§ 4.6 p.m.
§ LORD CHESHAMMy Lords, with the leave of the House, I should like to make a statement on telephone charges similar to that being made by my right honourable friend the Postmaster-General in another place. As from January 1, 1958, charges for calls will be drastically altered. Most calls now costing 6d., 9d. or 1s. will be reduced to 3d. The majority of charges for trunk calls will also be reduced. These changes pave the way for full automation in the telephone service, including trunk dialling 324 by subscribers, which will begin at Bristol towards the end of 1958. Full details are given in a White Paper, which will be available in the Printed Paper Office later this afternoon. I should add that, for the convenience of your Lordships, I have arranged for a number of maps typical of the new arrangements to be displayed in the Royal Gallery, which may assist in the understanding of the White Paper.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, it is a matter of reaction. As one looks round the House at the faces of noble Lords one ought to describe this as a joyous announcement, and we are very much obliged to the noble Lord for having made the announcement. Having listened to him, I would say not only that I welcome the statement but that I should like to know exactly how it has been arrived at. This is a most extraordinary anti-climax to the debate in which we were engaged on the general condition of the country, national finance and Government reflexes thereto. Perhaps it has been possible because some telephone users have been, and apparently will still continue to be, subject to much higher annual rentals for telephones. That is a possible answer. There is the next point, and that is that all of us are now paying. I think, 3d. for every local call.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHYes, I had forgotten that. Thank you. We are all now paying 4d. for a local call.
§ LORD CHESHAMMay I interrupt the noble Viscount? It is 4d. from call boxes.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHI thought I was right with regard to renters—3d. as distinct from the humble 1d. we used to pay not so very long ago. That is perhaps another reason. But we have been discussing finance, and what I am wondering is whether the noble Lord could tell us if there has been a kind of Post Office extra budget, with preparation for this to be fitted in as a new part of it. Will it result in a diminution or in the abandonment of any surplus in the Post Office which is paid to the Treasury? Are the 325 Post Office definitely going to help to finance this scheme out of the normal surplus paid over to the Treasury, or is that surplus actually to be wiped out?
There is another point to which I would draw attention, and that is that this statement says that this action will pave the way to the development of automation. Apparently, automation is not yet completely universal. It is going to be tried out in Bristol and successively in other areas—that I deduce from the statement. One question that arises at once among noble Lords on this side is how much labour will be displaced. I am entirely in favour of the development of automation—please understand that. But will the Government tell us exactly what plans they have for making some provision for the people who will be displaced, either by absorbing them into the Post Office services or by taking them into alternative occupation?
LORD REAMy Lords, I should like to join the noble Viscount who has just spoken in welcoming this most attractive bombshell. I should also like to follow very much on the line taken by the noble Viscount in asking whether this is due to a sudden increase in surplus in the Post Office accounts or is based on the economic theory of "small profits and quick returns". Is it the case that the Minister hopes that there will be more thin four times the number of three-penny calls in the future than there are one shilling calls made at the present time? If that is the case, will any of us ever be able to get any telephone call through at all?
§ LORD LUCAS OF CHILWORTHMy Lords, may I ask the noble Lord, Lord Chesham, whether it would be more convenient for him to answer the questions together, or would he like to reply now to the questions already asked before being asked any more?
§ LORD CHESHAMIf I may reply to that, I should prefer, with noble Lords' permission, to answer now what has already been asked. I have been following noble Lords as closely as I can and I will do nay best to answer their queries, and will then deal with other questions that may afterwards arise. Straight away, let me say that I realise that I am in a better position than any of your Lordships, having seen the contents of the 326 White Paper. That White Paper, I must say, makes the whole matter much clearer, as your Lordships, I am sure will agree, when there has been time for you to refer to it.
The noble Viscount, Lord Alexander of Hillsborough, who asked most of the questions, will probably not want me to go into vast detail on this matter but to deal broadly with the basic principles of the questions which he has asked. There is, nothing magic about this. The Post Office has had no extraordinary windfall anywhere, neither has it been supplied with a little extra capital, or anything of that sort, by the Treasury. As your Lordships will see from the White Paper, this is simply a question of re-arranging the charging arrangements in the first place on a much more rational basis than before. It involves very much greater use, and much more economic use, of existing equipment which is now, for technical reasons which I do not want to enlarge upon, not used to the fullest extent. It means much more economic use of existing equipment with very little extra cost. It will be possible, we believe, by virtue of the economies which will arise from that. I hope that that will be sufficient for me to say at the moment on that side of the question.
The noble Viscount's second question referred to the Post Office surplus. I do not think that this scheme is going to have very much effect on that. The present surplus which is budgeted for, I think, is generally agreed to be quite a modest one in an organisation the size of the Post Office. As the whole of this programme, or a large part of it, is going to be realised by economies, I do not think there is anything to fear in the way of any difference in the Post Office budget as we already know it.
The noble Viscount was right, of course, to have raised the question of personnel, and I will spend a moment on that. The people concerned fall into two sections. First there are those who will be displaced by the difference in the charging arrangements which will save a good deal of manpower—the number is estimated to be about 3,000. These will quite rapidly be taken up by the wastage which normally occurs during each year. When automation comes in, that will raise a somewhat greater problem, because as big centre after big centre has 327 its new exchanges installed local problems which will be more difficult to handle will be created. The number will probably work out at something like 2,500 a year. I cannot be more specific at the present moment on my right honourable friend's precise proposals for overcoming this, but this I can say: the Post Office is determined to deal with any problems (and we are fully alive to what these problems are) with every sympathy. My right honourable friend's proposals and plans so far as this aspect is concerned have been drawn up in full consultation with the unions affected.
§ LORD LUCAS OF CHILWORTHMy Lords, I am grateful to the noble Lord for those answers. There is just one further question I should like to put to him. Can he tell the House by what amount it is estimated that this concession will affect the revenue account of the Post Office?
EARL FERRERSMy Lords, while the noble Lord is thinking of the answer to that one, may I ask him this? If I understood him rightly, this "attractive bombshell," as it has been called, has come about by reason of the ability of the Post Office to use equipment more efficiently. If I remember correctly, some six weeks or so ago there was a reorganisation in the scale of charges. Can the noble Lord give us any idea why it should be necessary to reorganise them now, or has something cropped up in the last six weeks which has enabled this to be brought about?
§ LORD CHESHAMNo, nothing of the kind has occurred. The tariff changes which were made some time ago were made of necessity, because of the decision—a very proper one. I think—that telephone rentals should approach something like their actual cost and because of the coming into being of back-dated pay awards to Post Office personnel. That was the reason for that introduction. This scheme comes in now because, after a very long period of working on the matter, research and so on, this is the first moment that it could have been introduced in the form of a White Paper. The effect on the Post Office revenue is really this—I trust that I have understood the question of the noble Lord, Lord Lucas of Chilworth, correctly. The 328 concessions will cost some £8 million a year, of which £6 million has already been paid for, so to speak, by the previous increase in the local call charges, whereas the rest will be realised by economies. I trust that that is the information which the noble Lord wanted.