TELEPHONE CHARGES (Hansard, 9 March 1976)

§ Mr. Stephen Ross (Isle of Wight)
I am grateful for being given the opportunity to raise what I believe to be properly held grievances about certain aspects of the present scale of telecommunication charges. I have no doubt that when the Minister comes to reply—I am grateful to him for being here to reply to the debate, because he always does it so nicely—he will tell me that the Government have no jurisdiction over the matters which I shall raise, which are entirely the responsibility of the Post Office Telecommunications Division. Although this may be true up to a point, I consider that the Department of Industry and the Department of Prices and Consumer Protection should be more concerned about the scales.
In my constituency there is a rather remarkable man who is getting himself well known in the Ministries and Post Office circles. He is a retail butcher by trade named Mr. Stanley Stevens who, when he discovers something which he considers wrong or unfair, does not let go easily. He has done extremely creditable work of a social character in Ulster, regularly corresponding with families over there and arranging holidays in my constituency for some of the children. Moreover, at his own expense he has travelled to the Province to see the situation for himself. He also plays a leading role in charitable organisations on the island and therefore he is a man of action.
On Sunday 27th April 1975 he read of the new telephone charges in a Sunday newspaper and he thought that there had been a misprint. In the paper it was 384 stated that a call box user would in future be charged 26p for a three-minute cheap rate long distance trunk call compared with 9p plus VAT for the same operator-connected service to a subscriber. Since that time there has been a further revision in charges and the gap has widened to a greater extent, so that at present the cost for a short distance operator-connected three-minute call from a coin box at standard time has risen to no less than 52p, whereas in comparison for a subscriber—somebody with his own telephone—the charge is only 18p.
However, the matter does not stop there. If a Member of Parliament makes a call from a coin box either in or outside the House through the operator to Gerrards Cross it should cost him about 4p between 1 p.m. and 6 p.m. Monday to Friday. However, to neighbouring Beaconsfield the cost is 52p. On the other hand, Belfast and Thurso would in comparison be only 20p more, that is, 72p. No wonder Mr. Richard Last of Woking was exasperated when he wrote to the Daily Telegraph on 22nd November 1975 saying: I am still recovering from an experience I had when I tried to telephone my wife from a coin box in Shepherd's Bush. The number rang and she answered, but—as happens with STD—the machine swallowed my 2p piece, and then another, without connecting me. Exhausted both of coins and patience, I explained the situation to the operator. She was willing to connect me, provided I inserted a further 48p". He goes on to explain that it was not a type-setting error. It cost him 48p for the favour. He said: When I expostulated, at some length, she said the charge for a call via the operator was 52p and she was deducting the 4p I had lost. The fact that I was going through the operator only because the Post Office's machinery had broken down was irrelevant. That was the rule and she had no latitude in the matter. He went on to make comparisons but I think the extract which I have read illustrates the experience of many members of the public who normally use call boxes.
From these examples it can be seen that it costs almost three times as much to make a call via the operator from a kiosk as from a private telephone. No less than 34p extra is charged to cover 8 per cent. VAT and the rental of the telephone box. The 34p for three minutes' use of the telephone covers the cost of over three day's rental of a private line 385 and, according to recent newspaper reports, would reimburse the Post Office for a week's rental and the daily cleansing charge which it pays for some of its kiosks. A further 12p is added in the case of a reverse charge call from a coin box.
There are other anomalies, especially in relation to call boxes, whether the caller goes through the operator or not. But it is the short-distance trunk call—that is, the one within the 10 to 35 mile band—which shows up the greatest discrepancies and which should be seriously reconsidered. My butcher friend has prepared an excellent chart which has gone into many Departments of Government and the Post Office and which has been on the whole accepted as accurate, although there have been some comments about the size of the clock face.
This is an important matter since, regrettably there are large numbers of people who still cannot read or write, and others like myself who often cannot remember all the digits in the codes. Very often it is as much as these people can do to dial 100, and they are therefore dependent on help from the operator.
The rental cost has gone up so much that many people now cannot afford to have the telephone connected. When I moved house recently I decided that an extension was a luxury I could no longer afford. More and more people are having their telephones disconnected and will therefore have to use call boxes.
The radical system upon which the Post Office bases its charges acts unfairly to those who live on a coastline such as in my constituency where we get no benefit from the system with local calls from towns like Ventnor or Shanklin. The charge groups give an unfair advantage to some parts of the country such as London where it is possible to dial millions of people in all directions up to 35 miles. A coastal town does not enjoy that advantage and that leads to the conclusion that some other method of differentiating between areas should be considered. I am told that the scale which operated before the current one was fairer.
I come finally to the role of the Post Office services advisory committees, which are the bodies set up by Government to look after consumers' problems. 386 It is time for the Government to take another look at them. They do not normally hear representations from users in person. The charter which established them does not seem to exclude such an arrangement but it does not happen in practice and that is a pity because it is just the sort of forum to which a member of the public should be allowed to put his grievances and be cross-examined about it in friendly way before the committee decides whether to make a report to the national council. In its turn the national council would decide whether to pursue the matter with the Post Office.
I understand from correspondence I have had with the general manager of the telecommunications division of the Post Office that the scale of charges is now under further consideration. I hope that the Minister's Department will feel constrained to put its oar in, or at least that the Department of Prices and Consumer Protection will do so, so that we have a scale which more fairly represents the service provided. Perhaps the Department would also inquire, after this exchange of views has taken place, why, when new boxes are installed, they will not use 10p and 50p coinage but rather 5p and 10p coinage. Although I do not want higher rates, that would be a more sensible basis on which to instal new machines.
I have dealt rather too quickly with matters into which I should have liked to go in greater detail. I hope that the Minister will give us some comfort when he replies.

§ The Minister of State, Department of Industry (Mr. Gregor Mackenzie)
I thank the hon. Member for Isle of Wight (Mr. Ross) for providing me with the opportunity to explain the complexities of telephone call charging systems and the anomalies which can arise, with particular reference to coin box and operator charges.
The hon. Gentleman was right when he said that I would begin my remarks by saying that this was a management matter for the Post Office. I emphasise that the tariff policies of the Post Office are its responsibility, not mine. Under the Post Office Act I have no authority over its tariff policy, apart from certain powers to issue directions, which are not 387 relevant to the matters raised by the hon. Gentleman.
The Price Code does not bear on the details of these charges. The Price Commission is concerned only with the gross effect. What I say, therefore—and I have said this so often that I may be guilty of tedious repetition—is said on behalf of the Post Office and is not within my Department's responsibility.
As I have said to other hon. Members who have raised similar issues, these debates are useful because the Chairman of the Post Office Board will read the hon. Gentleman's remarks and bear them in mind when framing future policies. The hon. Gentleman has had correspondence with the Post Office on behalf of a constituent about anomalies attaching to the group charging system. That was also the subject of an Early-Day Motion in his name last November. The hon. Gentleman's correspondence was also about the alleged injustice in the high charges for coin box calls dialled or operator-connected during the cheap rate period. His constituent has also, correctly and helpfully, been in correspondence with the Post Office Users' National Council.
The hon. Gentleman mentioned the difference in costs between charges in coin box calls and charges from a rented telephone. The comparison is certainly not a simple one, as the hon. Gentleman realises, between the actual call charge for the two—the subscriber pays a rental which in the case of most private subscribers is considerably higher than the sum of his call charges per quarter, and he pays value added tax on his bill. On the other hand, the cost of the call box to the Post Office includes the installation and maintenance of its more complex mechanism and the periodical collection of money from it and, unfortunately, these days there is a high cost of repair due to vandalism which is all too prevalent in many parts of the country. The cost of the call box charge, therefore, must include the costs which a private subscriber meets through the rental as well as these other special charges. Therefore, logically and economically it ought to be considerably higher.
Such anomaly as there is relates to the continuing low level of charges for dialled 388 calls from a box, since it is not easy to alter the coin-box mechanism to take account of the increased rates. It is far easier to adjust rates for operator-connected calls from these boxes. In the special case of local peak rate calls, for the present the call box is actually cheaper: this is perhaps regarded as the grossest of the anomalies.
All these facts have contributed to the considerable loss made from call boxes. Public call boxes alone lost the Post Office £25 million in 1974–75.
The Post Office has undertaken to keep the current level of rates for the price restraint period, but thereafter it will be introducing proposals for converting the anomalies that I, and the hon. Gentleman, have mentioned.
The hon. Gentleman raised the question of the diagram which Mr. Stevens prepared. Both we and the Post Office appreciate Mr. Stevens' helpful initiative, but the Post Office felt, after very careful consideration, that it was not quite simple enough to be of great value to the public. Admittedly, it deals with a complex topic which does not lend itself to easy simplification.
The hon. Gentleman also raised the question of problems arising in relation to some operator calls. Perhaps L may say that when subscriber trunk dialling—STD—was introduced, the Post Office could either have had a standard charge, regardless of whether the customer dialled or went by an operator, or have had separate charges each of which reflected the specific charges of that type of service. It chose the latter because it would be cheaper for the public, and so encourage greater use, and because it would discourage the needless use of operators.
By now virtually all exchanges in the country are provided with STD—the only exceptions are a few exchanges in the less populous parts of my native land of Scotland—and yours, Mr. Deputy Speaker—but they have less than 0.5 per cent. of the subscribing population.
However, there is another constraint which makes it impossible to use STD for a small proportion of calls although both exchanges are STD exchanges. The system will not accept calls that pass over more than about five different links, so a call that has to make a complex route through the transit network may outrun 389 the system and would have to be dialled through the operator.
Allowing for both these types of impracticability, more than 90 per cent. of trunk calls can now be done by STD.
The Post Office is looking into the possibility of reducing the difference in cost between STD calls and those which still have to be obtained through the operator. There are, as the hon. Gentleman will appreciate, some operational and technical problems to be overcome, but the Post Office hopes to be able to reduce charges for such operator calls to the equivalent of a three-minute dialled call as soon as it can. The Post Office Users' National Council knows of this and the Post Office hopes to be able to put detailed proposals to it, and to discuss them, shortly.
The suggestion has been made—perhaps not tonight, but at other times—that in case of difficulty subscribers ought to be able to go through the operator at no higher charge. If this were taken to the extreme it would lose much of the economy of the whole introduction of STD. In fact, the operator is able to do nothing positive in trunk calls that the subscriber cannot, given persistence, do for himself. In a few cases he could advise of a fault or delay and thereby save the subscriber's temper. The operator cannot know whether the subscriber who asks for help is frustrated by poorly working equipment, physically handicapped, plain lazy, or, as is often the case, has in fact dialled the wrong number.
The Post Office will in fact repay coins lost in attempting to dial but at present a call connected by an operator is charged the operator call rate. It is considering whether it can or should do more, but the rights and wrongs, quite apart from the technical considerations, are exceedingly complex.
The hon. Gentleman has commented on the variation of distances within which a local call is available. In some places a much longer distance is reckoned as a local call in one direction than in another. In some cases the trunk rate is made to apply for what are much more nearly local calls. That is perhaps one of the inevitable consequences of the pattern of charging groups that has been adopted. In all there are about 629 390 charging groups throughout the country. Each of the zones must be based on the pattern of exchanges, but as far as possible they follow geographical and economic patterns. Therefore, a market town is not separated from its suburbs and the area it serves. In almost every instance a local call is one that can be made within that group and the groups contiguous to it.
The hon. Gentleman's constituency, the Isle of Wight, is one group. The neighbouring groups are based on Southampton, Lymington, Fareham and Portsmouth. Each of those groups is contiguous, so the hon. Gentleman and the people he represents have the benefit of the local call rate in quite a wide area. I appreciate the hon. Gentleman's point about the south of the Isle of Wight, but if he considers the situation that applies a little further north, and if he looks at the map of the exchanges of the groups I have mentioned, he will appreciate that the area is reasonably well served.
I am sure that on reflection the hon. Gentleman will agree that any tariff system based on steps, whether for railways, buses or parcel deliveries, must have, by definition, some sort of imperfection. There is an apparent anomaly between the tariff at one point just before the step and perhaps at another point just after it. The only way of avoiding such anomalies, as we do so laboriously in the case of income tax law, for example, is to provide a system that is so complex that it is unrealistic in terms of ordinary transport and postal or telephone tariffs.
The Carter Committee will be considering many aspects of the work of the Post Office. No doubt it will be considering its tariff policies, amongst other things. As I have said, generally speaking this is not a subject for departmental control. However, I am grateful to the hon. Gentleman for the opportunity to speak on these problems. If he feels, for example, that for social reasons a specific variation of policy is desirable, he can make his views known to the Carter Committee. If he feels that he has more detailed points to raise, as he and his constituent will know, the Post Office Users' National Council has an exceedingly fine record of intelligent and successful intervention on behalf of consumers. I shall ensure that the points that have been raised by 391 the hon. Gentleman are passed on to the Chairman of the Board of the Post Office.

§ Mr. Stephen Ross
I thank the Minister of State for his comprehensive reply. I shall certainly read it with great interest. I am grateful to the hon. Gentleman for confirming that it is the Carter Committee which will investigate the telecommunications aspect of the affairs of the Post Office when the inquiry takes place.

§ Mr. Mackenzie
The hon. Gentleman will be aware that the Post Office Users' National Council is making a number of studies about telecommunications, postal charges and other matters. It is doing a useful job, and we trust that it will be reporting within the year. It will then be for the Committee to report to my right hon. Friend the Secretary of State. Thereafter, we shall make our responses.