HC Deb 28 June 1972 vol 839 cc1414-6
2. Mr. Leslie Huckfield

asked the Minister of Posts and Telecommunications when he intends to seek parliamentary approval for increased borrowing powers for the Post Office.

Sir J. Eden

Not in this Session.

Mr. Huckfield

Does not the right hon. Gentleman think that he should provide more money for the Post Office in order to improve the lousy telephone service that we have? The right hon. Gentleman gave me some figures which prove completely what he must know. Is he aware that the 3 per cent. failure rate for local calls and the 8 per cent. STD failure rate are completely inaccurate, and will he now go so far as to withdraw completely any kind of advertising of ISD facilities, which are a complete and utter farce?

Sir J. Eden

The question of borrowing powers does not have a direct effect on the forward investment programme. This is a matter for further consideration.

3 and 29. Mr. Ewing

asked the Minister of Posts and Telecommunications (1) if he will indicate the amount of interest being paid annually to the Government by the Post Office in respect of borrowing to finance the deficit on postal services;

(2) what percentage of Post Office funds is devoted to postal debts and interest charges and what percentage devoted to increasing the long-term efficiency of the postal industry.

Sir J. Eden

In 1970–71 the postal business incurred interest charges of £18 million, 4 per cent. of expenditure on revenue account, including some £8 million for deficit finance. Capital expenditure to increase long-term efficiency was £34 million.

Mr. Ewing

Will the right hon. Gentleman accept that this is more than just an immediate problem? In view of what he has said it is clear that the more funds that have to be returned in the form of interest charges and loan repayments, the less funds there are available for increasing and improving the long-term efficiency of the industry, and this cannot be unrelated to the previous Question which the Minister has just answered. Will he undertake to study this problem closely in order to resolve the difficulty in which the postal service is finding itself?

Sir J. Eden

There is some confusion behind the hon. Gentleman's question. The loss was £70 million in the year of the postal strike. Interest charges are not of dominating importance, because 75 per cent. of expenditure goes in labour costs and capital expenditure is not charged to revenue and, therefore, did not affect the loss in that year.

Mr. Golding

Is the right hon. Gentleman aware that the high level of interest charges imposed by the Treasury causes concern throughout the Post Office? There is a belief that with high interest charges, which could increase again with the rise in Bank Rate, the financial problems of the Post Office will become more severe than they ought to be.

Sir J. Eden

No, Sir. I do not think that the latter part of the hon. Gentleman's question follows. He will know from the 1970–71 report and accounts that the figure for interest rates in that year was about 6.8 per cent.

24. Mr. Charles R. Morris

asked the Minister of Posts and Telecommunications whether he will make a statement indicating when he hopes to conclude his discussions with the Chairman of the Post Office Corporation about the Post Office's current financial deficit.

Sir J. Eden

I have nothing at present to add to the replies I gave to similar Questions on 7th June.—[Vol. 838, c. 426.]

Mr. Morris

Bearing in mind the estimated shortfall of £180 million in the quinquennial financial targets for the Post Office, and bearing in mind the loss on the postal services of £72 million last year and an estimated £39 million this year, does the Minister expect that the Government will write off the Post Office's deficit? Does he envisage that they will propose economies in the postal services? Indeed, is the 5p post to become a reality?

Sir J. Eden

I cannot anticipate the results of discussions which are still in progress.

31. Mr. Golding

asked the Minister of Posts and Telecommunications when he will state the levels of future investment in the Post Office.

Sir J. Eden

They will be included in this year's White Paper on Public Expenditure.

Mr. Golding

Is the right hon. Gentleman aware that many of us on this side of the House are hoping that the level of investment will be sufficient to bring about the ending of the waiting list for telephones? Is he also aware that we are also wanting to see the levels of investment go up so as to provide the best quality telephone service possible?

Sir J. Eden

I accept the latter part of the hon. Gentleman's supplementary question and agree with him that that is clearly an objective, but I cannot give a firm answer to the first part of his question although it is certainly the intention progressively to cut into the waiting list.