THE POST OFFICE

HL Deb 26 February 1963 vol 247 cc38-75

4.18 p.m.

LORD CROOK rose to call attention to the work of the Post Office; and to move for Papers. The noble Lord said: My Lords, in moving the Motion which stands on the Order Paper in my name, may I remind your Lordships that the last occasion on which I had something to say about the Post Office was in March, 1961, on the passage of the Post Office Bill; and shortly before that on a Motion which I had ventured to introduce about the telephone service and some of its shortcomings. I recall that deliberately this afternoon for a very special reason, with which I believe all of your Lordships will be in sympathy. I do so because towards the end of that speech I said [OFFICIAL REPORT, Vol. 229, col. 531]: We have a Post Office of which we can all be proud. Come fair weather, snow or wind", we could always rely upon the Post Office service.

I recall that, as much as anything, because of a most unusual thing in a letter which the Postmaster General addressed to The Times in recent weeks. It was unusual in that, while Ministers often pay tributes in Parliamentary debates, on this occasion the Minister had gone out of his way publicly to say that he had received many tributes to the postmen who trudged their way through deep snow to deliver letters, and to engineers who had repaired telephone faults in almost arctic conditions. He ended by saying that the efforts of Post Office staff to maintain communications had not gone unnoticed. I think it would be very churlish of the mover of a Motion this afternoon, who intends in the course of what he has to say to offer some criticisms of the administration of the Post Office, not to say straight away that he is sure he finds in the minds of all your Lordships, and indeed of all thinking members of the public, a reflection of what the Postmaster General has said.

I know something of the difficulties in my own locality. They have gone far beyond the problems of snow getting in the way, and of ice formation; in fact, they have led to the complete stoppage of lifts and of automatic machinery operated by electrical current when, for many hours, we were forced to suffer a blackout. I say that, my Lords, in order to make it clear that no criticism I may offer this afternoon is intended to reflect on the effective work of those servants of the Post Office who, for so many years, and on many occasions very underpaid, have given such loyal service to the State.

However, I want to talk to-day about what the Act did in 1961—or, rather, perhaps, what some of us on this side thought it did. When we accepted it, we hoped that the freedom which was promised to the Post Office—a Post Office which we were told was going to embark upon all sorts of commercial operations—would provide better opportunities for the Post Office. But when we look at the Report—the first we have had—what do we find? I am bound to tell the noble Lord who is going to reply how much better this Annual Report is than any the Post Office has ever produced before—and that applies to the whole of its format and make-up, to say nothing of its illustrations, which show some of those very great things which the Post Office does, and of which we can be proud.

The first picture, for instance, is of Goonhilly. The Goonhilly Downs project, carried out, as it was, not only efficiently but economically, in order to deal with the movement of the satellites, is a tribute, I think, to the whole of the work of the Post Office engineers. There is a picture of the operation of Telex, which is spread not only across Britain and not only across parts of Europe, but is now linking us with the Commonwealth. Then we have a picture of the tower in Tottenham Court Road, which, before long, is going to dominate us, with its 580 feet of dish to try to pick up signals; and where, I understand, we are to be offered (though we shall have to pay for them) perfectly good lunches as the tower revolves. But that is not within the realm of this Report.

What the Report does show, to my horror, is that nearly every one of the estimates which the Post Office has made, one after the other on every subject, has been completely wrong. They have all been nullified by events, and it can be quietly indicated how true that is if one looks at the documents before us. The Post Office has not lived up even to the things which we were told when the Bill was being presented to us. We are still the seventh country in the world judged by the number of 'phones per hundred of population. I will not bore your Lordships with the figures, but the United States is up at the top and we are about a quarter of the number down, with countries like Denmark in between. But, of course, more important than that, seventeen years after the war has ended, we are still left with huge waiting lists of people wanting the telephone. There were 50,000 when the Bill was introduced, and we were told then that the limit it was expected anybody would have to wait would be twelve months. The waiting list to-day is 47,000—and some of those, to my knowledge, have been on the waiting list for years—and the Director-General of the Post Office has now been reduced to expressing the view in public that he hopes people will not have to wait longer than two years, because that would not be very good.

The story of the total number of exchange connections is equally woeful. Before the Bill was presented to your Lordships, it was estimated, in the White Paper, Post Office Prospects for 1961–62, that there would be 220,000 connections. In fact, the Report shows that there were 177,000. The next set of Prospects, for 1962–63, forecast another figure of 200,000. The last figure that I have which I can quote with any confidence is that at November 30 last, when eight of the twelve months had gone, when 95,000 was the achievement. It is the same story throughout each one of the things that we find reported. Failure to maintain the growth rate means that the supply has been allowed to fall below demand. In the first eight months of the financial year, which we shall be hearing about in a few weeks' time, the list grew by 7,481. My Lords, it is my belief that the Post Office would have been presented with an even greater problem had it not been for the fact that there were many people who, because of increases in their bills between July, 1961, and March, 1962 (and we ventured to offer some comments when the new scales of charges were presented in this House), gave up their 'phones. They relieved the pressure to the extent, I believe, of as much as 81,000: certainly I heard that there was a fall in demand of at least 30 per cent.

It is also true to say that when the Bill was debated we on this side of the House directed attention to the fact that there were 1 million people sharing lines. The noble Lord who then replied for Her Majesty's Government said that they had taken a census and had found that some 100,000 had now got so used to it that they did not mind and would stick it; that 200,000 were actively unhappy; and that another 100,000, given the choice, would presumably choose exclusive lines. We have had the new Post Office, in its new guise, dealing with that problem since March, 1961, and the figure of shared lines, my Lords, is 1 million—exactly the figure at which we started. What is more, the Postmaster-General, in the last speech I can trace on this subject, in May, 1962, said that he could not indicate when anything would be done.

The same is true, of course, of local lines. In the Prospects for 1962–63 we were told that there was a marked increase in the rate of growth of local calls, and that this was expected to be maintained. Now, my Lords, the accounts show that the increase, in fact, was 5 per cent., which is less than half the previous year's figure. Indeed, the Post Office have had some help, because the position might have been even worse if the growth had been as good as they thought it was going to be.

On the conversion of manual to automatic exchanges, we were told that we were to have another 100 conversions in the financial year. I do not know what the figure is now, but, even allowing for disruption by ice and snow, as one is bound to admit there must have been, I do not think there is any hope of the 100 having been achieved. But subscriber trunk dialling shows an even worse record. We were told that 25 per cent. of the exchanges were going to be on S.T.D. by the end of March, 1962, and nearly 40 per cent. by March, 1963. The Post Office Prospects for 1961–62 estimated that by March, 1962, there would be 300 exchanges covering 1½ million of the public—about one quarter of the total subscribers on the telephone service. But the Report shows that, in fact, only 250 were connected, serving only 1 million of the public and estimated in the Report by the Post Office itself as being not one-quarter by merely 18 per cent. of the total. The 1962–63 Prospects that your Lordships and those in another place were given last Spring showed that 500 exchanges would be on S.T.D.—making one-third of the public service by the end of this financial year. Apart from the question of snow and frost it is equally unlikely that this figure would have been reached in any case.

The importance of S.T.D. is shown very clearly in the Report because we are told there, as by the Postmaster General in his speeches, that trunk calls are the profit lead in the Post Office. Indeed, the Report shows, to the great credit of the Post Office, that no less than £16 million profit was made in the 1961–62 period. We are also told in the Report that the Post Office must prepare itself for a 13 or 14 per cent. annual increase in the calls. Well, what preparation for that increase does the Post Office propose to make? It is proposed to provide £17 million for capital trunk conjunction circuits in the coming year. That is exactly the sum which was provided under the same heading in 1956–57; when your Lordships may think that prices were somewhat lower, when one went to purchase, than they are to-day.

Finally, in my list of the things that were wrong in the forecasts I come to the most important of all. This stems from all the others and is the forecast of profit. Profits have fallen short because of failure to reach the targets to which I referred. The forecast for the year 1961–62 was £17 million. In fact, what was achieved was £12.6 million. The forecast for this year was the beautifully optimistic one of no less than £34 million. The best that those with whom I am in contact can suggest as a likely total for the end of this financial year in a few weeks' time is £13 million. My Lords, it is, in fact, to that point that I have been trying to lead, because, on the lower profits, the amount to be borrowed from the Exchequer is not even up to the statement given by the noble Lords who sat opposite when they proposed the Bill for our acceptance. The whole basis of what noble Lords on these Benches said on that occasion was that more capital was needed in this supposed freeing of the Post Office from Treasury control. We said that our colleagues in another place had moved Amendment after Amendment in the Standing Committee dealing with this point. They had moved them very effectively and they had been rejected. We did not think it worth while to put those Amendments again here, but we made it clear what we felt about the matter. We were told, "The Treasury's 'dead hand' has gone"; but in fact it is still there.

I was very interested and a little intrigued—and this has nothing to do with the particular arguments I am advancing to your Lordships—to find that early in January one of the Post Office hand-outs gave a fascinating account of early troubles in the Post Office over a hundred years ago. The hand-out quoted a great novelist who is known to your Lordships—Anthony Trollope—who, in addition to being a novelist, was also, in order to earn his living, a Post Office surveyor. In the course of his comments he says: We were bound down by salutary laws to expense which came from our masters at the Treasury. I could not help wondering whether the shade of Anthony Trollope had sat in the Distinguished Strangers Gallery in the other place on November 27, 1962, five weeks before-hand, when the Chief Secretary to the Treasury, speaking of public investment, said that the figure for the Post Office was still under discussion.

At least we were told, in speeches by noble Lords opposite when this alleged freedom was bestowed upon the Post Office, that forward planning was essential and that there would be a loan from the Exchequer of £40 million a year. Indeed some of us had been casting about on this matter and quoted Mr. Marples when he was Postmaster General some year or two before that. He had said he could not hope to run the Post Office or any other business he was connected with unless this "Stop-Go", business stopped, and unless there was some planning for five years ahead. It is interesting to note that he was saying that in November in a situation in which he had no idea how much money he was getting for the current financial year. We were told the present Postmaster General shared the views of Mr. Marples.

With this fall in profit and the commitments and capital expenditure, how can the present investment programme be maintained while at the same time reducing the pressure on current resources? The alternative is almost certainly a substantial increase in prices. That would make a rapid expansion of Post Office business much more difficult and indeed a hazardous occupation. At a time when we are worried about it and are running a National Productivity Year it would harm industry by increasing the whole of operating costs. It might cut production and cause yet more unemployment.

The Post Office appears to be trying to finance from its current resources too high a proportion of an expanding investment programme. In the earlier years (before the Post Office Act, 1961, that we were told was going to be so helpful) more than half the then much-smaller investment programme was financed internally. The Memorandum on the Post Office Bill, 1961, estimated for about two-thirds to be financed internally. The proportion of investment financed internally in 1961–62 was about that envisaged at the time the Bill was presented to us; that was, about 65 per cent. In the current financial year, 1963–64, the proportion of self-financed investment is going to rise substantially. It is going to rise to 73 per cent. in this financial year and to 80 per cent. next year—this at a time when the level of investment is itself rising rapidly—while the amounts to be invested are increased and the amounts to be borrowed are reduced.

The Post Office is now borrowing, or is going to borrow, less from the Exchequer than envisaged at the time when the Post Office Bill was presented to us. At that time it was assumed that the Post Office would need £500 million for investment over the next four years and that two-thirds of that would be financed internally. Your Lordships were told that £160 million would be financed by borrowing from the Treasury and that that was equivalent, the noble Lord told us in an excellent explanatory speech, to an annual average figure of £40 million. As I have indicated, in the year during which this Bill was moving through Parliament to become an Act, the Post Office received £40 million on loan from the Treasury. In 1962–63, they had to borrow £35 million and now they have committed themselves for the coming year to borrowing only £30 million, and that in respect of a year in which they are planning to step up their investment programme to £150 million, thus leaving £120 million to be found from their current resources.

What is more, the level of investment in the Post Office is expected to go on rising. So it should. It will rise to £167 million in 1964–65 and to £177 million in 1965–66. It is difficult to see how the Post Office can expect to finance from current resources such a proportion of its programme. Indeed, it is questionable whether in an industry as capital intensive as the Post Office is in respect of telephones, the internal financing of even two-thirds of investment could achieve a satisfactory rate of expansion. And that is accepting the two-thirds put to us at the time the Bill was before us. It would be at least of some help if the Post Office were getting that amount which was envisaged and promised when the Bill was before Parliament. If the telephone system is to be effective, I suggest that there must be some Post Office borrowing beyond these limits.

Section 9 of the Post Office Act, 1961, empowers the Treasury to make advances to the Postmaster General, and in subsection (3) of that section power is given to the Treasury to make these advances by raising money in any manner in which they are authorised to raise money under the National Loans Act, 1939, and any securities created and issued under this subsection shall be deemed for all purposes to have been created and issued under that Act. I do not have the acumen with regard to loans of my lamented colleague the late Lord Pethick-Lawrence, and I do not pretend to know exactly what is meant by that, so I would ask the noble Lord who is going to reply whether it means that a loan for telephone development could be floated, if that were approved. Perhaps he could even tell us why this subsection was inserted. I realise that sometimes sections are put in as a mere routine insertion and have very little meaning to far too many people. I also realise that this may have some relation to "Neddy" or "Nic" in these days of all these nice committees with friendly names, but no doubt the noble Lord will be able to tell us.

I have referred to only a few of the things for which money is needed in the Post Office. There are a large number of other developments which, in my view, are vital to the export industry as well as to the whole of the country. For instance, there is the electronic exchange. We are all delighted that the Post Office got ahead with this and opened the first electronic exchange last year. I am also delighted to hear of two or three other electronic developments on which experiments are being made, because all this is going to be of tremendous importance in capturing the export market. I am quite sure that we are ahead of the United States of America and the rest of the world in these things which our excellent research people, tucked away in the back rooms of the Post Office, are always busy doing.

I do not know how much more money is wanted for the extension of the Scotland-Iceland link. This is of tremendous importance for aircraft control in the Atlantic. I know that it has been opened between Scotland and Iceland, but whether it has got far towards Greenland and on to Canada I do not know. I shall be glad if the noble Lord can tell us, though, if he cannot, we can always hear later on. It is the same with regard to the Anglo-French micro-link, which was opened in 1960 and which has proved so valuable to the Post Office. I know that it was to be multiplied as the years went by, and perhaps the noble Lord can tell us whether that is being done or whether again finance makes it impossible.

If I did not realise that your Lordships can be bored enough by a speech of even half an hour, I could go on talking of the Post Office, of the great work it has done, of the great work it has to do, and also of the great things which are possible and which its scientific and research workers will go on to do—provided we do not let them flee to America because we do not pay them enough or give them good enough conditions. If in moving this Motion I have offered criticisms, it is of governmental policy and not of the Post Office or of its staff. For the Post Office and its staff I have nothing but the greatest praise. My criticism lies with Government policy. I beg to move for Papers.

4.47 p.m.

THE EARL OF LISTOWEL

My Lords, I am sure that my noble friend, with his customary humility, need not have apologised for this Motion. Those noble Lords who are here this afternoon are grateful to him for giving them this chance of another progress report from the Government on the work of the Post Office. We are also grateful to him for a characteristic speech, which had all the qualities of being extremely well-informed, balanced and constructive—the sort of speech which your Lordships most appreciate. I should also like to say how glad I am that my noble friend Lord Geddes of Epsom is to speak later in the debate. This is a real and very special treat. I remember when he was the competent and delightful secretary of the Union of Post Office Workers, and I am sure that there is no Member of your Lordships' House who knows more about the workings of the Post Office from the inside, from personal experience, than my noble friend.

As a preliminary to the few remarks I intend to offer, on the basis of careful and prepared thought, I should like to say how warmly I join with my noble friend in offering congratulations to the postal and engineering staff of the Post Office for the way they have carried on during the cold spell. Their devotion to duty has been entirely in accord with what those of us who know the Post Office would have expected, but I think that it was particularly remarkable because it occurred during the worst cold spell of the century. Among all the people whom I met during or after the cold spell, there was not one complaint about the delivery of mail, and I am quite certain that if there had been any serious complaint it would have been brought out in Parliament. This absence of complaint is the surest indication of the way the Post Office staff carried out its work.

Now, may I come to some brief remarks on two subjects, which I think are of outstanding importance? The first of these is the telephone service. Here I shall follow broadly what was said by my noble friend Lord Crook. I was at the Post Office in 1945, seventeen years ago, just after the war. Then, of course, we were faced by this telephone problem. It was much more acute that it is now: we had a much longer waiting list. But it was also much more excusable, because no one was surprised that telephone development in this country was brought to a standstill during five years of war. We were starting to make up for the arrears in the development of the telephone service. However, seventeen years have elapsed since then. The first six years, it is true, were years during which Labour Governments were responsible for the Post Office. But in subsequent years there has been a succession of Conservative Governments, and it is during that period of time that the defects of the telephone service should have been remedied. I think that this Government will look back on their record in relation to the telephone service as one of the worst blots on the services they should have rendered to the country; and this applies equally to their predecessors during the period since 1951 of Conservative rule.

I feel sure that it will be agreed by everyone, irrespective of Party, that we have far too few telephones in this country compared to countries in other parts of the world having a similar standard of wealth and standard of living. I will not weary your Lordships by quoting a lot of figures, but I should like to mention one or two. We in this country, as my noble friend Lord Crook said, have 16 telephones to every 1,000 inhabitants. In Norway, a much smaller country than ours—a country of a high standard of living, but not such a high standard per head as we have—they have 21 telephones per 1,000 persons. New Zealand has 32 telephones per 1,000 persons; that is to say, exactly double the number that we have. That, surely, is a rather shameful comparison.

What about new telephones? As my noble friend said, the prospect at the moment is not encouraging. The Postmaster General expected 200,000 new connections this year, and we have reached less than 100,000 during the first eight months. As my noble friend pointed out, it looks as if we are going to fall very far below the target. There is still this wretched waiting list. The waiting list did not change between 1961 and 1962; and on the figures given by my noble friend (I have the same figures, and I hope the noble Lord, Lord Chesham, will correct us if we are wrong) it has fallen only from 53,000 to 47,000 in the first eight months of the current financial year.

What should the Government have done, and what should they do, if they wish to remedy this situation? I want to emphasise that the main thing is what my noble friend was trying to impress upon the Government—namely, a change in the financial policy of the Post Office which would enable it to have more money for capital development. We all hoped that this would come about when the Post Office was given its financial independence and freed from Treasury control in 1961. We all looked forward to this as one of the achievements of financial independence. But this has not happened. What is absolutely essential is that a much larger proportion of capital development should be paid for out of loans and a much smaller proportion out of the diminishing profit from the telephone service.

In this respect, I believe that the Post Office, which I regarded, and I think all my successors and predecessors regarded, as, in effect, an extremly important business firm, although it happened to be subject to public control, should be on the same footing in regard to the raising of loans as any big private firm. It should be on the same footing as I.C.I., Unilever's or any other firm which is able to go to the open market and raise capital. I thought my noble friend's question was very pertinent: has the Post Office authority, either by acting on its own or by asking the Treasury to act for it, to go to the open market to raise money? I cannot see any prospect of the Post Office having enough capital for its investment programme, and therefore for any substantial improvement in the telephone service, unless a much greater amount of capital is made available from loans and a much smaller amount is taken from the profits of the service. This ties up with the whole programme for expanding production in this country. If the Government are seriously anxious to expand production, both for consumption at home and for export, then it is absolutely essential to have an efficient and up-to-date telephone service. A telephone service to that standard of quality is essential for business.

The one other matter to which I should like to refer (I apologise to the noble Lord for not having given notice that I would raise this, and, though I hope he may be able to answer me to-day, I shall naturally not complain if his answer is not as full as it would otherwise have been) is that of space communication; that is to say, communication by means of satellites in outer space. This is a revolutionary technical development in communications, comparable to the invention of wireless. At the moment it is in an experimental stage, but the fact that Telstar was put up by the Americans, that it functioned satisfactorily and that messages have been received, shows that this has enormous promise for the future. I hope that this country will not leave to Russia and the United States a development of such enormous importance to communications throughout the world. Other forms of space exploration I would gladly leave to out wealthier and more powerful neighbours.

When I was in America last autumn I went to Cape Canaveral, and I was told that the American Government is redoubling expenditure on space exploration because it is determined to reach the moon. I hope that we shall not emulate expenditure of that kind, and that we shall not go in for undertakings which seem to me to be primarily matters of national prestige. Let us leave that to others. But this business of improving communications throughout the world is of immense practical and commercial importance. That is why I think this country should play a leading part, both at its experimental stage and later on, when the operational stage is reached—possibly in only five or six years' time.

What seems to me to be an essential condition for any British or Commonwealth system of space communication is that, so far as we in this country are concerned, our part of it, anyway, should be subject to public ownership and public control.

I should like to ask the noble Lord what is the intention of the Government in that regard. There seem to me to be two perfectly good reasons why it is essential that this development in communications should remain in the public sphere, just as the telephone service is at the moment. The first is because of its incalculable political and military importance. I will not enlarge on that, but every noble Lord would agree that this matter of satellites revolving around the earth carries with it military and political implications of immense importance to the security of our country. The second reason why this should remain in the public sphere, and should not be left to private enterprise, is because the capital that would be required is so enormous that it could be raised only by a partnership between Governments and business. There is an estimate (I do not know how accurate it is, but perhaps it gives some rough idea of what may be needed) by the British Space Development Company that £200 million would be needed to launch nine satellites and provide six ground stations. As I say, I do not know how accurate that estimate is, but it gives us some idea of the amount of capital that would be required for a system of this kind.

In the long run, of course, it would be highly profitable, and the capital would bring in a return similar to, or, indeed, rather more than, that of an ordinary private company. But it seems to me that this system of space communications would have to be a partnership between Governments and private enterprise, and also a partnership between at least the Governments of the Commonwealth. I should hope that we might ask the United States to come into this partnership, because, clearly, if we could pool our resources with American resources that would be more economical and more efficient than having two separate systems started up at the same time. If we cannot get the American Government to come in, I think we should certainly ask Commonwealth Governments to come in on this with us. We shall be grateful to the noble Lord who is to reply for anything he can tell us about the Government's intentions in relation to space communication.

5.3 p.m.

LORD GEDDES OF EPSOM

My Lords, the first thing I must do is to thank the noble Earl for his kind references to myself, which brought a blush to cheeks that I thought were beyond that possibility. The next point I want to make is that I may be misunderstood, because it may appear from what I am going to say that I am in disagreement with the noble Lord, Lord Crook, who introduced the Motion, and the noble Earl, Lord Listowel. This is not true. Basically, I entirely agree with them that capital investment in the Post Office is nothing like high enough, and has not been high enough for many years. As a matter of fact, in the postwar period not only was the amount set far too low, but it was continually cut. Had it been at a much higher rate during those years, much of the criticism of the noble Lord need not have arisen. I agree that there are certain defeats in the telephone service which ought to be put right. I feel that rather deeply, because I happen to be on a manual exchange where the speed of answering is much more likely to be 50 seconds than 10 seconds, and where I am commonly toll in the morning that there are no lines to London. I continually have to wait while the girl goes up and down the junctions trying to find a line. Incidentally, I always find that extremely irritating, and I wonder why it is necessary that I have to hear the pop, pop, crackle, pop, as she goes up and down trying to find a line.

I agree that basically there is a need for more capital investment. One might be forgiven for believing, in the light of the speeches of the noble Lord and the noble Earl, on a Report which is called the Post Office Report and Accounts, that it was a telecommunications organisation or a telephone company of some kind. Of course it is nothing of the sort. The Post Office is still basically an organisation which runs a service for the whole population, in the form of conveyance of letters, post cards, parcels, et cetera, and rendering a large number of other services, some twenty in number, for various agencies. It was significant that when the noble Lord, Lord Crook, paid his tribute to the staff—in which, of course, we shall all want to join—his first reference was to the postmen. This, I thought, was quite a natural thing, and it is true that the postmen (not more, I agree, than the telephone linesmen, but particularly the postmen) have done magnificent work during this particularly bad period.

The two noble Lords will forgive me if I say that the other part of the Post Office staff, the vast majority of them, performing the vast majority of Post Office services, are sometimes inclined to think, in the light of a debate of this kind, that the telephone service is becoming—may I be forgiven for saying this?—the pampered daughter, and that people are apt to forget the perils of the brothers who do the work. It is, of course, true that the telephone service at the present moment does magnificent work. It earns most of the profit of the Post Office. This was not always so, as noble Lords know. There was a time when the telephone service was almost wholly supported out of the profits of the postal side. It is equally true that it would be possible to raise a very large profit indeed by a very small increase in postal rates. I am not suggesting to the noble Lord that rates should go up; I am merely trying to illustrate that the postal service is still the most important part of the services rendered by the Post Office.

The other point to bear in mind is this. While it is true that the telephone service makes a great contribution, particularly to industry and commerce, it serves only a minority of the population, whereas the postal side serves everyone. The whole population benefits from the postal side. When one bears in mind that in the forecast last year the capital expenditure for the postal side was reckoned to be about £9 million, and for the telecommunications side £122 million, one is apt to believe that there is some need to consider not only increased capital investment but priorities in this respect.

I want to speak for a moment on behalf of those people on what is known as the postal side, who believe that they, too, have a claim for consideration when it comes to capital investment. There are still a large number of post offices in which Post Office staff are working and which are appallingly bad. While it is necessary, as has already been said, that the telephone service should have much more capital investment, there are those on the postal side who believe that the Postmaster General, when he is looking at capital investment, thinks, as would appear from the discussions today, that the only people who really count in the Post Office service are those on the telephone side. There are people in the Post Office who believe that only the telephone side counts. But there are others. I do not disagree basically with what has been said by the two noble Lords who preceded me, but my plea is that when consideration is given to improved capital investment there shall be a material improvement in the capital investment of the postal side.

My last point refers to one result of mechanisation on the telephone side. I do not deny that much has been done by the Administration in discussion with the trade unions to try to deal with the inevitable redundancy that arises from mechanisation in the Post Office, as elsewhere. I do not deny that much has been done to try to reduce the evils, and to a very large extent they have been removed. But can I ask the Minister that further consideration be given to the case of the single person who is involved in a transfer arising from redundancy? There seems to be a mistaken idea that the single person is more mobile than a married one; and this is not necessarily true. It certainly is not necessarily true when dealing with a single woman, who very often has responsibilities equal to, and in a degree greater than, those of a married man. When a married man is transferred as a result of redundancy he gets compensation. It may not be adequate but at least he gets compensation. Where a single person is involved, particularly a single girl, she gets no compensation at all, the assumption being that she can move from this town to that town without any hardship or difficulty. There is a recent case on record where a girl in the telephone service, redundant as a result of mechanisation, found herself in the position of being unable to move because of an aged parent and had to take a drop in salary of a very considerable amount; in fact, 24s. 6d.

I want to suggest to the noble Lord that this is the sort of thing that surely ought to be given much more consideration than it is. It may be possible to quote Treasury regulations to say that this or that cannot be done, but I would suggest that there is something to be said for the idea that in a case of redundancy arising from mechanisation or the construction of an automatic exchange, anybody who is forced to lose salary or wages, call it what you will, should be allowed to retain on a personal basis the salary at the time of transfer. This is not asking too much; it is not asking even for a precedent to be created. I should have thought not only that it was fair and just but that it could be a charge against the Post Office that a decision to cause them to transfer at loss is harsh. I would ask whether or not it is possible for this also to be given consideration.

I have little more to say except to repeat that I do not want it to be thought that I am in disagreement with the two noble Lords. I do believe that capital investment ought to be increased, but I also believe it is necessary that we should bear in mind that there are two sides to the Post Office, telephone communications and postal; and postal still is, and I believe will remain in the future, the most important part of the Post Office service.

5.12 p.m.

LORD AIREDALE

My Lords, I have only one small point to make which I had hoped to tuck into some quiet corner of a rather longer debate than we have had this afternoon. There is a Post Office in the Central Lobby of this building which is called the "House of Commons Branch Office". It is used, of course, by all who come to the Palace of Westminster: Members of both Houses of Parliament, officials and visitors. I suppose the class of people who use it least are the Members of another place, because they have another Post Office which is their very own, situated just beside their own Members' Lobby. I would suggest that a better name for the Central Lobby Post Office in this building would be either the "Houses of Parliament Branch Office" or the "Palace of Westminster Branch Office".

It is true that there is a House of Lords postmark over ordinary prepaid letters which are posted within the precincts of this House, but apparently this does not apply to "Official Paid" letters; and when your Lordships receive through the post a communication from the Lord Great Chamberlain it has upon it, in the bottom left-hand corner, the ornate seal inscribed, "Lord Great Chamberlain, House of Lords", and in the top right-hand corner the postmark "Official Paid, House of Commons Branch Office". I would suggest to your Lordships that it would be a better thing if the Central Lobby Post Office were renamed so as to recognise the fact that it serves all who come on their lawful occasion to the Palace of Westminster.

5.16 p.m.

THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM)

My Lords I should like to begin what I have to say in a usual but by no means insincere way; that is, by thanking the noble Lord, Lord Crook, for his initiation of this debate. I think we should be grateful to him because, like him and others of your Lordships, I feel that a debate about Post Office affairs on a fairly general basis from time to time is very helpful. I should like to express my gratitude to the noble Lord not only for the way he started the debate but for his kind thought and cooperation in "tipping me off", so to speak, about a large number of the points he intended to raise. I appreciate that very much; and to show my appreciation I am going to ask him if he will allow me to compare him to a kind of barrow boy who has pushed before us a wheelbarrow full of extremely assorted fruit in the shape of the points that he has raised. It is extremely nice, will be very much appreciated and is encouraging to all the people concerned that among the load he included some strawberries as well as some raspberries. Perhaps he will not mind my adding that he seemed to me to have included one or two lemons as well.

I felt that he rather started his argument on a particular point with one of these lemons, and that is the question of the number of telephones per head of the population, on which he quoted various figures. I am happy to say that, unless I have my sums wrong (and I do not think I have), in this matter we come out sixth and not seventh, as he said. This is one of those matters which gives rise to the old saw about figures being able to prove almost anything. But I certainly consider that his bald statement as to our position in the number of telephones per 1,000 of population, and so on, needs a little qualification. I want to try to qualify it, not defensively but so that we see the true picture from these particular figures.

The noble Earl, Lord Listowel, referred to the number we had per 1,000 of the population. I think he made a slip of the tongue there and meant per hundred.

THE EARL OF LISTOWEL

I thank the noble Lord for correcting what was a slip of the tongue.

LORD CHESHAM

I say it only because I thought it was one. Apart from merely saying baldly that America, for instance, has 39½ telephones per hundred of the population while we have the figure that was mentioned, therefore it is a very bad thing, and that several other much smaller countries are way ahead of us, and so on, I think that there are other perspectives that we must use to look at this particular figure. Three of the countries which rated above us on that scale have a population about the size of London—not of the United Kingdom. And it must be remembered that in this country, perhaps it would not be entirely disagreeable to your Lordships if I said we suffer from having a much greater population density than the other countries. In the number of telephones installed, the number of telephones there are in this country, we come second in the world, not sixth. We come second only to America; although with the total of population divided by the number of telephones it comes out that we are in sixth position.

I suppose it would be reasonably true to say that one is likely to find more telephones in countries where people can well afford a telephone than in others where they cannot. If you take the figures on the basis of gross domestic product you find that the same six countries are in the lead. The order per 100 of population is United States, Sweden, Switzerland, Canada, Australia and then ourselves. The same six countries are in the leading position; the positions change somewhat among the first five. We are still sixth, taken on the basis of national wealth. Therefore I do not think it can be said that the use of telephones—what is technically, I believe, called "telephone penetration"—is unreasonable, by international standards, on that basis. I do not think that to choose that one narrow factor is the fairest possible way of assessing our position in the world.

The noble Lord, Lord Crook, said that the Post Office has failed to live up to various forecasts that have been made in the past on various matters; on the number of new subscribers connected, on the reduction of the waiting list, on the manual exchange conversions, S.T.D. development, rate of increase in local calls and so on. I think I must take some of these individually; this debate would scarcely be suitably conducted if we did not discuss these things individually, because they are important. If, as in the case of new subscribers connected, there is a shortfall, as indeed there is, the next important thing is to discuss the significance of it. The noble Lord gave us several figures, but the main ones he gave us were net figures, and that is the total number of connections made in a year less removals and less cessations of service. I want to work in gross terms because I think it keeps the position a little more clear. The stated target in Post Office Prospects, 1961–62, was that it was expected to bring service to 460,000 applicants that year; in fact, it came to 445,000, so to that extent the noble Lord is correct. The following year the figure was 450,000, and 415,000 were actually connected. That shortfall was due primarily to the fact that there was, as the noble Lord mentioned, a falling away in demand after the tariff increases which took place in July, 1961. The shortfall in the second period was because the demand again was less buoyant—if that is the word; at any rate, it was less than was expected.

Having considered all that, and the reasons for it, we expect that there will be a greater expansion in 1963–64 and we expect to connect up 510,000 in that year. All the same, even if those targets, for the reasons I have briefly mentioned, are not achieved, it does not mean that the position regarding either the present or the future is hopelessly bad, because it is expected that in March this year the total number of telephones connected in this country will be 5,200,000, and it will be 240,000 more than that in twelve months' time. That is again a figure representing, of course, an increase which is a net one.

The waiting list has always intrigued your Lordships. I have had a little experience of this myself in the past. I should like to give your Lordships the latest position, because the inference has rather been that little has happened. I would quote what the list was at the end of March. On March 31, 1960, it was 49,000. At the same date in 1961, it was 55,000. At the same date in 1962, it was 48,000, the figure of which the noble Lord, Lord Crook, reminded us. At December 31 of last year, which is the latest figure that I can give, the number was 45,000. So it is somewhat lower. And there were at that time a large number—104,000—which were actually in the pipeline being provided.

LORD CROOK

My Lords, before the noble Lord leaves this subject, I wonder whether he has the figures of how many people on the waiting list to-day have been on it for how many years?

LORD CHESHAM

My Lords, I have not the full figure available. The noble Lord quoted the Director-General as saying that people should not be on the waiting list for more than two years. I think the number who have been waiting in excess of two years is 3,000. I sincerely hope they will not have to wait very much longer.

The question of the number of shared lines was mentioned. It was stated that some time ago there were one million, and there are still one million. We had a little hollow, mocking laughter from the noble Earl who leads the Opposition, but who is not here now. But perhaps it is as well not to overlook what is the significant use of this system. It is a system which helps to make a better use of capital, and enables a greater number of subscribers to get a telephone than could be done in certain areas if they were to have an exclusive service. There is a slight advantage, in that the rental is £2 less; and it is still true to say, so far as I am aware, that the great majority of the million who have it are by no means dissatisfied and find the service really quite satisfactory. I know that the noble Lord thought that in some way that was not a sensible thing to say; but I believe it is a sensible thing to say, and that there is a part to be played by the shared-line system.

I know that your Lordships who go to America—I have been there only once so far, but others of your Lordships go more often—are usually impressed by the service over there. But I wonder whether that would be so if one judged it on the service over the country as a whole. I think that most of us tend to go to the more civilised centres where the service is probably very good indeed. But I have always understood that the party-line system was an integral part of the American way of life, at any rate when you get out into the more remote parts of the mid-West and so on. So evidently we are not the only ones who find that there is some good in it.

To turn to the question of the conversion of manual exchanges to automatic, your Lordships will probably remember that the programme for this was laid down and approved in June, 1959. It was that all manual exchanges should be replaced by 1970. That programme is going along quite satisfactorily, I am glad to say, at the approximate rate of two conversions a week. As at January 1, 1959, there were 1,041 manual exchanges serving 1 million connections. By January 1 of this year that number had gone down to 638, serving 700,000. The forecast was, in round terms, 100 a year, and that is about the rate of progress. I do not think that there is any significant falling below the target in this respect.

The noble Lord referred to local calls; he said that they were now increasing at a rate of 5 per cent., and that the rate ought to be higher. I must admit that the marked increase he referred to in the Post Office Prospects, while perhaps being unspecified, tended to give a brighter picture than was actually the case. Perhaps we are at fault in some way for having done that. But if there is any fault it was a genuine one. In point of fact, with increasing automation and with S.T.D. and so on, it is becoming increasingly difficult to sort out what is the local call traffic. But I can say that if a slight over-emphasis was given to local calls which gives rise to criticism, we can certainly hope with reasonable confidence that that increase of 5 per cent. will be continued.

As to S.T.D. itself, the installation is steadily going ahead. I agree that the noble Lord was correct factually in saying that it was not so far advanced at the present time as had been hoped. I should like to give your Lordships the latest position as I know it—there have been some complications arising because of the considerable increase in the amount of trunk traffic, which has been of the order of 14 per cent.; and in London in particular it has caused difficulties on which we are working hard and I think I can claim that we are having some success in overcoming them. The result is that over one and a half million subscribers now have S.T.D., including about three-quarters of the people in Central London, with the same kind of proportion in other large cities, and 26½ per cent. of all trunk calls are now dialled. It remains extremely popular with the users of the trunk services, and I think it would not be unreasonable to look forward with some confidence to achieving the target of making it available to nine tenths of subscribers by 1970.

Your Lordships will probably remember that the planned growth of this system was set out in a graph in the White Paper, Post Office Capital Expenditure, 1960–61. From that graph it was possible to see that we had expected that by now 38 per cent. of all subscribers would have it. There is the delay I have mentioned, which is being worked on, with the result that the actual figure, as near as I can give it in round terms, is 33⅓ per cent. instead of 38 per cent. I do not think we are likely to get back on to the planned position on the graph for about three years; but there is every reason to think that we shall get back to it then and that the programme will be completed by 1970.

I come, it seems to me, to more and more important points as I go along, and I am coming on to the question of finance by the same path as that chosen by the noble Lord, Lord Crook—namely, by way of profits. I think your Lordships will agree that when you make an estimate you make it to the best of your ability in the light of every factor you can think of as existing at the time, anticipating the future as best you can. However intelligently you do that, however hard you work at it, it remains an estimate. I seem to recollect that we have had one or two jolly passages at arms across the Floor of the House about the meaning and the importance to be attached to an estimate. But it remains an estimate—that is, the best you can do at the time.

It is certainly true to say, because it is there for all to see, that the profits fell from £24 million in 1960–61 to £13½ million in 1961–62, and that in spite of increases in charges. There are two reasons for that. One is that business has not been up to expectations: secondly, costs have been heavier than had been anticipated. The telephone business did expand, but the growth in the number of subscribers and of local calls, as I have already said, was not so great as we had hoped for. Parcel traffic went down, and the public did not go in for pools quite so much as they had been doing. That is something which is really of considerable commercial interest to the Post Office because of the vast amount of correspondence and sales of postal orders involved. On the expenditure side there were increases in pay and in prices, which added £20 million to the year's bill. The rather adverse trends which exhibited themselves then have not made their disappearance this year. Business has in fact been expanding, but only at the same rate as in 1961–62. And frankly, we had been hoping that it would have grown faster than that.

There has, of course, been a nasty shock to revenue owing to the weather and the cessation of the pools business. Of course, it would have been worse still if the splendid panel had not got to work. And I wish the noble Lord, Lord Brabazon of Tara, were in his place so that, on behalf of the Post Office, I could thank him for keeping the revenue going. There are also further increases in pay and prices to be allowed for. These are setbacks and their full effect will no doubt be apparent when the White Paper which is due out in the middle of next month appears. I have no idea what we shall see in it, but I think it would not be intelligent to expect anything other than that the hopes expressed in last year's White Paper will not be fulfilled.

My Lords, all that is a necessary preamble to the question of the financing of the Post Office's capital programme. The noble Lord, Lord Geddes of Epsom, who I thought made a most interesting speech, gave his views about the division, as it were, between postal and telecommunication services. I certainly have no desire or intention to drive a wedge between him and the noble Lord, Lord Crook—I should much prefer both noble Lords to work that out themselves, on the duelling field, if necessary. All I will say to Lord Geddes of Epsom is that I note carefully what he has said. I am sure that it is a matter of keeping the balance between the two, to which my right honourable friend, in his consideration, attaches considerable weight. But, apart from the distribution, and the question of where the emphasis should be in the capital programme, there seems to be a community of thought among the noble Lords as to how it should be achieved. My Lords, I hope that without undue over-simplification, I can deal with this point not at great length and reasonably simply.

It is perfectly right, as we were told, that the Post Office in recent years has financed something like 70 per cent. of its capital requirements from its own resources. That is a principle to which noble Lords opposite, particularly those now sitting on the Front Bench, appeared to take considerable exception; they betrayed, I thought, a good deal of suspicion of that as a method. I hope I shall be able to dispel some of that suspicion. This is no new discovery. Financing capital from your own resources has long been the practice in private industry, and I think I may say that nationalised industries are now increasingly tending that way themselves.

THE EARL OF LISTOWEL

My Lords, may I interrupt the noble Lord for a moment? I am sure we all agree about this, and I want there to be no misunderstanding. It is not a question of capital from the profits of the services as compared with capital raised from outside. It is a question of the proportion of capital from both sources. I think that is the only question at issue.

LORD CHESHAM

Yes, my Lord, I grasped that point, I think. I have not quite developed my theme as far as I should wish. I still find no reason to retract anything I said, because I still think, as the noble Earl said, that the only question is as to the division of it. I am going on to say that I certainly got the impression (as, I think, did the House), that the noble Earl and Lord Crook viewed the division with the greatest suspicion—a suspicion which I am endeavouring to prove is groundless. Perhaps I was not clear the first time, but that is what I had intended to convey.

Perhaps the noble Earl will recall Command Paper No. 1337, which was the Government's policy on the financial and economic obligations of the nationalised industries. The Government referred to the desirability of doing just that at the time. Perhaps it might be of interest to compare the division—as the noble Earl calls it—between the Post Office and what is happening in other industries. The Coal Board, in 1959–60—three financial years ago—was finding 23 per cent.; in 1960–61 it went up to 96 per cent., and for the next year up to 100 per cent. of its capital was found from its own resources. The Electricity Council figures are in the 40's: for the last three years, they are 41, 43 and 47 per cent. The Gas Council figures are 45, 66, and last year 79 per cent. I do not think that as a matter of principle there could be anything objectionable there. The noble Lord nods his head in a friendly way. I am glad of that because I want to go on to the next point, which is even more important.

What I want to get across is that there is nothing rigid, nothing fixed or stable. about the extent of what we will call self—financing in which the Post Office indulges. Obviously the percentage—the division—is going to depend on the capital requirements themselves, the financial out-turn of the business, and the profits. My Lords, that is not geared to some mystic formula as a result of which the next year's capital programme is directly formulated. It may be of interest to look at the figures of capital expenditure for the last five years. Going back to 1958–59, the figure was £96 million; in the following year, 1959–60, it was £100 million; in 1960–61, £105 million; in 1961–62, £125 million; in 1962–63, £133 million; and the programme that has already been approved for 1963–64 amounts to £156 million. That is not "peanuts". It represents an increase of 50 per cent. in three years or four years, whichever way you look at it.

But it is an increase of 50 per cent. in a pretty short time. I do not think it can really be complained that the Post Office is being starved of a capital development programme. Clearly, in 1963–64, to achieve that considerably increased figure which I have just mentioned, the division, the percentage, of what will be found and what will have to be made up by Treasury borrowing will depend on the financial results of the year. We shall learn those when the White Paper comes out, and that will be the time to assess what is to be the Treasury borrowing, because I assure your Lordships that there is no set process of reducing Treasury borrowing. I do not think the noble Lord said there was, but I believe he did a little implying.

The figures over the last four financial years are: 1959–60, £20 million borrowed; 1960–61, £37 million; 1961–62, £40 million; and it is expected to be £35 million in the current year. The noble Lord said something about £30 million in the future, but that is a little piece of knowledge which I do not share as no decision has yet been made, because, my Lords, as I have just tried to explain, no decision can yet be made. But I hope I have said enough on that subject to indicate that there is no sort of magic attached to a percentage above which borrowing may not go, or a kind of automatic ceiling on the Treasury borrowing. Therefore I think I may claim that the fears expressed that the capital programme would not be adhered to because of that division are groundless.

The noble Earl, Lord Listowel, asked a direct question: whether the Post Office has authority to go to the open market. If there must be a clear answer "Yes" or "No", the answer is, "No". The noble Lord, Lord Crook, had in mind that Section 9, particularly subsection (3) of Section 9, of the Post Office Act, 1961, had some interesting and devious meaning which meant that the Post Office could do that. Let me reassure the House, quite briefly, that Section 9 of the Act is a purely technical provision, which is included in nearly all such legislation, to give the Treasury the power they need to make advances in this way to the Post Office. It does not mean that a special telephone loan could be floated by the Post Office. It does technically mean that the Treasury could float one, if that were the only way they could think of for raising the necessary money. But I really do not think that one should think in those terms—that they would want to resort to that. There are plenty of other ways. It is a standard provision in legislation authorising the Treasury to issue capital advances, and that is all there is to it. I hope, therefore, that I have allayed more fears in that respect.

Before I turn to one or two other points which I must mention, I would refer to the proposal put forward by the noble Lord, Lord Airedale, about the Post Office in the Central Lobby. It has been called the House of Commons Branch Office for quite a time, but I agree that that is probably not the best description of it. It is a handy one, but it certainly does not pretend to be the best one. Administratively, so to speak, there is no need to change it, because it works as it is, but there would be no objection to renaming it The Houses of Parliament Post Office, for instance, if that is what is preferred by all concerned. The noble Lord prefers it and, if nobody minds having a personal opinion from me, I should prefer it, too. Quite how we are going to find out the opinion of all concerned, including the Members of another place, I am not quite sure, but if a strong, all-round proposal were put forward, I know my right honourable friend the Postmaster General would be only too happy to consider the request sympathetically.

The noble Lord, Lord Geddes of Epsom, drew attention to what I thought was an interesting point about single people being transferred on redundancy. I know he will not expect me to be able to give him a considered answer to-day, except that I would say that it seemed to me that he put his point with some thought, and, I know, with great seriousness. I should like to consider carefully what he has said, and I will certainly see that it is drawn to the attention of my right honourable friend.

The noble Lord. Lord Crook, at the end of his speech, had a basket of rather smaller miscellaneous fruit. You can pop those in and out of your mouth quite quickly, and I will deal now with some of the points that he raised at that time. The noble Lord mentioned Telex, in particular, and I am happy to say that inland Telex is going along very nicely. The 10,000th line has recently been added to the system. We expect that the growth of the system will be about 15 per cent. next year, and that the traffic on it will be growing at a rate of about 20 per cent. On the overseas side, the noble Lord pointed out that we have a very good Commonwealth link. We have, in fact, a Telex service link to 75 countries, including all the major Commonwealth countries; in addition to which it is now possible for people to use the service to dial their calls to most West European countries, which again is an advance.

I would mention, too, developments in the cable service. I do not think the noble Lord referred to it, but I wish to do so because another Transatlantic cable will be brought into service in the autumn of this year. That will be the first direct telephone cable link between Britain and the United States. The other information I wanted your Lordships to know was that the long Pacific link of the Commonwealth cable network will also be completed in the autumn of this year, connecting Canada to New Zealand and Australia and enabling a decent and reliable telephone service between those countries and here. We shall also be laying the first direct telephone cable between this country and Germany, which will be the first of a programme of six new cables to Western Europe to be laid in the next five years. A further system is to be completed by 1966. Plans have been agreed between the Governments of Britain, Canada, Australia, New Zealand, Malay and Singapore for the cable link from Australia to Singapore and Hong Kong through New Guinea and North Borneo. So that is another interesting point.

The noble Lord inquired about electronic exchanges, and I very much welcomed what he said because we agree with him. The first one, as he said, came into experimental use at Highgate Wood last December, and when my right honourable friend accepted it from the manufacturers he announced joint plans which the Post Office and industry have for three further exchanges. They will be prototypes for potential production ones, and they are due to open, at Goringon-Thames, Pembury, in Kent, and Leighton Buzzard, during 1964. I thought perhaps the noble Lord would like to know that. We hope that we shall go over to electronic exchanges in this country as soon as we can. But, besides that, as the noble Lord said, there is a large potential export market for them, and he was perfectly right when he said that we are in as good a position with regard to electronic exchanges as anyone in the world—and, I am happy to say, better than most.

The noble Earl, Lord Listowel, mentioned the very important question of satellites and space communications. I thought he would like to know that the Post Office is co-operating with the American National Aeronautics and Space Administration and with the American Telephone and Telegraph Company in experiments for transmitting telephone, telegraph and television services by means of satellites—Telstar, Relay and so on. The results of these experiments, at our end of them, have been most encouraging. Goonhilly has proved extremely efficient, and we feel that already it may well represent a pretty close approach to the ultimate design of an operational station. It also has the merit of being much less costly than its American counterpart. So I hope that the noble Earl will feel satisfied that we are by no means lagging behind in the technical field.

It is difficult to say at the present time what the commercial future will be, but certainly any development will have to remain under public control—although there is, of course, a considerable part to be played by industry in the matter. But I think it is a field, as the noble Earl said, where international co-operation is essential, and I can tell the noble Earl that Her Majesty's Government are fully aware of the need for understanding and co-operation with other countries. I think that is the way we must continue to look at it.

The noble Lord referred to that delightful submarine telephone cable from Scotland to Iceland, known as SCOTICE, and hoped that it had been, or was going to be, extended from Iceland to Canada, via Greenland. I am happy to tell him that it has recently been extended, and that part of it, he will be overjoyed to know, is called ICECAN. The radio tower he mentioned is going, ahead near the Museum Exchange; so far, it is up to 280 of its 520 feet. Installation of its equipment should begin in the spring of 1964, and we hope that the first microwave system will be operational in early 1965. He also mentioned the existing microwave link to France, and there again I can tell him they are putting in additional equipment, in partnership with French P.T.T. By autumn of next year there should be 600 additional telephone channels to the Continent available by that means.

My Lords, I have covered a number of points, some of them extremely briefly and quite a number of them, I think I may claim, with reasonable satisfaction from the Post Office point of view. Before I conclude, there is one more thing I must say. I am going to end where the noble Lord, Lord Crook, began (and I was very happy to hear the noble Earl, Lord Listowel, make remarks in very much the same vein); and that is with a reference to the praise which must be given to the staff of the Post Office, whether on the postal side or on the telecommunications side, who have been involved in great difficulties in regard to working, conditions. I should like, my Lords, to recognise that, and to tell your Lordships one or two stories—not perhaps individual in themselves, but merely as typical of what went on.

I should like to tell you of the train that got stuck in the snow near Keswick, where the postman from the local office turned out, unloaded the mail and humped it all through a mile of deep snow to the office. I should like to tell you about the postmen of Brighton, when there were difficulties in getting to work. As many as 100 of them each day were getting up at half past three in the morning and walking considerable distances from the outskirts to the central sorting office in order to get the delivery through. I should like to tell your Lordships about the postman from Stroud who was the first person to get through to the village of Bisley, which was completely cut off from the evening of December 29 until January 1. The road was completely blocked. The postman made his way across fields, through deep drifts, as best he could, and he finally arrived at Bisley in a state of exhaustion. One hour later, a police convoy arrived with a snow plough, but, in the meantime, the postman had been revived with a hot drink by the sub-postmaster and carried on with his delivery. He returned to his own office at 6.30 that evening, having been on the job outside for twelve hours.

My Lords, the power cuts that were referred to struck very hard at Luton. The main sorting office at Luton was without heat or light for eighteen hours. That did not defeat them, my Lords. They brought a mail van and some motor-cycles into the sorting office to provide light, and simply worked in their overcoats to defeat the lack of warmth. Thus they got the mail sorted out, and to time. The postwomen have kept their end up in exactly the same way. There was a village near Oldham where the postwoman who delivers there only once during the whole time failed to make her deliveries—and she acted as a conveyor of medicine to the sick in addition. My Lords, there must be literally thousands of stories like that among the postal people, and literally thousands more among those engaged on the telephone and telegraph side, because not only did they have a great deal of increased traffic to put up with but, of course, an almost unprecedented number of extra faults. They had to go through the most awful conditions in order to fix them, and they very often had to carry their equipment through the snow because, of course, all the vehicles were stuck.

There was, for instance the engineer who took four hours to reach an isolated radio station in Devon which was eight miles away. He got stuck for the night with no heat except what the radio valves gave. The next morning he struggled back again, he had a short break for a meal and went straight out to repair an emergency fault on a coastguard line. That, again, is typical of thousands, I am absolutely certain: and in giving unstinted praise to the way in which the Post Office have carried on I am sure that they, in their turn, would wish to acknowledge that the public have been pretty patient over these things and have recognised their efforts on the public's behalf. It shows, I think, one thing and that is that there is, and always has been, in the Post Office very much of a good spirit. That is clear from what I have been saying, and I hope some of it may have been evident in what I have been saying on the other matters that came up in this debate.

LORD AMULREE

My Lords, before the noble Lord sits down, I wonder whether he could explain a curious phrase in his speech: "telephone penetration". I was not quite sure what was expected to penetrate what, unless it were joined up with telephones in a pipe-line. Could the noble Lord say something about this?

LORD CHESHAM

My Lords, I think, had the noble Lord quoted me completely, he would have said that I referred to "what is technically known as 'telephone penetration'." I myself would have called it "distribution". That is what it means: the tentacles of the telephone system spreading among the population.

LORD AMULREE

My Lords, I thank the noble Lord very much for his answer, but I wonder whether these technical phrases could be kept out of common use so that we know what he is talking about.

6.12 p.m.

LORD CROOK

My Lords may I say straight away how grateful I am to the noble Lord who has just replied for his excellent and detailed reply in such an excellent spirit. I think it would be wrong if I were to fail to offer a few observations before asking leave to withdraw my Motion. I should like to thank those who have supported me by speaking this afternoon. The noble Lord, Lord Airedale. seems as if he has scored a victory with one quick shot in the bulls-eye. So far as the noble Lord on my left is concerned, he as an ex-Postmaster General and a friend of mine, and one who knows more about this than I do. I was delighted that he spoke on the important subject of satellite communication of which we shall hear a good deal more in the years ahead. At the risk of making the second cheek of Lord Geddes of Epsom blush (the first having already blushed apparently from what the noble Lord opposite said), may I say there was only one reason why I have not mentioned the need to build better premises and give better conditions for the staff in the postal side? That is that, while, when I moved a Motion of this kind fifteen years ago, I covered nearly the whole field, in these days I am conscious of the fact that the ex-general secretary of the Union of Post Office Workers, who worked with me in the trade union movement and the Civil Service for so many years, is here; and I feel it would be a little inopportune, perhaps, if I ventured to move into his own field and not leave it to him. I knew that he would be here and I left this field to him. That does not mean there is the slightest chance of a wedge being driven between us.

I wanted more capital, and I suggested one way in which this capital could be spent. But when we manage to dig the capital out of the Government will be soon enough to have arguments about what we should do with it. I do not resent the noble Lord's calling me a "barrow boy". I quite deliberately (knowing that I was putting over, as the noble Lord said, some "raspberries" or "lemons") tried to put in some strawberries. It would be wrong for noble Lords at this Dispatch Box to talk about the Post Office, and to offer criticisms of Government policy, without also painting a balanced picture expressing appreciation of some of the better things the general public ought to know about. One should also encourage the noble Lord to do what he has done—to give us in this House a review of some of the unusual and not-so-well-known parts of the Post Office service work.

I will not argue with the noble Lord as to whether we are the seventh or the sixth in regard to our telephone installations. I can only say that I must rely on the published documents. I got my figure from the documents of "T.E.M.A" (the Telecommunications Manufacturers and Engineers Association), who always entertain the Postmaster General every year and who appear to be completely reliable. Their annual report says: "In eight other countries the increase was more rapid than ours. The increase over the last decade was still lower than that of any other country, with the exception of Denmark."Then we come to it. We come seventh in the list, in the number of stations per 100 of population. But I would not argue over whether we are sixth or seventh. I know that the dinner was about due, and I thought maybe his right honourable friend had been to a new dinner and got a later picture.

LORD CHESHAM

My Lords, I do not want to waste time on this, but I think I ought to say, in justification, that we may both well be right. What I should have said (I meant to say so, but forgot) was that my list was drawn up on countries having more than one million telephones. There might be a difference of qualification in that way—

LORD CROOK

My Lords, I do not think it matters whether we are sixth or seventh; what matters is that we are a long way behind the place in which we ought to be.

On shared lines I should not like the noble Lord to think I should be critical of shared lines as a policy if it were simply that people were offered the opportunity of having either a shared line or their own line. That is what I am accustomed to in America. I go there usually once in every year—I make the noble Lord a gift of this. It is not just that two people share the use of the line. In wild country, where there is not much demand for telephones, and where there is such a long run of wire, then five people will share, and they can still be amicable about it. Of course, they pay accordingly. But they are given that opportunity. The point I was raising here to-day, as I did in 1961, was about those whom the noble Lord who replied on that occasion described as the 200,000 who were actively discontented with being on that list. The other 100,000 who were given the chance would get off it. I am not worried about the 700,000 who told the Post Office: "We like cheapness." But we object to making people share lines, with the inconvenience and the lack of secrecy.

On S.T.D. I was glad to hear of the excellent progress. What is not known to everyone is the wonderful public relations job in teaching the public—and this is very necessary—now being done by the Post Office.

My own office goes S.T.D. on March 1 and we have had not only pamphlets for the staff with full details of exhibits they can go to see at public libraries et cetera demonstrating the new method, but also the loan of a short-run film; and in our own film room we have been able to offer to the staff with the co-operation of the Post Office four shows in a day on what the new system means. This is excellent work which is being done in this way. I was sorry that the noble Lord, Lord Brabazon of Tara, was not here to hear the encomium given him for saving Post Office profits, because the noble Lord is only just saved from having to do the same for Sir Gerald Nabarro, who nearly found it was his line as well to do that on last Saturday week.

When I come to the serious point I raised, the noble Lord has not answered it at all; or at least not the first part. He has not mentioned how he can stand there and justify the loan situation and say in 1961 there was £160 million needed in four years and it would be £40 million a year, when automatically it has been watered down, first to £35 million, and then £30 million. Though the noble Lord ventured to tell me that I was wrong, I was quoting from the OFFICIAL REPORT of the House of Commons a statement actually made by his Minister. The right honourable gentleman said: Despite that great advance our net borrowings from the Treasury will have fallen"— fallen, not risen— from £37 million in 1960–61 to £30 million in 1963–64". So I would say to the noble Lord that I was entitled to say that another £10 million was being lopped off, and if the noble Lord will do me the honour of reading the OFFICIAL REPORT to-morrow, he will see that, apart from any fresh criticism which I offered of what had happened, I said that had we only seen the Post Office getting what they were told they were going to get originally, they would have been at least that much better off.

I would say to the noble Lord how grateful I am to learn of the advance in Atlantic Telex and how the telephone service is going ahead. If I may reminisce, I remember going aboard the ship that laid the first cable across to Canada while she was getting ready, and speaking over the mountains of coiled cable lying in the bows of that wonderful ship. I had a chance of appreciating what a marvellous job of work the technical and research people in the Post Office had done jointly, of course, with the people who had constructed the actual cable. I found that every one of the repeater links put down every forty or sixty miles was gold plated. After all the experiments, they had found that whatever metal they used would become oxydised in time and the Post Office topped it all by gold-plating the lot. I have nothing but praise for the astonishing work done jointly by the industry and the Post Office research workers.

I was also glad to hear that SCOTICE has gone on to ICECAN, and to know that aircraft control across the Atlantic will have been made better and, whatever it may have been in the past, even safer as a result of the Post Office efforts. Finally, I would say to the noble Lord that what he said about the development of Post Office services is what I would have expected of the Post Office. Indeed, it is what I know of the Post Office and the public services. Whatever people may do in the way of throwing mud at the public services, the people in them have an esprit de corps, often missing in commercial concerns; a loyalty to something that they put at the head of everything they have in mind. I would add only that to the service which the Post Office gives, I think that the noble Lord, in such an excellent reply, has done his service this afternoon. I thank him for it, and ask leave of the House to withdraw my Motion.

Motion for Papers, by leave, withdrawn.