§ The Postmaster-General (Mr. Edward Short)
With your permission, Mr. Speaker, and that of the House, I should like to make a statement.
A Bill has been published today which, if it receives the approval of Parliament, will give me power to provide data processing services and facilities for sale to customers.
This is an important extension of Post Office activities. Computer usage in this country is much less than it should be. A great deal is being done by my right hon. Friend the Minister of Technology, with the co-operation of industry, to promote the efficient use of computers, and I believe that the Post Office can help this work by providing a National Data Processing Service. It is the purpose of the Bill to enable this to be done.
The Post Office has about £4 million worth of computer equipment already installed and working. By 1971, we aim to have 20 large modern computers in operation up and down the country. We use, or are planning to use, computers for a wide variety of jobs—from routine clerical work such as the preparation of telephone bills to the better management of resources in such fields as the planning of telephone networks, and for research and development into such matters as the transmission characteristics of satellite communication systems. Commercial-type applications include accounting, payroll work, stock control and the scheduling of vehicle movements.
To plan and implement these computer projects the Post Office has a large and 466 growing force of skilled systems analysts and programmers. It also operates a range of data transmission services which have been developed to exploit the use of computer facilities to the full.
There is here, therefore, a firm base on which to build a national data processing service capable of meeting a wide variety of customer needs.
I am sure that this new service would meet a widespread need, especially among the smaller businesses and organisations which are unlikely to be able to justify computers of their own. The first step would be to test the market and if, as I would expect, this went well, a full national service would be developed as quickly as possible. A start would certainly be made this year.
I want to make it absolutely clear to the House that the Post Office would not have or seek a monopoly of data processing facilities and would offer its services on a wholly commercial basis. Indeed, it would be prepared to make these services available to private computer bureaux. I am confident that the Post Office could operate successfully a data processing service on this basis.
It is very important that a start should be made as quickly as possible. But I have been advised that this could not be done under my financial powers under the Post Office Act of 1961, which sets out the purposes for which I can spend money out of the Post Office Fund. These purposes do not include such activities as the provision of data processing services; hence the need for the new Bill.
The Bill is a simple enabling Bill and very uninformative, and I felt it right that potential users of the Service should be told of our intentions at the earliest possible moment.
§ Mr. Bryan
We welcome what the Postmaster-General has told us of his proposals, in particular, the assurance that the service will be on a non-monopoly and fully commercial basis.
I have two questions to put. First, has there already been a market survey to gauge the demand, and what findings has that survey produced? Second, how soon will the service be available and how widespread will it be? In other words, will the service be available to medium-size firms in the provinces as soon as it is to large firms in the big cities?
§ Mr. Short
We have carried out a certain amount of research, and we believe that there is a great deal of scope for a service of this kind.
We shall start the service this year. The intention is to use unused capacity in our existing computers. We have at present seven modern computers and four or five older ones, and, as I have said, we hope to have many more in the next few years. There is spare capacity at present, and the intention is to use this spare capacity in the initial stages.
§ Mr. Dalyell
Will my right hon. Friend take it that we welcome his announcement, since it is in tune with what my right hon. Friend the Prime Minister said at Scarborough in 1963 and in exact tune with the contract which this party made with the electorate in 1964 and again in 1966? It is an example of the implementation of Labour Party policy.
Small businesses may find it difficult to know how to use systems analysis and data processing. What machinery does my right hon. Friend envisage for bringing to the attention of comparatively small businesses the ways in which they can make the best possible use of this excellent service?
§ Mr. Lubbock
We, also, welcome the Postmaster-General's proposal, although we think that it has taken rather a long time since the Prime Minister's speech at Scarborough in 1963.
First, will British computers be used by the new service? Second, has the right hon. Gentleman in mind the needs of public bodies such as the smaller local authorities, the technical colleges and the regional hospital boards? Third, will the services of the new data processing centre be available to them as well as to small businesses?
§ Mr. Dobson
I regard the Postmaster-General's statement as particularly welcome. My first question relates to the cost which will be levied on the user. Will it be a cost at other than cost level? In other words, will there be a reasonable profit to the Post Office in it? Second, what will be the exact position of the private bureau operators? Third, can my right hon. Friend assure us that he will be able to keep secure the confidentiality of information which is being processed?
§ Mr. Short
The costs will be very small in the initial stages because, as I explained, we intend to start the service by using spare capacity on computers which we have already, building up as demand builds up. The training and equipment to which I referred a moment or two ago will cost about £9 million over five years.
The private bureau operators will be able to purchase our facilities. They will have to pay for them, but we shall make our transmission lines and all our facilities available to them if they wish to use them.
The Post Office, of course, has a very high reputation for confidentiality, but we would ensure this further by a system of keys available to customers and/or access points into the system.
§ Sir H. Legge-Bourke
Why has the right hon. Gentleman felt it necessary to make this statement in advance of the report from the I.R.C. on the important inquiry which it is making into the relationship between the telecommunications industry and the Post Office? Is one of the reasons why he has had to make his statement today that the Post Office has over-committed itself in computer investment only to find that it cannot make full use of the investment already committed?
§ Mr. Short
I cannot think that the hon. Gentleman was listening to my statement. I said at the end that I felt it only fair and right to tell potential customers at the earliest possible moment. The Bill is now available, but it has only two Clauses and is very uninformative. I felt that anyone who might be contemplating purchasing computers or setting up bureaux would like to know what we proposed to do. It will be some time before the Bill comes forward for its Second Reading debate in the House.
469 There is no connection whatever between this and the I.R.C. investigation, which is a survey of the telecommunications industry and its relations with the Post Office. It is not concerned with this matter at all.
§ Mr. David Price
First, on the financial side, over how many years is the Postmaster-General working his depreciation calculations, and what rate of D.C.F. is he using? Second, on the technical side, will the right hon. Gentleman undertake that all future computers which he buys for this service will have random access rather than sequential access?
§ Mr. Maxwell
Will my right hon. Friend accept that this initiative by his Department will be warmly welcomed by the business community? Is he aware that the use of these machines for information storage and retrieval, particularly for scientific information, has considerable export potential? In the light of that, will he be willing to receive, or is the Department at this stage ready to receive, proposals from learned societies and private enterprise for this purpose?
Has my right hon. Friend allowed sufficient money for education and propaganda directed to the business community to let businessmen know of the existence of this service?
§ Mr. Short
I am grateful to my hon. Friend for his opening comment. We are always willing to talk to anyone. If people wish to come along to discuss the matter with me or any of my officials, we shall be glad to see them. On the question of education and propaganda, my hon. Friend can rest assured that we shall sell this service adequately.
§ Mr. Sharples
Will the computers be used on a 24-hour basis, or will the existing restrictions still be applied?
§ Mr. Molloy
While all fair-minded people wish to congratulate my right hon. Friend on this further modernisation of the Post Office and provision of a first-class service, may I ask whether the new 470 service will be linked with the giro system?
§ Mr. J. H. Osborn
What discussions has the Postmaster-General had with the bureaux, what contact has he had with the Ministry of Technology, and in what way will the National Computer Centre come into this? What arrangements is he making to provide computer advisory services and software as well as hardware among the facilities provided in the Bill?
§ Mr. Bellenger
On a point of order, Mr. Speaker. May I ask for your guidance? The statement made by my right hon. Friend today is presumably a speech in connection with the introduction of the Bill—the First Reading, as it were. Generally, Bills are introduced formally. Already, my right hon. Friend has not been able to answer a question, or has deferred it until the Second Reading. Am I right in my assumption of the procedure?
§ Mr. Speaker
I think that that is an accurate picture of what has happened today. It is a little unusual.
§ Mr. Tilney
How soon is the service likely to be available to Merseyside? Will the charges for data processing compare with present charges made by private enterprise bureaux and for the use of corporation computers?
§ Mr. Short
The system must be competitive. There is no question of the Post Office's having a monopoly. It will not get any business unless its charges are right. I cannot say how soon the service will be available to Merseyside. We hope to start the service this year, as soon as we get approval from the House, but I cannot at present say whether it will be available on Merseyside this year.
§ Mr. Higgins
Is the right hon. Gentleman aware that his answers to questions this afternoon suggested that he defines "purely commercial basis" in a very odd way? Are not overheads to be allocated to customers of the service?
§ Mr. Dalyell
On a point of order, Mr. Speaker. In relation to what was said by my right hon. Friend the Member for Bassetlaw (Mr. Bellenger), could we say that we welcome this perhaps unorthodox and novel procedure as a useful courtesy to the House?