HC Deb 04 July 1967 vol 749 cc1689-97
Sir H. Legge-Bourke

I beg to move Amendment No. 2, in page 1, line 12, at the end to insert: (2) After subsection (3) of section 1 of the said Act of 1961 there shall be inserted the following new subsection:— '(3A) In determining the priority to be given to payments out of the Fund as between sums to be paid in or in connection with the provision to other persons of services and facilities for the communication or transmission of data for processing by computer and the provision by him of services and facilities for such processing, the Postmaster General shall give an absolute priority to the first and shall not make any payments in or in connection with the exercise of his functions in relation to the second unless and until such provision has been made for the first as is sufficient to meet all the reasonable requirements of persons providing services and facilities for such processing'. The object of the Amendment is to stress that the real duty of the Post Office in respect of data processing is to provide the lines of communications required by those who cannot provide the service by themselves. That is the first obligation, flowing from the whole nature of the Post Office as we know it today. We are trying to provide a priority in the exercise of the powers which the Postmaster-General is seeking under the Bill.

Here again, the argument has already been made upstairs, and I do not want to repeat it, but the more the Postmaster-General looks into the matter the more he will realise that with the vigour that he now exercises throughout the computer industry the demand, as a result of private enterprise—both British and foreign—will be for more lines of communication to be provided by the Post Office. We do not want to see the Postmaster-General using the Bill as a means of borrowing further funds under the 1961 Act and using them for a purpose which could probably often be better served by private enterprise.

The Postmaster-General has satisfied me, at least, that the principal reason for introducing the Bill was not—as I feared when he made his first announcement—simply that he had over-invested in capital outlay and was finding it difficult to make that capital bring in a return.

The right hon. Gentleman has satisfied me that that was not the principal object. Nevertheless, he ought not to use this service to try to elbow out of the way private firms, very often with consideraable British investment, which are providing first-class employment, often under better conditions than prevail in many other places. They ought not to be elbowed out of the way with the somewhat monopolistic rights that the Post Office inevitably has, when these enterprises are providing the sort of employment and good remuneration that I have spoken of, and when they require the assistance of the Post Office in providing the line of communications that he regards as his first obligation.

Nor do we feel it right to allow this data processing service to diminish, in the Postmaster-General's mind, the need for him to press on with telecommunications and the ordinary work of the Post Office. I believe that his heart is in the right place. All that we are trying to do is to give him the fortifications, by writing something into the Bill to entitle him to do this, and be proud of doing it.

9.30 p.m.

Mr. Webster

I agree with my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke), who seems to have read the OFFICIAL REPORT of the whole of this excellent Standing Committee. The purpose that we think the Post Office should carry out, which this Amendment seeks to carry out, is the provision of the line. It is something about which I have spoken in Committee and I do not intend to go any further now. My feeling is that the Post Office, with its tremendous increase in its borrowing powers, is failing to provide the necessary line.

It is far too dramatic to say "failing" but if one goes from a waiting list of 440,000 telephones in 1949, to 40,000 in 1964 and then it more than doubles to over 96,000 last year, it would appear that the line is not being made. The Post Office should make this its special function. There is great extra borrowing power, but it does not appear to be used for this purpose.

We want to get the Post Office to concentrate on this part of its activities. It has to be faced that one is always suspicious of Government Departments. It is about the healthiest reaction possible. There is a suspicion that this investment has resulted in excess capacity in the Post Office. It is impossible to have a capital investment without, at some stage, having excess capacity but people are very reluctant to express this suspicion in public. My hon. Friend said that he never thought that there was any such excess capacity, or at least if there was he did not think that the Postmaster-General was conniving at it.

I accept that it is not being connived at, but with the best will, and the best management in the world, it is quite impossible not to have either excess capacity or surplus capacity. If one has neither, one is in the perfect dream world of Mr. Micawber, when something will happen tomorrow.

Sir H. Legge-Bourke

I was not suggesting that there was not excess capacity. I was simply saying that I am now satisfied that the Postmaster-General is not seeking to introduce the Bill solely because he has over-capitalised.

Mr. Webster

I accept that. But there is always this suspicion. If there is massive investment and massive capital equipment, one is not likely to get a reasonable factor of use in the first year of the equipment. In some cases there will be excess capacity and in some cases not enough capacity.

Take the example where massive investment and tremendous borrowing powers have not been adapted to providing a line for these purposes. A computer bureau or a series of banks in a consortium or a series of industrial companies or one big industrial company may have a computer and wish to set up a line from the computer to the terminal points in various parts of the organisation. The Post Office may say, "We are very sorry, but there is no line available for 12 months or 18 months." The reason for that is that the second part of the Clause has not been carried out by the Post Office— until such provision has been made for the first as is sufficient to meet all the reasonable requirements of persons providing services and facilities for such processing". This can be deliberate, or through mismanagement or misadventure. A big bank or a group of banks or a bureau seek to bring this service into action, go to the Post Office and ask for the line. The Post Office reply, "We will look into it." Later, they say, "We are sorry, but we cannot give you a link for 12 months or 18 months." As a consequence, there is frustration because of mismanagement, because money has not been used on the provision of the line. This may be due to mismanagement or to sinister causes, although I certainly do not impute any sinister reasons to the right hon. Gentleman, or it may be due to inadequacy of forecasting requirements.

In other circumstances, the Post Office may say, "There is excess capacity in this region and we can provide the service ourselves." As a result, the private bureau is driven out of business. This is what we seek to guard against—the non-allocation of finance to the service which the Post Office should be providing, which is the common carrier service of those who are seeking to use it as their customers.

Again, there may be bad buying procedures or inadequate manufacturing capacity. The Post Office may be asked by a computer bureau or firm to join the link. The firm may ask for coaxial cable. The cost has been quoted to me as between £1,000 a mile and £3,000 a mile. Unless he has very substantial reserves behind him, nobody can compete. He cannot accept those terms, and he is unable to go into business. That is because the Post Office is failing in its function economically to provide the line. If there is surplus capacity, as we have said, the Post Office can say, "We can provide the service through the data processing".

In this case, it is falling down on its basic function as a nationalised industry which we all respect—the function of providing the line and the communication between the centres where the information is being provided. We appreciate that the Postmaster-General is a highly reasonable man. We hope that he will accept this as a right and proper function for the Post Office in the modern technological society.

My hon. Friend the Member for Weston-super-Mare (Mr. Webster) has put the argument extremely well because this Amendment deals with priorities, rather than an Amendment which was not called in Committee and has not been called on Report defining exactly what the Post Office should and should not do. Throughout the Standing Committees debates and on Second Reading we on this side felt that the Post Office should decide what it was in business to do, and then make quite certain it did it well. If the Post Office does too much—and this is a lesson from private industry—it will find itself doing too many things, and not doing one activity well. It might have every success in other fields, but fall down on newer activities in data transmission and the consultancy service.

This Amendment deals with priorities. If we cannot limit the Post Office to doing what it ought to do, we must ask what its priorities are. The Amendment asks the Post Office to make quite certain that it provides a transmission link, whether by live coaxial cable of by microwave. My hon. Friend outlined various examples of the way in which the Post Office, which is running with the hares and hunting with the hounds in providing a service for its competitors, will inevitably be in a position of advantage.

If the Post Office has its own computers in one town and terminal links in another, it will make quite certain that they are connected properly, and at an early date. If it is a question of giving a faster line to take several thousand bits per second, as the expression is, as against 1,000 or 2,000 on conventional lines, will it not give the faster line to its own data computer advisory service? If that does not happen, I will be most surprised.

The Postmaster-General will not make the decision. The Post Officials themselves, the Post Office staff running the data processing services or the advisory service will say, "We have the computers and we have the terminal equipment. We now want these connected with the best lines giving the fastest and most reliable service." In that way, inevitably, the Post Office, providing an advisory service, will favour its own service rather than that of its customers, who are also its competitors.

It is therefore reasonable in this Amendment to stress the need for giving priority to this activity in which the Post Office ought to engage in order to ensure that all users of data processing equipment and all those who will use data transmission shall have the best facilities available, and shall not play second fiddle to the Post Office and its own data computer advisory service.

Mr. Webster

Does my hon. Friend consider that the modulator-demodulator should come within the mandatory right of the Post Office, or that bureaux could supply this modulator-demodulator terminal equipment?

Mr. J. H. Osborn

Terminal equipment is another problem altogether, but it is essential that the terminal equipment, where it is available, should be provided by the bureaux, and that they should be allowed to do this.

I hope that the Postmaster-General will refer to priorities in supplying terminal equipment. He referred to them in the Standing Committee, but will he make quite certain in his review that if outside agencies wish to provide their own terminal equipment—within the specification, of course, laid down by the Post Office—that will be possible? And will the right hon. Gentleman reaffirm the assurances he gave in Standing Committee?

9.45 p.m.

Mr. Edward Short

I hope that hon. Members who support and have spoken to this Amendment will realise that it could prevent the data processing services from operating. That would be the consequence of passing the Amendment; that is what it amounts to. Suppose that a private bureau in the west of England were to ask for a Post Office circuit between two towns and could not have it for several weeks, the whole Post Office processing service would as a mater of law have to stop operating until that circuit had been supplied. If this occurred, and it could, no customer anywhere would entrust his business to the Post Office knowing that at any moment it might become illegal for the Post Office to serve him.

We have to be fair to the Post Office as well as to private bureaux. While I am bound to oppose the Amendment because clearly it would defeat the whole object of the Bill, I understand the idea behind it and I realise the fear behind it. It is one of the three or four major fears which have arisen throughout discussion of the Bill, a fear that the Post Office should embark on a new activity while it cannot meet every reasonable demand on its present services. There would be very little progress if we always waited for perfection in one thing before we ever started another, in the Post Office or in life generally.

But there are, I think, two valid and relevant assurances that I can give the House to help to allay this fear. The first is that I have no intention whatever of allowing a data processing service to flourish to the detriment of the other Post Office services. The telecommunications service, which is the one mainly at issue here, is steadily growing and we move closer and closer to the time when every standard facility will be available on demand. A data processing service will not interrupt this process. The second point, and I can say this very emphatically indeed, is that no steps will ever be taken in the Post Office to impede in any way the facilities needed by data processing bureaux that are in competition with us.

These, I think, are the only ways in which I can assuage fears which I know to be real. For the rest, if the House were persuaded that the Post Office ought not to run a data processing service in the neat future, the remedy would be to reject the Bill, but the House has already agreed on Second Reading to the principle of the G.P.O providing this service. Because of that I could not at this stage ask the House to approve the Bill with a Clause which would prevent the service from operating.

Mr. David Price

I am sure my hon. Friends are grateful to the Postmaster-General for the assurances he has given. They go a long way to deal with the proper fears some of my hon. Friends have had. I make this final point at this stage. This is not only a matter of considering the availability of lines at this moment but of looking to the future. I should like to talk with the Postmaster-General some time about the whole problem of microwaves, how he feels minded to deal with this subject and whether he feels that this is something on which he will have a complete monopoly or deal with it slightly differently by being the licensing authority and allocating what he needs for his own service and what might be available to other people. This raises the whole question of a firm such as Extel and where it fits in.

All the information I have is that within what we call a real time network, in both the capital costs and the operating costs of such network—this will be done under the Bill by the Post Office and people outside—the proportionate cost of the transmission on the communications side is a great deal higher than it has been hitherto in simple E.D.P. services. The information that I am getting from the United States shows that where a real time network has developed and where the geographical points are farther apart, the proportionate costs of transmission go up substantially. I know of a case where 50 per cent. of the cost results from running a real time network.

With those thoughts, and thanking the Postmaster-General—

Mr. Edward Short

Before the hon. Gentleman resumes his seat, may I say that I shall be very happy to arrange these discussions. We still have to have some discussions on confidentiality with my officials, so that I shall be very happy to arrange this.

Mr. David Price

I am grateful to the Postmaster-General for that. In view of his undertaking, I beg to ask leave to withdraw the Amendment.

Mr. Speaker

Order. It is not for the hon. Gentleman to seek leave to withdraw. It is for his hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke), who will probably take the hint.

Sir H. Legge-Bourke

In view of the glorious unanimity of the House, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.