HC Deb 09 August 1972 vol 842 cc1706-7
8. Mr. Golding

asked the Minister of Posts and Telecommunications whether he will write off past losses in the postal service.

Sir J. Eden

I have nothing at present to add to the reply I gave to a similar question on 28th June.—(Vol. 839. c. 1415–6.]

Mr. Golding

Is the right hon. Gentleman aware that it is the view of the Post Office that if past increases are to be avoided the accumulated losses, expected to be £180 million by April, must be written off? Is he further aware that the Union of Post Office workers supports this point of view because of the worsening morale in the postal services? Therefore, will the Minister give us an early reply to representations from the Post Office?

Sir J. Eden

As the hon. Gentleman knows, the finances of the Post Office, in the light of the CBI price restraint and other matters, are under consideration. The UPW saw me the other day and made representations to me on this point, and I will undertake to make my position clear as soon as I am able to do so.

9. Mr. Golding

asked the Minister of Posts and Telecommunications whether he will state the financial results of posts and telecommunications, respectively, in 1971–72; what rate of return on telecommunication capital was achieved; and whether he will make a statement.

Sir J. Eden

As the hon. Member will have seen from the Post Office's recent report, the telecommunications business made a profit of £58 million and its rate of return on capital was 8.6 per cent., whereas the postal business incurred a £12.6 million loss.

Mr. Golding

Will the Minister tell us what was the increase in productivity in telecommunications last year and, despite that good performance, by how much prices would have had to be increased last year for the telecommunications service to reach the target of 10 per cent.? Further, will he tell us for the current year whether he will be revising the target or whether he will be driving price increases high enough to make it possible for the service to reach the 10 per cent. target?

Sir J. Eden

I have no price increase proposals before me at the moment. I believe the figures for which the hon. Gentleman has asked are available in the Post Office Report and he will also find them in the speech which was made by the Chairman of the Post Office at the time the report was presented. In considering this report, one has to face the fact that a higher level of pay and prices has added something like £65 million in costs, whereas higher charges to customers have brought in an extra £23 million. This has contributed very much to the adverse situation.

Mr. Speaker, may I say how much one shares in the sense of loss at the untimely death of Lord Delacourt-Smith who made such a great contribution towards the work of the Post Office engineers?

Hon. Members

Hear, hear.

Mr. Kenneth Lewis

Does not my right hon. Friend agree that the Post Office always has the difficulty that its more modern side, in telecommunications equipment, does a large amount of the work, whereas on the other side, which is labour-intensive, there cannot be any change because of the nature of the postal services, and that with rising wages—whether they are too high or not, they are inevitable—it is more difficult to make a profit?

Sir J. Eden

That is absolutely correct. Not only is the postal business labour-intensive and, therefore, very much affected directly by inflation but it has also been experiencing a decline in its business of about 9 per cent. on a working day basis.

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