POST OFFICE

HC Deb 22 March 1967 vol 743 cc1625-42

Order read for resuming adjourned debate on Question [15th March]: That the Postmaster General be authorised, as provided for in section 5 of the Post Office Act 1961, to make payments out of the Post Office Fund in the financial year ending with the 31st March, 1968.—[Mr. Edward Short.]

Question again proposed.

10.5 a.m.

Miss J. M. Quennell (Petersfield)

The weekly stories which I read as a child inevitably concluded at the most exciting point with the phrase in italics "to be continued next week", but I cannot pretend that my speech was amputated at its most exciting point. I would refresh the Assistant Postmaster-General's memory on the main points which I was putting.

First, I reminded the House that the Report was nearly a year out of date and pointed out our difficulty in that, although we could consider Post Office affairs, where they impinged on and were affected by British Railways, we could not summon the Chairman of the Railways Board to explain why the trains on which the Post Office relied were late.

Secondly, I talked of the training of Post Office staff, which is very important. In the coming few years the Post Office service, no matter what shape the Post Office takes, will be competing with an electronically developing industry for men of the desired qualifications. Thirdly, I tried to draw attention to the Post Office's difficulty in assessing in advance movements of population. I reminded the hon. Gentleman that there had been in existence some rudimentary form of liaison between planning authorities and the Post Office, which was clearly not working satisfactorily.

It might be worth while considering establishing this on some other basis. The Post Office might consider the feasibility study prepared by Professor Buchanan for development on the Solent, which envisages an increase in population of about 500,000 people in a greatly enlarged town. Although the demand for telephones in that area of Southampton may be of the order of hundreds at the moment, it will be hundreds of thousands if this develops. This exercise could be useful as a pilot study in assessing movements of population.

I also asked whether the Post Office or the Ministry of Defence would be responsible for the additional demand on telecommunications with the repatriation to this country of large numbers of troops under the Defence White Paper. Finally, I was cut off in mid-breath while talking of postwomen.

So much for the items which are detectable in the Report. Since this Report was published, the Select Committee on Nationalised Industries has published its Report, in which some of the queries which I have raised are mentioned. It may be that we shall be debating that Report, and I do not want to be out of order by anticipating that debate, but there are references to postwomen in that Report which are very serious and require a great deal of consideration. In the same way, there are references to British Railways. They, too, are very serious and require consideration by the Post Office.

On the subject of training, in the appropriate paragraph there is a reference to about 600 places being available to the Post Office in its own training establishment. There is no indication of the nature of those places. It does not say, for example, whether people are given sandwich courses, initial training or retraining.

Again, I do not anticipate any future debate, but I should like to comment on Chapter V, which is concerned with the Post Office Users' Council. This is the germ of an excellent idea. It is referred to in the White Paper on the Reorganisation of the Post Office, published only yesterday, which envisages its development. No doubt we shall be debating that at a later stage, but the Post Office Users' Council is something which, in the coming years, should be encouraged and developed to the maximum extent. Below the national level, I should have thought that local Post Office advisory committees should also be encouraged in the coming years. The success of the Users' Council is a measure of the chances of eventual success in establishing a really effective body of users' consultative organisations when the Post Office is reorganised.

The importance of the Post Office lies in the fact that it is one of the rare Departments which every man and woman and practically every child comes to use in a way in which no other Government Department is used. Everyone has views about its efficiency or inefficiency, how it could be improved and how its services could be more useful to the public. There is a great public interest in the Post Office, and basically it has to be remembered that it has a much more human association than practically any other Government Department. At one stage, it is reaching for the stars. At another, it is coming into contact with people all over the country daily, and it always will.

10.14 a.m.

Sir John Gilmour (Fife, East)

When the debate opened, a week ago, the Postmaster-General referred particularly to the fact that in rural areas postal charges hardly cover costs. In reply, I would say that, in rural districts, we get only about a quarter of the service which so many other parts of the country receive. I walked down Sloane Street this morning and, in a fairly short distance, I passed three or four pillar boxes which are emptied ten times a day. In the rural areas, there is one delivery a day. Having received a letter, if one wishes to reply, one has to wait until the next day before there is any opportunity to post a letter.

It was an unfortunate remark for the Postmaster-General to have made. The demands which rural services make on the Post Office are less than the high-cost operations in residential districts of London of emptying pillar boxes ten times a day.

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

Is the hon. Gentleman aware that in some cases it costs 1s. 6d. to deliver a letter to a rural area, whereas it costs less than 4d. in an urban area?

Sir J. Gilmour

One can easily find examples. In Banffshire, for example, there are cases where a postman may travel 10 miles up a road to make one postal delivery. In such a case, costs must be very high. On the other hand, when one considers the facilities provided for the towns, the service provided to rural areas is poor.

In my part of Scotland, a postman delivers the mail and, half an hour later, he returns to collect letters from the local pillar box, to which one may have to go two or three miles. Someone like a farmer who is out during the day has no opportunities to post a reply to any letter which he receives until the next day. That is something which should be borne in mind.

My hon. Friend the Member for Howden (Mr. Bryan) mentioned last week the running of the railways and its effect on the Post Office. When one travels from Scotland and sees mail being unloaded at King's Cross station, it is apparent that it is still being handled in the same way as it was 50, 60 or 70 years ago. Increased postal charges are imposed when we have a worse service and see no efforts being made to mechanise the handling of mail in a big centre like King's Cross station. One feels that the reason why costs are rising is because the fundamental problem of mechanising the handling of mail in the big centres is not being tackled as energetically as it should be.

Yesterday, I had the experience of getting on a bus which goes from Dundee to Turnhouse to connect with the plane to London. A 32-seater bus was provided for two passengers. Is any attempt made by the Post Office to use this service 'to get mail from Dundee on to a plane and so deliver it to London in a shorter time?

During the past few weeks, I have had a good deal of correspondence with the Postmaster-General about decreased service all over the country, caused particularly by the closing of post offices in the lunch hour. From many burghs in my part of Scotland, I receive complaints that services are not available to people in the middle of the day when they have time off.

Recently, I wrote to the Postmaster-General explaining that many people leave home before their local post offices are open. If they are unable to get to a post office during the lunch break, by the time they return home their local offices are closed again. In the case of single people living on their own who have no one to do errands for them, that can be a real hardship.

The Postmaster-General is always courteous in his replies, and in this case he said: Most of these people work in the larger towns where post offices do not close at lunchtime and they should, therefore, have no difficulty.… He can have no knowledge of conditions in my part of Scotland, where people from small villages travel 15 to 20 miles to work in the county town, where the post office closes in the middle of the day. By the time they get home again at night, their local offices are closed. Fortunately, those sub-postmasters who run post offices in connection with their own businesses do not think highly of the Postmaster-General's order to close in the middle of the day. Many of them remain open and provide a service.

What many of my constituents complain about is that postal charges have gone up when the service which they receive has gone down. There is a proposal in my part of the world to close down the Crown office in Leven and substitute it with a sub-post office. At the same time, when I write to the Postmaster-General to ask for sub-post offices to be kept open and for others to be reopened, the reply I receive is that this is too expensive and, therefore, people must travel to the main centres to get postal facilities. As a result, the public have a real grouse about postal services.

I have not yet had time to study fully the White Paper published yesterday, but I had noticed the large headline in page 6: Safeguards for The Users. It states: The Bill will require the Corporation to consult the Council about ail major proposals affecting its main services, in so far as these affect users. I very much hope that the Post Office's present actions can be examined.

While postal services from country districts to centres of population are fairly good, the inter-rural services are far from effective. I had a very good illustration of this the other day. On Sunday, 12th February, I posted a Valentine card, hoping that it would be delivered to my wife on St. Valentine's Day. The card did not arrive until the day after St. Valentine's Day, which meant that it took from Sunday to Wednesday to go 18 miles, and I was deprived of the pleasure of the card being delivered on the correct day. Such an instance shows that a great deal can still be done to improve the postal services.

I have always found head postmasters and postmen in my constituency work very hard on our behalf, and we are extremely grateful to them. In winter, they sometimes have to plough through snowdrifts to deliver the mail. It is not the hard work of those who deliver the mails of which we have cause to complain. The complaint is that there is not enough drive and direction in reorganising the Post Office to bring it up to modern standards.

10.22 a.m.

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

I was interested to hear the St. Valentine's Day dilemma of the hon. Member for Fife, East (Sir J. Gilmour). It conjured up pictures of how he tackled the problem and to whom he wrote about the delay, but in any case his wife probably does not know from whom the card came. Much of what he said about charges having gone up and services having gone down is probably very representative of general opinion. If he closely reads the Report on the Post Office made by the Select Committee on Nationalised Industries, he will probably agree that note should be taken of one or two references to causes. Let us hope that the new Corporation will also take note of them.

The hon. Lady the Member for Peters-field (Miss Quennell) quite rightly said that the Post Office is close to the public. It is estimated that over half a million people are employed, and when we add to that figure the families of those workers we have a very large section of the public closely associated with postal work.

I was a little bothered by what the Postmaster-General said last week about the interim set-up on the managerial side. I realise that he was talking about the highest posts—the Director-General, Deputy Director-General and Engineer-in-Chief posts, as they now are—but I should like more information about what is to happen at the regional level, which poses a different problem. As I understand, my right hon. Friend may well be getting to the point of having two regional directors instead of one, or at least having one on the postal side and one dealing with telecommunications. That might be good from one point of view, but might be difficult from the organisational point of view.

Under what authority will those in what is called the common services departments—people like safety officers and public relations officers—work? It is not easy to split up their work too strictly, and decide under which part of the hierarchy they will operate. If the Postmaster-General carries these ideas too far, he may be in some difficulty. Will he, therefore, give us some more information on this aspect, and also bear in mind the obvious organisational difficulties that will crop up if he follows the McKinsey recommendations too far?

I hope that the new Corporation's regional boundaries will conform to those of the economic development councils. There are now 16 public Corporations, all with varying areas, and this makes it extremely difficult for the economic development councils to work in with them. If we feel that public investment has some bearing on regional economics, the Corporation's regional set-up will provide an opportunity to make sure that at least the Post Office boundaries line up to some extent with those other regional boundaries we hope to have in the future.

Last week, the hon. Member for Howden (Mr. Bryan) said: I dare say there are many lazy people doing full-time work, but there are very few lazy people doing part-time work."—[OFFICIAL REPORT, 15th March, 1967; Vol. 743, c. 445] That may be a truism, but it is far too generalised to be of any use. I put it quite seriously to the hon. Gentleman—I am sorry that he is not here at the moment—that in the Post Office there is a very large area of expertise. For the very intricate second-level sorting or delivery work, we must, if we are to have part-time staff, have experienced part-time staff, but I am sure that it is accepted by the Post Office that, in the main, for such work one is probably better off with full-time staff, all of whom have the necessary background and the expert knowledge of the way in which mails are handled.

The power to engage part-time staff already exists. Under present agreements, part-time staff can be employed without any consultation with the unions concerned when the vacancy figure in London goes above 5 per cent. No such figure exists for the provinces. A large number of regular part-time staff work on the telephone side, but they are regular part-timers, trained to do the job for certain periods of the day when pressure builds up. That is where the difference lies. The Post Office has a very good record in this respect, and if there are one or two lazy people employed, I am sure they are very few in number, because the organisation soon weeds them out.

The Select Committee's Report brings out very clearly the fact that if we do not get our tariffs right in relation to total costs we are in trouble. It also brings out very clearly that there have been many instances over the years when the political situation has meant that the Postmaster-General of the day has not been able to persuade this House or the Cabinet to increase charges when the need has been there. I hope that we will now see a much firmer line taken in that respect, because it will make a great deal of difference and meet the point, made also by some hon. Members opposite, that capital investment is vitally needed on the postal side but has been deliberately cut down because there has been no opportunity to vote the money necessary for capitalisation there, although it has been available much more readily on the telephone side.

It is interesting to read in the Select Committee's Report the suggestion that we can have a much different type of contract, in terms of return on capital, on the postal and on the telephone sides. Most of us would be agreeable to that, because it is realistic. I cannot see it in 50 years' time, even when we can so mechanise the postal side so that we can get the capital return that we need in exactly the same way as on the telephone side.

There is a different problem on costs, which I thought might be mentioned in the White Paper on Post Office Prospects and it is what might happen if we adopt decimal currency. One of the problems for the Post Office would be the translation of the present money rates into new money rates, which would mean an increase in postal costs. This is the effect of a change in the system which, while it might be wholly acceptable, should be realised now.

Perhaps I can give two examples. The one new penny will be worth a halfpenny which means, in future 1.2 of a penny. Immediately there is a price increase for every penny spent before. if it is translated to 4d., the new 4d. stamp becomes 4.8 per cent. of a penny, very nearly 5d. If one does the same thing on the telephone serice there will be figures showing nearly 7d. for a telephone call instead of the previous 6d., although one would presumably be putting in a 6d. piece to get the same call.

It will also cause difficulty in dealing with change at Post Office counters. Millions of pounds cross the counters—

Mr. Speaker

Order. The hon. Gentleman must not anticipate this afternoon's debate.

Mr. Dobson

I will endeavour to stick more closely to the prospects of the Post Office. I was trying to show that some of the things which I thought might be in the White Paper had not been included. I appreciate why this is and why we ought not to talk too much about it now.

The White Paper dealing with the reorganisation of the Post Office, which came out yesterday, mentioned two things. One was the conditions of service, laid out in a loose form in paragraph 50 on page 11. This indicates that negotiations can begin soon on conditions of service, as soon as the Corporation is set up. I think that is what it means but I wonder whether it means that, as soon as the Corporation is in being, whether or not it is set up, we should allow negotiations to go on about conditions of service.

This is a very important point, because there are many conditions of service wholly to do with civil service conditions. I am glad to see that the hon. Member for Manchester, Openshaw (Mr. Charles R. Morris) is in his seat, because I know that he agrees with me in this. It is important that the conditions of service should be clear. There is also the position about superannuation. It is necessary to make this matter very clear. I accept that the change-over to Corporation would probably mean that no public servant could be worse off. I hope that at the same time we will have some transferability between the Corporation and perhaps other Corporations.

Those who have the privilege to serve the Post Office do so quite willingly, knowing that in that public service, from time to time, they get a lot of complaints, for which they are not personally responsible. This goes for all people, from those handling the mail and telephone calls to the managerial side of the Post Office. I hope that we shall see further improvement in Post Office conditions in the light of the very detailed examinations which have recently taken place.

10.35 a.m.

Mr. Philip Goodhart (Beckenham)

One aspect of Post Office accounting which has caused profound irritation to a number of my constituents is the provision, introduced in the measures of 20th July last, for the charging of one year's rental in advance for telephones for new subscribers. What has caused the irritation is that this has been interpreted by the Post Office in dealing with new subscribers to mean an old subscriber who has changed his address, even within the same telephone exchange area.

People who have been subscribers for five, 10 or 15 years, find themselves being charged a year's rental in advance when they have moved house. I have written to the Postmaster-General on a number of occasions and I have asked questions in the House about this. I have been told that there is some extra cost to the Post Office when a subscriber changes his address.

Plainly, the extra charge falling on the Post Office is not nearly as much as the charge for installing a completely new telephone. I cannot believe that it is right to interpret the measures of 20th July so widely that they hurt and irritate this small group of people who have been valuable subscribers for many years, and who are placing no real additional burden upon the Post Office.

10.36 a.m.

Mr. Ian Gilmour (Norfolk, Central)

I trust that the Assistant Postmaster-General has taken note of what my hon. Friend the Member for Beckenham (Mr. Goodhart) has said about the Post Office putting a quite unjustifiable interpretation on the word "new" and that he will agree that these old subscribers should not be charged in that way. One advantage of the Government making important statements last week, and of this debate dragging on over a week, is that there has been time to consider the Postmaster-General's speech of last week.

It was a good deal better than the White Paper. The Postmaster-General showed zeal for commercial principles which he does not always show in other matters. At one moment, he was so carried away that he referred to his hon. Friend as his deputy chairman. This is an encouraging sign for the future of Post Office management.

The Post Office White Paper did not sound a very hopeful note. It exudes the feeling, "Thank heavens for the squeeze. This gives us a breathing space. Now we can catch up. The Post Office will really come into its own because we have a nice squeeze and this is all very good for us." That is all very well, but it is not a very encouraging prospect when the economy deflates, because the Post Office will not necessarily be in such a good position.

Paragraph 11 of the White Paper says: The waiting list has been more or less steady since the measures of July, 1966. That is true, but the waiting list is over 120,000, which is twice as much as it was last year, and nearly three times as much as it was two years ago.

We all hope that there will be an improvement in postal services, particularly in rural areas, as my hon. Friend the Member for Fife, East (Sir J. Gilmour) said. Presumably, the Postmaster-General has received expert advice that a slogan like "Quality and Reliability Year" will be helpful in improving services. I hope that he is right. This type of slogan is rather reminiscent of Chinese wall papers and poster slogans. It reads slightly like one of those earlier and more attractive thoughts of "Chairman Short". I hope that it will be of some use. It does not seem to be a very sophisticated technique in bring about an improvement in services.

Paragraph 34 of the White Paper says this: Buildings. It is hoped to start 40 new post offices and 20 new sorting offices during the year. This slightly reminiscent note struck a bell in my ear. Paragraph 30 of last year's White Paper says this: It is hoped to start building about 40 new post offices and 20 new sorting offices during the year. The caution evident in the inclusion of the word "about" in last year's White Paper was reasonable. After the debate on 20th January the Assistant Postmaster-General wrote to me, in response to a query I had raised in the debate, saying that he hoped that 42 postal buildings would be started during this year, of which there would be 33 post offices and 9 sorting offices.

I hope that the hon. Gentleman will tell us whether paragraph 34 in this year's White Paper bears any relation to paragraph 30 in last year's White Paper and whether it is proposed to catch up on what was not done last year, or whether, as I imagine, it is separate and the Post Office is starting again.

The first sentence in the final paragraph of the White Paper is disturbing: The fall in return on capital now in prospect for 1967–68 is disturbing". The next sentence is almost more disturbing: The Post Office is confident that despite the temporary downturn in growth rate, the telecommunications business is an expanding industry with a bright future. This is an extraordinary way of putting things. It reads rather like the Rural Industries Association making an interim report about basket work manufacturers. No one would gather from this sentence that telecommunications is the world's biggest growth industry. To treat it as if it were a type of cottage industry slightly suffering from a downturn, or from a blight in a rural area, is out of scale with events.

The speech of the Postmaster-General was slightly less discouraging than the White Paper, because the right hon. Gentleman showed some grasp of the opportunities and of the need of a longer and deeper vision. I hope that the Post Office realises the vast potentialities of this industry and appreciates that it is vitally important for the whole future of the country.

10.43 a.m.

The Assistant Postmaster-General (Mr. Joseph Slater)

The hon. Member for Norfolk, Central (Mr. Ian Gilmour) has referred to the postal building programme. Ever since I came to the Post Office, two and a half years ago, this has been one of the aspects of the Post Office about which I have been disturbed, because of the lack of capital investment for the development of new buildings. Some of our buildings are antiquated. We have been going ahead as fast as possible trying to replace them. This will be our attitude in regard to building development. The hon. Gentleman said that telecommunications is an expanding industry. He is right, and we are as far in front as any other country.

I want to convey my right hon. Friend's apologies to the House for not being present this morning. He would very much have liked to have heard the rest of the debate, but, unfortunately, urgent Government business has detained him.

We have had a very interesting debate and I am grateful for the criticisms and suggestions which have been made by hon. Members on both sides. In particular, I much enjoyed the wise counsel of my hon. Friend the Member for Poplar (Mr. Mikardo). The whole House, and especially my right hon. Friend and myself, are indebted to my hon. Friend and his colleagues for the Report of the Select Committee on Nationalised Industries on the Post Office. It is an invaluable Report, which the Government are studying with the greatest of care.

In the White Paper which was published yesterday, and which has been referred to, in passing, by hon. Members, the Government have, after considering the Select Committee's Report, set out their proposals for the reorganisation of the Post Office. I am sure that the House will not expect me to deal today with the more technical recommendations in the Report. We are studying them very closely and perhaps we might return to the matter on a future occasion.

Last Wednesday, the hon. Member for Howden (Mr. Bryan) asked whether there would be a debate on the White Paper and the Report of the Select Committee. My right hon. Friend has brought the suggestion to the notice of the Leader of the House. If any debate on the reorganisation White Paper is to be joined with a discussion of the Report from the Select Committee on Nationalised Industries, I imagine that it would be for the convenience of the House not only to have a reasonable interval in which to consider the White Paper, but also to be able to refer to the evidence given before the Select Committee, which has not yet been published.

The hon. Member for Howden also referred to uncertainty which must affect everybody at this time when the conditions of service in the Corporation have still to be settled. I am pleased that the hon. Gentleman drew our attention to this. We shall be continuing our discussions with the staff, but this will take time, and some points may have to await the setting up of the Corporation. We have covered this point in the assurances to which the hon. Gentleman referred and which are recorded in the White Paper published yesterday.

I will not weary the House by repeating them, but they cover four major issues: first, the position up to vesting day, in which it is made clear that during this period the staff, being civil servants, will have access to the Civil Service Arbitration Tribunal in certain cases; secondly, the position if revised conditions of service have not been negotiated by vesting day; thirdly, security of tenure; and, fourthly, superannuation.

On this last one, I would like to emphasise that we have made it quite clear that existing civil servants will be entitled to choose to have the benefits they would have enjoyed under the Civil Service superannuation scheme if they had not been transferred to the Corporation.

These assurances were the subject of lengthy discussions with the negotiating committee set up by the two departmental Whitley Councils and agreed with them. The other staff associations were also consulted. I am certain that these assurances to which the Government are committed should have allayed any worries the staff may have felt.

The hon. Gentleman also asked about the timetable. This will depend upon the passage of the Bill through Parliament, but my right hon. Friend hopes that the Second Reading will take place before the end of 1967 and that, with favourable winds, the Royal Assent should be before the Summer Recess of 1968. If we achieve this timetable, vesting day is likely to be 1st April, 1969.

The hon. Member for Howden raised a number of detailed points other than those arising from the Select Committee's Report, and I hope that he will accept that I should not attempt to deal with them today. He asked whether we had any report to confirm British Railways' hope that electrification and rerouteing would produce improved punctuality by March, 1967. I know how hon. Members feel about the delay of mail. On the evidence of the first fortnight, there has been a decided improvement. That is the information I have, though it is too early to come to a definite conclusion.

The hon. Member also made some play about "Quality and Reliability Year", which started last October. At that time about 92 per cent. of fully-paid letters were being delivered on the first working day after posting. My right hon. Friend recently told the House that that figure has now improved to 93 per cent.

The hon. Gentleman mentioned the mechanisation experiment at Norwich. The trials of the new coding desks and automatic letter sorting machines there have not yet been completed because of delay in manufacturing some of the equipment. It would be premature to issue a report on those trials while they are still under way, but I shall bear it in mind. If the Norwich scheme is a success, we shall embark on the programme to which my right hon. Friend referred in his opening speech.

As a Yorkshire Member, the hon. Gentleman also mentioned Leeds City station. We are planning, a new head post office for Leeds, and the idea of putting a sorting office over Leeds City station is only one of a number of possibilities we are examining.

The hon. Member for Petersfield (Miss Quennell) made an interesting speech. I was interested in the research she had undertaken. I may not have time to deal with all the points she raised. First, I can assure her that all the computers we are ordering are of British manufacture. I can also assure her that the Post Office accepts full responsibility for the training—and retraining where necessary—of its staff. We have nearly 100 training establishments in various parts of the country.

The hon. Lady referred to telephones for Servicemen and their families coming back to this country. My Department has consulted the Ministry of Defence about this, and I am glad to say that we do not think that this will prove to be a very great extra demand on our resources.

The hon. Lady also mentioned post-women. We do have an agreement with the unions for employing postwomen on a temporary basis in places where there is a shortage of postmen. We employ about 1,000 women full-time and 6,400 part-time. My right hon. Friend is examining proposals for the admission of women to established posts on the same basis as men, but I cannot say more about that today.

The hon. Member for Fife, East (Sir J. Gilmour) referred to lunch hour closing of post offices. I think that I remember seeing him during the recent Adjournment debate on the subject of post office closing hours raised by my hon. Friend the Member for Dunfermline Burghs (Mr. Adam Hunter). Unfortunately, the hon. Gentleman was unable to get into the debate, in which I tried to set out the reasons why we have had to reduce the hours of service.

I do not want to go over all the points I made then. But we close at lunch time only where we have found that there is little demand and where there will be little inconvenience. In general, we only match the practice of local shops which also close at lunch time, and the service we give is still better than that of the banks and certain public authorities. The revised hours enable us to improve the working day of our counter clerks, which should enable us to recruit more successfully.

On another point raised by the hon. Member for Fife, East, he should be aware that over the country as a whole service in the rural areas is subsidised by that in the urban areas. My right hon. Friend has said more than once that he is giving special attention to mechanisation of the postal services, and he has put in hand a considerable programme under which £45 million will be invested over the next 10 years.

My hon. Friend the Member for Bristol, North-East (Mr. Dobson) spoke of the effect of changes in management in the regions. As my right hon. Friend said last week, the present all-purpose regional organisation will be split in most cases. This is largely a matter of growth; many of the present regions are becoming very large units to manage, and the precise details of how the split will be made will take a little while to work out. We are aware of the problems, such as that of safety officers, which my hon. Friend mentioned.

The matter of costs was also raised by the hon. Member for Fife, East. My right hon. Friend has made it abundantly clear that it is imperative that the gross imbalance in Post Office charges be put right if the finance of the two great services are to be developed on a sound footing. I emphasise that my right hon. Friend has also said that before he looked at the question of tariffs he wished to put the expenditure side of the balance sheet right by making every effort to improve the efficiency of the services, and he has put in hand a productivity improvement programme to that end. I hope that that will help to reassure the House that my right hon. Friend intends that the Post Office should continue to give the best possible service at the cheapest prices consistent with sound financial policy.

The hon. Member for Beckenham (Mr. Goodhart) reminded the House of the correspondence he has had with my right hon. Friend and the Questions he has asked about the one year's rental now paid in advance on ordering a telephone, instead of one quarter's. He suggested that that should apply to those taking the telephone for the first time, and not to existing customers moving to new premises, particularly if a telephone is already there. Naturally, I have some sympathy with that point of view, but we must face the fact that such orders consume resources and, therefore, for the present the new rental arrangements must apply generally. They entail the payment of nine months' extra rental in advance and when the initial payment has been made—absorbing purchasing power—no further payments fall due for a year, when quarterly payments again apply.

Finally, I thank hon. Members again for their reception of the Motion. The coming year will be a challenging one in the Post Office. My right hon. Friend announced when opening the debate a change in the organisation of the management and structure which will help the transition from a Government Department to a public corporation. The coming year will see that process well on its way. I am confident that the staff of the Post Office will prove equal to the challenge that confronts them.

Question put and agreed to.

Resolved, That the Postmaster General be authorised, as provided for in section 5 of the Post Office Act 1961. to make payments out of the Post Office Fund in the financial year ending with the 31st March 1968.