HC Deb 22 March 1972 vol 833 cc1478-80
6. Mr. Bruce-Gardyne

asked the Minister of Posts and Telecommunications whether he has now received the Post Office's proposals for revision of the Giro tariff structure to conform with the recommendations of the Cooper Brothers report; and if he will make a statement.

Mr. Chataway

As an essential part of the restructuring foreshadowed in my statement of 17th November, the Post Office proposes substantial increases in a number of Giro charges from 1st July, 1972; but many businesses and most private customers who receive their pay through Giro will be little affected.

As the House knows, Giro is at the moment running at a loss of over £6 million a year; published charges have not been varied or raised since they were set in 1965 and introduced in 1968; and viability depends on a realistic tariff structure. In these exceptional circumstances, and after consulting me, the Post Office is today referring its proposals to the Post Office Users' National Council and the Government will meanwhile reserve judgment on them. I have agreed with the Post Office that the financial objective of Giro should be to make a positive contribution to Post Office finances within a year of introducing the new tariffs and to cover its overheads including depreciation and interest on both assets and losses within five years. Details of the proposals will be placed in the Library.

Mr. Bruce-Gardyne

I am grateful to my right hon. Friend for that information. Can he say whether the recommendations that the Post Office has made fully substantiate the recommendations in the Cooper Brothers report, which we have not seen? Can my right hon. Friend assure us that no steps will be taken by the Government to adjust the tariff increases to allow for the C.B.I.'s so-called price initiative?

Mr. Chataway

These increases have been regarded as a wholly exceptional case and they have been dealt with accordingly. They are in line with the recommendations of the consultants. They mean that the Post Office believes that within a year Giro will be covering its own variable costs and making an increasing contribution to the fixed costs of the Post Office. In short, the Post Office hopes that within a year the position will be such that it will be better off with Giro than without it.

Mr. Leslie Huckfield

Is the Minister aware that what he has said about the targets for Giro will act like a dagger hanging over its head? Since the right hon. Gentleman has kept Giro hanging round for so long in the past, ought not he now to be able to say something more encouraging?

Mr. Chataway

I do not accept that. This Government have always taken the view that Giro should continue only so long as it was able to pay its way. That is also the view of the Post Office. The Post Office has set these targets because it is convinced that Giro can be a viable proposition. My Department will monitor its progress towards break-even.

Mr. Geoffrey Finsberg

As my right hon. Friend, in conformity with the Act, is referring the proposals to the Post Office Users' National Council, will it be possible for that body to have a copy of the Cooper Brothers report under confidential cover?

Mr. Chataway

I will consider that point. There are difficulties about it, because the report was commissioned on the basis that it was to remain confidential to the Post Office and the Government. It is extremely frank about individuals, and written in such a way, I believe, as to preclude further circulation.

Mr. Richard

Does the Minister agree that it would be wrong if the P.O.U.N.C. had a copy of the report and this House was denied it? Obviously we shall wish to consider these proposals when we see all the details but, on the face of it, to turn round from a loss of £6 million to what would seem to be an operating profit in 12 months appears to be an optimistic target. Is that in accordance with the report, or is it a decision by the Post Office outside the report?

Mr. Chataway

It is broadly in accordance with recommendations made to the Post Office by its consultants. At the end of a year, it will only be in a position to make a positive contribution to Post Office finances. It will not be covering its overheads. It will be some time before it reaches that point.

Sir G. Nabarro

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's replies about Giro, I beg to give notice that I shall seek an early opportunity to raise the matter on the Adjournment.