HC Deb 19 April 1967 vol 745 cc502-42

10.25 a.m.

Order for Second Reading read.

The Postmaster-General (Mr. Edward Short)

I beg to move, That the Bill be now read a Second time.

It must be very rare for a Minister to be moving the Second Reading of two important Bills on two consecutive days. It is a measure of the vigour and energy with which the present Government are fulfilling their General Election pledges.

This is a very important Bill in that it establishes an infrastructure for the economy. It is a simple enabling Bill, and has only two Clauses. The first adds functions relating to the provision of services and facilities for the processing of data by computer to the functions in Section 1 (3,b) of the Post Office Act, 1961, for which payment may be made out of the Post Office Fund. The second gives the Short Title, and extends the effect of the Bill expressly to the Isle of Man and the Channel Islands, and by implication to Northern Ireland.

There is also an express provision that the Bill shall not extend the meaning of the words "the postal service" in the Government of Ireland Act. It will be remembered that the postal service is one of the "reserved matters" in Northern Ireland, in respect of which only the United Kingdom Parliament has power to legislate. The Northern Ireland Parliament thus clearly retains its power to legislate in respect of data processing.

We shall lay ourselves out to provide any data processing service for which there is a customer with whom we can come to terms. At present, we contemplate the following range of services:

  1. (i) Provision of computer time;
  2. (ii) Provision of data preparation and input facilities;
  3. (iii) Systems analysis service;
  4. (iv) Programming service;
  5. (v) Facilities for computer to "talk" to computer;
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  6. (vi) "Desk top" computer facilities for individuals;
  7. (vii) Facilities for the establishment of "data banks".
The House will probably not require further elaboration from me of the first five of these items, although I would like to add that the Post Office has already taken a lead in this country in adopting the most modern form of data input—the direct machine reading of documents printed in what is known as the Optical "B" fount, a type face which I am sure will be universally acceptable for all purposes.

We have also a research and development project for a cheap machine which can be used to mechanise clerical processes at the point where a transaction takes place—for example, at a sales or cash receiving counter—automatically recording as a by-product the data necessary for subsequent computer operation. This project is in an advanced stage.

In the "desk top" scheme, individual computer facilities can be provided for particular people in a firm, for example, scientists, engineers or designers. By means of terminal equipment, located in his office, and connected by wire to a remote computer, the engineer can have all the facilities of the network at his disposal, paying only for what he uses.

The "data bank" is a file of information which is permanently held in a computer in a manner in which it is immediately available. An example might be a standing file of data or design information, maintained on one of our computers by the appropriate trade or professional body.

This, by means of the desk top facility I have just mentioned, would be available to individuals on a nation-wide basis. The inquirer would put his question from his office machine, the data, formulae, etc., would be extracted from the file, any necessary calculations done by the computer, and the result pasted back to him in his office.

The Post Office is already a big user of computers for its internal purposes, and has already a large supporting force of systems analysts and programmers. By 1971, we plan to have 20 large modern computers installed up and down the country, which will be connected together by data transmission links to form a single system.

By increasing the size of this network and making its facilities available to the nation as a whole we shall establish a co-ordinated framework which can be developed into a national computer grid. We believe that we shall be the first country in the world to do this and I think that the resultant "know-how" could well have export benefits.

As I said in my statement to the House on 6th April, the Post Office would not have, or seek, a monopoly of computer bureau services. The Post Office's function of transmitting data, as the national supplier of telecommunications is, of course, a quite separate matter.

Our bureau services would be offered on a wholly commercial basis; indeed, we would be prepared to make any of these services available to private computer bureaux or other private computer users. There is no intention of regarding the public side of this business as a marginal activity on Post Office computing. This means that charges to public users will fairly reflect their share of the total overheads. I want to make that clear. I am confident that the Post Office could successfully operate a data processing service on this basis.

There are many problems of detail planning—including the exact nature of public demand—the solution of which requires the spending of money and which I therefore cannot commission until I have the powers asked for in the Bill. Some of the more sophisticated services I have described also pose not inconsiderable technical problems, the solution of which will take time.

As soon as the Bill becomes law, however, we shall be in a position to sell computer time on a permanent basis and to provide data preparation services. We shall then have installations in London, Portsmouth, Derby, Lytham St. Annes and Edinburgh and we could comparatively easily considerably expand our equipment capacity if required.

There is a national shortage of systems analyst and programmer staff. We think that the National Data Processing Service will offer an attractive career in computing to the young entrant and we aim to make a contribution towards overcoming this national shortage by recruiting and training many of our own staff. We are aiming at recruiting and training 100 a year and until this staff comes forward, or we are able to release staff from our own projects, our systems analyst and programmer services are bound to be limited.

We are, however, working very closely with the National Computing Centre and we think that the work they are doing on standardising systems and developing programme packages will be of tremendous value in coping with this lack of skilled manpower. We shall not hesitate to use the services of existing analyst and programmer organisations or to purchase or rent existing programmes wherever appropriate to meet the needs of our customers. This shortage of adequately trained and experienced staff is likely, however, to be the most substantial brake on our progress in the first two or three years. We are prepared for this.

We shall, of course, do everything we can to develop the National Data Processing Service as quickly as possible and I think that three or four years should see us well into our stride with the whole range of our services. This is above all a growth project and the immediate task is to get it moving in the right direction.

Because we start off with the very considerable base load of Post Office work, "starting up" costs for the new service will be comparatively small and most of the cost attributable to the public service will be directly related to the demand. We think that on account of the National Data Processing Service we might spend about £9 million more on staff and equipment over the first five years than we should have done on purely Post Office requirements during the same period. But what is actually spent on public account will be quite closely related to public demand.

I have differentiated between public account and Post Office account only to give the House some idea of cost. There will, of course, only be one service and I would like to reiterate the point I made earlier that all users of the service, be they Post Office, Government Departments, or members of the public, will pay rates calculated on exactly the same basis. Needless to say, this service will be operated on the same financial basis as the others we provide. It must make a profit each year and generate its contribution to capital requirements of the Post Office.

As I have said, we have not yet been able to study likely demand in complete detail and this is, of course, one of our priority tasks. We shall be pleased to talk to anyone who thinks that we may help. We should expect the service to be attractive to potential users who have not a sufficient volume of work fully to load a machine, who want facilities which can be had only from powerful and therefore expensive machines, or who do not wish to be troubled with the mechanics of computer operation and management which is a specialised activity.

These could include public bodies such as local authorities, the technical colleges, the regional hospital boards, as well as smaller commercial firms. They would pay only for the time they use. I should perhaps say that it is not proposed to interfere with the programme for university computers, but the national service may offer a useful supplement. Users who already have some experience of computing and who are considering extension or replacement of their present plant may find the equipment and "back up" facilities offered by a multi-computer service attractive and I would like to say that if we can come to terms we would be prepared to consider siting new installations to suit large customer needs.

When we are in a position to offer the "desk top" and "data bank" facilities, I would expect the nation wide character of these to have a great appeal in a wide variety of specialised applications, science, engineering design and information retrieval for a variety of commercial applications. We shall be very pleased to hear from learned societies or private enterprise in this connection.

The creation of a National Data Processing Service is a very large undertaking and I think growth and development will go on for a long time. Our initial sales and educational effort will probably almost certainly be selective. We shall probably select and develop particular ranges of activity and then market the solutions as hard as we can over the whole country.

The Post Office has already a high reputation for confidentiality and this reputation the new Corporation will be jealous to preserve. There would be a further insurance whereby access to information in the system could be had only by a customer in possession of the appropriate key code, the use of which could be further restricted to previously designated access points. So there need be no fear on the part of the customer about the confidentiality aspect.

Mr. Tam Dalyell (West Lothian)

My right hon. Friend refers to larger consumer needs. Can he give some indication of the minimum size he is thinking of? For example, is it a factory of 5,000 or 10,000 people?

Mr. Short

At the moment, I am talking about confidentiality. I am sure that my hon. Friend the Joint Parliamentary Secretary to the Ministry of Technology can deal with that point in more detail. What I am saying now is that, in view of our long reputation for confidentiality and of the new safeguards there is no need for any fear on this score.

But, of course, information held in electronic form is safer against commercial espionage, which is becoming one of the curses of the modern world, than that held in document form and whilst, taking the maximum precautions against such events, re-creation of records damaged by fire or other accident would be guaranteed.

The most immediate benefit of such a service is that the economies of scale which are possible will put computing facilities within the reach of a very large part of the business and industrial communities at attractive rates with considerable benefit to their efficiency. The "desk top" and "data bank" facilities will increase the efficiency and speed with which design work can be done and hence improve the date by which the product can be delivered.

But in the not too distant future, the greatest benefit of all may well be found to lie in the overall rationalisation of methods which the computer grid will make possible. For example, it will no longer be necessary for two firms using computers with access to the grid to send each other paper on routine business. Orders and requests for payments, order- ing and despatching goods, inquiries for goods and services, etc., will all be able to be done by computer "talking" to computer. An early Post Office example of this will be the computers preparing telephone accounts talking to the computers operating the giro service in those cases where the subscriber wishes to pay his telephone bill by giro transfer.

This is a very important part of the Government's efforts to modernise the economy and I hope that the House will give me the powers I am seeking and the Bill an unopposed Second Reading.

10.50 a.m.

Mr. David Price (Eastleigh)

This Bill is in itself modest and neutral. In this day and age it is difficult to take exception to the Post Office asking for the right to provide services and facilities for the processing of data by computer. But it all depends on how this apparently modest intention is interpreted by the Post Office. Until the Postmaster-General's speech, I felt that it was rather like buying a ticket on a mystery tour: we did not know where we were going. We were grateful to the right hon. Gentleman for what I might term his First Reading statement on 6th April. But, even after his speech today, we should have preferred a White Paper, which spelt out his intentions in detail. The matters into which the right hon. Gentleman went this morning do not lend themselves well to general debate. They are far better discussed in Committee where visual aids and the like are possible.

However, it is clear from the Postmaster-General's statement on 6th April, and certainly from what he said today, that, although the Bill may be a mouse, there are very considerable implications in letting this mouse loose among us. There are still many unanswered questions on which the wording of the Bill is entirely unproductive. It is, therefore, still difficult for us to assess the real consequences of what the right hon. Gentleman is asking us to do.

I should like briefly to go through a number of stages in examining these propositions. The Post Office has about £4 million worth of computers in current use. We are told that by 1971 it aims to have 20 large modern computers in use, although we have been given no estimate of the value.

On 6th April, my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) asked this very proper supplementary question: Is one of the reasons why he"— that is, the Postmaster-General— 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?"—[OFFICIAL REPORT, 6th April. 1967; Vol. 744, c. 468.] The only reply which that question evoked from the Postmaster-General was that my hon. Friend had not been listening to the statement. It was a very proper question to ask.

We got the real reply on 13th April in answer to a Written Question by my hon. Friend the Member for Worthing (Mr. Higgins). I should like to quote part of the Postmaster-General's reply: The loading of computers is a continuous process and the total load is redeployed between machines as required. The total load is currently about 50 per cent. and increasing."—[OFFICIAL. REPORT, 13th April. 1967; Vol. 744, c. 225.] I go back to the questions which I asked the Postmaster-General when he made his statement, namely, over how many years does he aim to depreciate his computers—the ones in current use and the 20 more which he intends to buy? What rate of D.C.F. is he using? I understand from the reply which I had from the Financial Secretary to the Treasury a few months ago that all Government Departments are using the D.C.F. approach to their investment appraisals. I await an answer. We are entitled to be solicitous of the return on public investment, and we have not had an answer to that.

I assure the House that nobody is keener than I on the use of computers when they make economic sense. They have immense potential. But they should not be introduced simply as political gimmicks or, as is the case with some firms, to keep up with the technological Jones's.

I draw attention to a recent article in British Industry by Mr. Frank Warner, managing director of Urwick Diebold Ltd., which is probably the largest firm of independent consultants in this field. Mr. Warner said this: Many installations have achieved savings only remotely related to their overall costs. In others, the costs are not even known. Improved management control is often claimed, but unless specific improvements in management performance can be demonstrated, such a claim is unverifiable. Later, he said: This is not a uniquely British problem. In the U.S.A., current surveys reveal that some 40 per cent. of computer installations fail to pay their way. Our own estimates, however, suggest that in the United Kingdom the percentage of unprofitable computers may be as high as 75 to 80 per cent. If this is so, computers are at present a drag on the national economy. This problem is particularly real in a public monopoly, because it does not have to justify its investment programme by the acid test of the market. This is one of the unsolved problems of public affairs. Neither side of the House knows the real solution to it.

Are the 20 large modern computers which the Post Office is to have by 1971 justified or not? I simply do not know, and I suspect that, with respect, the Postmaster-General does not know. Therefore, I should like to see the economic justification for them at least expressed in D.C.F. terms. I revert to my earlier questions: over how many years are the Post Office computers to be depreciated; and what discount factor does the Post Office use in its investment appraisals?

I turn to the Postmaster-General's proposal to offer computer services to the public. In so far as the Post Office has spare capacity on its current computers or future computers, I should not take the least exception to its hiring out their surplus time. Its prior market should be other Government Departments, because they all lie within the sphere of public investment. I welcome what the Postmaster-General said, namely, that he will encourage both Government Departments and local authorities to make use of the facilities which the Post Office will have available.

So far as the Bill is necessary to make that possible, I welcome it. But when the Postmaster-General goes beyond that limited proposition, we are dealing with something of a different order, I suspect that most Members do not realise the significance of what the right hon. Gentleman has told us today. On 6th April he spoke about the early installation by the Post Office of a full national service. Today, he told us more about how he conceives that national service. This raises the question of what proportion of his 20 large computers to be obtained by 1971 is to fulfil this new rôle and how far they are to fulfil what I might call the internal rôle of the Post Office—the Giro, and so on. I suspect that it is a fair proportion.

I should say a word or two about our views on computer grids. The House will agree, I think, that the predominant factor in leading us to think in terms of computer grids—the right hon. Gentleman's national service—is the progress made in the speed of central processing. If we conceive of a computer system as a complex of information processing units and of communications links, we see in the present state of the art that the bottleneck is no longer in processing the information but in getting the information to and from the system.

The obvious way of matching input—output speed to processing speed is to allow many users to share the computer. This takes us straight to concepts of time-sharing on computer grids. These concepts have been talked and written about in the technical Press with considerable intellectual conviction. But few, if any, systems have been established as yet. I suppose that the banks and the Post Office are the nearest to putting the theoretical concept into practice, but so far these have been internal grids. To my mind, there lies a very big difference.

The most successful example of a computer grid that I know of is the internal grid at the M.I.T. As the House knows, at the M.I.T. there are now some 160 stations, each with a teletype-writer which links the user direct with the central computer.

Undoubtedly, there are immense potentials in such systems. But, in relation to the Post Office's rôle in such systems, I suggest to the Postmaster-General and the House that the first priority of the Post Office is to provide the line to all users at reasonable commercial rates and to take every advantage to develop the technological potentials of the telecommunications side of a time-sharing computer system to the full. No one else can provide the line, be- cause the Post Office has a monopoly of the lines. This is where Britain differs from the United States of America. This is the unique responsibility which falls upon the Postmaster-General. I believe that the monopoly position of the Post Office is determining in these matters.

That is why, at this stage in the development of the computer art, I have grave doubts about the Post Office involving itself in the provision of national computer grids. I believe that the Post Office should concentrate its endeavours on providing technically improved and commercially cheaper telecommunications services. This is not only a personal objection to the further invasion of the private sector by the public. It is also a matter of priorities. Until the Post Office improves the telecommunications system of the country, it had better not try to run computer grids.

Mr. Speaker, you and I know how difficult it is to get a line between Southampton and London on the ordinary telephone during office hours. I should prefer to see the Post Office concentrating its efforts upon meeting better the ever-increasing demand for traditional telecommunications services before embarking upon a full national computer service on its own. The Postmaster-General should remember the warning of Pliny: The cobbler should not go beyond his last. Let me make it clear to the House that the Post Office has a long way to go before it has fulfilled its side of the bargain—the telecommunications side, the monopoly side.

I should like to develop for a moment some of my ideas of the sort of scope open to the Post Office to develop on the telecommunications side. They are very exciting.

In theory, there is a case for saying that the Post Office should develop a communications network transmitting digital signals exclusively. Voice could be converted to and from digital form at telephone exchanges. Digital signals could then be used in terminal equipment and throughout the switching apparatus. About 64,000 binary pulses per second will provide a telephone circuit. The micro-electronic revolution makes such a system theoretically economic. In the present state of the art, it would be possible to construct a network economically and make equipment which would do any of the following things.

First, it could transmit pulses over a single pair of wires at rates up to 6 million bits per second. Second, it could transmit pulses through a coaxial channel at 300 million bits a second and, if one went as high as a 20-unit coaxial cable, one could get up to a capacity of 3,000 million bits per second each way. Third, it could transmit 6,000 million bits per second each way through a two-inch wire guide by means of radio waves whose wavelength is measured in millimeters—the Maser principle. Finally, it could transmit 6,000 million bits per second by means of an orbital satellite. I should like to know what is the Post Office's thinking on these prospects.

I put it to the Postmaster-General that, if he wishes to think big and technologically ambitiously, let him think in terms of placing a satellite in synchronous orbit Over this country to combine a national television system which would be infinitely better in the long run than what we shall have to do on colour, and a new digital system. If the Post Office takes on that one, it will have its hands full without trying to embark on a full computer system, and it is in these terms that the Post Office should be thinking.

The right hon. Gentleman will be aware that the independent computer bureaux are very concerned at his declared intention to develop a full national service as quickly as possible. Because of his monopoly of the line, he has a giant's strength. Let him be cautious how he uses it, because he will recall what Shakespeare had to say on such matters: …It is excellent To have a giant's strength, but it is tyrannous To use it like a giant. If the right hon. Gentleman uses his monopoly strength like a giant, he will crush the private operator. Through his monopoly of the line, in effect he will nationalise the major computer services of the country. I have no doubt that he will protest his innocence of such black purposes, but I assure him that I am not inventing these fears. If he looks at the current number of Computer Weekly, he will find this comment upon his proposals of 6th April: …the retaining under Post Office control of inter-connected routes, however, will make it very difficult for any other network to be established economically. The Postmaster-General told us today that he does not want a monopoly, but there are strong monopolistic tendencies in what he proposes because of his monopoly of the line. He says that he wishes to offer this service on a wholly commercial basis, and we were delighted to hear that all users will pay the same rate, whether they are internal within the Post Office, Government Departments or private users. At some stage, I should like to go into that in more detail, because we know from our own business experience that the costing of products and services is not a simple matter of blacks and whites. Above all, in a capital intensive activity like this, the question of over how long and at what rate one depreciates one's investment can be all determining in one's charges.

Then there is the issue of small computers versus large ones. I do not want to go into that today, but I express a personal view that, for a large number of reasons, social as well as economic and technical, over the next few years we shall see a big increase in computer capacity through the purchase and use of small computers. I know that the Parliamentary Secretary wrote with great feeling about large computers before he went to his present office, but I have a sneaking feeling that it is the small computers which will appeal to organisations in this country.

The right hon. Gentleman mentioned the national shortage of computer staff. He said that he needs to recruit 100 a year. I assume that those will be systems analysts and not programmers and operators. I should like the Parliamentary Secretary to comment on the Post Office's needs for computing staff and whether they were taken into account when the Inter-departmental Working Group produced its Report earlier this year on Computer Education. I should tell the House that I have a good deal of evidence from outside that the premise upon which that Report was based underestimated the likely computer usage by 1970.

The authors of the Report were talking in terms of 3,000 computers by 1970. The figure which I have had quoted to me from the computer industry is at least 5,000. I am not in a position to know who is right but, clearly, if 5,000 is the right figure, there is a considerable underestimate in the number of systems designers, systems analysts, programmers and so forth whom we shall need. I should like the Parliamentary Secretary to tell us whether the Post Office's needs have been taken into account in that estimate.

I want now to make a brief mention of certain problems which will arise in the establishment of the proposed national service. I am sure that the House will agree that what the Postmaster-General is proposing will accelerate the introduction of a common interface in software. I agree with the view, as I am sure the Postmaster-General does, that the absence of such a standard has been an important factor in holding back the wider use of electronic data transmission in this country. Clearly, the standard adopted by the Post Office will have a determining influence in setting a standard for the country. I do not object to this in the least, provided the standard is set by the Government as a whole, and not simply by the Post Office acting on its own.

On many occasions I have declared my view that in this technological age the Government have a duty to act as an active catalyst to promote technological development, and part of that catalytic function is to lay down technical standards where appropriate. Therefore, I would encourage the Government to settle standards for a common interface for softwear, provided, first, that they are satisfied that the state of the art is sufficiently developed to allow such standards to be determined, and, secondly, that this is done in consultation with industry and operators outside. I invite the hon. Gentleman to comment on this.

I should also like the hon. Gentleman's assurance that in determining the standard the Postmaster-General and the Government will not be too xenophobic in their approach. Computer technology is international. The pace of development is set internationally, not nationally, and therefore I put it to the House that we must think internationally rather than nationally in setting our standards. Let the Government beware that in settling computer standards they do not determine that we should drive on the left of the road when the remainder of the world is driving on the right.

The same applies within that broad context to the question of computer language. As we know, a number of languages have been developed and are in present use, largely directed towards different user needs, scientific, commercial, and so on, and the stage has been reached when people are talking about a common language which is applicable to all the different usages.

We know that I.B.M. has produced a new language called P.L.1 which is held to meet the needs of all users. It is not for me to go into a long discussion of its merits or demerits, but rather again to ask the Government for an assurance that they will not reject it on xenophobic grounds, because my guess is that through the world power of I.B.M. it is likely, whether we want it or not, that P.L.1 will become the common computer language of the world. Therefore, in deciding which side of the road we are to drive on, let us determine that we drive on the same side of the road as the other major countries in the world.

My final point is that at the end of his speech the Postmaster-General made some reference to the problem of secrecy and confidentiality in such a system. I am glad he did, because this is going to be an increasing problem. One has to consider not only the question of secrecy, but the whole social consequences of the sort of system about which the right hon. Gentleman is talking.

In a recent article in the Scientific American the authors said: It is already apparent that, because such a system binds the members of a community more closely together, many of the problems will be ethical ones. The current problem of wire-tapping suggests the seriousness with which we must consider the security of a system that may hold in its mass memory detailed information on individuals and organisations. How will access to the utility be controlled? Who will regulate its use? To what ends will the system be devoted, and what safeguards can be devised to prevent its misuse? I think that the author has put the problem very clearly and succinctly. They are not in themselves reasons for opposing computer grids, but they are questions which must be answered. I hope that the right hon. Gentleman will allow us to share further in his thoughts on these matters, because they are real ones. I am not saying this in any partisan sense. People fear that computer grids, with very much larger units and systems, may lead to the establishment of "Big Brother". I am sure that the right hon. Gentleman realises this, and I assure him that these are real fears.

Mr. Edward Short

I do not think it is an exaggeration to say that this is one of the most important problems facing society today. I agree that there is a big ethical element in it. I would be happy to discuss this privately with the hon. Gentleman, and also for my officials to discuss it with him.

Mr. Price

I am most grateful to the right hon. Gentleman for that generous offer. In identifying these problems, I make it clear to the right hon. Gentleman and to the House that I do not think I have the answer to them. In this sphere it is much more sensible to have a public discussion on the basis of all acting through common ignorance, rather than from common deceit and thinking that because we have identified the problems we know the answers.

I apologise for detaining the House, hut this is an extremely important matter. I have a rather Irish feeling about the Bill. I am not opposed to it in the least—in fact I welcome the interest which the Postmaster-General is taking in computers—but I am unhappy about it be-because I have a large number of questions as yet unanswered.

11.16 a. m.

Mr. R. F. H. Dobson (Bristol, North-East)

It is a great pleasure to follow the hon. Member for Eastleigh (Mr. David Price). He made a very thoughtful speech, to which I am sure everyone listened with great interest. I thought that he emphasised very clearly the difficulties which he found in accepting the Bill. I want to take up one or two things that he said which seem to be central to his argument, because I think that we can dispense with them reasonably quickly, if that is acceptable to the hon. Gentleman.

First, he talked about the monopoly of the Post Office. I know that he was speaking particularly about the monopoly which the Post Office has of lines. Therefore, there arises the question of potential users getting into the system now proposed in the Bill. I think that this will be met by some of the things that my right hon. Friend said in reply to questions following his statement on 6th April.

In answer to a question which I asked about private bureau operators, my right hon. Friend said: 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."—[OFFICIAL REPORT, 6th April, 1967; Vol. 744, c. 468.] The significant point there is that my right hon. Friend is giving as clear an assurance as he can that he will make transmission lines available to private bureau operators, in addition to anybody else who wants to use the system as it is.

I thought that my right hon. Friend's statement was very clear on the issue of confidentiality, which the hon. Gentleman raised. We may not know the answer to some of the questions which the hon. Gentleman posed, but I think that the setting up of this system will give us more opportunities to see what can be done in the way of curtailing economic espionage than we have had up to now. This does not mean making use of the Post Office "Big Brother" technique, but merely fitting into the lines and at all levels in the system suitable devices which will make the system secure. This is a matter of technology. It is much easier to deal with than it has been in the past, with the existing system of dispersing information or trying not to disperse it between private companies whether large or small.

I think that the principal difficulty of the Post Office in going along the lines suggested by the hon. Gentleman is that of making use of the equipment in other fields to start with. The hon. Gentleman mentioned micro-electronics and the way in which telecommunications could be developed. The principal difficulty here is that supply from the contractors is very small indeed. As the hon. Gentleman may be aware, there are hundreds of contracts now outstanding on normal equipment to the Post Office on telecommunications matters. I think that the last figure was about 900. This is rather a lot. Let us make sure that our present contracts are fulfilled before we get into new ones. It is therefore sensible of the Postmaster-General to recognise that he has at present about 40 to 50 per cent. of surplus computer capacity he can offer to industry.

If we are trying to rearrange our economy and make management aware of new techniques, trying to do this not just for the big operators but also for the smaller operators and companies, whether they are working separately or in combination with others, now is the right time to offer this sort of system to people outside the Post Office, in addition to those in the Government Departments.

The hon. Member for Eastleigh put his finger on the point when he quoted from the Committee's Report in January about the need for a greater number of computers than we are likely to have available. Everything we can do to make computer time and the systems that go with it available to both large and small firms will be very welcome. The Bill is particularly useful for companies in rather isolated parts of the country, and I make this point particularly with the South-West in mind. The Post Office can offer the facilities from any part of the country. For example, to serve the West Country it does not have to put the computer centre in Bristol, although I plead that my right hon. Friend will consider that at some stage. He should not ignore the claims of Plymouth or Exeter, but the computers do not need to be in such places to get the maximum advantage from the Bill.

Mr. John H. Osborn (Sheffield, Hallam)

Would it not be possible to use the transmission facilities of the Post Office with independent computers as efficiently as—and perhaps more efficiently than—what is proposed, and meet the requirements which the hon. Member has outlined?

Mr. Dobson

I understand the hon. Gentleman's point, but I cannot agree with it. The question is whether we want to offer computer facilities to firms spread all over the country. If we do, and I am sure the hon. Gentleman agrees, we must then decide whether they should be under the control of the Post Office or under private control. There is room in the economy for both systems, and there is no intention in the Bill to take anything away from private enterprise. Private enterprise firms are working on a sharing basis in many cases. Firms can buy computer time and there is nothing to stop them doing so in the future. What is important is that we use spare capacity, and make it available to anybody who wants to use it.

I believe that within the Post Office there are people who could be trained for this new type of service as analysts, programmers, and so on. A few years ago there was a successful attempt to train as programmers and systems analysts in the Post Office people selected from a wide range of those in the service. I hope that the Postmaster-General will not turn away his mind from the possibility of doing that again. I understood him to say that he was considering recruitment from outside to supply 100 staff in the next five years. But I hope that he will carefully consider giving people in the service an opportunity to enter this new sphere. Many would welcome the opportunity to do so and could use their training and talents very well.

We should also be considering the type of computers we shall use. It was signicant and welcome to me that the Post Office not only has completely British computers but has ordered a complete bank of wholly British computers, and will have it in the near future. That shows that we are keeping up with technological needs in this country.

Mr. David Price

How would the hon. Gentleman define a British computer? I am absolutely delighted that the Post Office has been buying many of the English Electric System 4 computers, but there are those who would say that they are not entirely British. I think that the English Electric system is the one which we shall mainly use. The computers are principally manufactured and developed here, but there is an agreement with another company overseas.

Mr. Dobson

There is no doubt that that happens in other spheres—the motor industry comes to mind. The hon. Gentleman was right when he spoke about the international aspects of technology. It is an international need and will develop as time goes on. If we enter the Common Market, as I hope we shall, technology will play an important part.

One of the most important things we must determine is that the Post Office will not be a monopolistic user only, and will not have a monopoly in computer techniques. My right hon. Friend's speech made it clear that that will not happen. I am sure that hon. Gentlemen opposite, with their deep knowledge of the subject, will come to the same conclusion at the end of the debate.

I welcome the Bill. It has great facilities to offer for the management of quite small firms. The facilities the Post Office will offer will be very good and completely secure. They can be improved and developed as techniques improve and develop here and overseas. Nobody should fear the Bill.

11.28 a.m.

Mr. John H. Osborn (Sheffield, Hallam)

I have listened to the debate so far and heard my hon. Friend the Member for Eastleigh (Mr. David Price) refer to this as a mouse of a Bill. In course of time, when people look back they may see it to be an elephant. My hon. Friend spoke of the Bill as being modest. It is simple, with but 19 lines, and it proposes something constructive. The concept behind it is exciting but is, also, depressing to a degree.

I hope that hon. Members will excuse me if I have to leave the debate before the Minister winds up, as I have another engagement. That is the problem of morning sittings. Having given my apologies, I shall try to be brief.

My reactions to the Bill are those of a back bencher who has been faced first with the statement, then the Bill and now Second Reading. Something obviously needs to be done in this sphere, and the Government must be congratulated for that reason. The Postmaster-General has put his case in the statement and again today in a charming and perhaps disarming manner. We have wondered, and shall continue to wonder, whether he can comprehend the consequences of what he puts forward.

My first reaction is to make a plea to all who are interested in data processing and communications to consider what is being put before us and to give Parlia- ment their reactions before the Bill becomes law and it is too late. The Bill has far-reaching consequences, which we as a nation must study carefully. I am convinced that it places the Opposition in a very difficult position. I have been wondering whether to support or to oppose the Bill, because so many conflicting attitudes are expressed in it. That is why we on this side ought to be opposing the Bill outright. However, we try to be reasonable, and I am certainly trying to be so now.

Looking outside the House, computer manufacturers will obviously welcome the fact that the Government are to spend money in purchasing computers. This will mean more orders, so that their reaction will be positive. Looking further afield, the taxpayer has probably not thought about it. What we are doing is in strange contrast to the advice of the Chancellor to his back benchers last night, when he referred to growing public expenditure. It is very easy to spend someone else's money, and we have to ask how far we should permit the Post Office to spend money in this way.

I find it very strange that there was no reference to this in recent White Papers, Cmnd. 3233, Reorganisation of the Post Office, or in Cmnd. 3218, Post Office Prospects 1967–8. A White Paper outlining these proposals would have been helpful to the House and the country. What is lacking in the debate is a knowledge of the philosophy, the financial reasoning, the assessment of return of capital, and the full costs of what the Postmaster intends.

We have some background information. I have a note from Professor Gordon Black, of the National Computing Centre, who referred to a national study of a computer grid. That was a study, with no information on how such a grid would be implemented. Dr. John Laski, of the London School of Economics, in the New Scientist of September last, reported on computer grids and their operation in the United States, together with some of their limitations. When the Postmaster-General made his statement, an associate of mine, with the Bell Telephone Company, happened to be in the House. I was able to gain some first-hand impressions from him, but I have not had his reactions, or that of the Bell Telephone Company to this, and they would be valuable.

Mr. Dalyell

Referring to the interesting article of Dr. Laski in the British context, does not the hon. Gentleman see that there is no alternative to a national grid, such as suggested by my right hon. Friend? Surely the Bell Telephone Company context is entirely different, if only because of size?

Mr. Osborn

Bell have some experience in this field. I am not opposing the concept of a national grid system, which must obviously use the Post Office lines. This whole subject is one for specialists, but it is something that will affect the country. The difficulty is to make it possible to indicate to the people how they will be affected by it. This is one of those areas of activity which the country will have to continue to leave in the hands of experts. I believe that this activity would have been better carried out by the Post Office for local authorities, public bodies and the nationalised industries in the first instance. I also think that this is an area where the Government can have a co-ordinating influence in the matter of information abstraction, storage and retrieval.

The Parliamentary and Scientific Committee is undertaking a study on this subject of technical information, trying to discover what are the possibilities. I have been associated with that work. No conclusions have been reached as yet, but, obviously, the Postmaster-General's proposals will be studied by the Committee. The other area for using processing equipment of this type, information storage and retrieval is for current affairs, this would include statements to be made. This would be of direct concern to this House.

The Postmaster-General referred to the concept of the data bank and desk top computers. This is a concept that we must operate, and something that must come. The question is: how will it come? The right hon. Gentleman referred to the co-ordinated framework of a national computer grid. This must come to some extent, but to what extent is a question that must be given much wider study. We must not give the Postmaster-General a free hand without knowing what he is doing, and commenting on it.

The right hon. Gentleman also raised the question of confidentiality. I talked to a businessman and he said, "Of course, we will not let our information go to the Post Office Bureau"—he would not place his secrets there but for those who do, how can we guarantee that there will be confidentiality. The Post Office undoubtedly has a very fine reputation. I am convinced that the Postmaster-General was sincere when he stressed this confidentiality, but this is something which those affected will have to explore.

Mr. Dobson

Would not the hon. Gentleman agree that it would be technically easier to build complete secrecy into this new equipment and its use, whether on the line side or in the equipment, at all levels? It is possible to do this now with the present system of trying not to disperse information between companies.

Mr. Osborn

If we are confining this to computers, I could not give the answer, but it would be possible for someone who held the key, namely, the Post Office, to break this secrecy down. Proper answers must be given to these questions. I have tried to indicate that I am not an expert in this matter, along with many other hon. Members. These are simple questions to which we must have simple answers.

In his disarming way the Postmaster-General said that this was not to be a monopoly—the Post Office would do it with others. I fear that we might make the same mistakes as we did in the development of atomic energy. Undoubtedly, with hindsight the British solution immediately after the war was one giving us technical advance at a very rapid rate. But those connected with the Atomic Energy Authority, and those who have been on the Select Committee on Nationalised Industries, realise that it has left us with a legacy. We must consider what will be the outcome if this Bill is implemented. Despite the Postmaster-General's protestations, will there be unfair competition, not because he wishes it, or the Government wish it, but will there be such competition as to drive the present users of computers out of this activity? We must examine this question.

This is an enabling Measure about which we have far too little background. We could have had a White Paper dealing with it. It is something which should be looked at by the Select Committee on Science and Technology. It should have been studied in much greater detail before the right hon. Gentleman asked the House for the Bill. Because we have mixed feelings it is difficult to make informed comments. Engineering, said: Although Mr. Short assured M.P.s that the G.P O. did not intend to have a monopoly in data processing services, this could be the result whether it liked it or not. Engineering, had much more to say. This is the danger. Has Engineering, understated the danger? Are we giving the Postmaster-General a blank cheque which will make it difficult for others to compete?

I do not wish to bring the political side into the argument, but there is Clause 4, which is part of Socialist policy. It is mentioned in the manifestoes. The Joint Parliamentary Secretary has strong views on this matter which no doubt he will reiterate. But this is an extension of Clause 4. It involves the ownership not only of production, distribution and exchange, but of information. This could be an insidious threat. Obviously, the Postmaster-General and the Government do not intend that this should be the case, or, it they do, they have presented the matter in a very disarming and charming way which makes it difficult for the Opposition to oppose it.

We have spoken of the strength of monopolies. My view is that transmission and the extension of coaxial cables, and so on, is undoubtedly something which the Post Office should extend in the form of a grid. I am not sure that a large Government agency is the best body to provide a national data processing service. This is a matter which will have to be debated in the House and outside. The Post Office must decide what it is in business for, and the taxpayers will want the Opposition to ascertain that their money is being spent wisely.

Since the Bill has been rushed on us, I should have thought that the Opposition would have been well advised to oppose it. If we do not oppose it, we must have clarification in Standing Committee. If that clarification does not make the matter much clearer to me and to others, then I shall urge my right hon. and hon. Friends to vote against the Bill on Third Reading.

11.43 a.m.

Mr. Tam Dalyell (West Lothian)

At one stage in his speech, the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) said that he was being non-political. However, he made some fairly politically loaded statements. If one draws analogies from, perhaps, a certain disappointment in the performance of the Atomic Energy Authority, one should recognise that, as usual, there are two sides of the story. If the hon. Gentleman proposes to make that kind of point, I should have to draw attention to the disadvantages as well as the advantages of having three consortia instead of perhaps one design authority. Although this is perhaps relevant to the Bill, it should not take up too much time this morning, as there are others wishing to speak.

I am baffled by the Opposition's argument. They say that we should have a computer grid, but they do not tell us who would run it. I reiterate the point which I made in my intervention, that if there is to be any sort of meaningful computer grid in a country the size of Britain, it can be run only by the Post Office. American experience in these matters often is not relevant and sometimes is entirely misleading. This is an instance in which it is very misleading.

The hon. Member for Hallam referred to Professor Gordon Black and the National Computing Centre. I have not understood Professor Black to question what my right hon. Friend the Postmaster-General is doing. Perhaps my hon. Friend the Joint Parliamentary Secretary to the Ministry of Technology can give us any views available to him from the National Computing Centre on these matters.

My hon. Friend the Member for Bristol, North-East (Mr. Dobson) laid stress on the regional development aspects of what the Government are doing. I should have thought that this was one of the most important aspects of what the House is doing today. I hope that the Government will take every opportunity to bring to the attention of potential developers, be they in the constituency of my hon. Friend the Member for Bristol, North-East, Scotland or the north-east of England, where the constituency of the Postmaster-General is situated, the benefits which can accrue to them from the developments which we are discussing.

The Postmaster-General said that we should provide a data service to any customer with whom we can come to terms. I do not have many doubts that big business will take advantage of the facilities. I have some doubts whether relatively small and medium businesses will understand how they can benefit. I therefore ask the Parliamentary Secretary, as I asked in a supplementary question when the original statement was made, what action the Government are taking to educate small businesses about the benefits which can accrue to them from this kind of service. Will the Government take the initiative and perhaps circularise a vast number of firms? What action are his regional officers and those of the Ministry of Technology taking in this matter?

The Postmaster-General referred to the question of research and development, especially on relatively cheap machines which could be used on cash counters. Obviously, this is extremely important, not only for British industry, but in terms of potential exports. Where will this research and development be done? Is the Post Office sure that the best way to carry out the increasing amount of research and development which it is undertaking is in its own centres?

As one who is strongly in favour of either having research and development carried out inside manufacturing units, be they public industry or private industry, or, alternatively, in the universities, I would argue that there is a strong case for pursuing the principle already adopted by my right hon. Friend of giving sponsored research work to universities such as Essex. Some of us on this side of the House welcome very much what my right hon. Friend has done in promoting chairs and research work at one particular university. I hope that this can be extended. Perhaps the Parliamentary Secretary can indicate what his Ministry or the Post Office is doing in this respect.

I refer briefly to a recent visit which I made to the Institute of Computing Science in London. One of the projects in which the Institute was interested was the basic language machine. In an article in the New Scientist, on 29th September, 1966, Bryan Higman referred to the need for what he called the B.L.M.—the basic language machine. He wrote: The Ministry of Technology, through its advanced computer project, has given B.L.M. its blessing in the form of hard cash. The machine could not be in service in less than about five years, but even that might be timely enough for large-scale application in a national information utility. This is directly relevant to the subject of our debate. It is also relevant not least to my constituents, many of whom work in microcircuitry and electronic engineering, and will develop increasing markets with Europe. Should we go into the Common Market, this matter would become extremely important for areas such as mine, where we want an efficient language service.

I do not know whether I am asking too many questions of the Parliamentary Secretary. Perhaps he would write to me on the subject if it is unreasonable to ask for a detailed reply "off the cuff".

I welcome what the Postmaster-General said about computer to computer, and particularly the relation of accounts to the giro system. Whereas these matters are now heard today by about 10 Members of Parliament, they will be far more important to the future of the country than many of the things that are discussed in a full house. That goes for the data bank, too.

I am concerned about the training of the systems analysts. I understand that there are to be 100 a year, but I should have thought that there was some argument in favour of a crash programme. The Parliamentary Secretary may have something to say on the steps that the Government are taking to increase the training of systems analysts. He might also tell the House at what age and at what level he thinks this should be done. Is it a suitable basis on which to expand the activities of some of the regional technical colleges? If so, who is to take the initiative—is it to be the technical colleges themselves?

My hon. Friend might be able, also, to give more details—perhaps in a public statement of where the 20 centres are to be. Here, I express particular interest in what is to take place at Edinburgh. I agree with the Postmaster-General that this is not in any sense a marginal activity, and I am personally glad that the charges to public users will reflect a share of the total overheads. I should like every opportunity to be taken to make this attitude public, in case any misunderstandings arise. How will the present service be used by regional hospital boards? Perhaps we might have an explanation of the remark that there will be no interference with university computers—I should have thought that a link here would have been useful.

I am concerned about the impact of data processing on government. I should like to draw attention to some rather remarkable writing by James Robertson, both in "Occasional Papers", published by the Treasury yesterday, and in his evidence to the Fulton Committee, which I consider to be some of the most remarkable evidence given to that Committee yet published. Robertson argues in favour of a nation-wide system of medical records and the use of such systems for tax assessment. He then says: …Ministries like the Ministry of Technology and the Department of Education and Science will set up 'banks' of technical and scientific information, which it will be possible to consult through terminals in various parts of the country. Ministries like Technology and Overseas Development will use systems of this kind for analysing the research and development programme and the overseas aid programme. In his evidence to the Fulton Committee he draws attention to the whole impact of this development on British government. He says: In thinking about the work of government, and in analysing how it should be performed, we shall have to revert to the traditional concept…where the function of making decisions is distinguished from the supporting function of processing the information relevant to them, and where different responsibilities for making decisions are clearly defined—horizontally and vertically—in relation to one another. As I know that other hon. Members want to speak, I will not go through the whole of Robertson's evidence to the Fulton Committee, but perhaps my hon. Friend will write to me on the extremely important questions that Robertson raises in his evidence, particularly in pages 52.54 of that evidence.

11.54 a.m.

Mr. Ian Lloyd (Portsmouth, Langstone)

I should, first, declare an interest by stating that I am chairman of one of the few independent computer bureaux in this country. It has been in existence now for nearly five years, and has had a fairly considerable struggle to establish itself. I can, therefore, claim to have some modest experience of the type of problem which the computer bureau faces and which, undoubtedly, this very much larger Government installation will face on a much larger scale.

At one o'clock this morning, many of us were present in the House legislating in an atmosphere of much emotion in a field that we could not hope to control. This morning, by an interesting contrast, the House is in a quiet and well-tempered mood, legislating on a proposal that will have a far greater influence on the life of the country than almost anything that has gone through the House of Commons since I have been a Member of it, brief though that time may have been. It seems strange that, although possibly more interesting things have been done here, on a matter of such great national importance we should find present now perhaps 2 per cent. of hon. Members and perhaps 1 per cent. of members of the Press Gallery.

Some time ago, one of the national newspapers ran a competition for a headline that would take the place of honour in the world Press in the year 2000. The headline that won the competition was "Government Computer Resign". Today, we are in at the start of another headline, which might be "Government Computer is Born". Although I do not have the opportunity to give an unequivocal welcome to that birth, I must be unequivocal in welcoming what the Postmaster-General has said, that at least part of the birth will take place at Portsmouth.

In between those two headlines might we not have one reading "Government Computer is Unwell"? Probably not—the headline is more likely to read "Mass Redundancy of Private Computers". Although those computers will not walk the streets, perhaps we might explore whether the Government computer will have some sympathy for them in their predicament. That is an aspect I want to explore in some detail—

Sir Harmar Nicholls (Peterborough)

I am rather interested in my hon. Friend's concentration on headlines, but is he not aware that the only time these computers are likely to get a headline is when they are divorced, or something like that?

Mr. Lloyd

I am much obliged to my hon. Friend. I am sure that he is quite right.

I turn to the Postmaster-General's description of the uses of computers. OFFICIAL REPORT, in column 465. I am sure that no one on either side of the House would object to his aim of having 20 modern computers in use by 1971, but the problem goes much further, because the right hon. Gentleman went on to say that a market for some of the computer capacity will exist … especially among the smaller businesses and organisations which are unlikely to be able to justify computers of their own.—[OFFICIAL REPORT, 6th April, 1967; Vol. 744, c. 465.] It is clear from that statement that the Post Office will compete specifically and directly with private computer bureaux.

I am sure that the right hon. Gentleman was sincere in his intention, and in his statement that the competition will be on a "wholly commercial basis", but we must explore that statement in view of certain aspects in private computer bureaux that are closely connected with it. First, the business failure rate has been very high. Second, profits are extremely difficult to earn. Third, technological obsolescence is unequalled.

Perhaps I can illustrate that third point by showing this small object. As the House is nearly empty at the moment, I think that all hon. Members can see it. It is a small plastic block in which are encapsulated the types of circuit in use three or four years ago. On the other hand, I have here the type of thing now going into the modern computer. It consists of tiny silicone cells which I can hardly see. One cannot see the circuitry unless one uses a small microscope. What a pity it is that in this Chamber there is no visual aid mechanism by which every hon. Member could see this object—perhaps the Postmaster-General will give some thought to some such provision.

The fourth point is that there is no doubt that capital requirements are formidable. It is fair to say that over the last four or five years, with much encouragement by Governments on both sides, a very considerable amount of private capital has been invested. Much of it has been lost, but some of it is still there and has a right to at least fair-minded consideration by the Government in respect of this proposal. In this context, we are entitled to ask: will the Post Office bureau be a commercial entity which is completely separate from the Post Office?

Will its accounts be quite separate from the Post Office accounts? Will we know as much about it as we are entitled to know—the House is moving progressively forward in this field—about it or any other public or private company? Fourthly, will its staff be paid at commercial or Civil Service rates?

All these questions are fundamental to the balance of the relationship between the Post Office computer bureau and private computer bureaux. The Postmaster-General has stated that the basis of its operation rests largely on the intention to use surplus or unused capacity. In principle, this is an admirable idea, but what does it mean and imply? How is this surplus capacity to be priced? The Postmaster-General has said that the organisation will carry its full share of depreciation and overheads. He has also said that it will not get any business unless its charges are right.

I should like to explore the very real inconsistency between those two statements. Does the Postmaster-General know what percentage of computer business in the country has recovered full depreciation and overheads involved in the giving of this business? I do not know the figure, but I should guess that it is undoubtedly very small. What is the Post Office policy to be? Is it to meet the market price, which in my experience broadly speaking does not cover overheads and depreciation, or is it to set appropriate theoretical prices which will recover overheads and depreciation of Post Office computers and as a result get no business at all?

If the Post Office does the former, this theoretically raises the questions of subsidy, where is the subsidy to come from, and how are we to keep a proper check and control over it? We must face straight away the fact that at the moment in the conditions prevailing in this country as I know and understand them—and as far as I know conditions prevailing in the United States where there are over 30,000 computers in operation at the moment—being competitive in many senses means being uneconomic, certainly in the short-term and possibly in the immediate term. Obviously, in the long-term that is a situation which cannot endure. For reasons we know of in the aircraft industry and others it cannot be viable in the long run, but in the short-term this problem has to be faced.

The Postmaster-General talked about spending £9 million over the next five years. Is it necessary to spend this public money? If so, can we be told what proportion is to be spent on machines and what proportion on "software" or programming? This is one of the most important decisions which have to be made by the management of many private computer organisations. We are entitled to know what is the Government's thinking on the management of the national computing organisation which it is proposed to set up.

Already in the country there is considerable surplus capacity of machine time. It is very considerable, but there is no surplus capacity of programming. This is a problem of which I am sure the Postmaster-General is aware. There is a surplus of machine capacity and we should know the Government's thinking on the effect of this surplus capacity, not only on the economics of the State sector and the national computer industry, but of the whole computer industry of the country.

We should like to know how the Post Office proposes to deal with the question of time priorities among its customers. If there are two very important customers, one a private firm and one a Government Department and both want computer time on Friday afternoon because it is essential to their operations, how is the Post Office computer organisation to decide priorities in cases of that kind? I am not suggesting that I know the answer, but this is a problem where some thought should be given to the criteria and the House should be made aware of the Government's thinking on it.

A good deal has been said about the question of confidence. I do not think that there is any real dispute about the Government's intentions in this matter or the Post Office's intentions about its considerable record or about the very important area which has been uncovered on which there are no clear or foreseeable answers yet. I make this simple point. The Postmaster-General has said that the new organisation will work as much in the field of programming as in the field of computer time. This is very critical because good programming requires a considerable understanding of the structure of a business as well as the details.

Programmers who have access to structural information will have to know a great deal more than a tax inspector has ever known about the structure of an organisation, its markets and everything else. He will have to observe an ethical code comparable to that which the best industrial consultants or the banks now observe. Other Government Departments and other business computers must not benefit accidentally. We must have a very solemn and effective assurance from the Postmaster-General about this.

Finally, are the priorities right? I have a particular bee in my bonnet on this and I propose to take two or three minutes to indulge the attention of the House about it. I have spoken before about computer facilities for the House of Commons. It is fair to ask, should not the Post Office he considering, in conjunction with the Treasury, the Department of Economic Affairs and all Government Departments receiving economic data, supplying or creating within the Palace of Westminster the necessary machinery data—processing computing facilities required to achieve a real-time presentation of national economic data for the use of Members of both Houses of Parliament.

This should be such a high priority required from our national thinking that I would be prepared to give a much fairer wind to any Post Office proposals which claim to be considering the national interest if I knew that in the list of its priorities the House of Commons was in the position it ought to hold.

I hope that the Parliamentary Secretary, who, I suspect, sympathises with this suggestion, will say something about it. This is the touchstone of any Government's respect for the House of Commons. I hope that in the near foreseeable future the Government will give an indication of how seriously they take this task. If we are to govern this country and it is to be a computerised country, numerous people in the position of decision making throughout the land will have access to more information than we have, or at least a comparable amount of information, and the far-reaching effects of that cannot be taken too seriously.

12.8 p.m.

Mr. John Biffen (Oswestry)

I wish to make my remarks under four headings: first, whether we want the Bill at all; secondly, whether we want it at this point of time; thirdly, some remarks about staff; and, fourthly, I want to touch on points about confidentiality which have been referred to by my hon. Friend the Member for Portsmouth, Langstone (Mr. Ian Lloyd).

Any Tory speaking on this subject ought to move with wariness, conscious of the absent-mindedness of Disraeli whose views on telegraphy resulted in it being instituted as a nationalised service. I think there is a danger that we might regard this morning's proceedings as of a substantial but relatively uncontentious nature, and, therefore, proceeds on its way. In a few years' time we will discover that this morning's proceedings were of far greater significance than anyone had really had time to assess during the short period in which we were able to consider the Bill.

The right hon. Gentleman said that this was fulfilling one of the Government's election pledges. That does not immediately suggest to me that it is therefore non-controversial. It might be, but I would have thought that there was at least a case for thinking that it might not be.

Mr. Edward Short

Modernising the economy.

Mr. Biffen

Modernising the economy is a sedentary slogan which falls from the lips as easily as anything. I remember the Prime Minister, when he was Leader of the Opposition, saying that if there had not been a case for Socialism, automation created that case. It is easy enough to try to fudge the political implications of so many of one's decisions and to say that this is a highly complex and technically significant subject and therefore we will remove it from party controversy and slip it in on a Wednesday morning and hope to get the whole beastly business through in one go.

But I wonder why something of this significance has not been the subject of a White Paper and of discussion by the Committee on Science and Technology. One would have thought that this was an issue which was pre-eminently suitable for a degree of public discussion before it was brought to the Floor of the House, where, ultimately, as we are seeing this morning, all final political decisions have to be taken.

My answer to the first question—do we want this Bill at all, do we have to have a national computer grid under the control of the Post Office?—is that I do not know. I do not feel that I have had the opportunity to appraise a good deal of the comment which I think I might otherwise have had had there been a longer time lag between the publication of the Bill and the Second Reading.

From information that I have, I understand that the Joint Parliamentary Secretary to the Ministry of Technology is seeing the banks, hoping, as I understand it, that they will be encouraged to move in with this major development. I feel that the discussions which he is having, or hopes to have, privately with the banks raise the kind of issues which could well have been given a public airing before the Bill was given a Second Reading.

After all, when the Bill was published, it was possible to hold the view that it was a Measure to enable the Post Office to use up spare time on the computers which it hoped to secure for its giro system. I think that this was very much in the mind of my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) when he asked his Question, but there can be no doubt after this morning that what the Postmaster-General seeks is something far wider.

The right hon. Gentleman called it "a simple enabling Bill", but he went on to say that "it would enable the Post Office to undertake any data processing service with a customer with whom we can come to terms". This has immense implications, and these have been the subject of some very interesting speeches this morning. I hardly think that they fall in the category of being non-contentious, or of secondary importance, which I always understood governed our proceedings on morning sittings.

There is one other point on which I should like to touch. It was referred to by my hon. Friend the Member for Portsmouth, Langstone and my hon. Friend the Member for Eastleigh (Mr. David Price), and this is how one can check overheads and make sure that the competition which is to be offered by this nationalised computer service will be fair to the private sector. This is an immensely difficult question to answer. It is much easier to throw down the challenge than it is to answer, because the whole question of checking overheads with a highly complex form of intensive capital investment is one which I would have thought would have put us all in some difficulty in knowing whether we were getting the right answer.

We do, however, know some of the pressures and traditions under which we will be operating, and perhaps I might deal first with the traditions. For reasons perhaps of historical accident, the Post Office has over the years tended to lose money on second-class inland mail and parcel post, both services which are used substantially by business. It has tended to do rather better out of its services to the public, but in the service offered to businesses there has been an element of subsidy. I always thought that the mail order companies did rather well out of this, but this is just a side illustration.

We know, too, that there is a widespread assumption that what industry needs today is to make far greater use of competing techniques. I have some doubt about this. The hon. Member for Bristol, North-East (Mr. Dobson) mentioned this, and he was not alone. Many would say that what we need in British industry today is greater emphasis on the use of all the modern technological services which might be made available.

I shall, therefore, not be surprised if the climate under which the Post Office will be operating over the next few years is that it is to some extent providing a national service if it offers a hidden subsidy in the provision of computer services. I hope that the right hon. Gentleman will not for a moment think that I am casting any doubt on the good faith in which these assurances are given, but my instinct tells me that pressures are bound to be developed which say that if one cannot load the machines there is a good case for trying to improve the general tone of British industry by offering the services at below true cost.

Mr. Dobson

If the Post Office gives a service at very much below what the hon. Gentleman thinks is a fair cost, what disadvantage is that, first, to firms taking advantage of it, and, secondly, to the economy of the country in general?

Mr. Biffen

I hope that I shall not be diverted too far in answering the hon. Gentleman. I think that it would be a misuse of the resources if one were subsidising and concealing the true cost. This could have consequential distorting effects on the economy.

My second observation on the hon. Gentleman's intervention is that he has illustrated the attitude of mind which I am saying might exist, because the situation to which he has referred is a situation which his right hon. Friend says will not arise. Already there is an hon. Gentleman opposite who says that even if it does arise there are very good reasons why one should consider the propositions which have been put from the Front Bench.

Mr. Dobson

It was the hon. Gentleman who raised the matter. He accepted what my right hon. Friend said, and then raised the hypothetical point in respect of which I asked a question, which the hon. Gentleman has not answered.

Mr. Biffen

We could obviously continue this discussion for some time and that might somewhat squeeze the debate, but I think that the way in which the hon. Member reacted to my observation lends point to my suspicion. We will have to leave it at that. I am sorry that I do not satisfy him that offering subsidised services has the effect of distorting the economy in a way which in the long run is harmful. This is something which we could argue endlessly. I think that one should try to assess a proper and fair cost. If anything, we suffer from a kind of obsession with the prestigious kind of investment and I regard computers as possibly coming into that category, and I am not alone in that view.

Sir Harmar Nicholls

If there were excess capacity, as my hon. Friend has suggested there might be, and if it was operated at below cost because it was subsidised, would not that mean that we were not fully and economically using the capacity already available, and would not that mean that nationally we were not using the whole of our capacity? Is it not one of our major problems in the economy today that we are not working to the full some of the very expensive machines which we have in our factories?

Mr. Biffen

My hon. Friend is absolutely right. The difficulties relate not to the total quantum of investment, but to the lack of profitable use of existing investment.

Secondly, do we want the Bill now? There are very strong reasons for questioning how the Bill fits the Chancellor's announcement last night, apparently made to a private meeting—that the Government are anxious to curtail public expenditure. We have been given the figure of £9 million. I should like to know how that is to be divided, not merely as between machines and software, but how much is to cover the salaries of those who are to carry out the service. Are we to understand that that figure excludes the 20 large computers which the Post Office hopes to have in service by 1971 and whose cost must appear in the Ministry's capital expenditure programmes between now and 1971? In the Postmaster-General's own words, these are very expensive and powerful machines. The House would considerably benefit from having further information on that matter.

There is, thirdly, the question of the staff. I have considerable doubts about whether the Government can recruit the staff required, unless they take a rather different attitude to these people than they have been taking to some of their other technically qualified staff. We have already had evidence made available to the House by the Public Accounts Committee to show what difficulty there is in recruiting technical cost officers to the Ministry of Aviation.

Evidence has been submitted to the Estimates Committee by the National Board for Prices and Incomes of its great difficulty in recruiting accountants. Are we to understand that in this case the Government will be paying the market rate for these people, a rate unrelated to any Civil Service pay scales? I believe that this is the policy which they have adopted at the National Computing Centre, but I should like confirmation of that. Is it their view that that policy should be extended to Post Office data processing activities? If so, how will those rates be related to the pay structure of others employed in the Post Office?

My fourth question concerns confidentiality. No one for a moment doubts that it will be the objective of the Post Office to treat this information with the utmost confidence. Not one hon. Member believes that there will be scope for any bribery of Post Office employees to make available any information which they may be handling. That is not the issue. The issue is that once a growing Government share in this kind of data transmitting is encouraged, companies come under increasing pressure to make the information available to the Government, as part of their national duty even if not as a statutory requirement. Yesterday we had the matter of Stencil No. 85 when the Inland Revenue had asked for information for which there was no statutory requirement whatever.

Incidents like that cannot but leave behind certain doubts. Once companies are committed to transmitting vital information, information on which vital decisions are to be taken and concerning investment, pricing policy and a whole range of top management decisions, they will come under increasing pressure from the Government machine to make that information available as part of their general co-operation with the whole business of Government.

Any business man who has any doubts or qualms about what I have said need only read the Fabian pamphlet by the Joint Parliamentary Secretary to the Ministry of Technology who sees the development of the computer grid system and the greater use by companies of computerised records as the means whereby the Government can take much more detailed regulatory control over the economy. The hon. Gentleman said in that pamphlet that the unit of decision taking was the company and not the industry. Once we have a growing computer service of this kind, a public authority will have all kinds of information in its hands, information on which individual company management decisions will be taken the details of which would be much desired by a party committed to national planning.

Mr. Edward Short

I hope that the hon. Gentleman will not overlook the fact that the Post Office is to become an independent corporation in the spring of 1969.

Mr. Biffen

I certainly took that into account when forming this view. That does not mean that I think that it will not be subject to the kind of pressures which rightly give rise to this anxiety.

It is in these terms that one has to have considerable doubt about the long-term consequences for the freedom of free enterprise should this kind of development go forward without much greater scrutiny than we are giving it on this occasion.

12.27 p.m.

Sir Harmar Nicholls (Peterborough)

As one would expect, most of the points which I had hoped to put to the right hon. Gentleman have been made. It is only right that we should ask many questions at this stage, because there has not been much time between publishing the Bill and this debate. As the Bill goes merrily on its way, we shall require answers in greater detail than would have been the case if we had had a White Paper and more time. No doubt the right hon. Gentleman and the Parliamentary Secretary will try to meet us on that issue.

I join with those who have asked whether this is intended to be a permanently subsidised service. Will it be run as a completely separate organisation, or will it be merged with other parts of the existing Post Office set-up? Will the wage rates be commercial, or Civil Service wage rates?

I know that this new service will be capable of examination by Select Committee, but will it be capable of being the subject of Questions in the House? The Post Office is to be an outside organisation later, as the right hon. Gentleman has just reminded us. Will a Select Committee be the only way in which to keep "tabs" on this new service, or shall we be able to put Parliamentary Questions, which are very valuable, especially for a new service which is just beginning and which help to reinforce Parliament's control?

How much of the £9 million is to be capital expenditure? How much shall we be able to see for our money and how much will be spent on building up the service and other things which have no tangible value? Has there been an examination of the demand and of the potential market to justify setting up the service? Are the right hon. Gentleman and his colleagues absolutely satisfied that we shall not have excess capacity which cannot be used?

I was always impressed with the late Aneurin Bevan's views about this. He felt very strongly that excess capacity with technical machine tools—

It being half-past Twelve, the debate stood adjourned.

Debate to be resumed Tomorrow.