the new increases will first hit industry, particularly the small firm. It is industry, particularly the small firm, which is the main user of the trunk telephone system upon which the right hon. Gentleman relies for a great deal of the money to keep the Post Office alive.

The new charges will hit firms which are just deciding whether to go to the unemployed regions of the North. Those contemplating moving may think again. Would it not be far better to stay in London or the South rather than be saddled with large telephone bills for calls made from the North to business people or Whitehall Departments in the South? The telephone charges are far too high already. We already have an appalling record in telephone installation and usage, and these increases will make matters worse. Even if the Postmaster-General could step up the pace of installation now, with the increase in cost and its effect upon usage, he would, I believe, be making no advance at all.

Furthermore, since the new increases for trunk telephone calls and the parcel service are bound to hit industry, especially firms which have gone to Scotland and the North-East Coast, it is plain that there is no co-ordination on these matters between Government Departments, unless, of course, as I suspect, it has been thought expedient at this time to put the burden on industry rather than on individuals, following the idea, since this may be an election year, that the electorate must not be annoyed just now. However, if industry is hit, the consumer will indirectly have to pay. This just seems to be the Postmaster-General's sneaky way of passing the buck. The consumer will suffer anyway, although initially the burden will go on to industry.

I agree with what hon. Members have said about the telegram service. Apart from a mad contribution from the hon. Member for Aberdeenshire, West (Mr. Hendry), there has been no support for the increase in telegram charges. The telegram is really the poor man's emergency line. By increasing the charge for telegrams, the Postmaster-General has discriminated against a small section of the population in rural areas who have always regarded the telegram service as their lifeline. As we have seen during the past two or three years, the Postmaster-General seems intent upon killing this service. We warned him many times during the passage of the Post Office Act, 1961, not to over-commercialise the Post Office and ignore these small but essential services.

I said earlier that the Postmaster-General has many times been wrong in his estimates and his judgment. I draw attention to a document published by the Post Office in 1958 entitled "Telephone Policy—The Next Steps". Speaking of the new techniques to be introduced in the telephone service, the foreword says: This Paper deals with Post Office telephone plans for the next decade.… They are the most sweeping changes ever made. They should revolutionise telephone habits in the next 10 years.… Costs will be reduced. Call charges will be cheaper. In the conclusions we read: These plans are based on a sound price policy … The Post Office cannot afford to invest in assets which are rarely used. The objective is to provide telephone service, not unused telephones. This is a convenient time to consider what has happened since 1958 and see how the plans for the ten years have gone. Five years have now elapsed. We do not need to go back to 1958. The past two or three years have been the stagnant years, the years during which the present Postmaster-General has been responsible for Post Office affairs.

In Post Office Prospects, 1961–62, page 5, it stated that the exchange connections estimated at that time would be 220,000 for that year. The Post Office actually connected 170,000. So in 1961–62, it was 50,000 short in its estimate. Again, in Post Office Prospects, 1962–63, it was stated that there would be a net increase of 200,000 connections, but the White Paper that we are now debating indicates that only 132,000 have been connected. So it is 68,000 connections short. Having estimated, as my hon. Friend said in his opening remarks, for a target of connections so high and which miserably failed, the financial surplus, too, has been much lower than expected.

We have also seen during the right hon. Gentleman's term of office that he has been toying with the telephone subscribers. In his first year of office, in 1960, he made a statement on telephone reductions. This was applauded by the House, and my right hon. Friend the Member for Caerphilly (Mr. Ness Edwards), replying to that debate, said that he hoped that statement would bring back the 300,000 subscribers who had been lost to the telephone service under the right hon. Gentleman's predecessor's rule.

A year later, in 1961, the right hon. Gentleman made a statement increasing telephone rentals. We estimated that that statement alone cost the Post Office a loss of a further 170,000 subscribers, because the number of lines that are annually given up increased by over 20 per cent. that year, and the demand, because of the rentals going up, also went down, and the Post Office lost 170,000 subscribers. The right hon. Gentleman came to the House again last week and made a further statement on increasing trunk telephone charges. Again, without any doubt whatsoever, this will have an adverse effect on installations and there will be a further loss of subscribers. The Postmaster-General now seems to delight in coming to the House and introducing a succession of little bitter pill budgets because he is proving annually so hopelessly wrong in his estimates.

The same applies to telephone installations. We are still lagging behind most industrialised countries with a stop-go price policy on telephones. At the moment, only sixteen people out of 100 have telephones in this country. In Norway it is 21 out of 100, in New Zealand 32, Canada 32, Sweden 38 and the U.S.A. 41. It was pointed out by some of my hon. Friends that there are 45,000 still on the waiting list for telephones and the figure, according to this year's White Paper, will rise further this year. It was 50,000 in 1961–62, so relatively no progress has been made in the past two or three years in reducing the waiting list.

Incidentally, many of those who have been promised connections will have to wait two years anyway. Then, having got a telephone, a person may be one of the unfortunate 1 million shared line subscribers, like my hon. Friend the Member for Dunbartonshire, East (Mr. Bence). Whether the Postmaster-General agrees or not, this is a really hated service. Most people who are on the shared line service hate it, distrust it, are suspicious of the joint service and would like to give it up. It is time that the Postmaster-General made some strenuous efforts to rid the telephone system of these shared lines. In some areas they are still compulsory if a person wants a connection. At least he should go as far as to make it a voluntary service only.

But, further still, the Post Office, having got a new subscriber, practically forgets that he exists. This should be the beginning of the Post Office interest and investment in him, not the end. Use of the telephone means revenue, and the uses of a telephone should be advertised and encouraged. I therefore applaud what the right hon. Gentleman said, namely, that the Government have decided at last, in spite of the fact that we have had a plan in existence for five years, to spend a little more on advertising the uses of the telephone. He did not say how much it is proposed to spend. I suppose that we shall have to wait until we have the annual report and accounts to find out whether this will be a worth-while advertising campaign.

We are at the bottom of the league when it comes to the average number of conversations per telephone per year. There is not an industrialised nation in the world which uses its telephones less than we do. This is solely because of the Postmaster-General's lack of initiative and because there is not sufficient advertising of the uses of the telephone. The average number of conversations per telephone per year in the United Kingdom is 607. In Norway it is 834, in Sweden 1,006, in the United States 1,309, and in Canada 1,750. We cannot have usage growth if we do not tell the people all the services which telephones can give.

I pressed the right hon. Gentleman on this point last year, and therefore we applaud the fact that the Postmaster-General is now prepared to spend a little more on advertising telephone services. The Post Office spends far less on advertising its real services than any other big enterprise or nationalised concern in this country.

The Postmaster-General introduced his plan ten years ago mainly because he had in mind the introduction of subscriber trunk dialling. We informed the present Postmaster-General, when it gradually came into use, that people were being badly informed about it. There were shoals of complaints. There were letters in the Press and Questions in the House about it. He gradually came under pressure, and he has now relented a little in these charges. But, as my hon. Friend the Member for Openshaw pointed out, the introduction of subscriber trunk dialling, despite the plan, is lagging 12 months behind schedule. What a dismal story.

Five years ago, the Government set out a plan for telephone development over the next ten years. It is now half-way through its development. It is failing all along the line—a slow rate of installation and new connections, a waiting list, not enough advertising of usage, shared lines and the trouble about the introduction of S.T.D., and mistaken estimated profits. This has been a period of stagnation in telephone expansion and usage within the Post Office.

Mr. Bence

Complete failure.

Mr. Mason

I turn to the question of global communications by satellites. I wish at the outset to pay tribute to the Post Office engineers for their designing, building, operational efficiency and particularly cost of the Goonhilly Down satellite ground station. This is a credit to the ingenuity and skill of the engineers, particularly when one compares the building and cost of it with the American counterpart and the model which the French adopted from the United States.

The Postmaster-General said today that satellite communications were now technically feasible. He said that there was a Commonwealth conference in this country last March about this and that since he has had exploratory discussions with the United States and Europe. He pointed out that cables and satellites were complementary systems and would be for many years. He talked about international co-operation, about Britain going it alone and about Britain and the Commonwealth co-operating on this. But he emphasised that the United Kingdom cannot go it alone; it would be unrealistic. His conclusion therefore was that, if this is to pay, it must be drawn up in such a fashion that we take advantage of transatlantic trade. The Post Office has been busy on these developments. The right hon. Gentleman estimated that the cost of research at the moment was between £1 million and £2 million.

The Postmaster-General did not tell us what the Post Office or the Government were doing. We still have no idea what the Government intend to do in satellite communications. We have a right to know. We pressed the Postmaster-General on this matter last year, but he seems to be uncommunicative when it is a matter of international communications. He is always vague and cannot tell us definitely what the Government are doing. We have already wasted two years awaiting a decision from the Government on this problem.

Let us consider the possibilities. First, we are members of the European Launcher Development Organisation. The plan was to use Blue Streak as the first-stage launcher and to adapt the French Veronique rocket as the second-stage launcher. The third stage was to be a German rocket, which has still to be developed. Initially, the plan was to cost about £70 million, of which Britain was to pay one-third. In view of the strained relations, particularly with France, it would appear that success is now doubtful.

Secondly, we have been participating in the United States experiments with telephonic and television communications via Telstar and relay satellites. This is all very well for experimental purposes, for testing ground equipment, gaining operational experience, and so on, but it is no good by itself in the long term. We must not be committed to the United States alone in global communications, because, in any event, the renting of telephone lines and television channels would prove exorbitant. It is bad enough that the Americans are able to cut off our missiles for defence purposes. There is no need for us to put ourselves in a position whore they can cut off our communications. We can certainly develop our communications with the Americans, using Goonhilly and the various satellites which are being launched from America for experimental purposes, but for us to be completely reliant upon the Americans would mean that we had to pay exorbitant rents to use telephone and television links across the Atlantic.

Thirdly, I understand that the British Space Development Company, formed about two years ago, presented the Postmaster-General with its plans more than twelve months ago. This appears to be a British-only project, a combine of aircraft firms who are initially interested. For the cost of £250 million, they assert that we could have global coverage by 1970, using our rockets, our own satellites and our own launching bases at places such as Woomera, the Seychelles and Christmas Island.

Fourthly, there is the United Kingdom-Commonwealth project. As the right hon. Gentleman said a year ago, there was a conference in London of the interested Commonwealth nations who were thinking that there might be possibilities of a Commonwealth project on satellite communications. They might, therefore, have done the groundwork on this scheme. The possibility which I suggest is of a Commonwealth charter, signed by interested parties, indicating a financial and user interest in the scheme.

The trouble is that although we know that all these things have happened, nothing positive has yet been done by the Government. The Postmaster-General seems to be creating the impression that he is not interested in either a British or a Commonwealth project, mainly because of his commitments in cable laying, especially the round-the-world cable network.

Mr. Bevins indicated dissent.

Mr. Mason

The right hon. Gentleman shakes his head. I hope that in winding up the debate the Assistant Postmaster-General will dispel all our fears on this score and inform us of his right hon. Friend's intentions for the development of a satellite communications system.

As is usual, we have two or three irons in the fire. We have plenty of ideas and industry is keen to start, but no decision is forthcoming from the Government. During the course of his remarks at the outset of the debate, why did not the Postmaster-General talk a little more about mechanisation? What has happened to the electronic sorting machine? Is this coming along at the pace that was planned? Is it not being introduced into the Post Office as rapidly as we expected?

What about the automatic letter facing machine? Last year, the right hon. Gentleman said that he was in consultation with the envelope manufacturers concerning the uniformity of envelopes. There is no point in bringing the automatic letter facing machine into post offices unless, first, we have uniformity in envelopes. He had a discussion twelve months ago with the manufacturers on this point. Why had he not any report to give the House today? Anybody knows who has gone round the sorting offices and has seen the hand sorters doing their job that what hampers their efficiency is, first, different sizes and, secondly, different coloured envelopes or envelopes with their different embellishments on them. Even if we were to get uniform envelopes before the sorting machine is ready to be introduced, that at least would increase the efficiency of the hand sorters. The right hon. Gentleman ought to have said something about that. Is the truth of the matter that the manufacturers themselves are holding this up?

Then what about the film he was planning to prepare showing the Premium Bond sorter, so that many of the punters on Premium Bonds could see that it is a fair machine? The right hon. Gentleman had in mind developing a film of some kind which could be put on television showing how the machine works.

My hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) would have been very pleased if he had been here at the outset of the debate and heard the right hon. Gentleman's remarks about the pictorials and how they are being used to better advantage. I am glad to see that the right hon. Gentleman appears to be relenting a little on the question of pictorial stamps. Indeed, in the last few months there have been many more appearing and many organisations' events can be commemorated. Personally I am not very pleased with the Productivity Year stamp, that picture of the United Kingdom with a thing like an arrow striking, up the spinal column of the British Isles. It looks rather like a picture of an atomic bomb explosion. I would have thought that the Postmaster-General would have intervened and used his ideas and initiative so that this pictorial for Productivity Year could have illustrated a typical example of British industry. Why not the coal mines and the mechanisation efforts in them which have increased productivity in the last twelve months by 8 per cent.—a nationalised industry, British industry, which is doing well? The Postmaster-General really has got a great opportunity if he intends to relax on this question of pictorials. Many of our industries could be portrayed, and many of our literary figures, as my hon. Friend the Member for South Ayrshire said, could also be portrayed.

We know the argument about diminishing the status of the Monarch's head on the stamp and about our being the only nation in the world which does not have the name on its issues. This can still be done on our pictorials. The right hon. Gentleman has proved it with his castle issues, which are fine examples. So I hope that he will take more and better opportunities in the future now that he is tending to relax on pictorials, and broaden their scope.

I should like to turn now to another question of which, again, the Postmaster-General made no mention in his speech, but which, nevertheless, is very important and relevant to this debate, and that is the question of bulk supply agreements. He knows quite well that he and his Department have been the subject of a great deal of criticism by the Public Accounts Committee. That Committee told him that it was disgraceful that he did not allow outside tenders for telephone equipment, exchange equipment, cables and so forth, and that he appeared to be protecting the ring of manufacturers, and that the Postmaster-General and, indeed, the House, were not getting any assurance of value for money under this method, and the Committee recommended that the Postmaster-General should break the ring and give other manufacturers a chance.

In the last Report of the Post Office, dated 1961–62, the Comptroller and Auditor General says: In June l962 I asked the Post Office whether any decision had yet been reached on the conclusion of new agreements and was informed that the position remained as stated in the Treasury Minute of 17th November 1961"— eight months previously. The matter was under examination by Ministers and the Postmaster-General hoped to make a statement shortly. The Post Office also informed me that the value of orders placed in 1961…62 under each of the four agreements and of orders placed with other contractors following competitive tender under the reservation clauses was as follows. For cable, the agreement contractors—those are the ring—had contracts to the value of £9,988,000, and other contractors nil. For loading coils the ring got £416,000 worth of contracts, and other contractors nil. For telephone exchange equipment—this includes the new devices such as the large equipment which the Post Office is now developing—the ring got contracts to the value of £22,810,000 and other contractors £179,000. For telephone apparatus the ring got contracts worth £11,817,000 and other contractors £508,000.

The Postmaster-General was pressed a number of times in the House to make a statement. Finally he made a comment in the House in reply to a Question on 24th July, 1962, as reported in c. 1261 of the OFFICIAL REPORT. He said that he was now prepared to change the present arrangements and that the purchasing of cable and loading coils as from April next would be open to competitive tender. That is very good. In respect of telephone apparatus, when the contract comes up for renewal next April, there will he provision to allow an increase from 10 per cent. to 25 per cent. of orders to be placed with outside contractors. He proposes to continue the arrangements for exchange equipment unchanged.

It is a welcome start that the right hon. Gentleman is now gradually attempting to break the monopoly position of Plessey, the Automatic Telephone and Electric Company and Ericsson Telephones. Hon. Members who have been watching this matter will no doubt be aware that these three firms merged three months ago and captured 40 per cent. of the G.P.O. contracts for telecommunications and telephone equipment. If we now look at the situation, the position after April, in view of the right hon. Gentleman's statement, will be that contracts for cables and loading coils of a total value of £10,404,000 will be subject to open tender. I am using last year's figures. In the light of the right hon. Gentleman's planned expansion of this equipment, no doubt the contracts may well be bigger.

In respect of telephone apparatus the total value of contracts will be £12,325,000, and 25 per cent. of these will go to open tender. The value of contracts for telephone exchange equipment is £22,810,000, and these will remain within the ring, no outside competitors being allowed to tender for them. In other words, there will be £45 million worth of work wanted by the G.P.O., and £32 million of it will still be cornered by the ring. To us this is still far from satisfactory. We note that Plessey is very much involved. It is in a key position in the ring. We hope that the right hon. Gentleman is not holding back from allowing more competition because of pressures which may be applied from the noble Lord, Lord Kilmuir, and the ex-Minister of Defence, who are—

Mr. Bevins

That really is an outrageously unworthy thing for the hon. Gentleman to say. I am sure that the hon. Gentleman and hon. Members on both sides of the House know me well enough to know that that is wholly untrue.

Mr. Mason

As the right hon. Gentleman has risen, we shall have to accept that assurance, but he must not try to tell the House that these two very influential Members of both Houses of Parliament, who are now influential men at the top of this firm which happens to be in a key position in supplying exchange equipment and telephone apparatus to the right hon. Gentleman, are not going to exert influence with him if they can. I am pleased that the right hon. Gentleman says that he will not bend or relent or give way. We applaud him for that, but he must recognise that these influences are at work, as we on this side of the House have recognised it.

Mr. Bevins

The hon. Member is too naïve politically if he believes that any such influences are at work, either upon me or any of my right hon. Friends in the Government.

Mr. Mason

All right. The right hon. Member defends his position but when we have had a ring situation, a monopoly, in this equipment for so many years and when the Public Accounts Committee has assailed it and has criticised the Post Office because of this situation, the Postmaster-General cannot just push it easily on one side. We accept his assurance that he does not bend to any of these pressures, but because pressure groups are developing in many spheres, not only in Post Office matters but in others, we must recognise that they may, according to the strength of the Minister concerned, have influence. On the subject of bulk supply agreements, the right hon. Gentleman could go further, especially in line with the recommendations of the Public Accounts Committee.

We have warned the right hon. Gentleman many times about over-commercialising the Post Office and its services. Many of them are essential and do not pay. No matter what he tries, some of them will continue to run into debt. We hope that he will see that he does not over-commercialise with a consequent loss of the value of the marginal services. In the last twelve months or so he has increased the charges for hospital lines being used to relay sporting events to patients, football matches on Saturday afternoons in particular. We regard that as a rather mean charge. Now he is to increase the cost of telegrams which some regard as an emergency service. This appears to be a discriminatory act. He is also opposed to more telephone kiosks because he is losing money on them, yet in rural districts they provide a necessary emergency service.

So it goes on. I hope that he will heed our plea and remember that the Post Office is still a public service, not one to be run solely with profit in mind.

Brigadier Terence Clarke (Portsmouth, West)

The hon. Member for Barnsley (Mr. Mason) spoke at some length about rockets in space. Will he say whether at the next election the Labour Party will propose to nationalise space?

10.2 p.m.

The Assistant Postmaster-General (Mr. Ray Mawby)

The hon. Member for Barnsley (Mr. Mason) probably put his finger on one of the basic differences between the two sides of the House when he concluded his speech, and we can dispose of it quickly. He asked that we should not over-commercialise the Post Office. We have no intention of doing so. The Post Office has a place in our society and we are as interested as anyone in seeing that it keeps its proper place. However, once one starts to ask that the Post Office should not be over-commercialised, one begins to lose sight of some of the facts of life. If we are to provide increased services and to connect more telephone subscribers, we must have a large amount of capital investment, and that must be found from somewhere. It is probably one of the fundamental differences between us that we believe that in this, as in any other service, the money must be found from somewhere to continue to provide the service and to increase the benefits to be obtained from it.

The Eon. Member for Manchester, Openshaw (Mr. W. R. Williams) asked whether the share of capital investment found from revenue would continue to run at between 60 and 72 per cent. In fact for 1963–64 it is down to 55 per cent. of the total.

Mr. W. R. Williams

Can the hon. Gentleman go a step further and say that it will be maintained at SO to 55 per cent?

Mr. Mawby

I could not give the hon. Gentleman that assurance, but the important thing is that in providing 55 per cent. this year, with the support we are getting from the Treasury, we should be able to do a great deal with that amount.

The hon. Gentleman also raised the important question of extending the services of the Post Office and going to spheres of potential business. He instanced in particular people who delivered literature issued by various companies and asked whether the Post Office was interested in this business. The household delivery of literature is being seriously studied, and we wish to take advantage of the opportunities to engage in further business. I assure the hon. Gentleman that as soon as agreement is reached with the staff we hope to make an announcement and take action along those lines. We are not allowing the grass to grow under our feet and we are going all out to get all the business that we can, but naturally we do not want to take the final step before we have reached agreement with the staff on this matter.

The hon. Gentleman, and several other hon. Members, made the point that our forecasts had been badly out.

Mr. W. R. Williams

On the question of the expansion of services, I also referred to the Giro system. Has the hon. Gentleman anything to say about that?

Mr. Mawby

I have nothing to add to what I said in reply to the hon. Gentleman the other day when this matter was raised on the Adjournment. It will be realised from what I said then that we have not closed our minds to this matter, and if we were assured of a reasonable return on this type of business, naturally we should take steps to get it.

As regards the financial forecasts, it is obvious that these must be out, because, as my right hon. Friend said, business has been less buoyant, and pay awards have been heavier than were predicted. One can therefore undersstand the figure being out on that count.

I do not think one can say that S.T.D. is 12 months behind schedule. We said by March, 1963, 500 exchanges serving one-third of all subscribers would have S.T.D. This has been broadly achieved but naturally in some cases we have fallen behind expectations.

The hon. Gentleman chided us on the fact that we had not fulfilled, and were not likely to, the points which N.E.D.C. had made. The figures which the hon. Gentleman quoted from N.E.D.C. were given to N.E.D.C. by the Post Office. We are conscious of the challenge they point, particularly in regard to manpower, and we shall discuss with the staff any steps that we take, to make certain that we have a forward look at the situation.

The hon. Gentleman also raised the point about the increase in the overseas printed paper postage rate, and my hon. Friend the Member for Carlisle (Dr. D. Johnson) raised the question of hard-backed books as well as paper backed ones. It is important to point out that the revenue from all overseas printed postage covers about half the cost of running the service. The increased charges announced by my right hon. Friend will reduce the loss we are making by about half—from £3 million to £1.7 million. Many foreign countries charge as much as or more than we do for this service—Austria, France, Germany, Norway and Sweden being among them. In such a matter as this the size of the loss we make must be taken into consideration, and the step to reduce the loss by half must be regarded as a reasonable one.

Many hon. Members have raised the question of the increase in telegram charges. So many hon. Members raised the point that I do not need to list them; it would be easier to list those who did not speak about them.

Mr. Ross

Send us a telegram.

Mr. Mawby

The question we must ask ourselves is whether the telegram service ought to be subsidised and, if so, at what amount. In the last three years the deficit from the service has risen. In 1959–60 the deficit per telegram was 4s. 3d.; in 1960–61 it rose to 4s. 7d., and in 1961–62 to 5s. O½d. Is it right that the users of the other services of the Post Office should subsidise the telegram service?

It has been said that this is the sort of service which is used by people who have not got or cannot get a telephone. In many cases a letter performs very much the kind of service for which many people use a telegram.

Mr. Manuel

I hope that the hon. Member will appreciate that I was not trying to be difficult when I referred to deaths and illnesses occurring in the lower income groups. In such cases relatives and friends can be summoned hurriedly to the bedside by a telegram. Nobody would sit down and write a letter.

Mr. Mawby

I agree. It is a fact that from time to time telegrams are used to notify relatives of death or sudden illness. But we must bear in mind what percentage of the total number of telegrams sent come into this category. Life and death messages account for only about .3 per cent. of the total number of telegrams, whereas about two-thirds of the total traffic is social traffic. As there are about 8½ million social messages a year, this number represents less than one per household per annum. It is important to bear that fact in mind.

The consumer survey of the service in 1956 showed that the people who sent greetings telegrams at that time tended to belong to the higher income groups, and to have telephones in any case. Hon. Members who have spoken on the subject have agreed that what we are concerned about is not the person who wants to send a greetings telegram to someone who has just got married, or for any of the other reasons for which they are sent. Telegrams in this category account for 30 per cent. of the total traffic. We are really interested in the 1.3 per cent. who find it necessary on special occasions to send a telegram.

Mr. Manuel

Will the hon. Gentleman recognise the point that we have all been trying to make? We are not talking about the 1.3 per cent. of the total number of telegrams sent, but the percentage of telegrams sent by people in the lower income groups.

Mr. Mawby

It would be impossible for the Post Office to ascertain that information. When people send telegrams, they are not asked by the Post Office what is their income group.

Mr. Ross

From the way in which the charges are going up, the Post Office will need to do that.

Mr. Mawby

A deficit of 5s. 1½d. on every telegram sent is too high, particularly when we take into account the relatively small number of telegrams which are of the "life and death" type. Basically, it is important that this relatively small increase should be made to ensure, not that the service pays its way but that other users do not have to subsidise the service.

Mr. Ross

Surely, because they represent a relatively small proportion, these telegrams could be isolated and the necessary increase put on "social telegrams" as the Minister has described them.

Mr. Mawby

We should have to prove that they were "life and death" telegrams.

Mr. Manuel

Oh dear!

Mr. Mawby

A special charge may be made for a greetings telegram. But if someone sends an ordinary telegram, an extra duty would be put on the sub-postmaster to satisfy himself that it was a telegram which would come into the 1.3 per cent. category; that it was a "life and death "message. One knows from the messages which appear in the personal columns of newspapers that often the text of a message can be different from the meaning. It would be extremely difficult to differentiate if we laid down that certain types of telegrams could be sent at a special subsidised rate.

My hon. Friend the Member for Harborough (Mr. Farr) referred again to the size and weight limits for parcels sent overseas. The present maximum weight is 22 lb. and the maximum size is 3 ft. 6 in. long and 6 ft. in length and girth combined. To meet the requirements of the Premier Drum Company, to which my hon. Friend referred, the Post Office would have to make a special extension of its limit. The company's parcels would not fit the Post Office parcels bags and they would be too large for the parcel fittings and equipment. Post Office experts have visited some of the European countries where heavier and larger parcels are handled, in order to study the arrangements in those countries. A number of alternative schemes for the acceptance and handling of larger parcels have been examined in detail. It has become clear, however, that any useful extension of our present limits would call for special handling of larger and heavier parcels in sorting offices away from the main stream of parcel traffic. This would add to costs and mean high postage rates.

The Universal Postal Union's Parcel Post Agreement, to which the United Kingdom is a signatory, places a ceiling on the amounts we can include in our postage rates for conveyance abroad. The cost of sea transport of parcels over 22 lb. in weight going to many of the destinations for which there is most traffic would take us above the amount we can recover in postage. We should therefore lose money on every heavyweight postal parcel accepted for the destinations concerned. Any change in ceilings would mean that any increases could not become effective until 1965. The Premier Drum Company apart, there is very little evidence of demand from exporters for any increase in the size or weight limits for parcels sent abroad by post, and it becomes very doubtful whether any extension of our limits would be justified at present.

Only recently we have raised from 15 lb. to 22 lb. the weight limit for parcels in the inland service, and it is desirable that we should have time to absorb the increased traffic that this problems which its handling may throw up before making any further extensions. I can tell my hon. Friend the Member for Antrim, North (Mr. H. Clark), who was concerned about parcels traffic to Northern Ireland, that the Postmaster-General will consider the question of carrying parcels by air. I must point out, however, that the cost at the end of the day may be considered too high.

The hon. Member for Ince (Mr. T. Brown) has evidently been a very patient Member for a long time. I cannot say anything at the moment about the provision of which he spoke of a Crown Post Office at Ashton-in-Makerfield. I shall be happy to meet him and discuss the whole problem with him and also the improvement he suggested in some of the sub-post offices in his constituency.

My hon. Friend the Member for Aberdeenshire, West (Mr. Hendry) made some interesting suggestions. He referred to the return which is made to sub-postmasters. I must point out that sub-postmasters are not civil servants but are more in the nature of agents who undertake to provide facilities for the conduct of Post Office business, of which there are 23,000 scale payment sub-offices. The express letter service of which he spoke is already in being and an extra payment can be made. It guarantees a service faster even than the very good service we get for the 3d. mail.

The hon. Member for Edinburgh, East (Mr. Willis) raised the question of the effect of railway changes upon the Post Office generally. He also raised a point about the proportion of capital expenditure to be spent in Scotland. He was very altruistic in not being merely interested in Scotland but also in other parts of the country with similar problems. This is a view which I believe is held by most hon. Members. Other things being equal—price, delivery and so on—development district firms are given preference over others. If firms in development districts do not secure a substantial part of the order, normally 25 per cent., on the first tendering, the lowest unsuccessful tenderer among them is offered part of the order at a price which is such that the whole cost of the contract will be no higher than if full competition had been allowed to prevail.

The essence of the scheme is that it does not involve Government Departments in extra cost. Where it is possible to undertake more work at factories in development districts without loss of efficiency there is no reason to suppose that the firms are not already responsive to the appeals the Government have made to industry generally. We investigate all applications made by firms, or by trade associations on their behalf, to be added to our list of suppliers. In 1961–62 we examined over 1,000 applications and added 400 firms to our trade lists. When tenders are invited we review our records of firms in the depressed areas to ensure that no likely supplier is overlooked.

We can only more or less estimate the pattern. As to the purchasing pattern of this capital development, we believe that about 15 per cent. will go to development districts, 2.5 per cent. in Scotland. 2.7 per cent. in the North-East. We are examining the possibility of increasing the proportions of our orders in these areas. This is on orders which will be placed. We calculate capital investment by the Post Office in Scotland to be nearer 9 per cent. of the total.

The hon. Member for South Ayrshire (Mr. Emrys Hughes) mentioned the question of the Burns stamp. He also told us what the man in the Soviet Union had said to him. He asked, apparently, "Why do you not in Britain treat your literary giants like we do?" I know of one or two literary men in this country who are rather glad that we do not. As the hon. Gentleman knows from the different statements which have been made by my right hon. Friend and myself at Question Time, we are certainly liberalising the whole attitude towards stamp policy, and I have no doubt that, if the hon. Gentleman continues to put this pressure on, he will find that he is not pushing against a locked door.

The hon. Member for Openshaw said that he could not defend services where the service was taking a couple of days to get through. This is perfectly true. It is something that I could not defend either, nor would my right hon. Friend seek to do so. Therefore, I should like to say a few words about the parcel post service. The parcel post service is not all that it should be. We are making strenuous efforts to improve it. In the short term, we are working closely with the Railways Board to speed up the transit of parcel mails on the railways. We are sure that the Board will do everything possible to help. For the long term, we are looking at the whole basis of our arrangements for getting parcel mails about the country. The reorganisation we have in mind will mean concentrating parcel mails on suitable centres, dispatching them mainly by rail in bulk consignments between those centres, and making fairly considerable use of road transport for distributing the parcels from the centres. We expect this not only to improve the service for our customers but also to reduce costs. As a test of this reorganisation, we intend shortly to start the large-scale experiment covering the whole of East Anglia about which the hon. Member for Openshaw spoke earlier. He also asked questions about it. We are keeping in close touch with the Railways Board in these matters.

Mr. W. R. Williams

I hope that the hon. Gentleman understands that we used the expression "long term" in its usual connotation. It does not apply now because as from next Wednesday we do not know how many lines will be closed. The situation has become very urgent.

Mr. Mawby

As I said earlier, already our reorganisation is designed to move in bulk on main railway lines to the distributing centres and for the distributing to be done a great deal more by road. This goes some way to answering the points made by the hon. Gentleman on what steps we are taking to try to maintain as high a standard of service as possible.

Mr. Hilton

The hon. Gentleman says that the East Anglia experiment is likely to start soon. Can he give us an idea when this will be?

Mr. Mawby

In the next month or so. I cannot be any nearer than that.

Mr. Manuel

Is the hon. Gentleman aware of the problem that parcels sent by rail from my constituency get to London by next morning—and of this there can be no doubt at all—but because of over-centralisation and possibly because of the reconstruction at Marylebone there are interminable delays and parcels going south of London take six to seven days to reach their destination?

Mr. Mawby

This is one of the problems. The difficulty which we have to face in moving parcels from sender to receiver is that there are many complex problems and solving one of them does not solve them all.

The question of mechanical parcel sorting has been raised several times. Here we are making more rapid progress than we had dared to expect. Following trials with a variety of equipment we have now obtained a new type of parcel sorting machine which we believe will meet all our requirements. This machine is on trial at Preston and Worcester and has passed all its tests with flying colours —so much so that we have already decided to equip another dozen or so large offices with it. This answers questions asked in the debate about how long we experiment before we put equipment into operation.

During the last year we have continued with the conversion of Crown post office counters to all-purpose service and we now have the system in operation at about 1,440 offices. Further conversions will takes place as reconstruction and modernisation schemes are completed. There is no doubt that the new system provides a better service for our customers and it has been widely welcomed.

The hon. Member for Openshaw raised the question of wages in relation to costs. and I should like to say a few words about finance. There are fundamental differences in the financial problems of the two main services—postal and telecommunications.

The postal service has a very high labour content by the very nature of its business. Of the total expenditure of £232 million in 1961–62, £34 million is the total cost of contract conveyance of mails by rail, road, sea and air, and no less than £175 million of the remainder is in respect of staff, including pension liability. Some 30 per cent. of these staff costs are incurred in the actual delivery of letters and are clearly related to the frequency and pattern of our delivery arrangements.

Although great efforts have been made to introduce machinery into the letter sorting processes we are still a long way from achieving the spectacular success necessary if substantial economies are to be made. The variety in the type of mail is in itself a great handicap to machine sorting, and a greater degree of standardisation of mail matter would be a considerable help. As has been pointed out, we are working to achieve standardisation in consultation with envelope manufacturers. The fact remains that until a machine is devised capable of reading addresses, all mail matter has to be passed through at least one hand process, if only so that it can be coded.

The pattern of our postal service under which 50 per cent. of the mail is posted after 5 p.m. and even a higher proportion —80 per cent. to 90 per cent.—is delivered on the first delivery creates peak conditions which by their nature do not enable the most economic staffing methods to be used. Further, the building of additional houses, many of them far removed from delivery offices, adds continually to the cost of delivery. For all these reasons, improved productivity in the postal service is extremely difficult to achieve, and the service is very susceptible to increases in wages. In fact, during the past 10 years increased expenditure due to improved pay and oilier conditions has averaged 4.3 per cent. per annum of total expenditure whereas improvement in productivity has averaged only 0.3 per cent. We must, therefore, face the fact that unless (a) there is a sustained national economic growth at an unprecedentedly high rate, in which case new income should rise decidedly faster than the real cost of earning it, and (b) there is also much greater wage restraint, rising charges for postal services will be the only alternative to subsidisation, whether by telecommunications or the taxpayer, or a lowering of the standard of service.

In telecommunications the financial problem is different. Technological advances during the last thirty years, particularly in long-distance communications, have been very significant. Improved productivity can be achieved by the introduction of more machinery and the latest techniques. For these reasons it is necessary that relatively large sums of money should be spent on, first, the expansion of the service to cater for the increasing demands being made upon it, and, second, to replace old equipment and to introduce the most modern techniques.

The pattern of telecommunications expenses is different from that of the postal service. Of the total expenditure —£250 million—interest and depreciation together amount to £92 million, and of the remainder, £129 million represents labour costs. This is still a very significant part of the total expenditure, and increases in wages of the order of 6 per cent., which is what has happened in the last year, cannot be absorbed by improved productivity even in a service where technological improvements in certain sections are making a significant contribution. In fact, average figures for the past ten years similar to those that I have given for postal are 3.5 per cent. pay rates, etc., and 1.8 per cent. productivity. Thus, though the problem is less formidable, the same points arise as regards future prospects.

I think the House would agree that it would not be wrong for me to repeat what so many have done earlier in the debate, including my right hon. Friend, namely, to pay a compliment to the staff for the tremendous work which they have done and their unfailing efforts during the severe winter. We have received tributes from many quarters, and the staff must be pleased to know that the discomfort and inconvenience that they suffered are appreciated.

Question put and agreed to.

Resolved, That the Postmaster-General be authorised, as provided for in section 5 of the Post Office Act 1961, to make payments out of the Post Office Fund for the financial year ending with the 31st March, 1964.

Resolved, That the limit of the Postmaster-General's indebtedness to the Exchequer under subsection (2) of section 10 of the Post Office Act 1961 be increased from eight hundred and eighty million pounds to nine hundred and sixty million pounds.—[Mr. Bevies.]