Two-tier System (Hansard, 25 January 1968)

§ 6 and 7. Mr. Maxwell-Hyslop
asked the Postmaster-General (1) what estimate he has made of the extra expenditure on similar postage of present users of first-class mail in the first year after the introduction of the two-tier system;

§ 8. Mr. Blaker
asked the Postmaster-General whether he will postpone the arrangements for two-tier postage at present intended to come into effect in the autumn of 1968.

§ 9. Mr. Michael Shaw
asked the Postmaster-General what consultations he has had with industry, before deciding to introduce a two-tier postage system; and if he will make a statement.

§ Mr. Edward Short
During 1967 93 per cent. of fully-paid letters were delivered by the next working day after posting.
The aim of the two-tier system will be to give first-class mail a service at least as good as the best we give now, with improved reliability. Second-class mail will generally take a day longer, with a small proportion deliverel later than this.
The indications are that many people who now use the first-class service will send their letters by the second-class service. The effect for each user on actual expenditure on postage will depend on the charges, and this question is at present being examined by the National Board for Prices and Incomes. The two-tier system will introduce an element of choice for the customer which does not exist at present.
As regards consultation, we had nationwide market research in 1966 and again in 1967. We had talks with stationery trade representatives, with manufacturers of franking machines and other business equipment, and with the Post Office Users' Council. A large majority of those consulted were in favour of the two-tier system.
I see no reason for postponing its introduction.

§ Mr. Maxwell-Hyslop
How can it be compatible with the Government's policy towards the stabilisation of costs to increase the price for the same service by 75 per cent. and for a service taking one day longer by 25 per cent. over existing rates? Is this not scandalous? Will the right hon. Gentleman assess the burden on the economy before putting this into effect?

§ Mr. Short
The hon. Gentleman has whipped himself into fury about figures he himself has invented. I said nothing about any increases at all.

§ Mr. Blaker
This change will make obsolete a great deal of special manufacturing equipment and surely one year is not sufficiently long to amortise it or to order the new machinery necessary. Why cannot the right hon. Gentleman postpone 564 the introduction of the scheme for a reasonable time?

§ Mr. Short
I postponed its introduction for over a year when I took office, so the trade has had much more than a year in which to make arrangements. I understand that it is reasonably satisfied.

§ Mr. Shaw
The right hon. Gentleman's Department has a very fine record for consultation with industry, particularly manufacturing industry, before any changes are made but is he aware that, in this instance, I am informed that the manufacturers of stationery, particularly of envelopes, are still most unsatisfied with the complete lack of consultation? They were not consulted at all before the announcement was made.

§ Mr. Short
The decision to do this was a Government responsibility but the manufacturers have been consulted since it was taken. It may interest the hon. Gentleman to know that this morning I have received an invitation to be the guest of honour at their annual dinner.

§ Mr. Rankin
Could not greater use be made of air services in transmitting first-class mail?

§ Mr. Short
We use air services a great deal now. We generally use the most economic and speedy service we can find.

§ Mr. Bryan
What percentage of first-class mail and what percentage of second-class mail does the right hon. Gentleman expect in the new set-up? How does he expect to be able to produce a standard of reliability for first-class mail?

§ Mr. Short
The percentage split as between first-class mail and second-class mail will depend on the differentials. Different differentials will give different splits. But obviously the desirable one is 50–50.
The great merit of this scheme is that work in sorting offices, which now comes in two big humps with little to do between them, will be evened out during the day and this will enable first-class mail to be dealt with on its own.

§ Mr. Maxwell-Hyslop
On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise this matter on the Adjournment.