HC Deb 23 July 1970 vol 804 cc760-8

The following Written Question stood upon the Order Paper:

78. Mr. JOHN NOTT

To ask the Minister of Posts and Telecommunications if he will make a statement before the Summer Recess about his consideration of postal charges.

The Minister of Posts and Telecommunications (Mr. Christopher Chataway)

With permission, I should like to answer Written Question No. 78.

Mr. Arthur Lewis

On a point of order. Can you explain, Mr. Speaker, why the Minister's statement should be allowed to be made when the information and details of what is now about to be "leaked" to the House was leaked in all the Press this morning and on the radio? You have just said, Mr. Speaker, that you do not like the time of the House being wasted. We have read all the information which is about to be given. It must have been an official "leak" from the Post Office because no one else could have obtained the information.

Mr. Speaker

The hon. Gentleman has frequently called attention to the phenomenon known as the "leak". It is beyond my power to explain it.

Mr. Lewis

Further to that point of order. I appreciate that you cannot be responsible for the "leak", Mr. Speaker, but the Minister is asking for the time of the House to answer a Written Question which normally would receive a Written Answer. There is no urgency about this matter and no need for it because we all know what is about to happen: the Tory Government are going to put up the prices of the post. This information was in the Press. All that we need to do is to have a debate later when we have all the details. The right hon. Gentleman is just wasting time.

Mr. Speaker

It is sometimes courteous of a Minister, when he has an important announcement, to make it in the House.

Mr. Chataway

It will be noticed that there is only a passing similarity between the announcement which I am about to make and the reports which appeared in the Press this morning.

The following is the answer to the Question:

Yes. After consulting me the Post Office is referring proposals to the Post Office Users' National Council for increased letter, parcel and other miscellaneous postal tariffs. Its main proposal is that the present 4d. rate for second class mail should become 6d. next January and the 5d. rate for first-class mail 7d.; and that these new rates should become 2½p and 3p respectively on Decimal Day, in accordance with the officially recommended conversion table.

These services have, for more than two years, been incurring mounting losses and the Post Office has accordingly taken the view since the beginning of this year that increased charges of this order were necessary. Indeed it decided in May to embark upon the printing of decimal stamps at the new rates in order to ensure supplies in time for Decimal Day. I am assured, however, that this does not preclude consideration of alternatives in the light of suggestions from the Users' Council and until its comments are available the Government remain uncommitted to the Post Office's proposals.

Mr. Nott

We entirely appreciate that this is just another bill left over from the previous Government. However, does my right hon. Friend feel that, when inflation is brought under control, the proposed increases will be adequate to ensure that the postal services remain in surplus over the coming years?

Mr. Chataway

I believe that the proposed increases should be sufficient for the remaining period of the five-year quinquennium target period—that is, until 1973–74. But the plain fact is that we face an accumulated short-fall on target of £88 million by the end of this year.

Mr. Stonehouse

Is the right hon. Gentleman aware—

Mr. Pannell

On a point of order. It has always been your practice, Mr. Speaker, when calling Members to give preference to Privy Councillors according to their seniority.

Mr. Speaker

Order. It has not been the practice at Question Time to give preference to Privy Councillors. I called the right hon. Member for Wednesbury (Mr. Stonehouse) because he was the last Postmaster-General.

Mr. Stonehouse

Is the right hon. Gentleman aware that it will be recognised among those who know the facts of the situation in the Post Office that some increase in the postal tariffs is justified at this time, but that the swingeing increases which he has just announced are completely unjustified? They will not encourage efficiency in the Post Office and they certainly would not have been approved if the last Administration had continued in office.

Is the right hon. Gentleman further aware that the Post Office Corporation had no authority from the last Administration to print the stamps to which he has referred and that its anxiety was to achieve the highest possible increase in productivity? It is fairly clear that the swingeing increases which the right hon. Gentleman has just announced will be pushed through. Is he aware that this will take away from the Post Office Corporation the incentive to increase productivity which it was the wish of the last Administration it should achieve? Is he also aware that he is inaccurate in suggesting that the postal services were incurring mounting losses over the last two years? The first six months of the two-tier system showed a surplus in that department. May I ask the right hon. Gentleman—

Hon. Members

No.

Sir R. Cary

On a point of order. Is the Rule suspended on this Question?

Mr. Speaker

Long supplementary questions prevent others from putting questions.

Mr. Stonehouse

Will the Minister undertake to review this proposal, which, he says, the Post Office is sending to the P.O.U.N.C., in the light of the need to increase productivity in the Post Office and in the light of the need to avoid a swingeing increase that would incur great burdens for consumers?

Mr. Chataway

The right hon. Gentleman claims that there was no loss on the transactions of the Post Office during 1968–69 and 1969–70. [Interruption.] The facts of the matter are—[Interruption.]

Mr. Speaker

We cannot debate in shouting. Mr. Chataway.

Mr. John Mendelson

On a point of order. It is not right, Mr. Speaker, that we should keep silent when the Minister misrepresents what my right hon. Friend has said.

Mr. Speaker

Order. I never ask the House to keep silent. A certain modicum of noise is permissible.

Mr. Chataway

The right hon. Gentleman suggested that I was in error in claiming that there had been mounting losses on the postal side of the Post Office's business over the last two years. The figures are that for 1968–69 there was a £9 million shortfall. For 1969–70 it is likely to be £26 million and for 1970–71 £53 million, making a total shortfall on target of £88 million.

As to productivity, the Post Office's estimates are based on an assumed rise in productivity of 1½ per cent. over the coming years. This contrasts with a decline in productivity over the past two years.

It is true, as the right hon. Gentleman suggests, that the Post Office embarked upon this printing of stamps without the consent of the Government. I am, however, informed by the Post Office that it embarked on this printing with the full knowledge of the Government and that that information was deliberately suppressed before the election.

Mr. Marten

rose—[Interruption.]

Mr. Speaker

Order. What I have said about noise on one side applies to the other side in just the same way.

Mr. Marten

Concerning the printing of the stamps before the election, does my right hon. Friend recall what his predecessor said: that the Post Office was printing these stamps without his consent and without his knowledge? [HON. MEMBERS: "He did not say that."] Can my right hon. Friend say whether the Post Office is allowed to print new stamps without the consent of the Minister of Posts and Telecommunications?

Mr. Chataway

Yes, the Post Office is allowed to proceed without that consent. As I say, however, it was done with the knowledge of the Government.

Mr. Benn

The Minister has announced the largest increase in postal charges in the history of the Post Office—that is to say, a 50 per cent. increase in the basic charge of 4d. is the largest increase in the history of the Post Office—five weeks after the then Leader of the Opposition, now Prime Minister, made a speech on the eve of poll to the effect that he would take a firm grip of a number of public sector charges, including postal charges. Is the Minister also aware that 5d., 7d., 10s. and £1 stamps have always been printed, that nothing is to be read into the printing of the stamps and that the Cabinet had not approved the increase?

Will the right hon. Gentleman refer the proposed increases to the Prices and Incomes Board? Did the Ministry of Posts and Telecommunications consider alternative systems? Will the Minister now tell the House that during the election the criticism he was really making was that the previous Government had not increased charges enough?

Mr. Chataway

I am a little surprised that the right hon. Member should intervene in a matter of this kind when one recalls the tremendous song and dance he made in October, 1964, about an accumulated shortfall on profit which was less than half of what we are talking about today—£120 million over the quinquennium. We are talking today about a shortfall which, if it were left to run similarly over the whole quinquennium, would amount to about £305 million.

As to printing, the fact is—as I should have thought the right hon. Gentleman would know—that a phosphor bar is required in the units which constitute the main postal value—that is to say, at present the 4d. and 5d. units and, after the change, the 6d. and 7d. units. It is the presence of those phosphor bars which determines the intention of the Post Office. The printing was on the basis, as again the right hon. Gentleman knows perfectly well, of a tariff of this nature.

We have not accepted these proposals of the Post Office, as I have made clear. I have announced this application from the Post Office and informed the House of the legacy with which we have been left, but when the Users' Council has had the opportunity of studying the Post Office's proposals the Government will come to a decision on the matter.

Mr. Benn

Will the right hon. Gentleman answer my question: are these proposed charges to be referred to the Prices and Incomes Board? Secondly, can the right hon. Gentleman recall any occasion when a Government have authorised a price increase to cover the next five years ahead, having fought an election campaign in which they have time and again demanded a tighter control over price increases?

Mr. Chataway

The right hon. Gentleman is going from bad to worse. I have told him that we have not authorised these price increases and that they are being referred, not to the Prices and Incomes Board, but to the Users' Council, as is the normal procedure, before the Government come to a decision.

There is no question of putting up prices to cover deficits for years ahead. The price increases which are now proposed are, in the opinion of the Post Office, only those which are necessary to meet the deficit with which it is now faced, in part as a result of the inaction of the Government of which the right hon. Gentleman was a member.

Sir J. Rodgers

Is my right hon. Friend satisfied that the two-tier system is the best system of postal collection and delivery? Can he say what would be the comparable cost if we went back to a unitary system of only one rate of charge for the posting of letters?

Mr. Chataway

It is too soon to take final decisions about the two-tier post. It has both advantages and disadvantages. What is clear is that if we were to move away from the two-tier system that would not afford any means of putting up the charges by much less.

Mr. Russell Johnston

Is the Minister aware that if he took his hon. Friend's advice and considered doing away with the two-tier system the effects on poorer people, who use the postage system a lot, would be much more severe than it is likely to be even as it is?

Mr. Chataway

I think the hon. Member is probably right about that.

Dame Irene Ward

May I ask my right hon. Friend if he will kindly outline the powers of the Post Office Users' Council? Has it any power to reject? What is its position? Is it really just a sort of method of using these kinds of councils with which I do not agree very much?

Mr. Chataway

The Users' Council has a statutory right to be consulted—[HON. MEMBERS: "Ah."]—and it represents a wide cross-section of users, and the Users' Council, under the Chairmanship of Lord Peddie, will examine these increases, not only the major increases but the rest of the increases for postal and parcel charges also.

Mr. Charles R. Morris

Will the Minister bear in mind that if these alarming increases are subsequently linked with the abolition of the postal two-tier system, he will in fact be putting in jeopardy the hitherto guaranteed morning after the day of posting delivery, and in fact the public will be receiving an inferior service for a more costly postage rate?

Mr. Chataway

I will hear in mind the comment the hon. Member makes.

Mr. Stratton Mills

Can my right hon. Friend say at what level in the organisation the decision to make this printing was taken? Was it authorised by the Post Office Board itself? And on what date did printing commence?

Mr. Chataway

I am inforced by the Post Office that the Post Office Board took the decision on 15th May finally to go ahead with printing of these decimal stamps with the new tariff.

Mr. Kelley

Would the Minister tell us if the questions he has answered are £14 or £10 questions, and how much it would have cost if he made a simple statement to the House on the matters he has dealt with?

Mr. Chataway

I hope I have made as simple a statement as the facts warrant, but it is, as the hon. Gentleman would agree, a very unpleasant situation with which we are faced.

Mr. St. John-Stevas

Is not the significance of the relevations concerning printing that the responsibility for any proposed increase rests upon the negligence and incompetence and dilatoriness of my right hon. Friend's predecessor in office?

Mr. Chataway

Yes, I believe there will be absolutely no doubt in the minds of the public that, faced with a deficit of this kind, an increase, and a large increase, is absolutely necessary, though I hope I have made it clear that we are not committed and cannot be committed to the proposals of the Post Office.

Mr. Jay

Is this proposal part of a general policy by this Government of raising prices for essential services?

Mr. Chataway

It is part of a policy on the part of this Government of putting the nationalised industries on a sound commercial foot ing—[HON. MEMBERS: "Oh."]—despites the legacy with which we were left.

Mr. Benn

Would the right hon. Gentleman not agree that the Prime Minister fought the whole election on charges in the public sector? Let me quote what he said—

Hon. Members

No.

Mr. Speaker

There can be no quotations in a supplementary question.

Mr. Benn

Will the right hon. Gentleman accept that the Prime Minister, during the campaign, time and again attacked the level of charges in the public sector, including postal charges? He now comes along and makes a 50 per cent. increase. [HON. MEMBERS: "No."] He announces a 50 per cent. increase is to be considered, and that without referring the matter to the Prices and Incomes Board at all.

Mr. Chataway

We have, as I have said on a number of occasions this afternoon, not made this increase; we are not committed to these proposals of the Post Office. I will say this to the right hon. Gentleman, that if my right hon. Friend the Prime Minister and all of us had known during the election—[HON. MEMBERS: "Ah."]—as he and his colleagues knew, if full information had not been deliberately suppressed, what he said about the Post Office might have been somewhat different.

Mr. Stonehouse

On a point of order, Mr. Speaker. May I ask your guidance? This is an extremely important subject which will have considerable repercussions in the economy. May I ask whether it will be possible for the House of Commons to debate the issues involved before the Minister comes to a decision about approving the increases now proposed?

Mr. Speaker

That might be dealt with in Business Questions later on.