POST OFFICE AND TELEGRAPH (MONEY) BILL (Hansard, 15 December 1959)

§ THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM)
My Lords, I think I said quite enough on Second Reading about the Bill itself, so that I need add nothing more to-day. I think I should take this opportunity, however, very briefly to mention three or four points about how the money provided for in the Bill will be spent and the developments which will be made possible by it. Of the total capital expenditure for which the Bill asks—that is £270 million—it is expected that about £244 million will be spent on the telephone service, about £19 million on the postal service and £7 million on the telegraph service.
On the telephone side, there is no doubt that Subscriber Trunk Dialling is the most dramatic development. Your Lordships will remember that Her Majesty graciously inaugurated the new system at Bristol last year. The subscribers there, I am glad to say, seem to like being able to dial for themselves calls to about half the other telephones in the country. In fact, they practise"Do it yourself" for about 97 per cent, of the calls for which that is possible. Last month Bodmin joined Bristol Central by being converted to this system, and Evesham will follow early in the New Year. That, my Lords, is only the beginning. By March, 1961, which is about halfway through the period to be covered by this Bill, the Post Office are planning for customers connected to about 90 other exchanges throughout the country to have similar facilities. By 1965, about 60 per cent, of all long-distance calls should be dialled by the caller, and by 1970 the proportion should be up to over 90 per cent.
There is similar progress forward to automation in regard to the Telex service. Your Lordships will probably know that this is a service that enables customers to send or receive written messages with the same speed as a telephone call; and it is therefore hardly surprising that so valuable an aid to business efficiency should have expanded 378 pretty fast. There are now about 5,000 subscribers to this service, and its conversion to full automatic working will be completed by the end of 1960. This should result in economies in operation, and should also lower the cost of call charges to customers. The three Telex centres in Scotland are being converted now, and they will be followed in the spring of next year by those at Birmingham and Nottingham.

§ VISCOUNT ALEXANDER OF HILLSBOROUGH
Could the noble Lord tell us exactly what is the nature of this service? Is it something like a teleprinter, or what is it?

§ LORD CHESHAM
It is something very like a personal teleprinter: I think that is the best way to describe it. The subscriber simply taps out the message, and it arrives at the other end at much the same speed as a telephone call would. It is a sort of personal teleprinter service. I think we might expect an even faster expansion of user when it is converted, and perhaps in ten years' time there may be about 20,000 subscribers.
I should like to go on for a moment to developments on the postal side, because I want to assure your Lordships that we in this country are just about leading the world in developing machines which help with mail handling. At Southampton, initial trials have been completed with prototype machines which separate packets, long letters and short letters, date-stamp them, and arrange them ready for sorting. Production machines from these prototypes have now been ordered for further trials in three large centres. At Norwich all the ordinary letters are now being sorted by machines which were designed by Post Office engineers and were built by a British firm. These are being tried out in other places as well; and orders for them have been received from Egypt, Switzerland and Soviet Russia. Even more advanced techniques of letter-sorting are being developed which, if the development is successful, will enable yet more of the letter sorting to be done automatically. Then, what I think I can claim to be the most highly mechanised parcel sorting office in Europe, with a completely new type of parcel-sorting machine, has just been opened in Leeds by my right honourable friend. And 379 this process of automation, as it were, has not been confined to inside the sorting offices. The customers at our counters have not been forgotten: there are trials going on with suites of self-service machines for use in our public offices.
Finally, I feel that I must say a quick word about that very ambitious project for a round-the-world cable, which came into being as a result of the Commonwealth Conference in London in 1958. A start is to be made in 1961 by laying a cable between this country and Canada. It will be a single cable of a new British design, and will be using British two-way repeaters throughout. On the understanding that other Commonwealth countries would be willing to shoulder similar obligations, we have agreed to play a full part in this very comprehensive Commonwealth scheme; and we have recently taken part in a successful conference in Sydney to plan the long Pacific link which goes from Canada to New Zealand, and thence on to Australia. The recommendations of that conference are now under consideration by all the Governments concerned. One point that I should like to add is that no part of the cost of this scheme is included in the money which is sought under the present Bill. The United Kingdom share of it will financed by Cable and Wireless, Limited.
My Lords, that is all I have to say, but I hope it is enough to show your Lordships that a great deal of development work, some of which can almost be described as exciting, is going on which we hope will lead both to better service to the public and better working conditions for the staff. I should like, therefore, to commend the Bill to your Lordships for a Third Reading. I beg to move.
Moved, That the Bill be now read 3^a.—(Lord Chesham.)

§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, we are very much obliged, as always, to the noble Lord for the manner in which he has introduced the Third Reading of this Bill. It gives us an opportunity to say one or two things about the Post Office. Its record is certainly complete justification for what can be done by a national 380 service—or, if you like to call it so, a nationalised service—where the one thing to be looked at and considered is the service to the public. The extent to which the professional and technical staffs of the Post Office have themselves been responsible for many of the quite new avenues of development, with their own inventions, and things of that kind, is remarkable, and I think that they deserve a high word of praise from members of all Parties in our Parliament. I should like to congratulate them upon the developments they are making.
It is very interesting, of course, to hear about the especially advanced position which we hold internationally with regard to the new processes of sorting mail. However, the service to the public in general is a very wide and sometimes a very elementary thing as well, and I feel that some of the more populous centres in rural areas are still very badly served. The noble Lord himself kindly took up a matter for me in regard to an urban district of 3,500 people where, at the time I communicated with him, there was no collection of letters after about ten o'clock on a Saturday morning—and that is not very convenient. The time of collection has now been extended for an hour or two; but we really ought to try to meet the needs of the public in an area like that. Where there is a concentration of population in a rural area which has an early closing day—say, on a Wednesday—they ought not to find that they can do no business with the Post Office after eleven or twelve o'clock on a Saturday morning. A little elasticity there would greatly improve the contentment and happiness which is so widespread as a general rule amongst the public with regard to the Post Office services. As to the resilience of the general administration and the expansion of the duties of the staffs of the Post Offices, with the additional tasks laid on them, the extraordinary development in counter work in the last twenty years is so remarkable that we ought not, perhaps, to be so ready to decry our general British capacity for dealing with these matters, and be always comparing ourselves un-favourably with some other country overseas.
The financing of the Post Office intrigues me very greatly. The Money 381 Bill which is before us to-day is to provide for Treasury money to the extent of £120 million to be spread over about two and half years; but, in fact, the actual expenditure on development of one sort and another (mostly on telephones, as has been indicated by the noble Lord) will be £270 million. One hundred and fifty million pounds of this is to be provided, I suppose, by what might be termed accumulated depreciation provisions. It is a little strange to me after my study of mostly co-operative trading societies' trading balances to follow the accounts of the Post Office on this matter. Certainly we always show a very careful depreciation account in a balance sheet, with any additions that may come into contemplation during a particular year, and always arrive at what is the net value of all capital buildings, shop-fittings, rolling stock and even livestock in their proper positions. One would never take into account in a balance sheet anything which had not been written down to the extent of the depreciation provided for in the year's account. Now we see a new technique (I know that it has been discussed in other spheres besides the Post Office: in general industry and the like)—the technique of writing off so much every year on the balance sheet and at the end of so many years spending that amount of money. That is a procedure which sometimes would be greatly criticised. The old and devoted shareholders of the company concerned may well say,"Why have you adopted this extremely unsound method of writing up assets?"
Of course, it may be argued that what has really been done is to transfer what has become a permanent reserve in depreciation account to new capital additions, but those new capital additions will continue to require their annual depreciation allowance every year thereafter. I am wondering, in these days of inflationary prices, what sort of system there is in the Post Office for providing for what seem to be heavy increases in depreciation charges every year. Anyhow, there was something in the intervention of a Conservative Member in another place, who asked whether or not we could be satisfied with this procedure, and, where capital assets were depreciated out of the balance sheet, how they could be replaced. We had some 382 information on this matter from the noble Lord two years ago, but I am still not very clear about the advantages of going along this channel of action, and would like to know a little more.
What is perhaps most likely to be in the public mind to-day about this report—a very promising report in many respects—is the priorities which the Post Office have in mind for the use of this new capital expenditure. The large sum to be spent includes about £244 million for the telephone service—I think that was the figure the noble Lord gave this afternoon. Of course, it is pleasing to hear of the success of the experiments in the trunk dialling system at Bristol, now to be extended to Bodmin and Evesham, and to be extended considerably further during the next five to ten years. But what about the people who are still labouring under grave disability in the ordinary telephone service? What sort of priority do they get? Two years ago the Postmaster General made a severe increase in charges, and some of the privileges of the customers were taken away. For example there used to be a time when I got 100 calls a year free, because I was paying a decent rent for the telephone service. That has been wiped out. A call used to be 1d.; now it is 3d. And if what was said in another place is correct—perhaps the noble Lord would say whether it is true—when the scale of charges went up, 300,000 subscribers gave up their telephones because they could not afford the new charges. That is not a great success.
At the same time we have for years had a long list of people who have applied to become subscribers but have not yet had their telephones installed. I am glad to see from the report that the list is decreasing. Again the noble Lord will correct me if I am wrong in my estimate, but I think that about 160,000 potential subscribers are still not supplied with telephones. Should not this capital expenditure on the telephone service give high priority to meeting these difficulties in the service?
I come to the question of the efficiency of the service. From reading the Report of the debate in another place, I gather that about 5,000 exchanges, out of a total of 6,000, have automatic dialling. What about the 1,000 which have only 383 manual handling? I have raised with the noble Lord several times the question of Enfield, a very important suburban town. It is in Middlesex and is not one of the series of metropolitan boroughs, but it is really part of the Edmonton, Tottenham and Southgate group of boroughs. Enfield still has a manual exchange. If I ring up a friend in the borough of Enfield, I get a ringing sound at the other end, but that is not the number I want, it is just the manually handled exchange at Enfield. After listening for half a minute or more, I hear a difference in sound, which is the call being put through to the subscriber by the manual exchange. As often as not, I may get through to another exchange altogether. What happens exactly I do not know. Sometimes I have to wait so long on the first call that I give it up and ring off before the second call begins. Then perhaps the person I am calling comes through and finds that I am not there to answer it. It is an extraordinary mix-up. That has a bad effect upon business in Enfield, which is a very busy place. It is a great engineering and furniture-making centre.
I hear all sorts of gossip and grumbles about this matter. What seems to me extraordinary is that the present Secretary of State for the Colonies, formerly the Minister of Labour, has to be persuaded by the Postmaster-General to give some priority to turning manual exchanges into automatic ones. I hope that the noble Lord in charge of the debate will draw his attention to Enfield and perhaps use his weighty support. I do not want this only for Enfield; I want it also for the other 999 exchanges which are still manual. I want them to be given priority over some of the new experiments, valuable as these are. What comfort is it to learn from the report that by 1970 there will be a 90 per cent. automatic trunk through-service when it is going to take the same time—that is, ten years—to transfer the remaining manual exchanges to automatic working. That seems to me to be entirely a wrong basis for the priorities in this matter.
How is it proposed to deal with surpluses in future? The Post Office has a substantial surplus of nearly £8½ million for last year. In looking at the accounts, I see that for some years previously there had been a deficit. This year the 384 whole of the surplus is to be transferred to general reserve. One is very interested to know that there will be a general reserve. Apparently at the rate you are paying on depreciation account you accumulate such a reserve that you can, as it were, pull out of the moon £150 million to increase capital expenditure. All these years past you have had a deficit on your general account; this is the first time you have started a general reserve for some years and you put in the whole surplus. It might be some consolation to the people who are paying for threepenny calls and suffering other disabilities in the postal services to know that there is going to be a general reserve, but I think it is about time, at the rate the Post Office is expanding, and if you are going to get the full use of the developments of which you have proved you are so capable, that some consideration should be given to the matter of charges. When the Chancellor of the Exchequer goes up and down the country lecturing industry in general, and retailers in particular, as to the need for reducing their prices, I think something should be said on behalf of those users of services which have been so long, so well and so deeply established as the general postal, telephone and telegraph services. I put that point forward for consideration.
This is a Third Reading—although, for the convenience of business, this particular discussion was postponed from Second Reading to Third Reading—and I have time to put only one other point, which is this. On the whole, I think we have seen rather fewer reports in the last two years of deliberate, damaging and very expensive raids upon valuable mails. I do not know how much is included in your capital expenditure for improving your security. I must say, however, that it seemed to me an extraordinary situation when I read in the paper the other day of a Post Office can—or so it seemed; it was a red van—which appeared at one of your district offices and the driver was able to collect valuable mail and get away. Nobody at the district office, apparently, was aware of the fact until, I suppose, the proper collector came later and found that the goods had already been stolen. What is the Post Office doing? If the position in regard to the number of these awful train robberies 385 and affairs of that kind about which we got so"het up" a few years ago has been improved by better security, what further is now going to be done to try to eliminate them altogether, and especially to have a really up-to-date method of preventing an impostor in a properly coloured van—I daresay he used a uniform, but with no other means of identification—from getting away with a business like that? I should be glad if the noble Lord could tell us a little more about security. I have nothing else to say, other than to repeat what I said in opening: that, taken as a whole, the Post Office deserves our thanks and the thanks of the whole community, and I think it gets them.