POST OFFICE BILL

HC Deb 11 November 1968 vol 773 cc37-154

Order for Second Reading read.

3.40 p.m.

The Postmaster-General (Mr. John Stonehouse)

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

The Bill is a massive one, dealing with all the ramifications of the biggest business in Britain. It arranges for the transfer of the operations of the Post Office from a Department of State to a new authority—the Post Office. It also arranges for the establishment of a new Minister and a new Ministry. The new Minister is to be responsible for the sponsorship of the Post Office and also to take over the broadcasting responsibilities of the Postmaster-General. The Bill also arranges for the establishment of a Department of National Savings, which will be responsible to the Chancellor of the Exchequer.

As the House knows, the Post Office is rich in historic tradition. People who remember that Rowland Hill introduced the penny post in 1840 sometimes forget that the traditions of the Post Office go back very much further than that. The first Master of Posts actually took up his position in 1517—over 450 years ago. The first Postmaster-General—the first in a long line of which I am the 101st—took up his position in 1660, which is over three centuries ago.

Although the Post Office has such deep roots and so much history behind it it is not a dead and decaying organisation today—far from it. It is as modern as phosphor bars in postage stamps and as automatic sorting machines for envelopes; it is as modern as a computer, and as a computer-controlled electronic exchange. It is as modern as pulse-code modulation and the high-speed Giro banking service, inaugurated by the Prime Minister only last month.

The Government have decided to set up this new Corporation so that in the communications explosion we shall be experiencing during the next 10 years there will be a public authority fully able to take advantage of the commercial opportunities available to it to serve the public and to provide new ways of improving communications within the United Kingdom.

During the next 10 years we shall no doubt see the majority of homes installed with telephones. We shall see the perfection of the T.V. telephone. We shall also see telephone lines into homes becoming the most important links between those homes and the outside world, available not only for speech but, with attachments, for print-outs, communications of all sorts, invoices, bank statements, and the like. The telephone will also be available for remote control of machinery and for very efficient communication between Britain and the rest of the world.

Already, we have data transmission at 24,000 bits a second and, experimentally, at over 40,000 bits per second. This will be commonplace in 10 years' time, with computers speaking to computers over a communications network at a very rapid pace. The new Corporation which we hope will be set up as a result of the Bill will be helping to fashion these new communications opportunities for the advantage of consumer business in particular.

Hon. and right hon. Gentleman may ask why a Corporation is essential for this task; surely the Post Office has been doing this well for many years? Indeed, the Post Office has remarkable achievements to its credit. But there has been a gradual development of the independence of the Post Office as a commercial organisation during the past few years, and the Government believe that this must now be passed a stage further and that the Post Office must be given complete commercial independence.

Up to 1912 there were no separate accounts for income and expenditure, and up to 1933 the revenue of the Post Office was treated as the revenue of the Crown, and any surplus income over expenditure was absorbed by the Exchequer. In 1961, the Post Office Act gave the Post Office the financial status of a public authority. Hon. Members may feel that that went far enough, but the Government believe that it it did not. They believe that the new Corporation, with complete commercial independence, will be able to operate even more successfully than the Post Office has done heretofore. The new Corporation will operate with statutory obligations placed upon it. It will be expected to maximise its efficiency within those obligations and given a fair and reasonable price structure. It will be able to do this by establishing a new career structure separate from the Civil Service.

This brings me to one of the key reasons why the Government believe that a new corporation is essential. Nearly half the Civil Service today is in the Post Office. If this situation were to continue it would have two effects. First, the Post Office would be compelled to organise its business within a framework designed for another purpose altogether. Secondly, in redesigning the function of the Civil Service for the administration of the governmental machine the Government would be forced to take into account the needs of half the Civil Service employed in a commercial set-up. It is most appropriate to give the staff of the authority the independence of authority employees rather than having them tied by Civil Service rules.

Another major reason for the establishment of the Corporation is to secure the separation of the commercial functions of the chairman of a nationalised industry from the functions of a Minister. This is essential, and is demonstrated by the anomalous position in which previous Postmasters-General and myself have found themselves, having both to be Ministers responsible to this House and also chairmen of the Post Office Board, running a commercial set-up.

In view of the speculation that has appeared in some quarters perhaps I should make it crystal clear that the present Postmaster-General has not been a candidate, is not a candidate, and will not be a candidate for the chairmanship of the Post Office Corporation when it is set up, for the simple reason that he has no ambition in that direction. A new chairman will be appointed during the first three months of next year. He will take over as the chairman of the Corporation even before vesting day so that there can be a smooth transfer of responsibilities from the Post Office as a Department to the new Corporation.

The Corporation will take over assets which the Post Office has available to it. First, of course, is a tremendous investment in the communications network which we already have, to a total value of £1,800 million, although at replacement cost, of course, it would be very much higher. There are 10,000 buildings, a huge network of cables, also the microwave links and the Post Office towers, the numerous installations of post boxes, and so on, established all over the United Kingdom. This is a tremendous investment and one which the Corporation will, of course, be able to use to great advantage.

The next asset which it will take over is the staff of the Post Office. Here, I pay a tribute—I am sure that my hon. Friend the Assistant Postmaster-General will associate himself with this, since he has now held that position for four years and has had much more experience of the Post Office than I have—to the abilities of the staff in the Post Office, who, in my experience, have done an enormously successful job running a commercial organisation in very difficult conditions.

The managing directors of the main businesses in the Post Office are men of the highest calibre and experience, who are ably assisted by directors who are every bit as good as, if not better than, directors in private businesses outside. They have done a wonderful job in building up the Post Office to the peak of excellence that it has today.

The achievements of the telephone service are sometimes attacked, but I think that, in comparison with other countries, our telephone service is extremely good, and, of course, our tariff rates are very much lower than most. Bearing in mind that, for years, the Post Office had been denied the investment to which it was entitled, the achievement of the directors of the telecommunications service, particularly in dealing with the tremendous expansion programme during these last few years, has been tremendous.

On the postal side, coping with the difficulties, relying on so many agents and dealing with the complications of delivery to 18 million points in Great Britain, as well as a total of 35 million envelopes a day, is a wonderful achievement. Although the Post Office has been very much attacked during the last few weeks over the change to the two-tier letter system, what has impressed me, seeing this operation from the inside, is how wonderful it is that this tremendously complicated operation has gone through so smoothly and successfully.

This is because the managing directors and directors in the Post Office have very great ability, and I think that the Corporation will be very pleased to take over these managing directors. The rank and file staff in the Post Office are loyal, devoted and dedicated to their task. The Post Office, although it is so large—about 400,000 employees—is a family and the spirit is better than one finds in most other enterprises. This will, I am sure, be a great asset to the Corporation.

Also, the Corporation will take over the plans and the investment programme which the Post Office has worked out during recent years. I would like here to pay a tribute to my three immediate predecessors, because under their guidance the Post Office has been able to fashion a very big investment programme, envisaging as it does the expenditure of about £2,000 million during the next five years. The vision of my predecessors and the courage which the Government have shown in endorsing their plans will be a wonderful asset to the new Corporation, which will inherit these investment plans.

The Corporation will take over the responsibilities of the Post Office, in particular the postal monopoly and the telecommunications monopoly, which will be 100 years old next year. It will also take over the new Giro banking service which will, of course, be operating competitively with the banking system in Britain. It will also have the National Data Processing Service, which is providing services not only for our own Post Office but also for outside firms.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

On that point of the Giro and the banking system operating competitively, will the transactions in the Giro pay the 2d. Stamp Duty which is paid on cheques by its competitors?

Mr. Stonehouse

The Giro system will be subject to all the tariffs and taxes which any competitive bank will have to pay.

As I said, the staff in the Post Office are the greatest asset which the Corporation will have, and it will be, I am sure, the Corporation's ambition that they should be brought into industrial participation to the fullest extent. I hope that it will be possible for ways to be worked out for the staff to participate in the policy-making of the Post Office in future years. But the management must be decisive. It cannot afford to be flabby. The forms of participation which are worked out must be wholly responsible. I am very hopeful that, over the next few years, it will be possible for the union representatives to work out with the Corporation ways in which the staff can be brought in to participate.

That brings me on to the question of the conditions of the staff in the new Corporation. One of the reasons for the Corporation being set up is to take this large number of men and women out of the Civil Service to a new authority. Some, in the Savings Department and those staff who will be transferred to the new Ministry, will, of course, remain in the Civil Service. We have been unable to give the great bulk of the staff the right of staying civil servants, but their conditions of service will not be affected before the Corporation is set up.

The present conditions of service which have been negotiated will continue until new conditions on detailed points are negotiated with the new Corporation. The Government have, however, found it right to set out certain specific assurances to the staff. The House will remember that these were set out at length in the White Paper on the reorganisation of the Post Office, which dealt with the position after vesting day, conditions of service, security of tenure and superannuation.

I will not deal with them at length, but, on conditions of service, in so far as revised conditions have not been negotiated with the unions by the Corporation on vesting day, the conditions in force immediately before vesting day will continue to apply until they have been varied by negotiations or, where applicable, by arbitration. Fortunately, the Post Office is a growing business and is most unlikely to run into any but very minor redundancy problems. The Government have felt it right to assure the staff that the authority will, subject to manpower needs, functions and efficiency, give a high degree of security of tenure. We want people to look to the Post Office for a career. I am equally sure that they would not wish to regard the Corporation as a cushion.

The superannuation schemes for the nationalised industries are approved by the sponsoring Minister. Because of this we have already been able to put to the unions a comprehensive superannuation scheme for introduction by the Corporation. The unions are not completely happy about this because we have proposed that, like the generality of nationalised industries, the retirement age for men should be 65. That seemed to the Government to be appropriate, but realising that, as civil servants, the present staff could expect to draw their pensions at 60, we have written into the scheme we have proposed a right for existing staff to choose the benefits that they would have received if they had not been transferred from the Civil Service. This arrangement will, I am sure, commend itself to the House.

It might be appropriate if I refer to the way in which the House can continue to exercise its supervision over the way in which the Post Office Corporation does its business. There will, of course, continue to be full parliamentary accountability, as is the case with every other public authority. There will be debates in the House, no doubt on Supply days. There will be borrowing powers Bills, when the borrowing powers of the Post Office must be increased. There will also be Adjournment debate opportunities for hon. Members to raise points.

As is usual for the sponsoring Ministers of other nationalised industries, there will be the possibility of Parliamentary Questions to the Minister responsible on general matters. However, hon. Members are often particularly concerned with constituency problems—detailed day-to-day questions—which it has been possible for them to address to a Postmaster-General, but which no longer will be allowed as the Corporation will be independent. I am sure, however, that hon. Members will be able to receive the fullest possible information from their local head postmasters and from the directors of the Post Office. This will give them every possible opportunity of remedying any complaints that their constituents may have.

Furthermore, we are providing in the Bill for the establishment of a Post Office Users' National Council, which will give the consumer—the customer generally —an opportunity for making his or her opinions felt at the point of power. It is noteworthy that this was one of the innovations that the Government introduced during the period when my right hon. Friend the Minister of Technology was Postmaster-General. The present Post Office Users' Council has been very much welcomed and has turned out to be a great success. I am sure that all hon. Members will join me in paying tribute to the work of the Council and, in particular, of its Chairman, Dr. E. Kamm.

As the House will see in the Bill, we are providing not only for a National Users' Council as such, but Post Office Users' Councils for Scotland, Wales and Northern Ireland, so that the specific problems affecting those countries will be kept in mind.

Clause 1 of the Bill arranges for the abolition of the post of Postmaster-General. In many ways we will find some chagrin in the fact that this ancient position is to be abolished. It is one of the oldest positions of State. There is, unfortunately, no alternative. Because of the legal complications involved, there is no possibility of this title being retained.

The Clause refers to the appointed day. It would be convenient if I advised the House that we have in mind, subject to the passing of the Bill by early summer—when we hope that it will receive the Royal Assent—the appointed day being 1st October, 1969.

Clause 2 sets out the position of the Minister of Posts and Telecommunications. This Minister will have the sponsoring responsibilities of the new Corporation, He will be assisted by a staff of about 400 and the annual cost of this Ministry will be about £900,000. This Minister will also have the broadcasting responsibilities of the Postmaster-General; and Clause 3 gives the details of the functions which that Minister will inherit.

Clauses 6 and 7 are the key parts of the Bill. Clause 6(1) states that the Post Office …shall be established"— as— a public authority… It goes on to say that it …shall have such powers and duties as are conferred and imposed on it by, or by virtue of, the following provisions of this Act… Clause 6(2) states that The Post Office shall consist of a chairman and, to a number not exceeding twelve nor falling short of—

1. (a) three, as regards the period beginning with the day on which this Act is passed…"

This provision allows for an interim board to begin to take over the responsibilities of the Corporation between the time of the Royal Assent, whenever that may be, and the appointed day.

Clause 6(6) refers to the tax position of the Corporation. Here the Post Office will be in a similar position to that of the other nationalised industries. It will be subject to the normal taxes to which they are subjected, including rebate of Selective Employment Tax.

Clause 7 includes the powers and duties of the Post Office to provide the various services as laid down in subsection (1)(a) to (d). Subsection (2) shows the ability of the Post Office …to construct, manufacture, produce, purchase…and repair anything required for the purposes of its business… The House will note that this power, which we believe is essential for the new Corporation to be able to safeguard its sources of supply of important equipment, is subject to limitation in Clause 13, which allows for the Minister to give or withhold specific approval for the extension of the manufacturing facilities of the Post Office. The Post Office will also be able to provide, for the benefit of others, consultancy and advisory services. It will, if it provides these overseas, have some reimbursement from the Ministry of Overseas Development.

Clause 11 shows the powers of the Minister of Posts over the Post Office. These appear in subsection (1) in common form, allowing the Minister to give general directions to the Post Office where he believes that to be requisite in the national interest. A Select Committee recently suggested that it would be appropriate to have a special Minister responsible for nationalised industries as a whole. The Government are considering these proposals, but it is considered too soon to take them into account in bringing the proposals in the Bill before the House.

Clause 14 contains the details of the Post Office Users' Councils which, as I said, will be established nationally and also separately for Scotland, Wales and Northern Ireland. It will be arranged that the expenses of these councils will be paid for by the Minister, to establish their independence from the Corporation. In the event of a conflict of view between these councils and the Corporation, there will be an opportunity for appeal to the Minister. Any major questions which the Corporation is considering must be brought to the attention of the council. This will give the council a good deal of authority to do its business.

Mr. Stratton Mills (Belfast, North)

Would the right hon. Gentleman make it clear, however, that although there will be a right of appeal to the Minister, the final word will rest with the Post Office?

Mr. Stonehouse

In the event of a critical situation arising—one which the Minister felt was of such major importance that he would have to take a direct interest in it—it would be possible for the Minister to exercise such authority as he considered best to ensure that the public interest was served. I am sure that, on the majority of occasions, an amicable arrangement will be arrived at between the council and the Corporation, which would certainly not want to ride roughshod over the interests expressed on behalf of its consumers.

Clauses 23 and 24 set out the exclusive privilege of the Post Office in regard to the postal service and, in particular, Clause 24 sets out that privilege in regard to the telecommunications service.

It might be convenient for me, while mentioning Clause 23, to say that the Government gave very careful consideration to changing the law on the concept of "good delivery". Under historic provisions, the Post Office, unlike most other postal administrations, must deliver an envelope to the address of the addressee, and this involves the Post Office in some very remote deliveries indeed, such as remote farmsteads up long driveways. It has been considered appropriate for a special charges scheme to be established to make the addressee pay an extra amount for delivery to a remote place.

The Government have been studying this problem, but have decided that it should not, in this Bill, introduce any change of the good delivery provisions that now exist. It will, therefore, continue to be incumbent on the Corporation to maintain good delivery, however remote the addressee may be.

We also considered the fact that while some may feel that good delivery to a remote place is a subsidy to the addressee—perhaps a farmer in a remote place in Scotland—as most mail originates in towns, and as the sender pays the postage, it is, in fact, a subsidy to the town and the sender and not to the addressee. We gave a lot of consideration to this matter, but considered that it would be better not only for the Corporation to take over the privileges of the Post Office monopoly, but also to take over its responsibilities.

Mr. Ian Mikardo (Poplar)

While completely accepting my right hon. Friend's argument in relation to such a charge, would it not be sensible, in such a labour-intensive industry, for the Post Office to encourage, by agreement, the use of such things as garden gate post boxes and nests of boxes in blocks of flats to reduce the labour costs of the industry?

Mr. Stonehouse

I am glad that my hon. Friend raised that point. I intended to make it myself. Because of the expansion of housing estates, the Post Office are having to provide 500 to 600 extra postmen a year to cope with delivery problems, which are made worse by high blocks of flats—in which every flat expects a postal delivery—and long driveways. It would be very helpful if customers could make voluntary arrangements with the Post Office for nests of boxes in blocks of flats and garden boxes which would obviate extra long journeys by postmen delivering envelopes.

Clause 24 deals with the exclusive privilege of the Post Office with respect to telecommunications. This has been completely recast. The privilege as it now exists is based on the Telegraph Act, 1869, which is now out of date in the sense that it does not allow for all the most sophisticated and modern ways of communicating by wire. This Clause sets out the various provisions of the new exclusive privilege which the Corporation will have.

Clause 40 deals with the giro system and allows for the Corporation to act as a banker. Clause 42 allows for the Post Office's accounts to be audited by auditors appointed by the Minister. Clause 84 deals with the situation affecting the Isle of Man and the Channel Islands. If at some future time the Isle of Man wishes to conduct its own postal service, it will be free to ask for that. At the moment, the Isle of Man is content that the United Kingdom should continue to provide its postal service. The two communities of the Islands of Jersey and Guernsey have decided to run their own postal service.

Clause 86 deals with the future Ministerial control of programme distribution systems. So far, the control which the Postmaster-General has exercised over wire broadcasting systems has been dependent on the telegraph monopoly, but that will be transferred through the Bill to the Corporation and it is, therefore, necessary for the Ministerial control of wire systems to be established through this Clause.

Part V deals with the establishment of the Director of Savings and the Department of Savings which, as I said earlier, will be the responsibility of my right hon. Friend the Chancellor of the Exchequer.

In my opening remarks I said that this country would be experiencing a communications explosion in the next 10 years. If the country is to have a highly efficient and successful economy, it is essential that our communications system should be wholly successful and efficient. It will be the task of the new Corporation to ensure that the progress which the Post Office has so far made in this direction shall be continued. I am sure that the objects of the Bill will commend themselves to the whole House.

Several Hon. Members rose—

Mr. Speaker

Order. May I remind the House that many hon. Members wish to speak in the debate. I wish to call as many of them as possible and hon. Members can help me, if they will, by keeping their speeches reasonably brief.

4.20 p.m.

Mr. Paul Bryan (Howden)

May I start by thanking the Postmaster-General for his very full and lucid explanation of the Bill. He has said on past occasions, if he did not say it today, that this is the biggest reform ever undertaken in the history of the Post Office. We are, therefore, fortunate that never before has there been so much preparation for the reform.

Over the last few years we have had a Select Committee, a White Paper, a P.I.B. Report, an I.R.C. Report, a probe by McKinsey, and recently the Brookings Institute has had its turn on the Post Office. We could hardly have had more investigation than has taken place over the last few years. In the Conservative Party and. I expect, in the Labour Party, we have been thinking a lot about this matter, too. Out of all these investigations has come one common point of agreement—that the Post Office must turn itself into something more commercial, something more like a business.

But before we debate the Bill, the public ought to be told how much has already been accomplished over the last two years on the ground towards this goal, what changes of organisation have taken place and what physical changes have been made in the various post offices throughout the country. The main change which is the separation of the Post Office, or the main parts of it, into two divisions—telecommunications and the postal services. I should like to congratulate the Post Office on the speed at which this has been achieved. It is only 14 months ago, I imagine under the influence of Sir John Wall, that "Preparing for Corporation Status" was published. Much of that which was proposed in that pamphlet is already in being. May I read one or two passages to show the extent to which division of the Post Office was proposed.

First: The Post Office needs to be reconstructed quickly into two separate businesses—post and telecommunications—because each has widely different operating characteristics and problems; each is growing at a different rate and must be free to develop at its own pace; and each therefore has its own requirements for successful management which demands the concentration of attention Later, the pamphlet reads: In applying the above principles, each business must have responsibility for the conduct of its operations and be provided with the 'support' functions essential to efficiency. Thus posts and telecommunications must each have control of its buildings, establishments, and personnel, finance and motor transport. Thus, even the common services are being divided to provide two entirely separate functions.

I imagined, when that pamphlet first came out, that there would be considerable local physical difficulties in making the changes in the postal buildings, but on visiting post offices I have found that postmasters have welcomed them and that the fact that telecommunications has moved out of a post office building has almost always been a blessing. The building was bursting at the seams anyway and warranted division. Strangely, too, the postmasters say that they now have very little business communications with their opposite numbers at the telecommunications end.

I have said all this because it leads me to my first question: as, in reality, the Post Office has become virtually two organisations, and plans to become completely divided, why, in the Bill, do we theoretically and in law pretend that they are one organisation when, in fact, they are ending up as two, with just a flimsy legal bridge, and no more, to join them? In addition to the admirable reasons given in the pamphlet for two divisions, I could add several more. As a start, this enormous business employing 2 per cent. of the working population of the country, is too big in itself for efficiency. In these days of takeovers, one must remember that size in itself is no virtue. It can be a positive vice when, as in this case, size is due to the fact that two entirely diverse businesses have been joined together.

To illustrate how diverse they are, their almost every characteristic is not merely different, but in utter contrast. Telecommunications are capital intensive and the postal services labour intensive. The one division is highly technical, needing a highly specialist and qualified staff, whereas for the other, far more general abilities are required. One is rapidly growing—almost the fastest growing industry that we have—where as it is conceivable that the postal service in the years ahead could contract. Telecommunications have endless, unknown possibilities. The future of the postal service is less mysterious. Telecommunications are profitable and could be made highly profitable. The postal service is less profitable. That last factor creates the danger, if they are to be kept together, of cross-subsidisation.

Having said all that, I can think of only one reason why they are being kept together, and that is the bad reason of cross-subsidisation. I cannot help wondering whether the reason their accounts have been kept more or less similar is that the profitable service can help the less profitable service when it comes to fixing charges in the years to come. That would be a very retrograde step to take now that we are moving towards a commercial pattern.

I am aware that the Select Committee came down—but only just came down—on the side of one Corporation, but wonder whether, when it came to its conclusion, the Committee realised the extent to which these departments would be separated physically. I doubt whether even the Post Office realised it at that time.

Colonel C. G. Lancaster (South Fylde)

When the announcement of the Corporation was made, we were so far advanced in our consideration of Post Office methods that we felt it rather inopportune to discuss, in coming to any conclusion, whether there should be one Corporation or two. For that reason the question of one or two Corporations was left out of our final Report.

Mr. Bryan

I am grateful to my hon. and gallant Friend for that intervention.

I personally, and, I think, my hon. Friends, would prefer two separate organisations—a postal service organisation, which might be called the Post Office, and a telecommunications organisation. I should also prefer the postal services to remain a Government Department as they are now. As a traditional and labour-intensive business I do not believe that it would gain to the same extent as the telecommunications division from having its freedom from Government administration. A dynamic explosive industry such as telecommunications will gain far more advantages. I feel that the postal services would lose more than they would gain by not being a Government Department.

I am quite sure that the consumer would lose. Without arguing the controversy of last Monday, I suggest that we have only to look at the two-tier debacle, a controversial subject about which the country was highly disturbed, to see the extent to which people would take very unkindly to the fact that they could not write letters to their Members of Parliament about the Post Office and that, in turn their Members of Parliament could not represent their grievances in the House. That is the only method of complaint they have.

If the postal services become a public Corporation, then, despite the assurance which we had from the Postmaster-General, I feel that there is very little that the consumer will be able to do when he wishes to protest. He can, I suppose, write to the Consumer Council, or possibly to the head of the Corporation, although the head of such a massive Corporation as this will not lose much sleep if he receives a few letters from his customers.

The staff to whom I have spoken so far would much prefer to remain as servants of the Crown. One might say that it is more seemly in that the Post Office will continue to use the Crown and the Royal cypher, and the title "Royal Mail".

I maintain that telecommunications should be a separate Corporation. I and many of my colleagues would like to see private capital involved, just as is the case with the Bell Telephone Company of America. Otherwise we shall not get real dynamism and the industry will always be short of capital. Of course, we hope for this under a Socialist Government. But if we could achieve this first division into two corporations we could consider the situation when we return to power and see whether private capital could not be introduced in some effective form.

I come now to the position of the Postmaster-General himself. If we had the system I advocate—the postal services as a Government Department—presumably the Postmaster-General could be the sponsoring Minister for telecommunications. He would thus have a more worthwhile job to do than the proposed new Minister of Telecommunications and Posts. At the moment, that Minister will have too much power but too little to do.

Recently, a Select Committee of the House sat for five months considering Ministerial control of nationalised industries. This is the first nationalisation Measure since the Committee's Report, but the right hon. Gentleman gave scarcely gave a nod of acknowledgment to the Committee. I expected him to have a lot to say about such questions as whether there should be a Minister of Nationalised Industries, and so on. We would like to hear more on these ideas from the Minister when he winds up.

On Saturday, there was great publicity about the fact that the right hon. Gentleman was to become executive head of the Post Office as well as Minister. I did not understand exactly what this involved and why it was proposed—nor why it deserved so much publicity. Perhaps the Assistant Postmaster-General will give us some details of what all this is about and why the process, as laid down in the Bill, could not be followed without more ado.

Mr. Stonehouse

The Postmaster-General has always been the executive head of the Post Office. One of the reasons for the Bill is to separate the commercial functions, held by the chairman of an authority, from the political functions, held by the Minister of the Crown. I am doing no more than establish the Post Office Board as an effective operating board so that the commercial load, which the Postmaster-General takes upon himself, can be spread among members of the Post Office Board, thereby making the transition under the Bill to a commercial corporation smoother and more effective.

Mr. Bryan

I fully understand that, but why did it merit so much publicity? I can appreciate the internal arrangements which are to take place, but many people appear to have thought that the right hon. Gentleman had taken on important new assignments.

Sir Henry d'Avigdor-Goldsmid (Walsall, South)

Perhaps I may draw my hon. Friend's attention to the article in the Sunday Times yesterday, which said: In another surprise move Stonehouse is appointing Douglas Howell, a Sunday Mirror journalist, as his personal assistant on a nine-month's secondment. Howell's job will be to produce reports on various aspects of the Post Office's business, intended to help the Board in its decision making. Stonehouse is adamant that Howell's appointment is not a public relations one, prompted by the recent storms over the two-tier post. But the internal Post Office document announcing it states 'he should help us to avoid serious mistakes in matters having a public impact'". I thought that that might help my hon. Friend.

Mr. Bryan

I am not sure that Mr. Howell can help to avoid serious mistakes. He seems to have caused a serious misunderstanding.

I turn now to the question of the manufacturing powers in the Bill. At the moment, the Post Office manufactures very little. It repairs and services equipment. It is the user rather than the manufacturer of equipment. Talking to Post Office personnel, I have never met one with a desire that the Post Office should manufacture, because, in this activity, one can only manufacture on a very big scale. It is a formidable undertaking to start a factory making telecommunications equipment. Why is the Minister giving these large powers to the Post Office to manufacture?

According to the Bill, he could permit the Post Office to make almost everything. As the Post Office does not want to manufacture, why are these powers in the Bill? Does it mean that the Government are to encourage or oblige the Post Office to start manufacture?

Even if the Assistant Postmaster-General gives us a comforting reply, we shall remain uneasy about the powers in the Bill to invest in subsidiaries or to finance or to buy a majority shareholding in a company. If it is difficult to start a factory or to create a manufacturing organisation, it is easy to take one over if one has enough capital, as the Government always have. These are far the most dangerous part of the proposed powers. Once this trend develops we shall see nationalised industry competing with private enterprise.

This, in theory, is a thing which private enterprise should never fear but the State organisation always starts with the advantage of a subsidy by the Government in one form or another, so it is never straight competition.

Mr. Mikardo

Does the hon. Gentleman forget that private industry is being subsidised by the Government by about £2 million a day? Mr. Bryan: Whoever is being subsidised, at the end of the day the Government decide to what extent the subsidies should be paid and to whom.

Then there is the question of wired broadcasting relay systems. Does the Post Office intend to enter that field on any scale? Private enterprise makes relay services available to l¼ million homes already.

We believe that, in some respects, the Minister has an insufficiency of power. It would be sounder if all the monopoly powers were in the hands of the Minister himself. He would, in turn, delegate them to the Post Office as he thought fit—and he would be bound to delegate considerable powers. We would know where the monopoly power lay and Parliament would have some control over the Minister, who would be the trustee of a monopoly granted for a period to the Corporation. But, as the Bill stands, Parliament will have no control over a Corporation to which these powers will be bequeathed absolutely.

According to the Bill, the Post Office will inherit all the telecommunications monopoly absolutely, and we shall challenge this in detail in Committee. We believe that there is too rigid a monopoly in the provision of subscriber equipment and that the system has been a drawback in the past to the industry, particularly in exports. The leaders of the industry will tell one that the inflexible standards laid down by the Post Office have resulted in goods made in this country for the Post Office being unsaleable abroad. We need far more flexibility in this than we get now. I understand that, abroad, private firms can supply subscriber equipment and service it on a far greater scale than is the case here. We want to introduce as much competition as we possibly can in every way. Every time we do, we shall help not only the customer, but our exports and our manufacturers.

Obviously, one has to concede that the Post Office must have considerable monopoly powers. No one would claim that the delivery of letters was something which should be handed to private industry. But, because of the unavoidable monopoly elements, it is all the more important for us to make a thorough search for opportunities to introduce competition. I am not anxious to raise the temperature of the debate, but I honestly believe that the trouble with the two-tier system has been a timely warning of what monopoly brings, because we saw unfolded before our eyes the insensitivity of monopoly. This is summed up in a phrase in the instructions which were given to the Post Office on 25th October about the cancellation of the order to hold back the delivery of local letters. The instruction said that delaying local letters was to have been considered three months after the introduction of the two-tier system. Can anyone imagine any private enterprise about to issue a new product or new service, saying that after three months it would study public reaction? It was only the pressure from the public and the Opposition that resulted in its being considered not three months, but six weeks later. In view of the obviously ludicrous situation which had arisen, that reaction was slow enough by any standards.

Mr. Stonehouse

Before the two-tier system came into operation on 16th September, my managing director and I decided that the operation of the system should be reviewed within five or six days af its inauguration. It is ridiculous to suggest that we were to wait for three months before reviewing the position. We were subjecting it to continuous review as the days went by.

Mr. Bryan

I will quote from the document of 25th October. It says: Paragraph 11.4 of Circular 157/68 indicated that local delivery arrangements would be reviewed nationally three months after the introduction of the new service: the purpose being to consider whether (in the light of local delivery costs, the services being afforded to second class mail and public reaction) some second class mail should be included in first class delivery of Day B. In view of public reaction to the two-tier service, and complaints about delay to local mail in particular, a preliminary review has now been held.… What more can one say? That is an illustration of the lack of sensitivity of monopoly. It is not the evil of the men in charge, but by nature that is the sort of thing that happens when a monopoly has no competition.

Incidentally, almost the saddest thing of our debate last Monday was the sensitivity of the Postmaster-General himself. The Postmaster-General made his concession not at the beginning of the debate, but two minutes before the end so that we could not comment on it. Monopoly creates a lack of sensitivity towards the public and excessive self sensitivity of those in charge.

I should like to join the Postmaster-General in paying tribute to the staff. It could never be more apt than in this case. Despite its enormous staff of 400,000, the most surprising and gratifying thing is the spirit of the Post Office, a spirit which seems to permeate the staff throughout the country. Nothing is more important in the reforms which the Bill proposes than to keep the postal employees with us.

As the Assistant Postmaster-General knows, the Post Office has many unions and associations. How are their numbers to be affected? It would obviously be desirable to reduce the number but it is equally obvious that there are tremendous difficulties. What has been done in that direction and with what success? One advantage resulting from the delay in introducing the Bill has been more time for talks between employers and employees. By the time vesting day comes, negotiations should be complete in almost every respect, and yet I get the feeling that this will not be so and that some people are still worried about their future.

For instance, Treasury grade employees will be ex-civil servants, like many Post Office employees. When they first joined, these people joined the Civil Service, not the Post Office as such, and were then posted to it, with the understanding that they could apply to go to any other Department whenever they liked. That privilege, if such it can be called, will finish on vesting day. People of this grade whom I interviewed only last week did not seem to know exactly what their conditions would be on vesting day. It will be very hard on them if they are not allowed to apply for a transfer if they want to do so. That matter should be cleared up by vesting day, but, if that is not possible, there should be a concertina period of a year or so during which the privilege of applying for transfer should continue to exist.

The Opposition will do their best to help to improve the Bill in Committee. This is yet another opportunity to examine and improve the Post Office. I should like to make one comment with great sincerity and I hope that it will be noted by the hon. Member for Bristol, South (Mr. Wilkins) and his colleagues who have great experience of unions. When we say things about the Post Office, we are not getting at the staff. Oddly enough, the Opposition depend on the Post Office staff for our information more than anybody else does, because there is nowhere else we can get it. If I want information, I have to go to postmasters in Chester, York, Leeds, or London, or wherever I happen to be, and I would be very embarrassed if I felt that I had later unfairly used the information they gave me. At the same time, one cannot always wear kid gloves and say that everything in the garden is lovely, or we shall never improve anything.

Over the last five years—and I say five years in order again to make it un-controversial—the public has been saying that, as compared with the rest of the world, our postal services are good and that our telephones are bad, while those who use the Telex say that it is awful. The Postmaster-General thinks that the two-tier system is a great success, but it is no exaggeration to say that the public regards it as a shambles. There may be many reasons for saying that that is not so, but that is what the public thinks. All these things must be faced. I very much hope that the Giro system will get off to a good start, because we are ready for something to go well with the Post Office and I hope that the Assistant Postmaster-General will be able to give us some report of how the Giro system has got off the ground in these early days. It so happens that we are coming to this Bill when, for good reason or for bad, public confidence in the Post Office is low: we shall do everything we can to increase that confidence.

The Postmaster-General has stressed the size of the Post Office. This organisation affects the lives of everyone and the livelihood of almost everyone in the country. That means that although the Bill may not be exciting by many standards it is certainly the most important Measure in this Session, and I assure the right hon. Gentleman and the House that we shall do all we can to give it the treatment worthy of its importance.

4.50 p.m.

Mr. Ian Mikardo (Poplar)

Reference has already been made to the investigation into the Post Office, the results of which were reported in the 1966–67 Session by the Select Committee on the Nationalised Industries. It is as a result of what I learned during the course of that investigation that I now want to make one or two observations. Perhaps I might remind the House that the Report of the Committee, which represented hon. Members on both sides, was unanimous, and that perhaps it was that, among other things, which gave it whatever weight it had in the minds of the Government and others.

The Report was historic in a way because, as far as I know, it was the first occasion on which it was possible for a Select Committee to influence the formation of policy while that policy was being formed. Examinations by Select Committees are usually ex post facto. Sometimes some changes come about as a result of those ex post facto examinations, but it was while the investigation was being carried out that the Government first announced their intention to change the status of the Post Office from that of a Government Department to that of a public Corporation, and the then Postmaster-General was kind enough—and, if I may be permitted to say so, wise enough—to say that the Government would not finally make up their mind about structure and form until they had had the advantage of reading the Select Committee's Report.

We of the Committee therefore felt that we were doing something worth while in our researches; that the time and energy put into this work could possibly issue in action in some form or other. In fact, the Bill follows very largely the recommendations of the Committee. I do not think that that is because our recommendations were so brilliant. The great majority of them were probably what Mr. Punch used to call "a glimpse of the obvious", and I am quite sure that, broadly, the Postmaster-General would have reached the same conclusions even without our help. Nevertheless, it is worthy of note that the Bill follows very largely the pattern we suggested, including, as the hon. Member for Howden (Mr. Bryan) has just said, the pattern of a single Corporation.

That conclusion was reached as a result of fairly close consideration. It must not be imagined that we just produced it off the cuff. We adduced some evidence to show that a complete split would have involved a not insubstantial increase in administrative personnel, and hence in overheads. The present arrangement of partial separation—and one could argue how far it should go—is less "oncostly", if I may coin the word, than would be a total separation.

I know that there will be some people, much more malicious than I, who will construe what the hon. Gentleman said about this matter as being in conformity with the general Conservative principle that anything that is easy and profitable should be passed to private enterprise and that anything that is difficult and unprofitable should be left publicly owned, because that makes it easier for hon. Members opposite, in their weekend speeches, to say that public ownership always loses money. Of course it does if one always hives off from public ownership that which makes a profit. But I would not dream of imputing any such motives or interpretations to the hon. Gentleman.

What I have learned out of my experience on the Select Committee, not only in this investigation but in others in which I have taken part, is that the provisions in the nationalisation Statutes, the words used in them, the formal powers which are conferred upon "the Minister" and upon the Corporation and the formal statutory division of powers between them—all that does not matter very much. It is not the words and the forms which matter: what matters is the way in which they are interpreted in practice.

The relations which grow up between the Minister and the chairman of the Corporation and the Corporation's general management attitudes—these are the things which determine the way in which it works. Whether the relationships between Government Department and Corporation are close, cordial and effective, or whether they carry the seeds of some friction and discontent, is determined by these management attitudes and by personal relationships rather than by words in a Statute. Indeed, in different nationalised industries with separate statutes worded in almost the same way, we can get different levels of relationships from the best to the very worst.

I want to comment on five things in the Bill where this applies above all, and which the House must probe now and in Committee. What matters is not so much the actual wording of a Bill, but the intentions behind that wording and the way in which the wording is put into operation.

My first comment concerns "the Minister". We in the Select Committee did not discuss in our Report who the Minister ought to be, but our later Report, to which the hon. Gentleman referred, in the 1967–68 Session, on the general control of nationalised industries, proposed, as the hon. Gentleman reminded the House, a single Ministry of Nationalised Industries which, of course, would cover the Post Office.

I entirely accept, as my right hon. Friend said, that that recommendation is too recent and must be still so much in the maw of Government consideration that it would have been nonsensical to have held up the Bill or to have sought to change it in the light of that recommendation. Nevertheless, in the absence of an overall Ministry of Nationalised Industries, there will now be yet one more Minister whose function is, effectively only to sponsor a nationalised industry—or nationalised industries, if we can count the B.B.C. and I.T.A. as nationalised industries.

The new Minister's functions under the Bill will be even more limited to the supervision of public corporations than, for example, are those of the Minister of Power who, in addition to his public corporations, has a petroleum division and responsibilities for safety which run beyond the public corporations.

In this case, therefore, we will have a Minister merely sponsoring a public Corporation and, having nothing else to do, finding difficulty, as I believe, in preventing himself from duplicating the functions of the Corporation and overlapping the functions of the chairman. I therefore make the point that this change in the status of the Post Office, at this moment above all, strongly reinforces the view put forward by the Committee, in its 1967–68 Report, for a single Ministry of Nationalised Industries.

A second respect in which it is the practice and not the words which matter is financial control. With regard to the general financial obligations of the Corporation, I am sorry to see that all that appears in the Bill, in Clause 31, is a repetition of the same tired, old, discredited jargon that appeared in the nationalisation Measures between 1945 and 1950. Perhaps in saying that I am being a bit unjust, because it is not easy to find a better statutory form of words. But may I be allowed to express the hope that the old jargon about financial control, in Clause 31, does not reflect the old confusion which has existed for so long, as the Select Committee tried to show, in the minds of Ministers about financial control of the industries which they sponsor.

I would imagine that in 1968 there could have been found a better form of words for Clause 31 than the one which would have been written if the White Papers of 1961 and 1966 had never been produced and there had not been all the refinements that there have been in recent years in our thinking about investment control, discounted cash flows, pricing policies, and so on.

Within the general framework of financial control, there are two specialised points that I should like to make. Under Clause 11(8), the programme for investment control is agreed with the Minister. That is as it should be. It must be the Minister who has the broad strategic overall control of investment. But I hope that it will be just overall strategic control and that the Ministry will not try to do the Corporation's job of detailed investment planning. The Ministry should do no more than lay down the guidelines, lay down a d.c.f. rate, and within the framework of that level those who run the Corporation should have a wide degree of autonomy to take the tactical decisions about investment.

The second financial matter to which I want to refer concerns the agency services—those services which the Post Office, for convenience, carries out on behalf of other Government Departments. Under Clause 12(7), the Minister is the final arbiter of charges for agency services, and it is obviously right that he should be. But I hope that he will bear in mind, as the Select Committee suggested and as, I think, he partially, if not totally, accepted in the White Paper, the necessity to ensure that charges for agency services not only cover the operating costs plus overheads, which they have done in the past, but allow for a proper contribution to the surplus which is required to cover the Post Office's overall financial obligation.

Mr. Stonehouse

My hon. Friend will be glad to know that that provision has already been made.

Mr. Mikardo

I am much obliged. I am glad to hear that.

Since my right hon. Friend is in such a friendly mood, would he consider this point? Should not the telephone kiosks and telegrams be agency services? These are two services which nobody can run at a profit. Hon. Gentlemen opposite would never want their return to private enterprise, because they cannot be run at a profit. I cannot see any way of running them at a profit, and I do not think that anybody else can. Therefore, they are run in what is conceived to be, and, I think, rightly, the public interest.

We should find a way of running down the telegrams service. It could be done. The very small proportion of what might be called "life and death telegrams" could be sent through police channels and the rest we could live without. Although telephone subscribers sometimes use the kiosks and sometimes send a telegram, they are much less likely to do so than non-subscribers. Therefore, telephone subscribers are, broadly, subsidising the telecommunications of non-subscribers through the kiosks and telegrams.

There are other losing services. In spite of recent increases in charges for Commonwealth telegrams, some Press telegrams are still losers. I do not know why the taxpayer should subsidise Fleet Street. In so far as anything is being run at a loss because it is in the public interest, why should it not be an agency service? Why should not the Minister call upon the Post Office to provide kiosks and machinery for sending telegrams and pay it for doing it, just as the Minister of Social Security pays for the payment of money in return for pension warrants across the counter? I come now to the users' councils. There is to be a Users' National Council and Users' Councils for Scotland, Wales and Monmouthshire, and Northern Ireland. I doubt very much whether all this great apparatus will be worth while—whether the game will be worth the candle and whether it will justify the benefit to the consumer. In the end—and here I dissent very sharply from what the hon. Member for Howden said—where public services are concerned, and especially a service like this, in which virtually every adult is a consumer, it is Parliament which is the consumers' council.

My experience of constituents' complaints is different from that of the hon. Member for Howden. A woman in my constituency who has been overcharged for gas does not go to the Gas Consumers' council; she goes to old Mikardo. She does not know the name of the chairman of her local gas consumers' council, but she knows the name of her Member of Parliament, because he has an unusual name. She does not know where to get hold of the other fellow, but she knows where to get hold of me. I am her consumers' council. It is inevitable that this should be so, and it will continue to be so.

The hon. Member for Howden suggests that once the Post Office is a Corporation I will not be able to be a consumers' council. My experience is that much better and far quicker attention is paid to constituency complaints by the chairmen of public corporations than by Ministers. An hon. Gentleman opposite shakes his head. I am speaking from my own experience. If they do not treat the hon. Gentleman as well as they treat me, perhaps that is his own fault. They treat me courteously because I write to them courteously.

I doubt whether this whacking great apparatus will be worthwhile, but if the four consumers' councils are set up they should be genuine and not log-rolling affairs. Recently, I made the acquaintance for the first time of the Telephone Users' Association. I know that hon. Members on both sides are associated with it, and I do not want to give anybody offence, but I came to the conclusion that it was not much more than a smooth public relations exercise—I hesitate to say "public relations racket" —operated on behalf of some manufacturers of telephone equipment.

The hon. Member for Howden will not be shocked to learn that I take a different view from that which he takes on the question of manufacturing. As he said, Clause 7(2) confers manufacturing powers which are limited by Ministerial approval under Clause 13. That is also right, since any change, upwards or downwards, in manufacturing powers is a matter of policy for which the Minister must be responsible. Although the hon. Gentleman opposite takes a different view, I think that the wording used in the Bill is highly restrictive and leads to the view that there are no circumstances in which the Minister will give approval to an extension unless he must. The wording suggests a predisposition against any extension of manufacturing beyond the present levels, but there is a powerful case for a considerable extension beyond the present levels.

The hon. Gentleman mentioned, in an aside, the Bell Telephone system. He will be aware that during the Select Committee's inquiry it was thought that a visit should be paid to the A.T. and T.A sub-committee of the Select Committee investigated this and its findings are published as an appendix to the Report. The sub-committee drew attention to the emphasis which was placed by the A.T. and T. on the advantages of the operation, the research and the manufacture all being in the same hands. In that case it is in privately and not publicly owned hands.

That was not the main point. The main point it made was about integration and feed-back. The operator could feed back comments on new developments to the researcher; the manufacturer could feed back manufacturing figures to the researcher; the researcher could pass on new ideas to the manufacturer; and all these sections were together under the A.T. and T. umbrella.

Almost the only way in which the Bill differs from past nationalisation Acts is that this is the first time that a Minister is not empowered to control the Corporation's research and training programmes. It is the first time that a Minister has yielded control of research to a Corporation. I think that that is right and that my Select Committee would agree with that. We have always urged that that was a matter upon which the operators of the industry should have autonomy. If they are to control training and research in their way, then, undoubtedly, notwithstanding the close contacts between public and private research organisations in this sphere, that will reinforce the case for the Post Office to move towards the American pattern of the Corporation which runs telecommunications also controlling research and development, and also controlling the provision, with a much larger element of manufacture on their own account.

Will the Assistant Postmaster-General, when he replies to the debate, give me an assurance that the intention is not, as could be read from the words of the Schedule to the Bill, to use the powers of the Minister under Clause 13 to hold down the level of manufacture to its present level?

The fifth and last point on which I say that it is not the words but the practice that matters is what has been broadly called industrial democracy. The phraseology of Clause 11(1) follows word for word the similar provision in the Iron and Steel Act, 1967. I hope that the Corporation will interpret and manage those words in a better way than did the Iron and Steel Corporation, which landed itself with a strike and a court of inquiry in almost record time. My feeling is that those who run the Post Office will be much more skilful.

I believe—and I was glad to hear the observations of my right hon. Friend on this—that the Post Office should try to go a bit further. This is an industry in which, as has been said, there has always been and still is a remarkable esprit de corps. It is an industry which has pioneered new techniques in industrial democracy. The Post Office has done more than any industry towards giving employees a say in the selection of the people who are to supervise, which is a healthy thing. The Post Office could in that and in other ways, without danger and without interfering with managerial efficiency, conduct experiments which might show the way to other industry.

I had better say, as did my right hon. Friend, that I am not a candidate for the job of chairman. Had I been 15 years younger, and not so involved and interested in the work of the House, I might well have been a candidate, but I am obviously well past it now. Whoever the chairman is to be, I am sure that we all wish him well. He will have a great and exciting opportunity to do something outstanding.

My last point, since it concerns our procedure, may be of particular interest to the House. It is an "in" point, a family joke among ourselves, but it is one of some importance. The Select Committee on Nationalised Industries, in its special Report of 1967–68, which was concerned with its own order of reference and scope of activities, suggested that its order of reference should be widened to permit inquiries into a number of other public organisations, one of which was Cable and Wireless. The then Postmaster-General resisted, not fiercely but quite firmly, the inclusion of Cable and Wireless within the framework of the Committee's order of reference.

Clause 127 empowers the Treasury to sell its interest in Cable and Wireless to the Postmaster-General before vesting day, or to the Post Office after vesting day. If that is done, and Cable and Wireless becomes a wholly owned subsidiary of the Post Office, the Select Committee on Nationalised Industries would have the power to investigate its affairs. I am glad to see my right hon. Friend indicating assent. This illustrates how silly it was for the then Postmaster-General, who must have known what legislation was on the stocks, to resist the extension of the Committee's order of reference in this way.

It is clear that the main function of the Bill carries the assent of the whole House It would be very surprising, on a Measure of this size, with such a degree of novelty, if there were not elements which could be improved during the course of the proper consideration which the House will give to it.

I wish that the parts of the Bill which are technical and carry no political controversy could be examined by the procedure of a Select Committee rather than by a Standing Committee, so that hon. Members could talk and throw ideas backwards and forwards instead of having to move formal Amendments and vote. I am sure that a better job could be done in that way, and I should very much like to see that happen. We all wish the Bill a fair wind, and the best of good fortune, and the greatest success to the Corporation which will be set up by the Bill.

5.20 p.m.

Mr. Ray Mawby (Totnes)

The hon. Member for Poplar (Mr. Mikardo) has, as usual, talked a lot of horse sense on the Bill. He raised one point which has worried me for a little while, and that is how far the agency services should be extended or the acceptance that the new Corporation will be carrying out an agency service.

When I held office at the Post Office, I was continually concerned at the amount of loss made each year by public kiosks; yet, at the same time, there was rightly an outcry whenever a kiosk was to be closed or a large estate was developed, and the inhabitants regarded this as a social service which should be provided for them.

I feel that unless the Minister treats kiosks in particular as an agency service, there will be a tendency—again, quite rightly—for the Corporation to say that they are not a commercial project and, therefore, there is no need to extend the number of kiosks, whatever the social reasons may be, whereas it would, in certain circumstances, be right and proper that the service should be continued and even extended.

For that reason, therefore, I agree completely with the hon. Member for Poplar and I hope that the Minister will give this matter careful consideration. Otherwise, we shall find the value of this social service diminishing because the Corporation, quite rightly, will say that it is not a commercial proposition and, therefore, that it will not do a great deal about it.

One thing which strikes me on looking at the Bill is that we are to have a Minister of Posts and a Parliamentary Secretary. As the hon. Member for Poplar said, they will have rather limited activities. They will be served by a staff of 400. I have done some quick arithmetic, and I calculate that the combined salaries of the Minister and his Parliamentary Secretary will be 1.3 per cent. of the total wage and salary bill of the organisation. This is a very high ratio for the chairman and managing director, if one might so describe them, of an outside organisation. My view would be that, with an organisation of 400 and a wage bill of only £900,000, this will be a job for a Minister of State rather than for a full Minister with a Parliamentary Secretary.

I see the difficulty which will arise if there is a Minister of Posts supported by a Parliamentary Secretary. Obviously, their main activities would be to deal with the television authorities. It is not often, however, that we have to renew the B.B.C. Charter and Licence, an occurrence which obviously would give the Department a great deal of work, and we do not have to bring in an independent television Act very often, either. Therefore, those two gentlemen will be very much under-used and the Department will, I am sure, to justify itself, seek to duplicate the work of the Corporation.

That is one of the things which worry me. I wonder whether proper thought has been given to whether it would not be better to follow the line of the Select Committee and have a Minister who is responsible for a number of nationalised industries. This would overcome my problem of having a Minister and a Parliamentary Secretary over what will be a very small Department, struggling to find enough to do and, in so doing, possibly interfering in and duplicating the work of what should be a forward-looking commercial organisation.

The second point which concerned me in the Bill was the general Ministerial control and supervision of the Post Office. Clause 11(6) worries me because it provides that The Post Office shall not disclose any directions given to it under any of the foregoing provisions of this section if the Minister notifies it that he is of opinion that it is against the interests of national security to do so. What does that mean? If it simply means that the Minister has given to the Post Office a direction which involves national security, I have no complaint. The difficulty is that it is left within the opinion of the Minister.

I certainly do not want to see an extension of secrecy, of which so many of us have had experience, even in the recent past, whereby actions cannot be published, although they have nothing to do with security and, very often, they are hushed up only because a Department or a Minister has made a mistake. I would, therefore, like clarification of this point and satisfaction that this power will be used only when the Minister is completely satisfied that national security is involved and that he would be loth to prevent the Post Office, if it so wished, from disclosing that directions had been given to it which were against its own inclinations.

We are politically opposed to the Clause on manufacturing. All I would say of the existing powers of the Post Office is that, when I was in office, I found that the factories, which, in the main, were concerned with refurbishing rather than with the manufacture of new equipment, were very well run and performed a valuable service. In some cases, they manufactured small items which were required in such small numbers that it would not have been right to put them out to contract. I have no complaint whatever about the action taken in those days. I agree with the hon. Member for Poplar that the wording also suggests that the Minister is making it clear that it will take a great deal of persuasion to make him agree to extend any of the manufacturing powers of the Post Office. That is right and proper.

The thing about which I am mainly concerned is Clause 24, which covers the telecommunications privilege. The Minister said that the existing powers were covered by rather antiquated Acts and that the position should be brought up-to-date. Did he not also consider that the principle of a telecommunications monopoly was antiquated, too? This is important, and it raises a number of questions.

Clause 27 deals with the right to issue licences. Now that the Post Office is to be made a public Corporation, I would have thought that the telecommunications side should operate vis-à-vis the customers rather more like the other nationalised boards. If, for example, electricity is connected to one's home, one does not necessarily have to buy the television set or the cooker from the electricity board but can obtain such equipment as one needs from a private contractor. That, at least, affords some semblance of competition which, in the telecommunications side of the Post Office, is non-existent.

The Minister said that there will be—indeed, there already is—a communications explosion. We all know that there is this communications explosion, and it will continue. The demand, not only for extra telephones but for trunk services, is such that, as the right hon. Gentleman said, the Post Office is hard put to it, in capital, manpower and materials, even to keep pace with the demand, which goes on increasing, and that is a very important consideration.

He then went on to say that he could see in the near future even television 'phones. I think the ordinary subscriber at the moment would much rather have a greater guarantee that the 'phone he has will work more efficiently. We know areas in the country where people find it extremely difficult at certain times of the day to obtain contact with other parts of the country. This is because of the shortages of capital, materials and manpower.

Yet we have a situation in which, because of the monopoly power of the telecommunications section of the Post Office, private industry is prevented from playing its full part in a combined effort to satisfy the tremendous and growing demand. Throughout the country there are private organisations which will install a complete internal system of telephone communication. They will either sell a system or hire it out, or put it on hire purchase. Any person using such a system in the office and wanting to talk to someone outside the office has got to have an additional telephone installed by the Post Office, and all repairs and maintenance, equally, have to be done by G.P.O. people. We ought at least to create a situation in which there would be opportunity for those manufacturers, and in which no one would have to go to one supplier, both for the supply of the basic service and also for his instrument and all the equipment.

Of course, the manufacturers must fulfil the high standards which are properly required. That is an important point. They must fulfil fairly high standards, but where they can offer a customer the service they ought to be allowed to do so. It is wrong in this day and age that a person or an organisation taking over a large office block should have to tie up capital in equipment for communications when the capital ought to be tied up in the product that person or organisation is there to make, and where that person or organisation can rent a system from an outside organisation he should be able to do so.

As far as I can see, the only way in which this can be done is by some disinterested body being set up, whether it be on the lines of the Federal Communications system or in some other way, and which could set the high standards which, as the right hon. Gentleman said, the Post Office has always set. We all accept that the Post Office has always had and continues to have high standards in the telecommunications system. We must be satisfied that those high standards will be maintained for instruments, switching equipment, and, indeed, all the equipment fitted by private contractors. That body would make certain that those standards were maintained.

Once this situation were established, the consumer would be in a position to choose between suppliers and could choose a private supplier, perhaps because he wanted to rent, perhaps because he felt the private supplier would give better maintenance service. After all, he is the consumer and he is paying, and he ought to be able to pick his supplier for his own reasons. If he could, the G.P.O. would at least have some of the great capital burden lifted off its shoulders, and this would make certain that the limited capital available to the Post Office could be more widely employed. Do not forget that, even under the Bill, borrowing will, in the main, continue to be along the lines it has always followed, and this will continue to be restrictive.

Moreover, development would not be liable to changes of mind by the Government. We have in the past seen capital programmes of the various nationalised industries severely changed when what we wanted was to make certain that we were making full use of the available capital and manufacturing capacity wherever it existed.

Another matter, which my hon. Friend raised, is that many manufacturers in this country find they have to have two manufacturing assembly lines, the line on which they supply equipment for the Post Office and the line along which they supply the export market. Is it not possible, under the system I am suggesting, that there would be at least opportunity for private manufacturers to bring forward their latest designs to be evaluated against high standards by the appropriate body, which would decide whether they were good or bad? At least they could be considered by a properly disinterested party, whereas at the moment, under the Corporation, if no changes are made, they will be reviewed by an interested party, whatever we may say about it.

Were I to go further I should be dealing with Committee points. Those were the main points of principle I wanted to raise. There are other hon. Members who want to speak so I shall conclude now, while certainly reserving the right to deal with these and other points in more detail in Committee, if I happen to be a member of the Committee.

5.38 p.m.

Mr. Harry Randall (Gateshead, West)

I welcome the opportunity to follow the hon. Member for Totnes (Mr. Mawby) and, clearly, the contribution he has made arises from his work in the Post Office. His comments have indeed been informative.

I have been very glad indeed that so far in this debate no hon. Member has decided that this is an opportunity to raise the temperature as, perhaps, it was raised a week ago. This is all to the good. There is in the Bill a good deal which is common ground between us, and I hope that our deliberations will continue in the way in which they have started.

I suppose one could comment, on Second Reading of this Bill, that the Bill is a curtain raiser to a new and momentous chapter in the history of the Post Office. It is the beginning of a very big step forward. It is a major Bill. It has 138 Clauses, there are 11 Schedules, and it covers no fewer than 230 pages. It sets out to place under new management a vast trading organisation whose customers—last year, at least—spent more than £800 million on communications services alone. It is also one of the biggest industrial organisations in the world concerning both staff and total assets.

The Bill will convert a Government Department into a public Corporation. The Post Office, "Old Faithful", steeped in all the traditions and service for over 300 years—perhaps a little tarnished during the past few weeks, possibly years—is now on the list of newcomers.

Those of us who served in the House in 1961 when the Post Office Act was going through Parliament, particularly those who were more closely concerned with the Committee stage, were made aware that in due course there was more to follow. Quite obviously something else had to follow the Post Office Act of 1961 transferring finances from the Treasury to the Post Office. We are today discussing what has followed.

At that time I was a little sceptical and suspicious. I was not altogether happy about that Post Office Act. Mainly because of the makeup of the Government and the philosophies held by a number of right hon. and hon. Gentlemen opposite, I had the feeling that, like the transport system, performing a double rôle as a provider of a social service as well as a commercial organisation which is expected to balance its budget, the Post Office would be mutilated. I felt that its profitable section, telecommunications, would be hived off and given to private industry, leaving behind the purely postal side of the business. It is clear that under the Bill this is not to happen. As I listened to the hon. Member for Howden (Mr. Bryan) opening the debate, it seemed a trailer of the things that are to come if there should be Tory Government in future. But under the Bill there is no hope that there will be this division.

Posts and telecommunications are required to perform a public service. Unlike private industry, which concentrates on the profitable areas for its activity, the Post Office is required to carry the bad with the good. Postal and telecommunications services are required not only in large cities where activities tend to be profitable, but in the remote rural areas where activities are unprofitable. The profitable areas have to carry the unprofitable. Nor could there be any question that it concentrates on one at the expense of the other. In social terms, the provision of a call box in a remote village is just as essential as a private branch exchange in a plush city office of a business executive. It is this public service which gives the industry its distinct and unique character, and it is this distinct character which draws the best from those who work for it.

Without misjudging the hon. Member for Totnes, in view of his past activities with the Post Office I thought that he would have made some reference to the staff with whom he worked very closely. The hon. Gentleman was a very good Assistant Postmaster-General. I thought that he would have taken the opportunity this afternoon, in view of the years that he served at the Post Office, to say a word about the staff. I do not wish to do him an injustice. I know the hon. Gentleman personally and I know how deeply he felt on staff matters when he was at the Post Office. He left the Post Office with a great love for it. My experience of Post Office workers is that they have a great sense of social responsibility and a pride in the public service that they provide.

This quality can be seen at its best on occasions of national emergency. The service has the reputation of continuing through fire, tempest and storm. We often hear, as we did during the difficulties of the Shropshire "siege", that Her Majesty's mail must get through. That has been said many times and that is the reaction and the dedication of so many of the Post Office staff.

I emphasise this quality because one of the factors which arise when status and function of the Post Office services are under discussion is commercialisation of the service provided. One of the basic reasons behind the content and the policy of the Bill is that "public corporation" will give the service a greater degree of commercial freedom. It is right that there should be greater commercial freedom. I am not arguing against that, but I have my anxieties—and they have been strengthened this afternoon listening to the Opposition—that the desirable trend to greater commercial freedom should be made at the expense of the public service hitherto provided. The quest for greater profitability should not subordinate the needs of those who are entitled to the service which the Post Office can provide, even though their provision may be uneconomic in the strictly financial sense. In short, I believe that the public service character of the industry must be maintained whatever the form or status it takes, and it must never be subordinated to commercial needs.

Another aspect which has given me concern during the past years when thinking about the sort of new and modern structure for the Post Office is the argument that posts and telecommunications should be separated into two distinct entities. I do not deny that strong arguments can be made for separation. I sat on the Select Committee on Nationalised Industries and those arguments were presented there. The main arguments and all the evidence before that Committee were to the effect that the needs of the two services were quite different in that one is capital intensive and the other labour intensive. Both arguments are sound, but, having spent most of my working life in a combined, integrated system of communications in the Post Office, I suggest that any splitting of the two main services would destroy the way in which they rely upon each other. The services are nationwide and heavily interdependent on each other. There are a number of common services, but the most important aspect is research and development.

Within the broad general principles of the Bill I believe that it will be possible not only to maintain the public service character of the communications industry, but to continue to reap the advantages. The single corporation was the view of the Select Committee, which, after an exhaustive and searching inquiry, considered that the well-tried pattern, on the whole, had worked well. Moreover, the Director General of the Post Office at that time, Sir Ronald German, who gave valuable assistance to the Committee, said that he saw no great advantage in carrying the separation of the services much further than it had already gone.

Having mentioned the Select Committee on Nationalised Industries, I should like to offer my congratulations to my hon. Friend the Member for Poplar (Mr. Mikardo) on his excellent chairmanship of that Committee, and the help and guidance which he gave us. I congratulate, too, the Post Office officials who gave considerable help and time to the Committee. Finally, I offer my congratulations to those witnesses from other industries and trade unions who contributed to the Committee's Report.

It was, indeed, a searching inquiry. The House may be interested to know that it is 35 years since we had the last full-scale inquiry into the Post Office. In the event, the timing of the Committee's inquiry appeared to be well chosen, first, because it put on record much of the up-to-date facts and intriguing story of this vast organisation. Secondly, if a member of the Sub-Committee may be immodest enough to point this out to the House, it provided the Post Office and new Corporation with a good start in their deliberations on the constitution and new structure.

But, thorough as was the inquiry, together with the comprehensive proposals put forward, it was not to be expected that all the Select Committee's proposals would find acceptance, and it is here that I am disappointed, because in the Bill I find that the principal links between headquarters and the regions have undergone a change.

The previous all-purpose regional organisation is to end, and there is to be a split into separate postal and telecommunication regions. I accept that substantial arguments were put to the Committee on this issue, and that Messrs. McKinsey said that there was some advantage in a single-mindedness of management in each service, but my view is that of the Select Committee, that the division will involve considerable complications about common services, duplication of staff, and so on. We have already heard that there is to be an increase of 400 in the staff arising from the new organisation, and I am sure that further criticisms will be made.

The whole history of the Post Office contains recommendations for changes. A Committee reports that there should be one organisation, and then a decade later another Committee reports that there should be a regional organisation. No doubt, we shall continue to get suggestions from various Committees about how the organisation should be changed. Because of my experience in the Post Office over many years, I believe that it is wrong to split the regional organisation. I believe that regional directors would and should have concern for postal and telecommunications services. The present structure has worked well so far, and I see no reason why it should now be altered.

I turn, now, from the general principles of the Bill to discuss one or two measures on which I should like my hon. Friend the Assistant Postmaster-General to comment. My first point arises under the broad heading of consultative machinery. We have had the White Paper, Cmnd. 3233, on the Reorganisation of the Post Office. I welcome the generous references in paragraph 52, and especially the comment: The new Corporation will not be taking over an industry marked by bad industrial relations: on the contrary, a fine tradition of co-operation and consultation between the management and staff has been built up in the Post Office. That is very true, and I warmly thank my right hon. Friend for his generous references this afternoon to the Post Office staff.

Over the years the Post Office staff have contributed much to the development of the Post Office, and quite often they have taken risks in doing so. One of the principles adopted by one of the trade unions in the Post Office is that everyone should ensure that the service is efficient, and this attitude is to be found among the workers in their approach to the many problems which confront them. I welcome the "expectation" that the Corporation will ensure that this develops further.

I believe that it was right and proper to leave no doubt about the contribution made by the staff, but I must remind the House that the early history of trade unionism in the Post Office was extremely bitter. There was grave opposition to them. I remember that a one-time Postmaster-General referred to the workers of the Post Office who were demanding a little more money as blackmailers and bloodsuckers. At the next General Election he lost his seat. I believe that Post Office workers contributed somewhat to that result.

I propose next to comment on paragraph 53 of the White Paper, which is in part a faint echo of one of the three factors which Messrs. McKinsey felt inhibited a drive towards more positive management within the Civil Service environment. In a Post Office publication entitled "Preparing for Corporation Status" I found the following statement: Management staff relationships have gone further in the Post Office than in most commercial enterprises. That seems a strange reason to advance for the failure to achieve a drive towards more positive management.

Paragraph 53 goes on to say: …the Government intention is that the two sides, in discussions before vesting day, should review their arrangements and approach to ensure that any weakness is removed. In my view paragraph 54 points to a possible weakness, namely, the fact that there are too many unions in the Post Office. It is not, however, sufficient to say that some rationalisation of the structure of staff representation, accompanied by a reduction in the number of associations…would be helpful both in streamlining and speeding up joint machinery… The four largest trade unions concerned have already taken action. They have formed a joint trades union council to seek to promote a thorough-going reorganisation of the Post Office trade union movement.

There is a widespread belief that a greater degree of unity is required in the trade union movement, but what is wanted now is for my right hon. Friend to get on with the discussions referred to in the White Paper. A great deal of encouragement is needed from my right hon. Friend so that the new Corporation, which has a real interest in the matter, as have the staff and the public, can enter into discussions for the rationalisation of the trade union structure.

Paragraph 11(3) of Schedule 1 provides that the Post Office shall make available to those persons, at a reasonable time before the discussion is to take place, such information in its possession relating to the subject (other than information whose disclosure to those persons would, in the opinion of the Post Office, be undesirable in the national interest)… Those are the words to which I should like to draw my right hon. Friend's attention. They caused some apprehension. All that is required is a general reassurance to the staff that it is not intended to exclude normal material which is involved in day-to-day negotiations. I believe that no departure is intended from the present practice but the words contained in Part II have created some apprehension.

There will be many changes in the process of reorganisation, and for Post Office staff one of the most important questions which will arise is grading. Over the past four years many changes have taken place at managerial or top level. It is now over two years since the first announcement was made about Post Office reorganisation, and yet there has not been a word about grading below the managerial level. There has been no disclosure of the method of evaluation of the work performed by the staff. At present, there are about 350 different Post Office grades, many of which are grouped in the Civil Service hierarchies. It is unthinkable that when the reorganisation is carried out and the Corporation gets under way it will continue to work with about 350 different grades.

I should like to hear a statement tonight from my hon. Friend the Assistant Postmaster-General on the question of grading. Many Post Office workers are disturbed on this point. They want to know what is to happen about their grading in the new set-up. Their anxious inquiries are invariably met with the response that the establishment of the Corporation will not make much difference to them in this respect. But I am sure that my hon. Friend will agree that if it is to make any sense at all the Corporation should be efficient in its working. My right hon. Friend is most anxious that the Post Office shall be efficient, and the staff are concerned that it should be. The regrading of staff should not take place within the outmoded Civil Service hierarchies. A meaningful Post Office grading must be introduced. It is not unreasonable for men who are going to work under new management to ask questions and to expect answers. It is no wonder that they are disturbed.

The position here is somewhat like that in respect of superannuation, about which there was some complaint a few weeks ago. Delay occurred in that case. Grading is one of the issues which the Post Office staff regard as important, and it is time that they heard more about what the future holds for them in the new Corporation. Lack of information in this context breeds fear. Fear may lead to opposition, and in this great change-over we must try to take the staff with us.

I listened to what my right hon. Friend said about superannuation. I can assure him that the raising of the retirement age to 65 has caused a good deal of misgiving. It has turned things a little sour. The question is very important to many men who have done almost 40 years' service and who are now nearly 60 years of age. Conditions of superannuation are excellent, and I would not like to say anything against them. Improvements have been made, but they will not be available to members of the staff who are approaching 60 years of age unless they are prepared to stay on until they are 65. It may be that the Treasury has intervened. Nevertheless, it will be worth while for my right hon. Friend to reconsider: he question. Over the weekend I heard of discussions taking place at meetings held all over the country at which the question of superannuation is constantly being raised.

Clause 84 of the Bill provides for the possible surrender of the Post Office's exclusive privilege in the Channel Islands and the Isle of Man. I understood from what my right hon. Friend said this afternoon that the Isle of Man has decided to allow the British Post Office to continue to operate these services but that the Channel Islands have opted to take over the exclusive Post Office privilege. I have had private correspondence on the matter, and I want my right hon. Friend to know that there is strong resentment among the present Post Office staff about the take-over by the Insular States, because the staff feel that a decision has been made before firm undertakings and assurances have been obtained from the States concerning pay and conditions for existing Post Office staff.

I have seen a document in which the Post Office Service Investigation Committee in Guernsey has presented its recommendations. The Post Office staff in Guernsey are aware of the recommendations and have a feeling of deep resentment against Her Majesty's Government for approving the take-over of Post Office services by both Jersey and Guernsey. The staff feel that the guarantees which have been given in respect of the conditions of employment of Post Office staff who have elected to be employed by the States are not as firm as they could be and should be. The undertakings given by the States are qualified by the words contained in Recommendation 2(b), which qualifies the implementation of the pay and conditions proposed by adding that they shall be implemented to the full extent that they"— that is, the States— are capable of implementation. That qualification worries the Post Office staff. They believe that their fears are not groundless, because even the report talks about the uncertainty in the rate of future growth in the services, which the Islanders contend throws a doubt on the continuing viability of the Post Office in the hands of the States. They make the further claim that Her Majesty's Government have been more than generous in the pricing of buildings, vehicles, equipment, etc., at present owned by the British Post Office. I have received a letter which says: It would appear from the prices asked for buildings, etc., that Her Majesty's Government have been very generous in their pricing, almost intimating a desire to offload the Channel Islands Post Office services. I hope that the worst fears of many of my old friends in the Islands will not materialise. The Government have a solemn obligation to these valued servants, and before we surrender our privilege we should ensure that their future is in no way imperilled as a result of the setting up of the new Corporation and the take-over by the Insular States.

Is my right hon. Friend satisfied that the proposals leading to the take over by the Insular authorities are sound, viable and acceptable, even from a commercial point of view? Is my right hon. Friend satisfied about the great agitation in the States to get into the industry of the philatelists? Is this not an indication of the lack of viability of the service there? Is he quite sure that, in handing over, he is acting in the best interests of the Post Office staff? Is there not a reason for their anxiety over this qualification in the recommendation, and should we not be careful before handing over these valued staff? But even more important than the commercial side, surely we should honourably carry out our obligation to the staff. These matters profoundly worry the staff in the Islands, and they would like a statement from my right hon. Friend.

This is something of a nostalgic moment for me. Two years before I left school, I was associated with the Post Office, since I was in the Norwood Postal Military Band and was invited to become a telegraph messenger when I was 14 because of this connection. Throughout my working life, the Post Office has been my constant companion and I have tried to serve it both within the Post Office, in the union field, and, if I may say so, in the House.

When we were discussing the Post Office Bill in 1961, the then Postmaster-General, Reginald Bevins, said of me in Committee one day, "The trouble with the hon. Member is that he loves the Post Office too much." I did not resent that, but I would prefer to put it another way. My loyalty to "Old Faithful" has never waned. It is a great and grand institution. Men and women over the centuries have served it well and they never lack pride in public service.

I wish the new Corporation well. Problems will be many and severe, but it will take over a rich inheritance of pride of service and unfailing loyalty. If I do not agree with everything in the Bill, there is one Clause to which I can give assent. Despite all that flirting with other names for the Corporation, the two words "Post Office" are to remain. I am grateful that my right hon. Friend should have done that. I want to see the new Post Office Corporation developing on the history of the past and becoming an even greater success.

Several Hon. Members rose—

Mr. Deputy Speaker (Mr. Harry Gourlay)

Order. Many hon. Members have signified their wish to speak in this debate. If only hon. Members would display the virtue of brevity, it would assist the Chair, and more hon. Members could take part.

6.13 p.m.

Sir Ronald Russell (Wembley, South)

The hon. Member for Gateshead, West (Mr. Randall) said that he hoped no one would introduce any heat into the debate. I assure him that I will not do that, but I should like some light on one or two points, and I may be a little critical.

First, I am sorry that the title "Postmaster-General" is to disappear, not only because it is old and almost a household word, but because it is short, particularly in comparison with the titles of many other Ministers in the Government. The only ones which are shorter, I think, are the Minister of Power and the Prime Minister. Instead, we are to have a clumsy title of Minister of Post and Telecommunications. The Assistant Postmaster-General will be called the Parliamentary Secretary to the Ministry of Posts and Telecommunications—or nine words, with 63 letters, instead of three words, with 26 letters. That is almost as bad as the Under-Secretary of State for Defence for the Royal Air Force, which is about the clumsiest title ever invented. I would ask that this question be looked at again.

I know that the right hon. Gentleman said that there were legal problems, but is it not possible legally to divest himself of the responsibilities as Postmaster-General and then reassume fresh ones? Only a title is involved, after all. Why should not a title, even though an old one, and despite legal complications, be renewed in another guise?

There is a tendency in the Post Office to put more and more burdens on the public. I know that in some cases this is a penalty of technological progress. For instance, we now have all-figure telephone numbers. No one would deny that they are more difficult to remember than the old system, particularly in the London area, with exchanges and four figures. Even the dialling was easier to remember. I realise that they are a necessity for subscriber trunk dialling, both inland and overseas, even though those two sets of calls represent only 13 per cent. of the total in the country as a whole.

Presumably there may in time be some saving of staff and, therefore, of cost through this development, but we are also to have—in some cases we have it already—post codes. This is another burden on the public. Although we can remember addresses to which we write regularly, even if it entails a postal district like S.E.1 to remember a post code as well is far more difficult. My bank is in Newcastle, so I have come quickly in touch with post codes. The code of my bank is NE1 1NS. I can remember that at the moment, but I do not know whether I will be able to in a month, when I have to write to it again. This will be multiplied a thousandfold for the whole of the public.

Are these codes for sorting by machines? If so, how is a machine to differentiate between the varieties of handwriting which is shown among members of the public? What sort of an area will each code cover? I see from the last Report and Accounts of the Post Office that the Post Office Users' Council has been complaining because it has been said that the post codes will not be included in addresses in telephone directories. They have asked for this to be reconsidered, since it will cause great confusion, as telephone directories are used for finding addresses almost as much as for finding numbers. What will be the delay if someone does not include the post code in an address?

We have also been told today of another burden for the public, although it is one which will remove a burden from Post Office staff. That is the suggestion that we might bring in post boxes for flats and at garden gates. This idea is used a great deal abroad, especially in the United States and Canada, where long walks must be suffered by postmen calling at houses in large grounds, and also in blocks of flats, particularly if they do not have a lift, but the boxes will obviously have to be very large to cope, for example, with the large documents which Members of Parliament receive from the general public. I am glad that, if it does come in, such a development will lighten the burden on postmen.

In that connection, what is happening about the experiment with trollies for postmen to carry the mail about in? We have learned this afternoon that the railways do not seem to be too thrilled by the idea of trollies for passengers to carry their luggage in. Have any experiments been conducted into this way of lightening the postman's load?

We are also being asked to write our names and addresses on the reverse side of envelopes to save time at sorting offices when letters must be returned to senders. This represents more work for the letter writer. Indeed, the letter writer will be doing a geat deal more work, so saving labour in the Post Office. Will he, as a result, gain something in return? While it is difficult these days to expect a reduction in charges, it is to be hoped that a long time will pass before Post Office charges are increased.

Is there any chance of the telephone services operating more cheaply under the new régime? Two years ago an international comparison was made between the cost of telephone services in 10 countries. It revealed, comparing the rental plus cost of local calls in those countries, that Sweden and the Netherlands had the lowest charges while West Germany and Israel had the highest. The United Kingdom appeared about half way down the league. The comparison was made on the basis of the rental plus 500 and 1,000 local calls. In each case Great Britain came out about half way down the list.

It was interesting to note that the Hull telephone system came out cheapest in the United Kingdom as a whole, both for the rental plus the cost of 500 local calls and the rental plus the cost of 1,000 local call comparisons. In Hull, the rental and 500 local calls cost £16 13s. while under S.T.D. in the United Kingdom as a whole the cost was £18 13s. The corresponding figures for the rental plus the cost of 1,000 calls were £20 17s. in Hull and £22 6d. in the United Kingdom as a whole. In both cases the charges in non-S.T.D. areas were higher.

On the other hand, the charge for the rental plus 500 local calls in Sweden was £9 3s. and for 1,000 local calls it was £11 11s. Why is the Swedish service so much cheaper. Considering the large distances that must be covered—it is further from the north to the south of Sweden than it is from the north to the south of Britain—it seems peculiar that there should be this differential.

One of the worst features of the two-tier postal system is the failure of the Post Office to deliver 5d. mail on Saturdays. When I was in Northumberland during the summer my mail was redirected from this House. This occurred both before and after the two-tier system was introduced. I received my redirected mail regularly on Tuesdays, Fridays and other weekdays, but mail redirected from this House and stamped "10.30 a.m. Friday " did not arrive on Saturday, the following day, but the following Monday morning. Considering that it was all, including the 4d. mail. stamped "first-class" when redirected, I cannot understand why it was not delivered on Saturday.

This is probably only one of many examples that hon. Members could give. The long-distance mail posted on Fridays appears to be getting stuck in the system before Saturday mornings. It should be capable of being delivered at the usual time the following day, and I trust that this and the other points I have raised will be looked into, either now or when the new Corporation is established.

Mr. Speaker

In calling the next speaker, I again remind hon. Members that the majority of those now in the Chamber still wish to speak and that every long speech reduces the chances of hon. Members being called.

6.25 p.m.

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

I join hon. Members in giving a general welcome to the Bill, which is, of necessity, long and which, as a result, will be a considerable time in Committee. I am sure that the majority of hon. Members will approach the Committee stage in an objective way and will wish to see the Bill finalised in such a way that the new Corporation gets off to a good start.

What is the Bill really about? If we are seeking to make the Post Office a commercial proposition—a view which is generally accepted on both sides—we must not lose sight of the fact that it must remain a public service. My hon. Friend the Member for Gateshead, West (Mr. Randall) made this point in an interesting and understanding speech. We listened to his remarks with great pleasure. His contribution on this, as on other matters, was of vital importance. I agree that if the new Corporation acts in a purely commercial capacity, we will be doing a disservice to the many millions of people in Britain who need postal and telephone services.

We must, therefore ocmbine the two, and I believe that the terms of the Bill will, in the main, secure this combination. We must have a clear understanding of what it means to provide a social service for those who need it. For this reason, I am worried when I hear hon. Gentlemen opposite suggest that public telephone kiosks should be made to pay, irrespective of all other considerations. They must pay and not be subsidised by private subscribers, they demand. This is all right as long as we remember that people will want to make telephone calls, but cannot afford the rental to have telephone sets in their own homes.

I appreciate that if there was a cessation of telegrams, one of the biggest burdens would be lifted from the shoulders of the Post Office. While that may be so, it would deny an urgent aspect of the services now being provided by the Post Office to its customers generally. We should not prevent people from having this urgent means of sending news. More than 40 per cent. of the population still cannot afford telephone sets in their homes, even if they could get them. I hope that the Minister will tell us clearly what he understands by "commercial" from the point of view of the Corporation's activities, particularly in relation to the public service aspects of the new structure.

I am not sure that I understand what will be the chain of command. Without being given a clearer statement of what is envisaged, I cannot at this stage give my full support to this part of the Bill. It seems that there is an overriding function written into the Bill for my right hon. Friend to have something more than a general oversight of Post Office affairs through the Post Office Board. I fear that he could too easily slip into the habit of oversighting most of the usual operations of the Corporation, and this would be contrary to what we are seeking to do. The matter is not made clear in the Bill. The chain of command inside the Corporation is not clear, either—the command from the headquarters staff to the regional and local offices and vice versa. I am sure that, whatever the structure, it will work, but we should get the position exactly right now and not leave things to chance.

I was particularly disappointed to hear my right hon. Friend's remarks about the reference in the Bill to staff participation in Post Office management. For many years the union of which I am still a member and with which I have been associated for a long time has had one of the best records in Post Office affairs. It has used the conciliatory machinery to the best possible advantage. It has built up over many years of service an excellent record and, as my hon. Friend the Member for Poplar (Mr. Mikardo) pointed out, between 1958 and 1960 it gained an opportunity for the staff side to have some say in selecting supervisors. To have reached that position with the management without much disagreement is a wonderful record, and I regret that it is not stated in the Bill that there will be staff participation, or certainly a staff side member on the Board.

My right hon. Friend said that he hoped that there would be an opportunity for Post Office staffs to participate in this way during the next few years. I hope that he will consider this matter again and bring it more to the fore so that, from the very inception of the Corporation, the staff associations will have an opportunity to participate in the management of their affairs.

I welcome the temporary arrangements to which my right hon. Friend referred. I do not believe that he wants the job of chairman of the Board. I suggest that the sooner he appoints a full-time chairman, and so relieves himself of the pressure which must be on him at the moment, the better. As my hon. Friend the Member for Poplar said, the attitudes that exist between the Minister and the Board and, lower down, the Board and the management and staff side will create a sound and efficient organisation once the Bill is passed.

I share some of the fears that have been expressed about the users' councils. It is obviously vital that there be such bodies and if they develop into the sort of councils which we have for the coal, gas and other nationalised industries, they will serve a useful function. However, I am not sure that the introduction of such councils for Northern Ireland, Scotland and Wales will necessarily serve the purpose we have in mind, erhaps there is a case for a Northern Ireland Users' Council, but I am not sure about the other local councils.

I trust that, whatever the final decision on this score, these councils will have a reasonable opportunity of formulating discussion and comment. I am not sure that their terms of reference as given in the Bill will allow them to do this. At what stage will they have an opportunity to comment on what the Corporation is doing, and how will their comments be used? Will these councils reflect general opinion or bipartisan or partisan opinion, either for or against the Corporation? I hope that they will reflect opinion in neither way, but will be absolutely constructive.

Clauses 43 to 50 of the Bill refer to the Cable and Wireless staff and other matters. May I point to some of the problems which will arise unless we deal with this situation properly? When the Post Office took over Cable and Wireless, just after the Second World War, it created a number of difficult problems which even to this day have not been finally resolved. That amounted to a failure to integrate the Cable and Wireless section into the Post Office services. There has been a feeling of discrimination between the two for some time and, despite the fact that the staff now working in Cable and Wireless are probably entirely different personnel from those who were there in 1947, this problem has never been solved.

Reading Clauses 43 to 50—and I shall raise this point in Committee—I am not sure that the answer proposed is the right answer. If we do not integrate this section fully, as all other sections within the Corporation, we shall be asking for the creation of difficulties which will still rear their heads 20 years after we have started the Corporation.

I have some questions to ask and some comments to make on problems which are endemic in the Bill for the Post Office staff in particular. The first concerns superannuation. My hon. Friend the Member for Gateshead, West referred to that. It is a personal problem for everyone now enjoying Civil Service amenities and status. I do not believe that we have yet been given the right answer by the Postmaster-General when he describes the way in which he wishes to tackle the problem. If we can say, in general terms, that no one will be worse off, then all are reasonably satisfied. But then each member of the staff gets out the rules and regulations and works out his own personal position—and that is where the difficulties start.

The older members, approaching 40 years of service, will be at a disadvantage if the procedure is pressed in respect of which there are discussions between the Postmaster-General and the associations who are looking after the interests of their members. If the clauses in that document are pressed, there may be difficulties, and we must avoid that in the start of a new Corporation. The senior staff, those who have been with the Post Office a long time, must be able to change to the new Corporation in the best possible way and to give their full support to a completely new type of organisation. I hope that my right hon. Friend will look at this point again.

I make a similar comment about grading. Before a new organisation of this kind is formed, and bearing in mind the history of grading over many years in the Post Office, people ought to know, before they move into the new structure, what their grading and their relationship will be one to another. That must be shown to them because it is part of their career prospects, and it must be shown to them before we agree to such a change. If this problem is endemic in the change, as I think it is, we ought to know what is proposed before we agree to the Bill.

May I also comment on the consultative arrangements for the staff in the new Corporation? The Post Office has a fine history in this respect. It has been marred to some extent by the large number of unions, for most people in the Post Office feel that they could well be reduced. But we need a move by the Postmaster-General to inform the staff where they will stand in this respect. They should have clearly put to them what is their future in staff consultation and consultative arrangements generally. We are changing from a system which has been well tried to one which is totally new, and we need an assurance.

I am sure that all hon. Members wish to give the Bill detailed and constructive study in Committee. I welcome the statement by the hon. Member for How-den (Mr. Bryan)—and I make a similar plea—that we should put aside political jargon and rigmarole and have regard to the damage which is sometimes done by attacks, if not by general comments, on the service to which we are all much indebted. I want the Bill to be passed so that we may continue this supremely good service and this supremely great industry, giving the full public service which it has given for several hundreds of years.

6.45 p.m.

Mr. Stratton Mills (Belfast, North)

Like other hon. Members, I welcome the Bill—all 230 pages of it. Those who are interested in examining it in Committee will feel that they have a meal before them, to which this debate is only the appetiser.

It is obvious that there is much good will for the Bill on all sides of the House. As the Postmaster-General said, the aim is to bring about a fundamental change in the structure of the Post Office and to give it a new commercial drive. That is an aim with which we on this side of the House are well content, because it is clear to us that a more commercial outlook is much needed in the Post Office, a fact which was underlined by the Report of the Prices and Incomes Board in the summer. In those parts of the Post Office which I have come across, I have felt a much greater need for a commercial approach.

In the new structure, there will be an opportunity to get in new management at all levels. Most important, it will give flexibility in salary scales and enable the Corporation to get away from the Civil Services salary structure, so as to get the necessary management talent. I welcomed the reference in the White Paper to devolving "as much authority and responsibility as possible at every level", and I hope that the administration of the new structure will implement this principle. Other hon. Members have paid tribute to the Post Office staff, and although I should like to see a more commercial approach, in many sectors, in the higher range of management, I join in those compliments.

I believe the Post Office owes a great debt to Sir John Wall, who has been admirably suited to the interim period before we move to Corporation status. I am sorry that it has not been possible to persuade him to stay on as head of the new Corporation, as he would be an excellent choice. I was amazed to read in the Sunday Times that the Postmaster-General was temporarily to be the new chief executive. I was even more amazed to read this morning in the Financial Times observer column—I will quote it in full, as it is worth repetition: There is nothing better for Sunday morning newspaper readers than a good spontaneous surprise story. You know, the sort that looks like an unofficial leak but somehow finishes up on all the front pages in great detail. No one knows this better than the man of the moment, Postmaster-General Mr. John Stonehouse, who organised yesterday's story during the week and told Sunday newspaper reporters about it on Wednesday. I do not know whether that statement is true, but we should have a reply about it at the end of the debate. Is it correct that this was not a leak but a story planted by the Postmaster-General? I will not speculate on the motives, but if that is what happened, there are certainly grounds for adverse comment.

I appreciate that this decision by the Postmaster-General relates to only a temporary appointment, but I wonder whether this is desirable? I thought that the main intention was to have a more commercially-minded management. If, at the very beginning, in the most formative stages, we have the Postmaster-General acting as chief executive, that is unsatisfactory. It is of vital importance that the man who is to be the chief executive in the future should be in on the ground floor. It would be much better to expedite the appointment rather than to have this half-and-half arrangement with the Postmaster-General both as the political chief and as the executive overlord. I hope that he will have new thoughts on the matter.

I had hoped that in the new status of the Post Office there would be experimentation in the type of structure of a nationalised industry. There is nothing party political in the comment. I should like to see much more experimentation in the Post Office, first with respect to capital. There is an immense shortage of capital for all the nationalised industries. Is it not possible for the Post Office to raise some of its fixed interest capital on the market rather than through the Treasury?

That would remove the Post Office to some extent from general Treasury control of its overall capital budget. I go further: will it not ultimately be possible to sell part of the Post Office equity to the public? I emphasise that I am not suggesting that we should sell all of the Post Office equity, but that we should have a mixture of public and private holdings. These suggestions should be considered, as they would help the Post Office become more experimentally-minded.

May I comment on charges? At present, the Postmaster-General must get the consent of Parliament, by Statutory Instrument which can be discussed in the House, for increased Post Office charges. Under the Bill, the Post Office will be able to alter its charges more or less at will, merely by going through a consultation procedure—and I do not regard that as altogether satisfactory. I should much prefer a method such as that in the United States, where the Bell Telephone Company, because it is a monopoly, must go before some form of public body and argue its case there and get its consent before price increases are authorised.

The third experiment which I want to see concerns consumer relations. I disagree with the hon. Member for Poplar (Mr. Mikardo)—and I shook my head vigorously in dissent when he made the point—in his view about the efficacy of complaints to Ministers. Possibly his experience is different, but I have always found that I receive better and more attentive answers from Ministers in reply to correspondence on behalf of constituents than I receive from the boss of a giant nationalised industry. I still feel that one gets much better attention from Ministers. A Post Office Users' Council as a body to deal with complaints does not impress me one little bit. It is not a satisfactory substitute for Questions and Answers in the House and for the opportunity to write to and see Ministers.

The consultative bodies in other nationalised industries are not an inspiring example of what we want to see for the Post Office. I view these consultative organisations as "stooges" which take a long time to deal with anything and which inevitably are too closely tied to the nationalised industries about which it is concerned. It is important that we should look at the general picture in much greater detail in Committee, but one alternative would be to establish a Parliamentary Commission to consider the question of complaints by consumers for all nationalised industries and not purely those in respect of the Post Office.

Such a Commission would sit upstairs and have a kind of Question Time, perhaps once a week, with an Order Paper on which one could table questions which the chief executives of the nationalised industries would answer, also dealing with supplementaries. Such a system would be worth all the consultative committees. I hope that we can explore this kind of idea more fully in Committee. The other alternative is to look at the rôle of the Government-sponsored Consumer Council. Perhaps it could take over the consultative rôle vis-à-vis all the nationalised industries on behalf of the consumer. It could have the advice of independent experts which is of particular importance.

I turn now to the proposed powers of manufacture. If the Post Office wishes to increase its manufacturing powers substantially under the Bill, it will have to get the Minister's consent. What does "substantial" mean in this context? It would be preferable if such powers could only be authorised by the Minister through a Statutory Instrument so that there could be proper Parliamentary examination.

The Prices and Incomes Board has commented on the inland telegram service and the former Postmaster-General made a holding statement about it last summer. When can we have a full statement of the intentions of Her Majesty's Government in this respect?

I agree with my hon. Friend the Member for Wembley, South (Sir R. Russell) that the proposed title "Minister of Posts and Telecommunications" is ghastly. I prefer the familiar name "Postmaster-General". It goes a long way back and I would be sorry to lose it. The name has a pleasant ring about it and I do not altogether understand the reasoning of the Postmaster-General, who says that there are legal difficulties. I assume these arise on the transfer of the assets, but surely it is not beyond the ingenuity of man to find a way out. Perhaps we can look at this in Committee and consider whether we cannot retain the more interesting name of "Postmaster-General".

I wish the Bill every success and hope that the new arrangements will give the Post Office a new commercial drive.

6.53 p.m.

Mr. Dennis Hobden (Brighton, Kemptown)

I support the Bill. There seems to be an outlook on the benches opposite that, if an industry is publicly owned, the management is not commercially minded. We should give the lie to this. Captains of private industry have paid tribute to the heads of publicly-owned industries time and again for their efficiency, commercial mindedness and modern outlook.

I do not think that we need make a great deal of the question whether my right hon. Friend is acting as Postmaster-General during the interim period. It will not be comparable with previous situations in which private industries have become publicly owned and there was, therefore, the need to appoint a chairman of the new Corporation at once.

I welcome the tributes paid by hon. Members to the Post Office staff and their work. When I first heard of the proposal to make the Post Office a Corporation—and I have spent a lot of my adult working life in the Post Office—I did not think much of it. However, following publication of the Bill, and having, in the House, seen how the nationalised industries are used as political footballs, I would like to see the Post Office taken out of this arena so that its staff could get on with the job.

I acknowledge that hon. Members opposite are not criticising the staffs when they attack the nationalised industries, but it is no good making these criticisms unless the person being complained about is identified. I do not mind hearing criticism of my right hon. Friend the Postmaster-General or of my hon. Friend the Assistant Postmaster-General. They can speak up for themselves. Nevertheless, criticism should be identified, because otherwise the staff of the Post Office feel that it brushes off on them and they resent it.

Morale in the Post Office, as a result of the criticism of the last few years, has reached a low ebb. Since the war, thousands of Post Office workers have gone elsewhere for better pay and conditions. For years they have had depressed living standards, with low pay and uncongenial hours which require the uniformed grades, in particular, to work at all hours of the day or night.

As a result, of course, the Post Office has experienced large shortages of manpower. This has required overtime—and that overtime is compulsory, because, as the Post Office is a public service, the depleted staff is expected to maintain the service. Paradoxically enough, I believe that it is because of the overtime that the Post Office has had rather more industrial peace than it would otherwise have had. The employees have been able, by overtime, to supplement their meagre basic earnings.

But we should appreciate the fact that, if the Post Office ever achieves a full staff and the employees have to live on their basic pay because there will be no need for overtime, we can expect serious industrial difficulties, since they will not accept lower standards than those enjoyed by people in other industries.

I say this because there is nothing in the Bill, as far as I can see, to provide that Post Office workers are to get wage and salary reviews on their own merits. The Post Office workers are conditioned to a principle of negotiation known as "fair comparison". By this method, there is intensive examination of wages and conditions in broadly comparable undertakings. If there is movement in wages and conditions in those other industries, a corresponding award is made to the comparable Post Office grades. I must say that the system has brought about more just awards than the Post Office staff received previously, but it does not alter the basic situation that it entails lengthy and detailed examination and lengthy negotiations after that.

Post Office workers are puzzled and angry at the time it takes to get an increase in pay. They may be forgiven if they believe that the process for bringing about increases in their pay is deliberately designed to ensure delay. This places an enormous responsibility on the trade union leaders in the industry, who are anxious to get the best possible pay and conditions for their members. I pay tribute to those union leaders who have achieved much by patient negotiation and without resorting to industrial action.

The Bill is also noteworthy for what it does not contain. For some time, as other hon. Members have said, talks have been going on among the various unions about future grading of staff, but what are the Minister's proposals for grading in the lower echelons of the service? We have heard nothing about this yet and I hope that we soon shall. Has my right hon. Friend any firm views, and will his ideas be the subject of discussion with the interested parties well before vesting day, which is probably less than a year away?

Attention has already been drawn to the fact that there are now 350 different grades in the Post Office. It is high time that proposals for integration were put forward as a matter of urgency. I remind my right hon. Friend that as far back as March, 1967, his predecessor but one said that one of the objects of the new Corporation would be to group people on the basis of function rather than class or hierarchy. If there are to be alterations in the grade groupings, there will be a resultant impact on the various unions involved.

This was mentioned by the hon. Member for Howden (Mr. Bryan), who asked about the number of trade unions. We have to get the gradings before we can see what unions should represent the grades. If we can get that right, there may have to be some reduction in the number of unions. My view is that we should be moving towards the concept of an industrial union, one union for one industry.

To give them credit, the Post Office unions have been having discussions for some time about how they could rationalise their basis. They get on well with each other and, in practice, their leaderships are forward looking and they are making progress, but it is no good their making progress unless my right hon. Friend lets them know his views. I think that he should take some initiative in this matter by first withdrawing recognition from the National Guild of Telephonists.

This splinter organisation has never achieved anything for its members. Its members have received benefits fought for by the Union of Post Office Workers after patient negotiation. The Guild is an anachronism in our modern world. Time and again it has resisted all attempts to bring it within the orbit—

Mr. Speaker

Order. Although the debate is very wide, the hon. Gentleman must link what he is saying with the Bill.

Mr. Hobden

I am sorry, Mr. Speaker. I was trying to show the connection between consultation processes and the Corporation's new status. Rationalisation of the structure of the unions is needed.

Another problem inherent in the Bill is the proposal to extend the retiring age under the Corporation to 65. Much as I rejoice in the fact that the strangulating hand of the Treasury is finally to disappear from the Post Office scene, I do not believe that the staff should be in any worse position after vesting day, and I welcome my right hon. Friend's assurance on this point. However, if he wants to be assured of future recruitment to the Post Office, he will have to reconsider this situation. If he does, some of the cynicism now felt by some members of the staff will disappear and the new Corporation will start off on the right foot.

I agree with what others have said about the Post Office Users' National Council and I fully support what was said by my hon. Friend the Member for Poplar (Mr. Mikardo) about the consultative councils of other nationalised industries. If the Electricity Users' Consultative Council closed down tomorrow, probably not even its members would be aware of it, let alone the public who are supposed to take their complaints to it.

I welcome the Bill. Any small matters which I have to raise in connection with it I shall hope to raise in Committee.

7.5 p.m.

Dr. M. P. Winstanley (Cheadle)

I am glad to follow the hon. Member for Brighton, Kemptown (Mr. Hobden), because it gives me the opportunity to correct a misapprehension of his. I refer rather to what he said last week that to what he has just said. Last week, he appeared to think that if any of us suggested for a moment that everything was not entirely happy and satisfactory within the Post Office, we were in some way attacking the trade union side, or asking for the whole nationalised industry, as it were, to be abolished, and so on. That is not true.

I said some critical things about some of the work in the Post Office and I am prepared to say the same things again and again, but that does not mean that I do not admire and respect the work of the Post Office. I have been connected with it professionally for many years, I have seen it at close quarters, and I think that Post Office employees are very hard working and very much underpaid. I accept all those things and I believe that we are right to pay tribute to the staff as many hon. Members have, but I ask the hon. Gentleman to accept that if we sometimes say critical things about the management, or the unions, or the Postmaster-General, we are not trying to abolish those three things, but merely trying to improve them; and I hope that he will accept any comments I make today in that spirit.

My remark to which the hon. Gentleman took such exception was merely a quotation from the Prices and Incomes Board Report, which suggested that a certain procedure had taken seven years as a result of debate by the trade unions. I was told by the hon. Gentleman's hon. Friend the Member for Bristol, North-East (Mr. Dobson) that this merely showed how little I knew about the Post Office. I suggest that it shows how little the hon. Gentleman knew about the Prices and Incomes Board's Report. I am glad to hear that the hon. Gentleman now suggests that there are too many unions, a point which was also made by his hon. Friend the Member for Gateshead, West (Mr. Randall). If we are trying to get a better functioning of the industry, we must pay proper regard to the trade union side as well as to the management side to see that both function efficiently and we must also see that our own side, the political side, functions efficiently.

Since you made your second request for short speeches, Mr. Speaker, I think that the "bogey" has gone down from about 35 minutes to something very much less, and I shall try to accelerate that tendency. This is such a long Bill that it is almost impossible to make anything but a short speech, for if I were to deal with all the matters contained in it, I should be speaking for about a week. The only proper thing to do at this stage is to make some general observations and to reserve my general position and that of my right hon. and hon. Friends for the Committee stage and for when the Bill re-emerges from Committee.

One would hardly have deliberately chosen this time as the occasion on which to introduce measures which may reduce the accountability of the Post Office and of the Postmaster-General for it. We have all heard of the difficulty and of the failure of the Post Office authorities in the introduction of what has been a perfectly satisfactory system, the two-tier system, which, as I have said, I support. The deficiencies have been in the way in which it has been introduced. There has also been the introduction of postal coding at a time when the Post Office itself could not say what percentage of offices were using mechanical sorting methods.

We had the original plan to surcharge non-Post Office approved envelopes when only a minute fraction of the mail could be handled by machines. There are immense waiting lists for telephones which, I am told, total about 120,000. In a district in which I was recently I was assured by many people that they had been told that they would have to wait until the autumn of 1970 for a telephone.

I mention these things merely to show that at this time there are difficulties in all these services. I do not lay them at the door of any one section, but it is very important to make it absolutely clear that whilst there are such difficulties, and while changes are being made, we are not now merely removing the Post Office from the area of accountability. What is to be the rôle of Members of Parliament? To what extent will be able to ask questions?

I agree rather more with the hon. Member for Belfast, North (Mr. Stratton Mills) than with the hon. Member for Poplar (Mr. Mikardo), who told us how successful he was in his dealings with the chairmen of nationalised industries. He may have had success, but most of us feel that a direct approach to a Minister is valuable. We must see to what extent we can preserve the accountability of the Minister in relation to those who do the work.

I doubt whether any hon. Member would maintain that the postal service, telecommunications generally, the expanding sphere of the national Giro, are operations that should be kept in a Civil Service kind of management. I am not attacking the Civil Service. I probably have a higher regard for the Civil Service than some hon. Members on this side. Civil Service methods, organisation, operation and rules are entirely suitable for some purposes, but not for this kind of industry. It is, therefore, right that this industry should move into a position where it may become more sensitive to the market and get into closer contact with the consumer and away from present restraints. Again, I stress that this is not a criticism of the Civil Service. I merely say that the Post Office organisation is now of a scale and character that it can no longer be, and ought not to be, controlled by the Civil Service.

In deciding what kind of change to make, we are probably making a decision quite crucial to the country. We have to decide how to run and control enterprises of major scale. I say at once that there are immense difficulties in leaving them entirely in private hands. Any objections that hon. Members on this side can advance about the nationalised industries can also be advanced about the large private monopolies. If we complain about over-employment and managerial waste in the nationalised industries, we can find every bit as much waste and over-management in certain very big private industries, though I will not mention them by name.

How do we operate a large-scale enterprise and maintain the public service principle and, at the same time, introduce the element of competition? I have looked at some industries with interest and I have found them seeking to achieve this in different ways. The electricity boards go some distance in fulfilling these requirements, but the case is different there because electricity is competing with other sources of energy, which means that some competition already exists. The regional structure allows competition between electricity boards in different regions and this has also been valuable. It is thus that, among the electricity boards, we find some of the atmosphere that there is in efficient and effective private enterprise systems.

The situation with regard to the postal service is a very different one. It is a mistake for people to talk, as did the hon. Member for Poplar, as though we were talking of an industry which is not profitable. The Post Office is profitable. The postal service is clearly profitable. In last week's debate I said that last year on a 4d. post the profit was £11 million, and that as the charge is now up by 25 per cent. it will presumably be even greater. I calculated that the postal services this year would make a profit of about £20 million. The right hon. Gentleman did not correct me and did not offer another figure in its place, so I can properly maintain that we have a profitable industry. Telecommunications is profitable. The National Giro will prove profitable. The computer side, and the data processing service will also prove profitable.

The trouble is that the profitability varies from place to place. That is why we need special arrangements for this kind of industry. If we leave it purely to the competitive commercial principle, the industry will operate where commerce is most effective: it will concentrate its resources more and more on the densely populated urbanised areas, where profit is found, and tend to neglect the other areas. It must, therefore, be under some kind of control so as to provide a public service ensuring an effective spread everywhere.

The Post Office can play an important part in social and political policies generally. Part of the Government's efforts to resist depopulation in certain areas must consist of establishing efficient communications. That is why an industry such as this must be in the hands of those having regard to something more than the profit motive. They must preserve the public service principle.

How are we to make the industry more competitive? One way is to make it raise its capital on the market. That point has been made by many hon. Members and was raised in an intervention by the hon. Member for Westhoughton (Mr. J. T. Price), whom I am glad to see in his place now. He spoke of it also in last week's debate—and, as he says from his present sitting position, he has raised it on other occasions. There are many examples of industries which have been in private hands being put into much closer contact with markets by having to raise their capital on the market. Dutch Airlines is a case in point. That organisation did not start to make a profit until it started to raise its capital on the market.

Mr. J. T. Price (Westhoughton)

The hon. Gentleman has been good enough to refer to the various comments I have made on this topic. I have spoken a number of times on the desirability of nationalised industries raising their capital on the market, where it is properly obtainable in the condition of the market. The position is similar to that of our Italian competitors. They no longer argue about nationalisation there. They issue public bonds which are over subscribed in a matter of days or hours. That idea is worth examining here.

Dr. Winstanley

I am grateful to the hon. Gentleman for supporting what I say. It is this kind of matter into which the House must look with the greatest possible care. Somehow, we have to find a method of preserving the public service principle while, at the same time, introducing elements of competition which have been found effective and valuable in other directions. I am not satisfied that the Bill, as it stands, does that. That does not mean that I do not support the Bill, but that I shall look at it in its later stages from that point of view.

We must consider the question of accountability to the consumer. The members of the consumer councils are to be appointed by the Minister, and by an English Minister, even for the Scottish, Welsh or Northern Ireland consumer councils. This is not the sort of body which the ordinary person would regard as an acceptable substitute for what he has formerly found to be a satisfactory way of ventilating complaints.

Mr. Stonehouse

The Minister will be not an English Minister, but a United Kingdom Minister.

Dr. Winstanley

I used the term in the sense in which I think it is understandable to most hon. Members. We frequently find that we have to make different arrangements for our colleagues north of Hadrian's Wall, but on this occasion it does not seem to be the case.

The consumer councils, as at present outlined, are more likely to be accountable to the Minister than to the consumer. This is not a criticism of them as individuals, nor of the Minister or his successor; I am not saying that they will appoint the wrong people. But if we are to have machinery for the investigation of complaints, people will want to feel that that machinery is accountable to them. I do not say that we could have wholly elected consumer councils, but we must do something to bring them into closer relation with the consumer.

I was glad to hear the Minister's statement about the pensions of employees, although I shall need to examine it closely. We must take every possible step to ensure that the rights and interests of Post Office employees are safeguarded. The Minister knows perfectly well that the Bill will not work unless he does this, and I am sure that he will want to do it. Any steps which he takes designed to engage the support and assistance of Post Office employees, to allay their very natural anxieties and to assure them that their rights will be unaffected and their positions will not be damaged will have our support.

I should like to say a few words about so-called industrial democracy. I am sorry that Clause 6 does not provide for direct statutory trade union representation on the Post Office board. If we want industrial democracy, let us have proper industrial democracy. This is an industry in which the record of labour relations has been excellent. The trade union movement has played a very useful part. It could play a better part with the reforms which have been mentioned. But there is a place for direct statutory representation of the trade unions on the Post Office board. That is a minor point.

We give the Bill our support. We will watch its various stages bearing in mind such points as how far the Post Office is to remain accountable to the House, how far the rights and interests of employees will be protected, and to what extent a channel is provided for the consumer through which he can direct his complaints, interests and demands.

7.24 p.m.

Mr. Hugh Jenkins (Putney)

I shook my head but refrained from intervening in the speech of the hon. Member for Cheadle (Dr. Winstanley) when he referred to the possibility of raising capital in the market for financing a great public corporation. This is a wholly undesirable proposal in that it would introduce into the Post Office conditions which, while possibly appropriate for a private profit-making organisation, would be wholly inappropriate for a public service corporation. The issuing of Government bonds to provide finance is different from raising capital on the market. The idea of floating a special Government loan for financing the Corporation is one proposition. It is the phrase "raising capital in the market" which puts the hon. Gentleman's proposal out of court.

Mr. J. T. Price

I have been dragged into this discussion quite unwittingly, but I think that my hon. Friend is mistaken. There is plenty of evidence in Europe and elsewhere that the raising of capital in the market by issuing bonds or by some other mechanism is common form and is not objected to even by good Socialists like myself who understand what is taking place. It behoves some of us on this side of the House to make it clear that we are not troglodyte or doctrinaire in this matter. If the impact on the Budget of raising sufficient money to meet the great demands of nationalised industries is so great as to be an embarrassment to us, we must find other means, provided they are rational means, of doing it.

Mr. Speaker

Order. We cannot have speeches in interventions.

Mr. Jenkins

This subject is possibly outside the ambit of the Bill, but I draw a sharp distinction between the equity market and other markets which are available.

It is surprising to find hon. Members who have for many years been pointing out the undesirability of direct control by the Government of a large-scale corporation such as the Post Office filled with anxiety about what will happen now that the alternative is put forward. How, they ask, is the admirable degree of public control exercised by the process of Question and Answer in the House to be replaced? I would answer simply, by not introducing the Bill. Then all these anxieties and alternatives about which hon. Members have been worried would not arise.

There is no better method of keeping control of an organisation of this sort than by the process of Question and Answer. I know that members of the Post Office have found this an onerous and difficult process. It is onerous and difficult from the point of view of the people who must answer the questions. But from the point of view of the people who ask the questions, namely, the public, and of Members of Parliament, who ask them on their behalf, the process is not to be denigrated.

Many years ago, there was a great debate in the Labour Party about the forms which public ownership should take. At that time I was in favour of direct control by Parliament, and I cited the Post Office as a good example. I pointed out that public corporations would not be directly accountable to Parliament, and only the hope that a new Minister responsible for all public corporations will be created reconciles me to the proposals in the Bill.

My hon. Friend the Member for Poplar (Mr. Mikardo) said that the chairmen of public corporations were more responsive than Ministers to letters from Members. I agree with hon. Members on both sides of the House who have said that that is not so. In my experience, the most responsive people to letters written on behalf of constituents are Ministers in charge of Departments. Next come members of public corporations. Far behind and most unresponsive of all are the chairmen of private enterprise concerns who seldom reply to one's letters, and when they do reply do so curtly and rudely, as though they resented one's intervention. Private enterprise is a pretty bad third in the race.

I regret that the Bill does not remove responsibility for radio and television from the residual Minister of Posts and Telecommunications. The opportunity has not been taken—perhaps it could not be taken in the Bill—to create a new Department. I hope that before long an opportunity will be taken to create a new Department.

There could perhaps be a Ministry of Amenities, Communications, Recreation and Arts, which would take over the functions of the Postmaster-General in this respect, the film responsibilities of the Board of Trade, the arts responsibilities of the Ministry of Education and perhaps the town planning responsibilities of the Ministry of Housing and Local Government, and so comprise a new Department, which is sorely needed. This would form a comprehensive whole in which the functions at present performed by the Minister would be a valuable part.

There is, after all, more in common between films and television than between some other functions of the Board of Trade and of the Postmaster-General. I hope that the Assistant Postmaster-General, in his reply, will feel able to say that, if such a change were subsequently to commend itself to the Cabinet, the Post Office would not resist it.

I recall a document called "Leisure for Living", which was put out by the Labour Party some years ago. Various aspects of our national life were envisaged as a whole. The document—

Mr. Speaker

Order. With respect, the Second Reading is a wide debate but not so wide as to include what the hon. Member is talking of now.

Mr. Jenkins

I will not pursue that, Mr. Speaker, except to say that the document mentioned films and television as being appropriately associated with the other matters to which I referred earlier. I hope that the Assistant Postmaster-General will not feel it right to oppose the removal from the Post Office of these duties, which have arisen only because of the Post Office's traditional and early connection with wireless telegraphy. It grew up automatically from wireles telegraphy to telephony, from telephony to radio, from radio to television; it was like Topsy and "just growed". Television has little relationship to the early functions carried out by the Post Office which were appropriate to the Post Office at that time. I hope that another opportunity will arise when I may deploy at greater length the argument for the creation of the new Ministry to which I have referred.

I join the other hon. Members who have spoken in extending my good wishes to this new service. It has been a much abused service, and wrongly abused. I have recently returned from the United States of America. I recognise the excellence of the telephone service in that country, which is chiefly due to a technical accident that in the early stages they chose a different method from the one which we chose, and now we are stuck with our method and cannot change it back to theirs. I would remind hon. Members that in order to make a telephone call in the United States it is necessary to put in 10 cents, which is about 1s., so although the service is excellent, it is rather expensive.

The least said the better about the United States Post Office; it is most expensive. One thinks of the tins outside houses in the United States and the fact that in high blocks of flats the postman delivers the letter to the bottom of the flats and the residents must come down to the bottom to collect their post. In comparison, the people of our country are insufficiently appreciative of the service they receive, which I believe to be unsurpassed throughout the world. My hope and belief is that the change will mean no deterioration in the excellent standard of service which is at present received from the Post Office.

The hon. Gentleman the Member for Belfast, North (Mr. Stratton Mills) referred to the desirability of a commercial approach. I do not share that enthusiasm. A commercial approach is concerned with securing the maximum profit at the least cost. That is a reasonable commercial aim; it is an aim which, if pursued by the new Corporation, would reduce our excellent postal service to disaster. The Post Office services in parts of the country are highly uncommercial. If commercial standards were introduced, I hesitate to think what would happen to the postal services of those living in distant regions and, indeed, to those living in high blocks of flats where the delivery of letters must be uncommercial.

I welcome the Bill, and I wish the new Corporation well. I accept my right hon. Friend's view that his position in relation to this matter is purely temporary and that he intends in due course to appoint someone to be in charge of the new Corporation. I hope that in making that appointment he will bear in mind that this service should remain a public service, and that he will appoint a man who will not wish to run the Corporation solely on commercial principles.

7.36 p.m.

Colonel C. G. Lancaster (South Fylde)

You, Mr. Speaker, have asked us to be brief. The hon. Member for Cheadle (Dr. Winstanley) said that it was difficult to make a short speech on such a long Bill. It is even more difficult for me to make a short speech, having spent two years looking into the affairs of the Post Office, but I intend to restrict myself to three general points.

I start with the matter on which I interrupted my hon. Friend the Member for Howden (Mr. Bryan), when he was discussing the setting up of one or two corporations. On 3rd August, 1966, I was chairing a meeting at the headquarters of the Midland Region of the Post Office at Birmingham. During the meeting I received advice that the Government had decided that a corporation would be formed, and I announced that to the meeting. Shortly after, the House went into recess, and we sat only for a short time when we returned before our report was completed. We on this side took the view that, in the light of it being so late in our inquiry, it was inadvisable to enter into discussion at great length as to whether there should be one or two corporations. Had there been longer, many of us would have pressed for two corporations rather than one.

Generally, we were in favour of what is now set out in the Bill. We felt that so long as the new Corporation acted within the policy of the Government of the day it should have considerable freedom. This would give it flexibility on staff matters, which the hon. Member for Gateshead, West (Mr. Randall) mentioned, and we thought it might be a step towards reasonable devolution. Since then we have been concerned with the much longer report on the public corporations and Ministries. The hon. Member for Poplar (Mr. Mikardo) was right when he said that not only would the Corporation come under the new Minister for nationalised industries, but that the House and the Minister would be even more restricted than at present. That is a general matter and will require much thought in due course.

On the Post Office side, we were in favour of the two-tier system. We knew that wages and costs were going up generally and we thought that tariffs would probably have to go up. We thought, however, that in various directions the Post Office would be able to put its own finances in order partly by charging more for the services which it gives in various directions, which at present are given only at cost, and partly by looking upon telegrams and country kiosks possibly as a social matter which did not come directly under its purview. In other directions, economies could be made as well, such as the handling of Press telegrams.

We thought that the advantage of the two-tier system was its flexibility. We had in mind that there would be a greater differentiation than there is at present—possibly 3d. for second-class post and 5d. for first-class. We realised that when the two-tier system was put into operation there would be a number of upsets. We could not have visualised the degree of muddle which took place.

The only regret which many of us have is that it reflected on the Post Office itself, on the men and women throughout the service. That was unfair. Hon. Members, on both sides, have paid tribute to their standard and to the loyalty and hard work which they give to the Post Office, and I would like to join in that tribute.

I was mostly concerned with the telecommunications side. I have subsequently read the report in some detail and I think that we have set out the position sufficiently fully that I do not need to go over it again. As has been said, it is an expanding service and it has great opportunities. I very much hope that the Corporation will grasp the opportunity of surging ahead with it.

I must, however, say one thing about some of the criticisms which have been voiced, not today, but on other occasions. The lack of telephone equipment and the like reflects very badly on the undertakings which make that equipment, but that is not altogether fair. Until 1961, the Post Office was very short of capital. It was only after 1961 that it began to get the capital that it required. Even at that time, it was short of ability in forecasting. Its forecasts were not good. This put the manufacturers into very great difficulty in attempting to produce the very sophisticated equipment which was needed at short notice. I think that the main reason was, first, a shortage of capital before 1961 and, secondly, a lack of good forecasting subsequently.

I do not want to say any more about that other than to refer briefly to the visit which the Select Committee, under the leadership of the hon. Member for Poplar, paid to America. The hon. Member said that we had produced an all-party unanimous Report, and that was enormously to his credit. From the fact that we issued a unanimous, all-party Report, it might be assumed that we were a placid Committee and agreed with one another on every subject. We did not. It was due in great measure to the way that the hon. Member chaired our activities that we were able in the last resort to submit an all-party and unanimous Report.

The hon. Member mentioned our visit to America. I had pressed for it. I thought that it might teach us quite a bit, and in the event it did. What we were most impressed about in the American telephone system was that despite the fact that A T. & T., which we visited, is almost a monopoly, handling over 80 per cent. of the business in the telephone world in America, its service to the public was quite exceptionally good, as was its after service. What is called its appointments service, which is being copied now in Brighton, was likewise of a very high order.

We had the opportunity one day of seeing what was called the Jersey Bell, the telephone system in New Jersey. We went into one of the local offices, where a coloured woman was interviewing customers who were asking for new telephones or making complaints of one sort or another. I and, I think, all my colleagues were immensely impressed with the way she handled that situation. We asked afterwards why she was so confident and we were given some background of the sort of training that those people in America have.

I agree with the hon. Member for Putney (Mr. Hugh Jenkins) that the service in America is expensive, as, I think, it will be in due course in this country. It is a prestige matter not only to have the telephone, but to have a variety of different coloured telephones throughout one's house. It is expensive, but it is extremely good. If one asks for a complicated call to a distant place in America, one is put through to Directory Inquiries, who are quite brilliant in the way they can handle it. One can speak to anybody at any point at almost any time with the greatest speed. I think that we shall be able to attain that ourselves in due course. It will come about only when entry into the Post Office service is looked on not as a short-term matter, as it is very often at present, but rather as a career. When that happens, I think that we shall be able to improve greatly.

Mr. Hugh Jenkins

I join with the hon. Member in his general approval of the American telephone service, but its process of waking up one in the morning is much inferior to ours.

Colonel Lancaster

I wish to say a word about research, to which the hon. Member for Poplar also referred. We had an opportunity of hearing something about the Bell system of research, and, no doubt, it is an excellent system Nevertheless, our own research is not all that bad. I looked into this side very carefully, not only the research done at Dollis Hill, which was much more impressive than I expected when I went there, but the research which is done by the various concerns which are making equipment for Post Office requirements. I hope that we not only continue with research in that direction, but will link up with universities rather more than we do at present.

I made a calculation about how much was being spent by A.T. & T. and by ourselves. It so happens that in both cases 2½ per cent. of general turnover was being spent in research. The actual figure for A.T. & T. is, of course, immensely higher than ours, because of the far greater amount of business it does, but, at least, we were in step relatively by doing 2½ per cent. worth of research in relation to turnover. I would like to see that figure slightly bigger. I regard it as being a little on the low side.

As we are to improve upon the telecommunications side in great measure by the degree of sophisticated equipment we provide, I think that it might be improved upon. It may be that all that is necessary on the purely Post Office side, which is not so highly sophisticated or mechanised. Nevertheless, on the whole, I formed a much more satisfactory opinion of the research which was being carried out than I had imagined before I took part in the inquiry.

Having said that, I think that I can speak for everybody on my side—and, I feel, on the other side, too—in saying that we welcome the Bill. It provides a great opportunity of going forward in a field in which we have been by no means laggards. It may be that within a year or two both Sir Rowland Hill and Mr. Anthony Trollope, looking down from another place, will feel that all their efforts were not in vain.

7.50 p.m.

Mr. Hugh D. Brown (Glasgow, Provan)

I suppose it is about time that there were heard accents which belong north of Hadrian's Wall. I am referring to what the hon. Member for Cheadle (Dr. Winstanley) said. I thought he was rather patronising in the way he suggested that all the civilising influences had come from this side of the Border. We know that that is just not true.

I want to declare some interest in Post Office matters. For 14 years I worked on the postal side. Then in the Civil Service I had associations with the unions and staff associations which had members in the Post Office, and, more recently, with the engineering union. Therefore, I welcome this opportunity of making this contribution to the debate on the Bill.

I recognise that this is indeed a big step for the Post Office to take. It is of some significance in the field of public enterprise. It is not surprising that there has not been any great ideological argument today. I think that, somehow or another, that will come out more in Committee on the Bill. There has been general agreement among Members, and certainly, from the hon. Member for Howden (Mr. Bryan) to my 'hon. Friend the Member for Poplar (Mr. Mikardo), there has been agreement that interest in Post Office affairs in the last two or three years has been quite substantial. It has been even a bit more pronounced in the last couple of weeks in the hullabaloo about the two-tier postal system, but it existed before that. There has been quite a lot of discussion, I assume, in all the political parties about the future of the Post Office.

In talking about the Post Office we are talking about big business—and this is the first thing to appreciate—big business in turnover, in the services supplied, and in the number of people employed, for 2 per cent. of the working population is of some significance.

Obviously, social factors must enter into this. No matter whether the employer is in public enterprise or private enterprise, an employer of such numbers of people must accept that there must be social considerations entering into his policy decisions. I think the hon. Member for Totnes (Mr. Mawby) wanted to see a more commercial approach, but if commercial approach is to be equated with ruthless rationalisation—or even, perhaps, bankruptcies like British Eagle's—I am not in favour of it. We must keep in mind some of the social considerations which are inevitably brought into play when we are dealing with such big business. Therefore, there is a case for a comprehensive national service.

We who live in Scotland are, perhaps, more conscious of this, because if services were run on a strictly commercial basis, which means an economic basis, I think it would be true to say we would have hardly any railway running in Scotland and possibly we would have no postal services in large parts of our country. So, perhaps, I am more sensitive to the social considerations and social responsibility.

Nevertheless, there are tremendous opportunities presented to the Corporation. This is a growth industry. My right hon. Friend, this afternoon, like his predecessors, gave some examples of the kind of science fiction world we could be moving into, provided that the opportunities are taken, but it is sometimes misleading to make speeches about those things. I am not blaming my right hon. Friend for drawing attention to the possibilities, but these sorts of things are some of the disillusionments of politics; it is these glossy things which are picked on, while a more pragmatic approach would mean improving existing services. It is, perhaps, because of the difficulties that those aspects of the problem are not fully appreciated. However, there are some interesting possibilities.

Not being all that technically minded, I could never understand why there has not been greater thought given to the possibility of so using the cabling system that, almost automatically, when new houses are built in the country, whether mansions, or houses on council estates, cabling is introduced into the houses for the telephone service, and the television service. If that were done that might stop us from worrying about private enterprise exploits of television companies. The way of supplying the service seems to me an unnecessary way and a most expensive way to the community as a whole. After all, when we are putting in services such as gas and electricity we could surely at the same time put in cables for the telephone and television services. Telephone cables are not, in technical provisions, all that unlike any other form of cable.

So I say there are tremendous possibilities here, and I am certainly interested in the experiment which is being carried out in the new town of Washington which will give us tremendous opportunities in the future to show what can be done in an intelligently planned society in which we genuinely try to make the best use of our resources, techniques and labour, instead of thinking in terms of things which make money for somebody else. We would have been much further ahead if some of these ideas had been put into operation sooner; in other words, we have some wasted years to make up for.

I am not claiming to be a technical expert—this is one of the difficulties that we are all in—but on the question of manufacturing it seems to me that there is a case to be made out for the linking of research facilities with the production side and the manufacturing facilities. We ought to be able to get a better balance.

It would not be unreasonable to look for ways and means of getting through the Corporation some kind of public control at least of some part of private enterprise. If competition is such a wonderful thing, it does not seem to me to be unreasonable that there should be an element of public enterprise in competing with manufacturers, because it can do all sorts of things, without being used as a vehicle for information, to make sure that manufacturers in private enterprise are efficient and not taking a public corporation to the cleaners as they have been known to do in the past. Therefore, the powers to invest given under the Bill seem to me to be useful for the future. I do not know whether I shall be typical of hon. Members on this side in saying it, but I do not think we should sloganise about this. There are enormous problems associated even with getting into this highly skilled, technical field. Nevertheless, some examination, at least, should be given to the possibility.

There are doubts about just what is intended. For example, on 26th July my right hon. Friend, replying to a Question on the telecommunications industry and in connection with the I.R.C. Report, said: As regards manufacture by the Post Office, the I.R.C. Report suggested no reason to change current Post Office policy and no early change in the existing scale or scope of the Post Office factories is planned."—[OFFICIAL REPORT,: 26th July, 1968; Vol. 769, c. 259.] Naturally, that is a very carefully worded reply. It could mean anything. I should like to know a little more precisely what it does mean.

I may be entitled to express doubts when the hon. Member for Totnes, who is not noted for championing the cause of public enterprise, seemed this afternoon to express his happiness. He said that he had no complaints about the existing set-up, and he agreed with the restrictive interpretation of Clause 7 as affected by Clause 13. If the hon. Gentleman is happy, that does not cheer me to any great extent. That is why I suggest there should be a little clarity.

The Corporation must be a good employer. We all expect this. No one suggests that the Post Office should be anything other than the best when we are dealing with public money. This is right. But it gives us an opportunity to think in terms of experiments in labour relations and management. I have not seen any evidence of the Post Office coming forward with its ideas on this subject. There is a reference in the White Paper to the need to continue the good relationships, to improve and to expand and, indeed, to experiment in staff relations and consultation, and, to use the current jargon, participation and involvement. So far there does not seem to have been any evidence of the thinking or ideas of the Post Office. Consequently, it makes it more difficult for some of the unions involved, representing the staff, to come forward with their ideas. I recognise that this is a difficult subject. I do not think that anyone has any precise formula for putting forward suggestions that exactly fill the bill concerning the implementation of theories on industrial democracy. I assume there must be some evidence of the thinking of the Post Office in the near future.

This raises fundamental issues. If there is to be greater staff co-operation in the sense of productivity agreements, it seems impossible to convince one side that it is getting a fair bargain or a fair deal if it has not got access to the maximum amount of information on which to make that judgment. I agree that this is difficult because there may be some areas where confidentiality must be retained. But if we are genuinely expressing a view, and not a platitude, that the unions are responsible, they should be treated as such and given more information than previously on which to base their judgments.

This imposes greater responsibilities on the unions. Everyone recognises that there should be fewer organisations representing the staff. But that, in turn, is linked to some extent with the problems gone into in some detail by my hon. Friend the Member for Gateshead, West (Mr. Randall) when dealing with grading problems. It is difficult to suggest changes in union structure, which in many cases are a product of grades, when no agreement has been reached or no suggestions have been made about changes in grades. While there are tremendous opportunities in the setting up of the Post Office Corporation, no one on this side would minimise the real difficulties which will also confront us.

Last week I made a comment about the hon. Member for Howden when he was doing his little bit in the debate on the two-tier postal system. There is no doubt that the Opposition see the Bill as an opportunity for extending private enterprise. For example, the hon. Member for Howden is quoted in the Financial Times as saying: The Conservatives would like this industry to be in private enterprise"— I presume this means the whole industry, not just part of it— like the Bell Telephone system in America. With private enterprise you find better management and more flexibility and more adventure. With private enterprise you find a greater desire to please the consumer. I am sorry that the hon. Gentleman is not listening to me. I know that he has heard his own speech often enough. Nevertheless, I have made the point.

But the hon. Member for Howden is not the only private buccaneer opposite. The right hon. Member for Wolverhampton, South-West (Mr. Powell) has also been making incursions into the Post Office sphere. I have not checked whether the right hon. Member for Wallasey (Mr. Marples) is still a Member of this House. I still consider myself a new Member, but I have not seen the right hon. Member for Wallasey buzzing about here much since 1964, despite all the wonderful ideas he presented when he was Postmaster-General.

This has been an interesting debate. I think that it is only fair to try to counteract the impression that all the inefficiencies in the community are to be found in public enterprise and all the virtues in private enterprise. I recognise that there must be a public scrutiny of anything belonging to the public. But I reject the assumption, for example, that every ship is completed in time—and there is hardly a dirty nationalised hand which touches anything to do with shipbuilding once the steel leaves the steelworks. No one seriously suggests that is responsible for the delay in completion. The same applies to the motor car industry, the furniture industry and the construction industry. Why do we need penalty clauses when we are building houses?

I had better not develop that point, because I realise that it has nothing to do with the Bill. Nevertheless, I think that hon. Members opposite do a disservice. They create a contradiction, or a suggestion of insincerity, when, on the one hand, they pay glowing tributes to the devotion, loyalty and efficiency of Post Office staff and, on the other hand, by inference, leave the impression that they are a crowd of half-witted, inefficient people who have come in out of the rain and who, if they were any use at all, would be in private enterprise. I think that hon. Members opposite need to make up their minds on the basic approach to public enterprise in a mixed economy.

I support the Bill. Even though it looks like meaning a lot of hard work, I look forward to being on the Committee and perhaps renewing some of these exchanges with hon. Members opposite.

8.8 p.m.

Captain L. P. S. Orr (Down, South)

I thought that the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown) struck a refreshing note in the debate. Like many hon. Members opposite, he spoke with great authority, and we listened with great sympathy and understanding to what was said about the staff of the Post Office. Although the hon. Gentleman has sought to undermine me in advance, in what I say I intend no reflection of any kind on the staff of the Post Office. I share the views of hon. Members opposite that we have a highly devoted, efficient collection of individuals from top to bottom who are imbued with public service. I say that in all sincerity.

The hon. Member for Provan said that he regretted that there had been no great ideological arguments so far in the debate. To some extent I share his regret, but the hon. Gentleman may find in what I say that I do a little to rectify the situation.

I should make it plain to begin with, in accordance with the traditions of the House, that I have an interest to declare. I am a director of a company in a group which is engaged in the manufacture of telephones and telecommunications equipment. May I also make it plain that I do not speak either for my company or for the industry as a whole. Indeed, I have no reason to suppose that some of the views I shall express will not be anathema to the industry.

One thing that I find evil in a monopoly is the extent to which the power of the monopoly buyer prevents the customer, in the form of the manufacturing industries, from being other than totally obsequious; and if there is anything to be said in criticism of the manufacturing industries it is that they have failed to assume their powers to help the consumer.

The Bill has taken a great deal of time to gestate. As several hon. Members have said, we have been discussing its proposals for years. We have had the Select Committee, and we have had the White Paper. The Bill itself has been delayed for one year, and I think it is fair to ask why, after a whole year's delay, when we were led to suppose that the Bill was already drafted, we have been presented with a turgid, ill-digested document of this sort? I do not think that I have ever seen a piece of legislation which is so incomprehensible.

Sir R. Russell

The Transport Bill.

Captain Orr

I did not study that Bill in detail.

I would have thought that the draftsmen and the skilled people in the General Post Office could have done something about some kind of codification in the Bill. There is scarcely a Clause which does not have a whole paraphernalia of references back to old legislation. This is a general objection to the Bill. It is very difficult to see where, for example, the powers of the new Corporation begin and end. I have sought advice from lawyers distinguished in this field. I have asked comparatively simple questions, but they have not been able to give me an answer. They say that the Bill is almost impossible to amend in any way that will make it sensible.

I come, now, to the principles of the Bill, and here I am mindful of the fact that several of my hon. Friends wish to take part in the debate. I shall, therefore, try to be as brief as I can.

Why have we got a Bill at all at this moment? Why are we faced with more Post Office legislation? In spite of all the congratulations which have been offered from both sides of the House, the reason is that both the postal and the telecommunications services are sick. This is no reflection on the staff. The reason for the Bill is that after recent years everybody realised that something must be done.

My complaint about the Bill is that it is another attempt to cure the symptoms, and not the disease. In the discussions in 1961 we were told that what was wrong was the rigidity of the Treasury control, and that if the time came when we could remove that control there would be greater flexibility and a considerable improvement. We have not seen that improvement.

We are told that one of the problems has been a shortage of capital. Of course, there has been a shortage of capital, but why? The answer is because nobody, not the Minister, nor the Post Office, nor the manufacturers, foresaw the tremendous demand for communications. The reason for this failure, and for the disease, lies not in the fact that the Post Office is a public enterprise, or that it is not private enterprise. The real disease lies in the fact that the Post Office is a monopoly. If that be ideological, I hope that it satisfies the hon. Gentleman.

All the evils of monopoly are there. We have seen the evils of monopoly buying in the existence of a manufacturers' ring. It existed for a long time without anybody making very much complaint about it. I remember talking about 15 years ago in the House about the evils of the ring. Eventually, as a result of parliamentary examination, the ring was finally broken. It was not broken because the Post Office thought it right to break it, or because it suddenly occurred to somebody in the monopoly that it should be broken. It was broken as a result of pressure from outside.

We see on the other side the evils of monopoly supply. The consumer, the customer, has no choice at all. He is at the mercy of the monopoly. When it comes to getting his telephone, he is in the hands of the Post Office, of the monopoly. The monopoly will tell him whether he can have one or not. The monopoly will tell him what it will cost. The monopoly will tell him when it can be installed, and he will have no redress. It is all very well having consumer councils and writing to Members of Parliament. The fact is that the consumer has no redress.

The great question is what we should do now. It is no exaggeration to say that this is one of the most important pieces of legislation to come before the House, because upon efficient communications depends the whole industrial and trading life of a nation. I cannot overemphasise the importance of what we are doing today. It is a pity, in a way, that the man in the street does not realise how vital this is. The question is what do we do now, and is the approach in the Bill the right one?

I believe that it is not. I think that it is a little academic whether we have one Corporation or two. I think that it is a little academic whether we retain the old postal services under Parliamentary control, and whether we have a Corporation for the telecommunications service. I think that what we have to consider is how we can limit the power of monopoly in the future.

I do not think anybody realises how this monopolistic power of the G.P.O. has grown, particularly in telecommunications. The original Act of nearly 100 years ago brought the telegraph service into Parliamentary control and gave the Postmaster-General monopoly power. Those who did that never envisaged the growth of the telephone and the modern telecommunications services. They never envisaged the growth of radio. They never even envisaged its invention. The powers which they then gave the Postmaster-General nationalised all these services in advance of their invention. I believe that that was wholly wrong.

We might well have seen develop a form of communication, especially in telephones, which was not even monopolistic. It might not have developed into a private monopoly. It might not have developed into the modern telecommunications system of the Post Office. We do not know how it would have developed. It has developed as it has because of the powers written in the Telegraph Act and the carelessness of the House in watching the subsequent development.

I remember—and this shows the arrogance of the monopoly—some years ago, when we began commercial television, the Postmaster-General of the day suddenly wanted to move many users of two-way mobile radio from one frequency band to another. We examined his powers to license these people, those powers having been taken for granted for a long time. We found that he was using powers which Parliament had never given him. He was operating under the Wireless Telegraphy Act, under regulations which had never been laid, and nobody had questioned the fact before.

Some of my hon. Friends have been talking about the Postmaster-General's present monopoly to supply customers' instruments. It is almost impossible to find any lawful authority for the exercise of that monopoly. I have asked some of my legal friends from where this power stems and they cannot tell me. I tabled two Questions to the Postmaster-General today. I have not seen his Answers. No doubt he will answer them, and I hope to receive them before the Bill goes to Committee. It is possible that the monopoly in the supply of consumer appliances has been extended in default of anybody's objecting to it. This is how monopoly grows. It grows like a cancer. When we examine the Bill in Committee we must seek to limit its provisions clearly and precisely. The Bill is so badly drafted that it is difficult to see how we shall be able to do this, but we must try.

For example, some Clauses deal with manufacture. In my submission, this is a field into which the new Corporation should not enter.

Mr. J. T. Price

Why?

Captain Orr

It should not enter that field because it is impossible for a public corporation to do so on the basis of fair competition. If it were able to do so it would be a reasonable provision, but it is not—and the person who eventually suffers is the customer, because inevitably the public corporation, protecting its own employees and its own capital investment, cannot afford to take a risk. It cannot risk capital. It must make certain that its manufacturing venture succeeds. Therefore, it must cross-subsidise, and the expense of doing so inevitably falls upon the customer.

Consequently, it is not in the interests of the users of telephones or any future form of communications for the Post Office to engage in manufacturing. In Committee we must be careful not to allow those powers to be given. It is all very well for the Postmaster-General—and he will be the last Postmaster-General—to say, "Oh, yes, these would be used sparingly and in a limited way, for certain purposes." In the future—and who knows what the future may bring, technologically?—this would be a most damaging power.

My other point concerns subscribers' instruments. There is grave doubt about the present limit of monopoly in the supply of these instruments. I agree with several of my hon. Friends who have said that this is also a matter in respect of which monopoly should end at the front door. In Committee, we must see that it does so. The analogy of gas and electricity has already been used and I will not labour that argument.

We are primarily concerned not with the present telecommunications service—the old-fashioned line-to-exchange-to-line throughout the country, on the old line network; we are concerned to see that nothing is written into the Bill which will extend the monopoly to future development. In a graphic phrase today the Postmaster-General talked about computer speaking unto computer. The question is: how, and by what medium? Who knows what kind of developments will take place in radio? This is one sphere into which the dead hand of monopoly should not be allowed to extend.

I believe that it was my hon. Friend the Member for Totnes (Mr. Mawby) who said that the difference between the telecommunications service and the gas and electricity services was that the latter two were competing systems. There may be competing systems in future communications. There may be line, on the one hand, and some new technological development from radio, on the other. We should ensure that these systems can compete. When other systems are developed the House of Commons should decide whether private enterprise shall continue or some form of public corporation shall be created. Let us not nationalise all these developments in advance and turn them into one vast, growing monopoly, because the danger will then arise that the Corporation, with its immense amount of capital to protect, will protect it at the expense of future technological development.

The reserve powers of the Postmaster-General, which are to be handed to the new Minister, are quite insufficient to prevent the growth of monopoly. The sponsoring Minister will have a relationship to the Corporation amounting almost to that of a father to his child. He could not be impartial in deciding an issue between the new Corporation and any future competitor. He might not feel it his duty to be impartial, so there is something to be said—it could be done now—for setting up an authority which was clearly seen to be impartial.

This need not necessarily be on the lines of the F.C.C. in the United States, but something which could hold the monopoly power, from which the Corporation would derive its powers and from which other systems which might be licensed would derive theirs, and to whom an appeal could be made on issues of competition between them. That same body could allocate frequencies, lay down standards or decide disputes about specification. Around that independent body could grow a whole case law which could be referred to. It would not only be impartial but would be seen to be impartial.

We can debate all these matters in Committee, however. The Bill's approach is not a good one. It is a bad Bill, but along those lines I will seek to improve it.

8.30 p.m.

Mr. J. T. Price (Westhoughton)

This is one of those rare and cosy occasions when there is so much agreement on both sides about an important Measure that it becomes rather dull and hon. Members go away.

Until the hon. Member for Down, South (Captain Orr) spoke, I thought that there was such bon accord on this Bill that it was responsible for the state of the House. Nothing empties the House so quickly as a debate on which there is some agreement, a sort of Council of State discussing something in a businesslike and rational way, shorn of the polemical arguments and ideological flounderings of which we are all occasionally guilty.

I do not say this in rebuke of anyone, because we have all done it and enjoyed it, but it is the note of controversy which fills the House. Agreement is not news to people who love Fleet Street and they engage in more exciting occupations at more exciting places.

I had no intention of speaking tonight until I heard some of the interesting speeches from hon. Members on both sides. I was drawn into a little cross-talk with some hon. Members about how the nationalised industries should be financed in future. I can put myself right with the Chair, if I incurred any displeasure for a long intervention, by reasserting what I have said many times. I say it now in relation to this important Bill, which seeks to transform the control of our postal services.

Clauses 31 and 39 deal with the financing of the new Corporation and will be examined in detail, I hope, in Committee. Clause 31 deals with the general question of the transfer of powers on an appointed day, and lays on the Post Office, as is laid on all nationalised industries, the duty of breaking even between revenue and current expenditure year by year. But the later Clauses, particularly Clause 33, deals with the commencing capital debt of the Post Office, which runs into hundreds of millions of pounds and which will have to be serviced under certain conditions.

But I am particularly interested in the borrowing powers, which are dealt with in Clause 35, which describes the limits to which the Corporation will be able to raise the money needed for its future capital requirements. References have been made tonight to financing the nationalised industries, of which this is one of the most important public services. I reaffirm my belief that it is time that we took a second look at ourselves—this applies particularly to the Government, who have the great responsibility of organising the finances of the country in difficult times—to see what the impact of the requirements of all our nationalised industries is on the budgetary position year by year.

We in this country, unlike many other countries which I could name, seek to finance our nationalised industries, with all their heavy capital requirements, from below the line in the Budget, and this represents a large slice of our indebtedness abroad. I have always maintained that if the requirements of the nationalised industries—our great fuel and power authorities and other public services like lighting, gas, and even the Post Office—cannot be financed from within the country, and I doubt whether they can nowadays, then the debt becomes projected abroad as part of our indebtedness to other countries.

My ideas on this question have not always been attractive to the Government. Nevertheless, this question of financing our great nationalised bodies must be tackled. If the debate had been taking place on a different Motion—if the criticisms of the Post Office had been laid in a Motion of censure on the Postmaster-General concerning certain events of the recent past, such as the two-tier system—the House would be full of hon. Members ready to fling buckets of mud, and I will not add to the bonfire tonight. My right hon. Friend appears today rather as an undertaker for the Post Office. He has not been sent here to praise Caesar but to bury him in the form of the existing Post Office organisation.

If this process of trying to raise money from the Budget for all the vast capital requirements of the Post Office and other nationalised industries is not altered, the public will have to go on paying in the form of additional charges for the services that are provided.

Until a few years ago a nationalised industry, including the Post Office, had to finance its revenue out of its day-today activities, with the final hope of breaking even. But Governments, including the Labour Government, whom I support, have changed their attitude. I am not saying anything out of school when I tell hon. Members that I understand why this change of attitude has come about. Not long ago the Post Office had to generate 6 per cent. of its capital requirement out of annual current revenue. The figure rose to 8 per cent., which meant charges going up. I believe that the figure is now higher, although it is difficult to discover it.

I am a member of the Select Committee on Nationalised Industries and I have had special opportunities to discuss these matters with the leaders of the nationalised industries whom we call to give evidence before our inquiries. I am finding now that the requirements from revenue to finance the capital of these great industries is getting higher, and perhaps for the Post Office it is now 13 per cent. If I am wrong in quoting that figure, I trust that my right hon. Friend will correct me.

If the constant difficulty of finding sufficient capital to finance these undertakings cannot be solved by borrowing from the market or the issue of Government bonds, then these undertakings will have to increase their charges to the consumer, with the result that costs will go up correspondingly to provide the capital required. This is unsound public financing. If Hugh Dalton, who was Chancellor of the Exchequer for a time, were here now, he would call it unsound. He wrote what one might call the standard text book on public finance and his literary work is still in use in many universities. I suppose that the trustees of his estate are still collecting royalties on the books he wrote on this topic 30 years ago. They are worth reading. He correctly maintained that if the public were being required to pay for something out of current revenue which might have a lifetime of 20 or 50 years in a new asset, then that was an unsound method of public financing.

I hope that, even in a new capacity, my right hon. Friend will consider this matter, because if this process of constantly requiring a great slice of the public charges for the day-to-day services that are provided must go towards new capital for an industry, we will find that these assets have far outlived the period for which the initial charge was made, with the result that in 50 or 60 years' time buildings and machinery will still be in use, though paid for long ago. This has the result of the next generation getting an asset for which we have paid and which they have played no part in financing.

This may seem a purely theoretical argument. I was tempted to comment on the remarks of the hon. Member for Down, South on the speculative theory of the evils of monopoly. Perhaps on another occasion I might be interested to break a lance with him on that topic. I agree that this is a public monopoly. It has shortcomings, but it also has great advantages, We can argue about that, too, on another occasion. It is sufficient tonight for me to stress that the whole question of financing the nationalised industries, including the Post Office, needs a thorough overhaul.

I have not had the advantage of speaking to the Postmaster-General personally on this issue—he is too busy to talk to individual hon. Members on such subjects, and I would not expect otherwise—but I read into the Press that he is to convert himself into a hybrid, into a Pooh-Bah who will be both Minister and chief executive at the same time. I do not know how that will work, but I should not like to try it. I might get away with a bland smile in certain places, but I should be constantly worried whether I was filling an office of profit under the Crown which disqualified me from sitting in the House. I suggest that the Postmaster-General might seek some legal advice on the matter.

Mr. Stonehouse

If it is an embarrassment to me, it has been an embarrassment to my predecessors for the last 300 years.

Mr. Price

My right hon. Friend must form his own judgment on the matter. I should not like to see a writ issued for a breach of constitutional propriety, which is a very delicate matter on which the hon. and gallant Member for Down, South can probably speak with more authority than I can, for he comes from Northern Ireland and I am merely a simple Englishman.

Let me make it clear that I have certain criticisms to offer of the Bill and that if I were in Committee I should have many criticisms to offer, but that does not mean that I look with general disfavour on the Bill, for the idea of making the Post Office more efficient appeals to me considerably. I am not a doctrinaire and I do not want to raise polemic issues, and I therefore give a general welcome to the Bill.

I must, however, leaven generosity with candour. I am worried about the lack of accountability for the future. I have had some experience of getting things put right in the House without the assistance of the Ombudsman, because I have always insisted on having personal contacts with Ministers who have the power to put them right. The idea that we can lightly gloss over the proposal to hive the Post Office off to some remote control, however much it may appeal to my sense of efficiency, is not entirel acceptable. If it conflicts with my feeling that the lack of accountability will make it more difficult to get public complaints put right than it is now, that is an adverse factor.

The hon. and gallant Member for Down, South spoke at length about the manufacturing powers of the Corporation. Let me tell him, with great respect to his special knowledge of the industry, that unfortunately many public services have to be monopolies, for one thing because we live in Great Britain, and it would not be Great Britain if only those parts of it which were prosperous and highly populated had services and other places, such as the Highlands of Scotland, the remote fastnesses of Wales and the even more remote fastnesses of Fermanagh and Tyrone, if I may say so, were not given these services because they were not commercially viable. We can, therefore, forget that as a matter of political philosphy because they must be monopolies.

But if there are to be monopolies, then I want to see that the new Corporation set up to run the Post Office is not hamstrung by other monopolies which are the sole suppliers of goods to the Corporation. Long before the nationalisation of the railways, we had this experience. I have some knowledge of the history of the railways, and in some ways it is comparable with the subject which we are discussing. When the railways were run under private enterprise and were not making a profit—for 40 years before nationalisation they did not make a profit—they were entirely at the mercy of the engineering firms. In the early days, under the first Railways Acts, put on the Statute Book by Parliament, they were at the mercy of the engineering firms which supplied them with all their capital goods.

Because they were so exposed to conditions outside their own industry, as private entrepreneurs they set up railway workshops in every corner of Britain in order to produce their own rolling stock, engines and equipment. They did that because they were exploited by their own capitalist opposite numbers who were running the engineering side of the industry. I have great respect for the hon. and gallant Member, but he must not chance his arm too far on that subject in Committee, because some very effective answers can be given him.

I apologise for taking a little more time than I ought to have taken, but I genuinely tell my right hon. Friend that we welcome the Bill, that we give it our good will and that we hope that in Committee it will be further improved on the lines that I have indicated.

8.48 p.m.

Mr. Kenneth Baker (Acton)

Like most other speakers in the debate, I welcome the fact that the Post Office is to be changed from being a Government Department into being an industry. The case for that is self-evident. It will clearly make the Post Office more efficient, and it will free those who are managing the Post Office from the day-to-day harrowing worry of political control by Ministers and politicians. I speak as a manager in the private sector of industry, and I should welcome the change if it were my job to run the Post Office.

In parenthesis, I welcome the Bill, too, because it tidies up the Post Office, which is a ragbag which has come about by historical accident. The fact that Part V will push the Post Office Savings Bank under the Treasury wing is entirely sensible, and I think that the Giro could well have gone with it. The Giro is essentially a banking function dealing with debits and credits. It will be a major part of the London money market in future, and it would have been better run under the Treasury rather than under the Corporation.

My first point concerns the managerial set-up proposed. I welcome the statutory recognition in the Bill that the Post Office is really two separate organisations and operations—the postal services and the telecommunications industry. The new Minister will be called "Minister of Posts and Telecommunications". There is a case for keeping the postal services as a Government Department but I shall not argue that now. Obviously, the problems facing the two sides are different.

The problems of the postal services are essentially logistic, the moving of goods in the cheapest and most efficient way. The problems on the telecommunications side are essentially technological. The basic difference is that the postal services have before them a period of static growth—virtually no growth at all—whereas the telecommunications side has ahead of it a period of dynamic and exciting growth. To make this division into the slow-growing and fast-growing operations seems sensible.

But the Bill does not go far enough. It will set up a team of executives to run the postal services and managers will have delegated powers to run them efficiently. But being a manager in a nationalised industry entail strains on executives greater than those in private industry. There will be a separate set of executives on the telecommunications side—senior managers who are capable and responsible men. Why is it necessary to have a board of 12 separate managers and a chairman between them and the Minister?

Surely the best way would be to allow the chief executive on the postal side and the chief executive on the telecommunications side to have direct communication with the Minister. The need for co-ordination has been used as the reason for the set-up proposed in the Bill, but why is it necessary to coordinate two services which are essentially different? The Board is likely to sap managerial authority and confidence on both sides of the organisation. Since managerial skill is so rare, why waste it by appointing a managerial board to come between the Minister and the two sides of the industry?

The Postmaster-General has appointed himself chief executive for the next few months. It will be a difficult time for him because he will have to be both captain of the team and the umpire. It will be difficult to combine the two rôles. He has said that he finds himself arguing with himself. He will find that a fruitless exercise. We have been trying to argue with him for the last few months, but with singularly little effect.

Secondly, there is the private capital requirement on the telecommunications side. This is the kernel of the debate, Unless we have completely separate managements for telecommunications and for postal services, the Board will, basically, hold back: the capital requirements on the telecommunications side. This is where private capital must come in.

I welcome the idea that the monopoly of the Post Office should stop at the front door so that we, as consumers, can buy the sort of equipment we want. Out of the £2,000 million earmarked for capital expenditure in the Post Office during the next five years, £300 million is for telephone apparatus for the consumer. Why cannot that be provided by the private sector? It seems the obvious thing to do. We should dismiss the ideological objections to it.

If private capital were brought in, we would get better equipment. Hon. Members will recall the telephone exhibition on the Committee Floor just before the Summer Recess. One of the machines would allow one to pre-record the 20 telephone numbers one uses most frequently so that, instead of having to dial one of those numbers, one need only press a button. I asked if I could have one. I was told, "No. We have an even better one." The second machine was certainly an improved version, but I was told that I could not have that either because it was not in production or was not going to come into production.

This is the whole trouble on the equipment side; equipment is obsolete or obsolescent almost the moment it is introduced, and I believe that a breakthrough in the telecommunications industry can be made only by incorporating private capital. We shall not get to the stage of having telephone receivers combined with television sets and so on unless private capital is brought in, and one obvious sphere for private capital is in the data processing network. I am surprised that the Government of my own party did not incorporate private capital in that from the very start.

Clause 7(2)(e) allows the new Corporation to enter joint undertakings with private firms. This is not being slipped in accidentally. It will be able to assign any of its activities to private companies, or to enter into any joint undertaking with a private company, and under Clause 7(2)(i) it is given authority to lend money to those joint undertakings. I congratulate the Postmaster-General on being sufficiently farseeing to appreciate that joint operations of this sort will come about.

I come finally to the users' councils All of us will agree with the sentiments in Clause 14 and 15 which deal with these users' councils. It is obviously sensible to consult the consumers of the products of nationalised industries, but I suspect that once these consumer councils have been set up, they will be very mild, tame and ineffective. I say that because, first, the Minister is to appoint them; secondly, he will provide premises for them to operate from; thirdly, he will pay them; fourthly, he is to provide them with salaried staff; fifthly, he is to have the right to summon their minutes, rather like a schoolmaster saying, "Let me see what you have been doing while I have been away". How can such councils be independent of the Minister or of the Corporation? One cannot be independent of one's paymaster or landlord.

The lip service which is paid to the consumer interest in Clauses 14 and 15 is very shabby, because if these councils are to be effective, they must have the power to employ technicians so that the technicians can review the various proposals. They must also have power to employ accountants so that their accountants may look at costing and pricing decisions. This would make them very effective watchdogs. At the moment, they are not to be watchdogs outside the Post Office protecting the consumer, but more like the Post Office's paid eunuchs sitting inside and protecting the Post Office.

The cat is let out of the bag by Clause 15(1) which sets out the duty of the Post Office to consult the consumer councils and says that the Minister must refer major proposals on any of the main services to the consumer councils. No one can quarrel with that, but what is a major proposal? Subsection (3) specifies that what is a major proposal and what is a main service will be left entirely to the discretion of the Minister.

When I read that subsection, I could not help recalling a remark of Beatrice Webb at the end of her life when she was asked what had made her marriage with Sidney Webb so successful. She replied, "It was very clear from the first day of our marriage when we decided that Sidney would decide matters of detail and I would decide matters of principle". When the questioner went on to point out that in any marriage there were many matters which were not clearly either of detail or of principle, asking her how those were decided, she said, "The question of what was a matter of detail and what was a matter of principle was in itself a matter of principle". This is exactly what the Minister will be able to say. He will be able to decide what the councils can look at and he will control and pay them and eventually sack them.

Those are my three points: first, that the management structure is unnecessary and that we should do away with the board and the chairman; secondly, that private capital must be brought into the Post Office and that ideology must not stand in the way; thirdly, that the consumer councils must be given powers, or not appointed.

8.59 p.m.

Mr. Tom Boardman (Leicester, South-west)

The intention of the Bill has the support of both sides of the House. We want a better postal service. All who have spoken in this debate have paid tribute to the postal workers, and in that tribute I join. My criticism is that the Bill perpetuates the historic accident whereby the postal services, the telecommunication services, and one might also say the postal counter services are lumped together. There are great differences between them.

I believe that the postal service must be a monopoly service. The Royal Mail ought to remain directly under the authority of the Minister and be accountable to Parliament. Major decisions remain to be made, some of which have been referred to by the Postmaster-General. There will be the question of door delivery—a major decision which will have to be made in the near future. That decision should be referred to Parliament. There will be the question of staff. In the postal service, which is labour intensive, we shall have a deficiency of 8,000 postmen by 1970. How is that deficiency to be met? Is it to be met by increasing prices or by reducing efficiency, or is it to be met by some form of subsidy and, if so, from what fund? These, again, are matters' that should be kept under the scrutiny of the House.

The hon. Member for Gateshead, West (Mr. Randall), who made what I thought was a very interesting and sincere speech based on long experience, also made an illuminating comment which shows much of the difference between the two sides of the House. He said that the profitable should carry the unprofitable. That may well be so, provided one knows which is the profitable and which the unprofitable, and provided that the subsidy is one that is carefully costed and made as a deliberate act of policy.

The problem in the Bill is that in putting the profitable side—telecommunications—into the same Corporation as the postal services side, there is grave danger of subsidy from one to the other without any sufficient distinction between the accounting of the two. I recognise that the Bill provides that the accounts are to be made up on a sound commercial basis—and I hope that that will involve quite separate accounting and quite separate forms of account for the various facets of the Corporation—but there is a danger of the profitable and capital intensive operations subsidising the labour intensive and less profitable service.

That is why I urge strongly that further consideration should be given if not to keeping these postal services out of the Corporation, or at any rate making sure they are quite separately costed. They should have different capital return targets. The telecommunications service requires a much higher return on capital than do the postal services, and it would distort judgment and cause wrong decisions to be made if the accounts and the presentation of the results of these operations were confused.

The counter services, which are now largely and increasingly an administrative and clerical function for Government Departments should, again, be kept out of the telecommunications side, and separately costed. We should be sure that the charges made for the counter services fully recover the costs that are incurred. There must be no subsidy there.

I should like to see the telecommunications service monopoly given the injection of private capital, but if the Minister will not go as far as that I urge that the monopoly should end at the front door. We must have a system whereby private enterprise can use its research and development techniques, and so on, in competition with the Post Office in evolving and promoting the instruments which will not only increase efficiency but will sell overseas.

I am glad to see the Postmaster-General nodding in agreement. We all recognise that had the B.B.C., with its monopoly on television broadcasting, had a monopoly on the type of television set to be supplied, we would not have the advanced television sets which we have now. I hope that the Postmaster-General will bear this point in mind and will consider satisfactory amendments to the Bill to permit it to be implemented.

9.5 p.m.

Mr. Ian Gilmour (Norfolk, Central)

Nobody could be excited by this Bill. The prospect of setting up another nationalised corporation is not one which could set anybody's blood coursing through his veins. Indeed, there is even a diminishing number of hon. Members opposite who see the creation of these ungainly edifices as the true fulfilment of a Socialist Utopia.

The best thing about this latest creation is that, unlike virtually every other nationalisation Bill, apart from the setting up of the Atomic Energy Authority, it is not taking an industry out of private enterprise and subjecting it to the inefficient meddling of the State; it is merely transferring an industry from a Government Department to a nationalised corporation. That is a far less melancholy proceeding. On balance, we approve of the transfer, although we much regret that the Government and the Postmaster-General have done so little to make the transfer anything but grey and gloomy.

We welcome a number of minor provisions. For example, we welcome Clause 131, which transfers to local authorities the Postmaster-General's statutory duty of issuing clog licences. After the Prime Minister's speech last year, this is a subject which it would be indelicate to pursue in the presence of hon. Members opposite, but we may be forgiven for hoping that their dog licensing powers will remain decentralised in the constituencies and not transferred to the Prime Minister and the Patronage Secretary.

On the main issue, as my hon. Friend the Member for Howden (Mr. Bryan) made clear, the Opposition think that the proposed organisation of the Corporation is bad. There is insufficient justification for having telecommunications and the Post Office run by one Corporation. As my hon. Friend the Member for Acton (Mr. Kenneth Baker) pointed out, this is an historical accident. Such a corporation will be too big. It will be divided organisationally, and it is pointless and damaging that these two divisions should be joined together at the top.

Apart from any question of bigness, there are two good reason why the marriage should not take place. The first is that the telecommunications side will be used to subsidise the postal side, a contravention of the purpose of the Bill, which is to make the whole operation more efficient. The second is that the marriage will provide more scope for backstairs influence and interference by the Minister. It is obvious that to keep postal services and telecommunications services together in the same organisation will facilitate what I think the Select Committee chaired by the hon. Member for Poplar (Mr. Mikardo) called "lunch-time influence" by Ministers and political meddling.

However, it seems from the weekend Press that that is not something to which the Postmaster-General objects. He announced at the weekend—or, rather, as my hon. Friend the Member for Belfast, North (Mr. Stratton Mills) pointed out, according to the Financial Times, he announced it on Wednesday but it was published in the Press only on Sunday—that he was going to double the functions of the Postmaster-General and the chief executive of the Post Office.

He himself admitted to the News of the World that he will "be in a schizophrenic condition." Schizophrenia is quite common in this Government, but it is not normally a condition for which one volunteers. He went on to tell the News of the World that: As chairman I shall take part in making decisions which I shall be against as Postmaster-General for political reasons. If we took that seriously it would be impossible to imagine a more ludicrous situation, but I do not think that we are meant to take it seriously. As the Postmaster-General made abundantly clear this afternoon, the whole thing was one of his—I will not use the phrase "jolly advertising gimmicks" since "advertising" is a painful word, but one of his jolly publicity gimmicks.

Mr. Stonehouse

The hon. Gentleman must be aware that he must not take everything that he reads in the Press, particularly in the News of the World, seriously.

Mr. Gilmour

I am not sure whether or not that is meant to be a denial of what the News of the World, printed in inverted commas, but I think that what the News of the World said was not out of line with other papers. Although it gave greater detailed insight into the thoughts of the hon. Gentleman than other papers, it was not essentially different from what appeared elsewhere. If it is inaccurate, it is very bad on the part of the News of the World, since there was all the time between Wednesday and Sunday to check the quotation.

For all those reasons the Opposition believe that it would have been better to have two separate Corporations; better still to have left the postal side as a Government Department, as it is in virtually every other country; and, best of all, to have left the postal side as a Government Department, and, in telecommunications, to have broken away from the outdated model of a nationalised monopoly corporation.

If the Government have botched up the organisation of the new Corporation by making it too big, they have also botched up its powers by making them too wide and exclusive. Clause 7, which gives powers to the Post Office, is as all-embracing as it could be, although the hon. Member for Poplar, predictably perhaps, found the wording highly restrictive. It is in fact a Henry VIII of a Clause. It even gives the Post Office power to manufacture not only articles required for its business but also "any articles of a kind similar to any so required", and it gives the Post Office power to buy itself into private business.

Mr. Mikardo

The hon. Gentleman has, of course, read the standard objects clause in the memorandum and articles of association of limited liability companies, and he will know that such a clause even for the smallest and most humble of companies is drawn far wider than Clause 7 of this Bill, so that a company which is set up to retail silk stockings will take powers to run railways. This is common form, is it not?

Mr. Gilmour

The hon. Gentleman also knows that it is uncommon form for companies set up to manufacture silk stockings actually to take over railways, whereas it is perfectly possible for nationalised corporations to diversify widely; so, with great respect to the hon. Gentleman, I do not think his parallel is very helpful.

We admit that Clause 7 is restricted by Clause 13, but if the Minister gives his authorisation, and there seems to be no limit on his power of authorisation, there is almost nothing that the Post Office cannot do. Clause 24 gives the Post Office a total monopoly of virtually everything to do with the post and telecommunications. So Clauses 7 and 24 taken together strongly suggest that the right hon. Gentleman is suffering from megalomania as well as from schizophrenia.

The Post Office, even at present, is in a uniquely monopolistic position. In the case of other nationalised corporations there is always some form of competition—gas competes with electricity, coal with nuclear power, the railways with the roads, and so on—but the Post Office has both telecommunications and the post. That leaves only the pigeons outside. There may have been a slight increase in their business during the last few weeks, but we want to make clear yet again that nobody suggests that the blundering was due to the faults of the Post Office workers, who have worked loyally and competently throughout. It was purely the fault of the Government.

Furthermore, the gas or electricity boards do not have the monopoly power of installing gas cookers, refrigerators or other equipment, whereas the Post Office has the monopoly of the installation of all telephonic equipment. Therefore, the Post Office has a monopoly wider and deeper than any other nationalised industry. It is a complete monopoly and, as my hon. and gallant Friend the Member for Down, South (Captain Orr) said, the customer has no choice. In these circumstances, the sensible thing would have been to restrict these enormous powers and not to extend them. The Post Office has more than enough to do already.

I do not want to add unduly to the Postmaster-General's diseases, but my hon. and gallant Friend the Member for Down, South has just remarked that monopoly grows like cancer. There is much to be said for competition between public and private enterprise, but that competition must be fair. If nationalised corporations are to be allowed to compete with private enterprise, private enterprise should be allowed to compete with nationalised corporations. Yet there is nothing at all in the Bill to ensure that the competition of the Post Office with private enterprise will be fair, while there is a lot in the Bill to prevent private enterprise from competing with the Post Office. Thus, the Postmaster-General evidently believes in one-way traffic.

To take the first point first, the Post Office has large borrowing powers. It does not have to worry about exports. It can make loses in certain fields and subsidise them, or it can break even. Above all, it has a dominating position as the sole purchaser and installer of equipment and the sole allocator of contracts. In such circumstances, it is almost impossible for competition on the part of private enterprise to be fair, and past experience elsewhere suggests strongly that it will not be fair.

Section 48 of the Transport Act gives the proliferation of new transport authorities the same absurdly wide powers that the Bill gives to the Post Office, but in that Section there was inserted, at the instance of the Opposition, the provision that in carrying on those activities, the transport authorities shall act as if they were a company engaged in a commercial enterprise". A similar insertion should be made in the Bill in Committee, although that will not be enough. In addition, either proper rules for fair competition should be laid down in the Bill or, perhaps, there should be, as my hon. Friend the Member for Totnes (Mr. Mawby) said, "a disinterested body" to decide what is fair and what is not, as well as to decide on quality.

On the second point, there should be some diminution of Post Office monopoly to allow competition with the Post Office by private enterprise. The circuit of telecommunications should not be kept closed. If the monopoly of the Post Office ended at the front door, as my hon. Friends the Member for Acton, Leceister, South-West (Mr. Tom Board-man) and others of my hon. Friends have suggested, this would encourage experimentation, which has been notably lacking under monopoly conditions, and such a development would also help the export trade.

Hon. Gentlemen on both sides of the House have criticised the setting up of a Minister of Posts and Telecommunications. Certainly, after this Bill, his residual duties could easily be carried out by existing Ministers. The two great achievements of this Government have been the creation of unemployment and the creation of inflation. The creation of a little unemployment amongst Ministers would be highly welcome both to this side of the House and to the country, but where Ministers are concerned the Government pursue their other great policy of inflation.

Indeed, the title of this quite unnecessary new Minister makes probable another Minister yet. I hope that the Assistant Postmaster-General will give the House a categorical assurance that this Bill will not lead to the setting up of an additional Parliamentary Secretary, one for posts and one for telecommunications, and that the Patronage Secretary will not, in that event, have the chance of handing out another job to yet another Left-wing rebel. [An HON. MEMBER: "The hon. Member for Poplar (Mr. Mikardo)?"] There is hope yet for the hon. Member for Feltham (Mr. Russell Kerr).

On this and other matters the Government and the Postmaster-General have ignored the Report of the Select Committee on Nationalised Industries, 1967–68. The Chairman of that Committee, the hon. Member for Poplar very generously granted the validity of the Postmaster-General's excuse of lack of time, but paragraph 5 of his own Report says: The Committee at the end of a major enquiry into the Post Office case session discussed the rôle of Ministers in relation to the proposed Corporation. They trust that the further conclusions set out in their Report will be considered by Ministers when preparing the necessary legislation and when establishing and controlling the Post Office Corporation. As we know, this did not happen. I see that the Report was ordered to be printed on 24th July. Presumably, there was no such need for security that the Postmaster-General could not have seen a copy in typescript. There has been a good deal of time, but the Report, which is, after all, of a very fundamental and very searching nature, has been totally ignored by the right hon. Gentleman.

Referring to this Report, Mr. Maurice Corina, writing in The Times Business News, said: The Government Departments supervising the operations of Britain's vast State-owned enterprises may never be the same again after the attack on their interference and inefficiency. That was pretty naive. He went on to say that the Report weighed exactly 3 lb. 8 oz. and contained enough explosive material to rattle every teacup in Whitehall. I am afraid he does not know much about teacups in Whitehall. In the Post Office, not one teacup rattled, not even a tealeaf fluttered; there they paid not the smallest attention to what happened.

The Report made detailed criticisms of the way nationalised industries have been run, produced detailed evidence to show that Ministers did the exact opposite of what they should do—that Ministers intervened in management, but they gave very little policy guidance. Yet what the Postmaster-General sets out to do is to extend and perpetuate this system, which has been shown to be working inadequately.

As a result, Clause 11 of the Bill, which is the one about directions, says that The Minister may, after consultation with the Post Office, give to it such directions of a general character as to the exercise by it of its powers as appear to the Minister to be requisite in the national interest. Those are virtually the same words as appear in the Air Corporations Act, 1949, the Coal Industry Nationalisation Act, 1946, and other nationalisation Acts. Indeed, it is what the hon. Member for Poplar called the same old discredited jargon of the Acts of 1945 to 1951.

Of course, we do not expect much by way of thought or new ideas from this Government, but it is surely more than a little surprising that there is almost nothing new in this Bill today. I think that the hon. Member for Poplar found only one difference from the nationalisation Acts of 20 years ago. Indeed, in form the Bill could be one of the measures carried out by the Attlee Government. This is remarkable, first, because of the record of the nationalised industries over the last 20 years and, secondly, because the objects of the nationalised industries have totally changed in that time.

It is worth looking back to read what the late Mr. Herbert Morrison said on Third Reading of the Coal Nationalisation Bill in 1946. He said: …and particularly to the miners I would say, emancipate yourselves from the understandable inhibitions created by the past, emancipate yourselves from the mentality thrust upon you by a crude capitalism. This is vital, this is essential, if this socialised industry is to take with it miners and managements, to become co-operators and partners in a great and worthy adventure for the common good".—[OFFICIAL REPORT, 30th January, 1946; Vol. 418, c. 972.] That was fine rhetoric. But, putting it mildly, it was not how things turned out. Anyhow, the atmosphere is very different today, and it is worth comparing it with the rhetoric of the Postmaster-General introducing the Bill at one of his almost daily Press conferences. According to the Financial Times, he said: It is a measure designed to bring nationalisation up to date as a fully commercialised operation in the consumers' interest. There is no question of emancipation here, no question of co-operation, and no great and worthy adventure for the common good. But while the Ministerial rhetoric has changed, the Government go on setting up the same discredited corporations. It is surely obvious that these nationalised corporations are out of date. It is wholly implicit in what the hon. Member for Poplar said this afternoon.

There is room for argument about how far denationalisation should go: whether there should be a people's corporation, as The Times suggests, selling the shares to every elector, whether the Corporation should be partly owned by the public and partly owned privately, like B.P. and other bodies, or whether it should be completely privately owned like the Bell Telephone Company. But there can surely be no doubt that the nationalised monopoly corporation is as obsolete as Clause 4 or Mr. Henry Ford's Model T.

Mr. Mikardo

I apologise for interrupting the hon. Gentleman near the end of his speech. What he has said is his view and he must stick to it. However, he must not quote it as being my view. That is not what I said.

Mr. Gilmour

I said that it was implicit in what the hon. Gentleman said when he pointed out that these Acts are are exactly the same as took place 20 years ago. Conservative as he is now, the hon. Gentleman must realise that conditions have very much changed in 20 years, and, therefore, there should be change. After all, I am only suggesting what the hon. Gentleman recommends in his Report. He suggests that the whole set up should be radically changed. But I do not want to put words into the hon. Gentleman's mouth, and I freely accept what he says and withdraw.

To conclude, a Post Office Corporation is an improvement on a Government Department for the running of these services. That is why we are not opposing the Bill tonight. But we strongly believe that a single nationalised monopoly corporation is a bad way of running the postal and telecommunications system.

9.30 p.m.

The Assistant Postmaster-General (Mr. Joseph Slater)

I have had the privilege of following the hon. Member for Norfolk, Central (Mr. Ian Gilmour) on previous occasions when he has directed his attack at the Postmaster-General of the day, just as he has attacked my right hon. Friend tonight. Since my right hon. Friend took over this office, I have not discerned any form of weakness which is likely to develop into an attitude of mind commonly known as schizophrenia. My right hon. Friend is not in that category. He is very much alive to the position of the Post Office and what ought to be done to develop its services on behalf of the nation.

We have had a most interesting debate, ranging over broad aspects of the Post Office. Questions on Post Office matters are nothing new to my right hon. Friend and to hon. Members, for in previous debates we have concentrated on specific aspects of the Post Office. Tonight, we have been able to look at this great organisation as a whole, and, in the context of the Bill before us, to discuss more generally the principles on which it should operate and the purposes it should seek to achieve.

It is true that we shall have many differences on points of detail, and even perhaps on the larger issues in the Bill, but I think there is little difference between the two sides on the main issue. Governments of both political persuasions have turned their attention to the difficult question of combining commercial freedom with public control, and I think that it is right to pay tribute to the important steps taken by the previous Government—to which reference has been made in the debate tonight—in separating the finances of the Post Office from the Exchequer. That was achieved by the Post Office Act of 1961, which was introduced by a Conservative Government, and this Bill is in many ways nothing more than a further and logical step along the road pointed out by that Act.

It has not been referred to during the debate, so perhaps I might tell the House that the administration of the Post Office as proposed in the Bill takes us back to 1932, when the late Clement Attlee was connected with the Post Office. It is his propaganda and his proposals which can be seen in the Bill. Clement Attlee wanted this Measure brought in then, but we had to wait until a Labour Government came in in 1964 and decided, in the course of their programme, to bring this Measure into effect.

Before dealing with the specific questions which have been asked, I think that it would be appropriate for me to refer once again to the position of the staff. The hon. Member for Howden (Mr. Bryan) and others have mentioned this during the debate. I suggest to the House that in this unprecedented exercise of transferring nearly half the total number of non-industrial civil servants from their chosen careers to a public corporation it is vital that they go with a good heart. This is essential in any case, because with such a labour-intensive business as the Post Office disgruntled staff would give the public a half-hearted service, and we do not want that.

No one has travelled the country more than I have during the last four years to visit post offices and telephone exchanges. I have met many ordinary members of the staff, often in the absence of officials. I have discussed with them matters such as the operation of the Whitley machinery. I have even discussed the prospects of the Bill. I have done so with one specific purpose in mind. I want to get back to the position which operated within the Post Office service. I want to recreate the good spirit which existed between the Post Office services and the Postmaster-General.

No hon. Member who has been around post offices or telephone exchanges can fail to be impressed with the sense of the service that they have rendered and they seek to give. As my right hon. Friend said, we must uphold this spirit, but that spirit would be under a very severe strain if it ever became thought that the future of the Post Office was to become a political issue. Hon. Members on both sides of the House want efficient services, and I am sure that the change introduced following the passage of the Bill will be a significant step in this direction.

My hon. Friends have referred to the superannuation proposals which have been put to the staff. I can understand their anxiety and their reason for questioning them. We are proposing that the retirement age for men shall be 65. My right hon. Friend has met a deputation from the unions so that he could listen to their objections and he is still considering the matter, but in cases such as that cited by my hon. Friend he Member for Bristol, North-East (Mr. Dobson)—in respect of those who have done nearly 40 years service with the Post Office—the men concerned can still choose to go at 60 with the benefits that they would have had had they remained in the Civil Service.

My hon. Friend the Member for Gates-head, West (Mr. Randall)—for whom I have a high regard because of the service that he gave to Post Office matters in the House on many occasions—referred to the position of the staff in the Channel Islands. In the light of representations made by the unions to my right hon. Friend's predecessor, I visited both Jersey and Guernsey in the early summer and explained the position to them. I also had discussions with the States authorities in both islands before the Government reached their decision.

Since then the unions have had discussions with the insular authorities and I am told that they were amicable on both sides. In any case, we are providing that any member of the Channel Islands staff who does not wish to serve in the insular service may transfer to the mainland. My hon. Friend the Member for Gateshead, West also referred to paragraph 11 of Schedule 1, which imposes restrictions on the information that may be given to the staff. The unions made representations about this to the present Secretary of State for Education and Science, when he was Postmaster-General, and he then gave them an assurance that the provision would not be interpreted restrictively and that its terms would not affect the larger area of management and union consultation in which information was or could appropriately and properly be given. The unions are on record as saying that this assurance is acceptable to them.

My hon. Friend the Member for Bristol, North-East and the hon. Member for Cheadle (Dr. Winstanley) have apparently read the Bill as failing to provide for the appointment to the Board of anybody who is responsible for staff relations. There is no express provision in the Bill for the appointment of such a member, but in defining the qualities which my right hon. Friend will look for in appointing a member to the Board I can assure my hon. Friend and the hon. Member for Cheadle that provision will be made to permit such an eventuality. The Bill is not specific as to the functions which individual Board members would perform.

My hon. Friend referred to Clauses 43 to 50 and appeared to relate them to the possibility envisaged in Clause 127. They do not relate to this possibility at all, but are intended to honour the undertakings given to Cable and Wireless staff in 1950, when the company was taken over by the Post Office. Knowing my hon. Friend, I do not think that he would want the Post Office to dishonour those undertakings.

There have also been urgent requests for the grading proposals for the staff managerial grades to be put to the unions as soon as possible. Naturally, my right hon. Friend and I are very conscious that this has not yet been done and I can assure the House that we shall make proposals as soon as possible. But it is interesting to note that well over 300,000 staff are employed in departmental grades, so there would appear to be no reason in the context of Corporation status why changes should be made.

Nevertheless, I am not suggesting that we shall not be proposing changes, but I would not want to be more specific than that at this stage, except to say that we have already told the Union of Post Office Workers that we do not propose, in the context of the change of status, to alter the grading of postmen, postmen higher grade, telephonists and telegraphists.

In an interesting speech, my hon. Friend the Member for Gateshead, West also referred to the union structure, and this has been in the mind of the hon. Member for Howden and others. The final structure must, of course, be a matter for the Corporation, but I understand that there is a good possibility that a number of organisations representing management grades will combine in one association. I thoroughly welcome this, as I do any other proposals which the unions can make among themselves for rationalisation, but, bearing in mind the experience of the Iron and Steel Corporation, one can see that this is a field in which the Corporation may well need to move carefully. Let us never forget that, even in the present organisation, there are 22 unions and staff associations.

The hon. Member for Norfolk, Central asked why it was decided to set up only a single authority. The Government gave careful consideration to this point and there was strong support for the idea of two or three separate boards. But while this debate was going on, hon. Members may recollect that the investigation into the Post Office service by McKinsey's demonstrated that there was considerable scope for developing separate operational managements within a single Corporation.

Moreover, if the decision taken two years ago had been to split the organisation statutorily, the process of changing the Post Office from a Department of State would have been further complicated. As hon. Members can see from the size of the Bill, the simpler exercise of setting up a single Corporation is quite complicated enough. Possibly even more important is the fact that the Post Office staff have grown accustomed to the concept of a single communications service and they have developed a very real loyalty to the Post Office. A complete separation at this stage might have created apprehensions and unrest which I am sure no right hon. or hon. Member would wish to see.

Finally, if future developments show that there is a case for separating the services, this can be done by the introduction of another Bill. Whereas if we had separated the services at this stage and found that the decision was wrong, to reassemble the separate services into a new, single corporation would have been much more difficult.

The Government therefore reached the decision it did but I wish to emphasise what was said more than two years ago. Beneath the single Corporation the activities of the Post Office will be allowed and encouraged to develop independently so as to organise themselves in the most efficient way to deal with the difficult problems which the giro system, telecommunications and data processing face. All these subjects have received the attention of hon. Members and I assure them that the Board will ultimately be responsible for all aspects of the work of the Post Office.

I have been interested to hear during the debate the comments of hon. Members about the telecommunications side of the Post Office and their claim that telecommunications should be removed entirely from the ambit of the Board. Unlike what is proposed in the Bill, some hon. Members have suggested that telecommunications should operate as a separate entity, while the postal side should remain under the Ministry.

I can best answer these demands by reminding hon. Members that some people have short memories. At one time, before the telecommunications side of the Post Office reached the position which it now holds, people complained about the other activities of the Post Office subsidising the telecommunications side. What a long way we have come, when now we have a formal application for a new board to be set up for telecommunications and for private capital to be injected into it. I suggest that the Bill seeks to achieve the best approach at this juncture.

The hon. Member for Howden wondered what was likely to happen in the future and commented on what might happen if the Conservatives were returned to power. I assure him that comments of that kind are not new to me. I have known for some time what would happen to telecommunications if the hon. Gentleman and his colleagues became the Government. We, on the other hand, are trying to finalise the position regarding telecommunications and the postal side, along with their administration, under the Bill.

Hon. Members have expressed fears about there being only one Corporation and the fact that telecommunications might be used to subsidise the postal side. I assure the House that that will never happen. The Government's general policy on such matters was made clear in the White Paper, Nationalised Industries: A Review of Economic and Financial Objectives. A clear distinction has been drawn between the accounts of the two services and between their financial objectives.

Several hon. Members have expressed concern about the activities of the new Minister of Posts and Telecommunications and have suggested that he might not have enough to do.

Mr. Mawby

Hear, hear.

Mr. Slater

The hon. Member for Totnes (Mr. Mawby) says "Hear, hear", but, in addition to being responsible for the Post Office, the Minister of Posts and Telecommunications will also have oversight of the B.B.C. I have listened to many criticisms from hon. Gentlemen opposite on this score and some of them have tried to lead my right hon. Friend into the trap of taking action against the B.B.C. and I.T.A. The Minister will also have responsibility for the regulations governing the use of radio apparatus and frequencies in Britain and for United Kingdom participation in the international field.

Mr. Bryan

Really!

Mr. Slater

The hon. Gentleman has not yet held a position of Ministerial responsibility. Until one has been responsible in a Government Department, and knows its operations, one cannot speak on the subject with adequate knowledge. I have explained that the Minister of Posts and Telecommunications will have a not inconsiderable load on his shoulders.

Many hon. Members have regretted the passing of the old and respected title "Postmaster-General" and have expressed the hope that it would be borne by the new Minister. As I have explained, the Minister of Posts will have markedly different responsibilities from those at present held by my right hon. Friend. It could be argued, of course, that if the title were to be retained it would be more appropriate to be given to the chairman of the new Corporation. Suffice to say that had we kept the old title matters would have been complicated in a number of serious ways.

There have been many occasions when, as old legislation has been amended, the new legislation has made a distinction between the two gentlemen whom I might call the old and new masters. There would have been almost insurmountable problems to have made such a distinction, if both masters had been postmasters.

Hon. Gentlemen opposite have laid stress on the need—I assure them that we agree on this—to equip the Post Office to operate efficiently as a commercial organisation. At the same time, they have repeatedly questioned the powers which the Post Office will have to go into manufacturing and to acquire subsidiaries.

Mr. Stratton Mills

Would it not have been feasible to have referred to the new Minister, if only for the purposes of legislation, as "Postmaster-General (1968)"?

Mr. Slater

I assure the hon. Gentleman that serious thought was given to this matter before the Bill was presented. If it could have been done, it would have been done.

Realising the need for the Post Office to operate efficiently as a commercial organisation, one might wonder why hon. Gentlemen opposite have questioned the powers which it will have to go into manufacturing and to acquire subsidiaries. I have no doubt that we will hear more of this in Committee. The main purpose of these powers is to ensure that the Post Office is equipped to safeguard its resources of supply in the future, as any sensible management should. We are talking not only about the needs of 1968 and 1970, but of the needs of 10 and 20 years hence.

Much has been said about the exclusive privileges which the new Post Office will enjoy. Some hon. Members have suggested that the new organisation will have a monopoly of providing apparatus in people's homes. There is nothing in the Bill to confer such a monopoly. The Post Office naturally has now, and will have in the future, the right to lay down rules on how apparatus should be connected to its system, but that is as far as it goes.

Captain Orr

Oh!

Mr. Slater

The hon. and gallant Member has declared his interest, and I am declaring the interest of the Post Office in accordance with the Bill.

Nevertheless, the Post Office is conscious of the need to give its customers as wide a choice of apparatus as possible and to give the telecommunications industry proper opportunities to find a market for its products.

Captain Orr

The hon. Member said that the new Corporation will not have a monopoly for the supply of consumer instruments but that it will be entitled to say that nobody shall be allowed to connect to the network without its authority. What is the difference? Is not that a monopoly?

Mr. Slater

The hon. and gallant Member will agree that we have to protect the system as it is used, but all that is under consideration and we shall see what comes out of it. [Laughter.] Hon. Members are chuckling. They have had the Floor to themselves for most of the day.

On the telecommunications side, my right hon. Friend is conducting a review of policy in this field with those objectives in mind. Mention has also been made about kiosks and other matters with which I have not time to deal now.

Several hon. Members expressed misgivings lest the emphasis on the commercial approach which is inherent in the change should be at the expense of the duty of service which the Post Office owes to the public. My hon. Friend the Member for Putney (Mr. Hugh Jenkins) referred to that aspect in his interesting speech. It is right that I should reassure him and the House, as I close the debate, by quoting the key passages about it from the White Paper. In those passages the Government stated their objective for the new Authority, and I ask the House to note that they gave equal emphasis to each aspect. The Government stated the objective as follows: to create an authority which will —be responsible for developing the most efficient services possible, at the lowest charges consistent with sound financial policy. —carry on in a worthy manner the Post Office tradition of service to the public. —develop relations with its staff in a forward-looking manner. That will be the responsibility which will be passed on to the new Corporation and to the people who will be appointed to operate this great organisation, to seek to give, and to continue to give, that service, irrespective of the torrent of criticism to which we have been subjected in the last few weeks. The new Corporation, taking over the new responsibility, will try to give the service which the people of this country ought to have.

I am grateful to the hon. Member for Howden for saying that the Opposition will not vote against Second Reading. We shall meet the Opposition in Committee where we shall, no doubt, have some very interesting debates.

Mr. Stratton Mills

Before the hon. Member sits down—

Mr. Speaker

Order. I think that the Assistant Postmaster-General has sat down.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).