HL Deb 23 January 1964 vol 254 cc1029-62

3.12 p.m.

Order of the Day for the Second Reading read.


My Lords, I beg to move that this Bill be now read a Second time. In my three years in your Lordships' House I have answered for a number of Departments but never, until to-day, for the Post Office. I am, of course, a regular customer of the Post Office, and as a customer I have always considered that the Post Office does a pretty good job, though one must have minor grouses from time to time like other people. I certainly enjoyed preparing myself for this debate, but I am afraid that I am far from having the great knowledge of the Post Office that is possessed by the noble Lord, Lord Crook. Before I come to the Bill, perhaps I might give a personal word of welcome to the noble Lord, Lord Hobson, not only because we were colleagues in another place for some years, but also because he is a former Post Office Minister. Your Lordships will no doubt agree that it is singularly appropriate, not only that he should have been introduced into your Lordships' House to-day, but also that he should have taken his seat in it for the first time.

The reason for this Bill is that during the five years 1963–64 to 1967–68 it is planned that the Post Office shall spend over £1,000 million on expansion, improvement and renewal. This compares with an expenditure of about £550 million in the five preceding years and represents by far the largest programme of capital development the Post Office has undertaken. Plans for the inland telephone service, which account for nearly £900 million of this sum, were outlined in the White Paper (Cmnd. 2211) published last November.

The Post Office, like all sound businesses, finances a substantial part of its capital requirements from its own resources by ploughing back depreciation provisions and profits. It is hoped to finance about three-fifths of the programme in this way. This leaves considerable sums to be met by borrowing from the Exchequer. To make this possible it will be necessary to raise the present limit on the Post Office's borrowing powers, which will be exhausted by about the middle of this year. That is the purpose of this Bill.

The limit on Post Office borrowing is fixed in terms of total accumulated debt to the Exchequer which may be outstanding at any time. The present limit is £960 million. The Bill raises the limit to £1,120 million and provides for it to be raised further, by Resolution of another place, to a sum not exceeding £1,320 million. The intermediate limit corresponds to an increase in borrowing powers of £160 million, which should, broadly speaking, be sufficient for the next two financial years. The final limit provides for a further increase of £200 million which, on present plans, should meet requirements for something like two years after that.

A programme of investment on this scale will enable the Post Office to develop and improve its services in a way that has not been possible hitherto because of shortages of capital. I should like to tell the House about the ways in which the money will be spent. First, a word about the inland telephone service. Some 90 per cent. of Post Office capital expenditure is on telecommunications. The White Paper gave details of plans to spend nearly £900 million on the inland telephone service alone in the next five years, compared with £490 million in the last five years. This immense increase in investment is needed, first, to overcome shortages resulting from insufficient investment in the past and, secondly, because the Post Office expects to have to meet much higher demands in the next few years as the 4 per cent. growth target for the economy is fulfilled.

At present in various parts of the country there are shortages of equipment in exchanges and shortages of wires between exchanges and people's homes. These shortages mean that people have to be kept waiting for a telephone. At the moment the number on the waiting list is about 46,000. This is much lower than it was in, say, 1951, when the total was over 400,000. Nowadays, plant is available for nearly 90 per cent. of all the applications received. A great deal of progress has therefore been made already.

But, my Lords, although the waiting list is less of a problem than it was, it still gives rise to justified annoyance and criticism; and, of course, it is not good business for the Post Office. It has therefore been decided, as announced in the White Paper, that the Post Office should aim to get rid of the waiting list as quickly as possible, and at the latest by March 31, 1966. By "getting rid of the waiting list" is meant that, even when special construction work is necessary, people should be able to expect telephone service within about two months of placing an order. The overwhelming majority will get their telephones within a week or two of giving their orders. This will be no easy task, but it will be done. It will not be possible, however, to eliminate the waiting list in less than three years unless shared service is continued. My right honourable friend the Postmaster-General hopes there will not have to be too much of this because he well knows that many people dislike the idea of sharing. The ultimate aim is still to give them some choice in the kind of service they have. But while there is a waiting list, it seems right to my right honourable friend that the provision of telephone service for all who want it should take priority.

In the trunk service also there are at present serious plant shortages. There has been an unprecedented increase in traffic. The number of trunk calls has more than doubled in the past decade, and the greatest part of this increase has occurred in the most recent years. Currently the rate of increase is about 14½ per cent. per annum. Consequently, and not surprisingly, there is now a shortage of trunk circuits which is affecting both the Subscriber Trunk Dialling service and the service given by operators. This is one of the main reasons why the quality of service is not at the moment as good as my right honourable friend would have wished it to be.

To meet the growth of trunk traffic the capacity of existing plant is being increased rapidly. More cables are being provided and a new microwave system—of which the new Post Office Tower is part—is being established. About 4,000 more circuits will be provided during this financial year, and there will be a further large increase in 1964–65. By March, 1968, there will be about 55,000 circuits in use, some 20,000 more than at the beginning of this financial year.

Another current problem is the state of some automatic exchanges. Many of them have been in use for over 30 years. Inevitably they are more liable to faults than more recent exchanges, especially when special work has to be undertaken such as the introduction of S.T.D. This is one of the reasons why the automatic service is not always as good as it should be. The replacement of these old exchanges is being stepped up.

Demand for telephone service is at present very brisk, and if the present growth is maintained, as one should expect if the assumptions of the National Economic Development Council about the growth of the economy are fulfilled, the prospect is that there will be over 11 million telephones in this country by 1968. This will be over 2 million more than were in use at the beginning of this financial year.

Simultaneously with provision for the tremendous expansion of plant required to meet the expected growth of the telephone system, the work of modernisation will go on. By 1968, it is expected, 98 per cent. of subscribers will have automatic service, and by 1970 virtually all manual exchanges will have disappeared. S.T.D. has already been provided at more than 600 exchanges serving over 2 million subscribers, or 41 per cent. of all subscribers, and further extension is in hand. So far, S.T.D. has been provided only at large urban exchanges, but equipment is being developed to provide it at small rural exchanges and some of this equipment should be in service next year. It is expected that S.T.D. will be available to about four-fifths of subscribers by 1968 and to nearly all of them by 1970.

A long-term aspect of the modernisation programme is the development of electronic exchanges, in which the Post Office is co-operating with the telecommunications industry. The Highgate Wood exchange, which opened about a year ago, is providing valuable experience on which to base the further development of a first standard production system. This development is going ahead very well, and it is hoped to have working in this country within a few years a system which will compete effectively with conventional exchanges.

The process of modernising the telephone apparatus in homes and offices continues, and new devices to help the subscriber are on their way. These include press-button telephones and an ingenious device on which one can record a private list of telephone numbers and which then automatically dials them when required.

My Lords, I come now to other telecommunication services. Plans for the next five years also call for capital expenditure amounting to about £50 million on telecommunications services other than the inland telephone service. Demand for Telex, which is used mainly by commerce and industry, is continuing to increase rapidly. There are over 11,000 subscribers on the Telex service and it is likely that by 1970 there will be 28,000 subscribers. To cope with this expansion about 23 new Telex exchanges will be needed.

Plans for the overseas telecommunication services include further use of automatic machinery, as well as expansion of the submarine cable system. London S.T.D. subscribers can already dial their own telephone calls to Paris, and this facility will be extended in the next few months to cover the rest of France, Belgium, the Netherlands, Switzerland and West Germany. Later this year, similar services will be opened for subscribers in Birmingham, Edinburgh, Glasgow, Liverpool and Manchester. In the overseas Telex service subscribers already dial most of their European calls direct, and equipment now being developed will enable them, within the next two or three years, to dial their own calls to the United States and to even more distant destinations. Plans are also in hand for the progressive mechanisation of the over-seas telegram service. To meet the needs of the growing traffic, seven new submarine cables across the North Sea are being planned in order to provide additional circuits to Denmark, Germany, the Netherlands, and Norway.

Finally on communications, may I say a word about satellite communications? The tests with the experimental satellites "Telstar II"and "Relay" are continuing. The ground station at Goonhilly has successfully demonstrated that satellite communications are feasible and that satellites can be used for telephone conversations, television transmissions and other forms of communication. Plans are being made to extend the Goonhilly station by the erection of a second large aerial. The Post Office is looking ahead to the time when an operational satellite communications system will be an economic proposition and is participating in discussions on Europe's r÷le in some future global system. There is also close contact with other European countries and with the United States in the purely technical field. The Commonwealth has been kept informed of all developments.

In conclusion, may I say something about the postal services? Although the lion's share of investment is in the telecommunication services, as I have said, the postal services are not being neglected. Over the next five years it is intended to spend about £120 million on posts, compared with about £40 million during the past five years. Four-fifths of the investment on posts will be for buildings, land and accommodation services generally. New postal buildings are needed to meet growth of work, to permit the introduction of new postal machinery and, at the same time, to improve working conditions for the staff. Over two hundred new postal buildings have been completed in the past five years.

The Post Office is now tackling the very big offices in London and other large cities, where the present buildings are often far too small and antiquated both for the efficient conduct of work and for the installation of new machines. During the next five years or so it is planned to make good progress in replacing this unsuitable accommodation with modern, well-equipped buildings in keeping with an efficient and progressive public service. A start has been made in London where the new Western District office is well on the way to completion, and four other large buildings will soon be starting. At the same time the Post Office is pushing ahead with the modernisation of a thousand or so Crown post offices which are old-fashioned but which do not justify replacement. Already about 200 of them have been modernised, and during the next five or six years it is hoped to deal with another 600 or so and, in effect, to break the back of this particular problem.

Also in the next five years it is expected to spend over £9 million on postal machines for sorting offices and £1 million more on development of new machines and research into new techniques—an average of £2 million a year compared with the £½million or so a year that was spent up to two or three years ago. The bulk of this money will go on installing proven machinery, such as chain conveyors and parcel sorting machines in sorting offices; but substantial sums will also be spent on letter segregating and facing machines and on development of coding and sorting machines. Those, my Lords, are the main purposes for which this Bill authorises increased borrowing powers. I beg to move.

Moved, That the Bill be now read 2a—(Lord Newton.)

3.29 p.m.


My Lords, may I mention straight away the reference which the noble Lord, Lord Newton, made to himself, and say that he need not have apologised: he has given us an excellent account of the reasons for a very good Bill. The noble Lord and I seem fated to face each other. I think in the last twelve months it has been so over the Greater London Bill, Health matters, and now the Post Office. And who knows which way round it will be the next time? May I also thank him for the reference he made to my noble friend Lord Hobson? I am very glad that he has come to join us, and we on this side welcome him. Had he been here a week earlier, perhaps he would have been standing at this Box or, at the very least, the task I am now to perform would have been shared between us.

Your Lordships will not be surprised if I say how much we welcome this Bill, because you will perhaps recall that I have been standing here for years pressing for expansion, pressing to get changes made. In particular, when the 1961 Bill came before us I urged, on behalf of those who sit on these Benches, that the provision for capital at the beginning and for working capital for the opportunity of further investment was so limited that the sooner we had new legislation the better. This is it, even if a bit late.

While the Postmaster General is to be congratulated on securing these increases in capital expenditure, I would make it clear that the new programme is not so ambitious in terms of growth as these increases would lead one to expect. The proposals for the rate of telephone growth contained in the White Paper to which the noble Lord referred are not new. The Paper stated that it is planned to increase the number of telephones, including extensions, by 2 million "— and, as he says, that means from 9 million to 11 million. These increases are, in fact, equivalent to a 25 per cent. increase over the period. That is an annual average of about 5 per cent. But long before increased investment figures were announced in November, 1963, the Post Office had had a 5 per cent. target. In a Parliamentary reply in another place as long ago as June 26, 1962, the Postmaster General said that his capital expenditure plan included provision for an average rate of growth in the number of telephones of 5 per cent. per annum over the next five years. Yet at a later date, in January last year—almost exactly one year ago—he had to admit that the increase in fact achieved in the year 1962–63 was only 3.6 per cent. He naturally covered himself by saying it was still his hope that he would achieve an average increase of 5 per cent. over the next five years.

What is clear to us is that the Postmaster General has merely re-phased his programme, forgetting and removing, in so doing, the very bad results of 1962–63. So, glad though we are to see the proposals in the White Paper, they are not ambitious. In the next five years the increase in the number of telephones will work out at only 24.3 per cent., compared to an increase of 21.3 per cent. in the five years just gone. Similarly, the rate of increase for trunks and junctions is to go up from 49 per cent. to only 57.8 per cent. But capital expenditure will be 59.8 per cent. up on subscribers' circuits and 97 per cent. higher on trunks and junctions than it was in the last five years. It seems odd to some of us on these Benches that such substantial increases in investment will not lead to a higher growth rate or greater achievement.

That raises certain questions. Is the new capital enough? Is it going to be used properly? Is it being swallowed up wastefully? I ask the third question because we are very concerned about the bulk supply agreements and what has been said by various people about them. Until April last year, your Lordships may remember, telephone apparatus and exchange equipment, cable and loading coils, were all sold to the Post Office under bulk supply agreements by which groups of manufacturers acted on a non-competitive basis. From April, cable and loading coils have been purchased by competitive tender, but it is still the case that at least three-quarters of telephone apparatus and 90 per cent. of exchange equipment will be purchased under bulk supply agreements until 1968.

So far as we know, the bulk supply agreement is on the lines of the past. Under this the Postmaster General agrees with manufacturers of telephone apparatus and exchange equipment, guaranteeing that he will place orders only with the manufacturer nominated by them for these quotas. It is assumed that both the agreements now in operation are the same as those we knew about before, which are under investigation in another place. Under those agreements, what happened was the establishment of a committee and the appointment of a secretary by the firms, and any order that the Postmaster General wanted to give he sent to the secretary, who within fourteen days had to say which manufacturer was to receive the order. If they could not get agreement on the committee of manufacturers, then the Postmaster General was notified of the automatic operation of the quota.

This exchange equipment agreement between the Post Office and five companies runs from 1963 to 1968 and is, in my view, a very important item for our consideration on a Bill of this kind. Your Lordships read the newspapers as much as I do and have read about takeover bids in this industry, as I have done over the past year or so, so I will not bore you with reminders. But I would point out that the growth of concentration in this industry and the bulk supply agreements to which I have referred may well have led to the Post Office paying too high a price for equipment. Certainly it is true that the manufacturers are now obtaining substantial profits which, to a very large extent, are derived from the Post Office.

How are the prices fixed? The theoretical position is that they are fixed by negotiation after an investigation into the costs of two or three firms which the Post Office regards as being most efficient. The prices, when they are fixed, apply to all the firms, and, except for variations in the cost of raw materials and wages that actually take place, they remain the prices throughout the five years of the contract. The first effect, obviously, of this is that any advantage which arises from increased productivity in the five-year period goes not to the Post Office but to the manufacturers. It is clear to us that by these agreements the Post Office loses badly during periods of increasing productivity, and we are in one of these now so far as the Post Office is concerned. I regret to say. however, that matters were made much worse by reason of the fact that for two-and-a-half years of the new agreements the prices paid are to be on the cost investigations made—except for certain items of exchange equipment—on prices between 1955 and 1957.

The Report of the Committee of Public Accounts for the year 1962–63, published last summer, which your Lordships may have read, had strong things to say about this. If I may quote, it said: The Post Office stated that in their negotiation of the prices to be paid during the first two-and-a-half years of the renewed telephone apparatus agreement they would in fact press for a fair share of any increase in productivity, on the basis of their technical cost officers' knowledge of what was happening at contractors' works. Your Committee do not regard this as an adequate basis for price negotiation so long as the Post Office continue to obtain supplies of telephone apparatus and exchange equipment under these agreements. Your Committee consider it essential that costs should be investigated before prices are negotiated and that the interval between investigations should not be extended beyond the agreed term. Your Committee therefore recommend that the Post Office undertake fresh cost investigations at the earliest possible opportunity. Most of us think that an examination at least annually would be about right in this matter.

If there are these high prices they lead to high profits and, my word, are the firms now doing well! The present large profits they are earning are undoubtedly from the Post Office, and what is profit to the private companies is, in our suggestion, unproductive use of capital by the Post Office because the Post Office can ill-afford to waste any of its capital expenditure. Two or three years ago the profit in the field of these manufacturers was poor. The profits of the Telephone Manufacturing Company, for instance, fell from £148,000 in 1953 to a loss of £1,059 in the year 1959, and the chairman of the company explained at the time of the take-over in 1960 that trading conditions in the telephone industry had become increasingly difficult. We could all have forecast that that would happen. This was the "Stop—Go, Stop—Go" which was going on due to a policy which provided inadequate investment. The consortium which opposed Pye in the Temco takeover justified their outlook by saying that to-day there is a large unused capacity in the manufacturing industry which is sufficient to deal with any foreseeable increase in business which any altered status of the General Post Office may bring about. What is it that has happened? Post Office capital expenditure on telecommunications, increasing by leaps and bounds, has gone from £75 million in 1958 to the proposal to spend £152 million in the current year, £171 million in 1964–65, and £189 million in 1965–66; and, as the result of increasing Post Office business in 1962, Temco instead of losing, earned a record profit of £373,285. The chairman of the company spoke with great glee of the way in which their work in communications proceeded apace and said: Far from finding that the market is on the way to being saturated, we are convinced that we have hardly scratched the surface. Clearly, they were not the only ones who hardly scratched the surface. At December 31, 1961, the then chairman of Plessey showed a consolidated loss before taxation of £76,151, but the Financial Times recorded that in October last year Plessey had made a gross profit even higher than the firm itself, or the amalgamation or consortium, had ever anticipated—the astonishing figure of £11,291,710. As a result of that, the net profit in the group had gone from £2.5 million to £5.7 million and, as the Economist pointed out, nearly one-half of the Plessey profits were made in the telecommunications sector.

That these companies are now in such a strong position can be attributed to profits earned from the Post Office. We are anxious that the Post Office, which is being given this large sum of further money, which we are glad to see given, shall take every possible step to see that it is used for improvement where efficiency is badly needed, because—I say this in the clear knowledge of one who has been associated with it over a long period of years—the great efficiency of Post Office staffs has itself been curtailed by this "Stop—Go" and the inability of the service to expand. The quality of the service demands improvement as a matter of urgency. It wants it permanently.

As long ago as 1961 the noble Lord, Lord St. Oswald, replying to me on a Motion I moved, said [OFFICIAL REPORT, Vol. 228, col. 217]: What is equally important, as noble Lords have pointed out, is that improvement in service should accompany this, and there are many who are dissatisfied with the service as it stands. I should be doing small service to the Post Office if I pretended that all complaints were groundless. I am bound to say that the Postmaster General to-day seems to be quite complacent about the quality of service. He appeared on the Independent Television programme "This Week" towards the end of last year, and in reply to a question said: Well, I should have thought that on the Whole the public (despite the interviews which I saw in this programme earlier on) regard the service as pretty efficient. There are, I agree, black spots especially in London and the Home Counties. I do not know where he got his optimism from, because quite clearly the Post Office figures themselves show that the standard of service is declining.

In recent years the number of ineffective calls due to the failure of the Post Office increased by one-fifth in the case of those made through non-director exchanges, almost one-half (in fact 47.8 per cent.) in the case of those made through director exchanges, and almost two-thirds (in fact 62.5 per cent.) in the case of those made through manual exchanges. All that the White Paper had to say about the quality of service was the cutting out of the oldest equipment, the vast increase in new equipment, of trunk circuits and Subscriber Trunk Dialling will give the public a quicker service without frustrations or delays. The Assistant Postmaster General in another place, when this Bill was in progress there, talking of the faults occurring which were due to Post Office failure, went on record as saying that on the auto-service side vigorous action was in hand to improve the figures for technical failures, and programmes were under way locally for overhauling the automatic networks and finding and clearing faults. But it is not yet by any means certain that the mere introduction of S.T.D. will in itself solve the problem. We must be certain that there is sufficient S.T.D. equipment. We must be certain about other things too. Much of the present high faults rate is probably due to the neglect over recent years that has taken place in the maintenance of equipment and the shortage which there has been of the proper staffs—all due to this starvation of capital and the "Stop—Go" attitude which was adopted and which was being denounced by Mr. Ernest Marples when he was Minister for the Post Office in another place. We want emergency measures taken. But they will not provide a long-term solu- tion. Only the acceptance now by the Post Office of high maintenance standards and the provision of adequate numbers of maintenance staff will provide this. I hope I was correct in reading into what I heard the noble Lord, Lord Newton, say, that this was likely to be achieved.

I have had a lot to say in the past about waiting lists. The noble Lord has suggested that waiting lists are getting to be a quite easy matter now. He has referred to the elimination of the waiting list referred to in the White Paper, although it says there are other things to be borne in mind as well. It does say in the White Paper that applicants would have their telephone within a week or two. In another place during the Second Reading of this Bill the Postmaster General amplified the White Paper and answered a rhetorical question, "What do I mean by getting rid of waiting lists?", by saying that, where special construction work was not necessary to get a telephone installed or connected to the exchange, people would get their telephone within a week or two of giving their order. That, he said, was not "pie in the sky" but something which would be carried out. When? That is the big thing, is it not?

What in fact is the present position? Last year between March 31 and September 30 the waiting list grew from 44,016 to 48,118, an increase of 9.3 per cent. in six months. In other words, in each of those six months, with the exception of June, the net demands for telephones exceeded the supply. Many people have to wait a long time for service, despite what the Postmaster General has said. On October 17 he committed himself to the statement that at the moment one could get a telephone in a matter of a week or two. The facts are that over the past year only between 52 and 55 per cent. of applications received were met by the end of the following month. If transferred connections are excluded, the picture is worse, because I find that only 36 per cent. of the applications received during May were connected by the end of June. That is not a matter of a week or two; it is in fact, to use the Minister's own words, still "pie in the sky".

The Post Office's own figures give some measure of the average waiting time for those applications for which plant and equipment are available—what they call the number of weeks "in the pipe-line". This shows how long it will take to deal with outstanding applications at the average supply rate of the past year. At September 30—the last figure I have—it stood at no less than 13.7 weeks. That does not include cases where the equipment is not available—cases where the wait is sometimes a very long one. On September 30 there were 2,888 applications which had been outstanding for over two years. These people ought to be given telephone service very quickly.

I want to remind your Lordships of the promise which was given. When we last discussed telephone matters in this House on February 20, 1963, eleven months ago, the noble Lord, Lord Chesham, stated [OFFICIAL REPORT, Vol. 247, 59]: 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. And I remember agreeing with him that they ought not to wait very much longer. Now, eleven months later, there are 2,888 waiting. We have achieved the marvellous target of having satisfied 112 people in the course of a year! At any rate I do not know how many years it is going to take to wipe off that figure.

I should like to say a few words about shared services, a subject to which I referred last year and to which the noble Lord has made reference. The noble Lord, Lord St. Oswald, told us, when he replied in this House as long ago as February 1, 1961, that out of approximately 1 million telephone sharers in the country 700,000 were perfectly satisfied with shared telephones; 20 per cent., or 200,000, were actively unhappy; and the remaining 10 per cent. did not mind particularly, but if given the choice would presumably choose an exclusive line. That is somewhere around 300,000 cases to be looked at.

The White Paper The Inland Telephone Service in an Expanding Economy makes it clear that they have no hope at all, and makes it even more clear that other people are going to be added to the list, whether they like it or not. The numbers with shared service are not reducing; indeed, they are on the increase. On September 30 last the number was 994,641—not a great deal of difference, again, between that and the figure of a million. The 200,000 actively desiring not to share are not to get the exclusive line which we thought in February, 1961, they were going to get. Indeed, in the last full year for which figures are available 20.5 per cent. of all new exchange connections provided for residential subscribers were on shared lines. I was astonished to learn from the debate in the other place that subscribers have even been writing to their Members of Parliament saying that although they had for years possessed an exclusive line they were now being compulsorily transferred to a shared line. We now learn that for some years to come the only way to meet these new demands of the Post Office service will be to insist on a number of people having shared lines—not a very inspiring achievement after all we were talking about in this House in 1961.

I have been talking about people who can afford telephones. I want now to mention the large number of people who do not have a telephone because they cannot afford it. They make use of two things for communication: kiosks and telegrams—two of the loss lines of the Post Office. When we discussed the Bill which made the Post Office a commercial concern I urged on behalf of noble Lords on this side of the House—and some colleagues on the other side of the House were good enough to support me—that the mere desire to make items pay was not the only consideration in running the Post Office; that we must not lose sight of the social purpose inherent in the kiosk and telegram services. The use of the present criterion of return on capital for fixing charges and allocating capital will, if carried to its logical conclusion, be quite incompatible with the concept of the Post Office as a public service providing the varied means of social communication as a whole for the public of this country.

I mention this matter deliberately because there has been a Parliamentary reply on this subject, indicating that the Post Office is opposed to putting up more telephone kiosks because it loses so much money on them. It cannot be right when more than a quarter of the adult population of this country should live in homes without telephones. For them the only contact with the out side world in many cases is via the telephone booth—when the newly-marrieds wish to ring up Mum (who can afford a telephone), or when they want to send a telegram.

I will not try to put in words what I want to say. I will quote to the House the much better words of the Professor of Telecommunications at London University, who recently said: …the running of a national telephone network is not solely a technological matter. It is essentially a social one. Broadly speaking there are two distinct spheres in which the telephone is useful. The first is the serving of industrial and business needs to enable the economic life of the country to proceed; a failure of any city region of our telephone network brings instant paralysis. The second is social—to keep scattered families together, to call the fire brigade, to assist shopping, to maintain friendships … to satisfy a host of needs for family happiness and security. It can be argued that the industrial field of service must balance its budget, but this has less force in the social field. I hope that the noble Lord, Lord Newton, will convey to his right honourable friend the feelings of those of us on this side of the House in regard to the social uses of the telephone through the kiosks, and the need to keep, and indeed to extend, them.

I was personally very interested in the reference by the noble Lord to the putting up of new exchanges. I was even more interested when he said that, actually, automatic exchanges were being pulled down and replaced—or were going to be—after 30 years, because they were worn out. Noble Lords may remember that although I live only 12½miles from the House, I live in a place which has not even yet achieved an automatic exchange. On the contrary, it is a place where, when the manual exchange was so bad, the Post Office looked at it and sent down another secondhand manual one to relieve the pressure. The Post Office has been receiving nothing but complaints, not only front individual subscribers but from important bodies. There have been complaints from the local Carshalton Urban District Council. I was very interested to see sitting opposite my noble friend who is connected with Queen Mary's Hospital at Carshalton and who will know that so shocking has been the telephone communication business in respect of the hospital that the Friends of the Hospital actually offered to find £800 a year which would be the cost of getting the hospital connected to the Vigilant exchange, which is automatic, and which is so good compared with Wallington that I can go to Vigilant and get through to Paris much more quickly than I can sometimes get through to my office here in London. That is no exaggeration, my Lords.

We are twelve miles from London, and we have been told that years must go by before we shall get an automatic exchange. We have been promised first one date and then another. 1966 has now been pushed out to 1967. We must wait for the new post office to be opened to take the place of the old post office, and then the old post office can be converted into the new automatic telephone exchange. I should think it is going to take until 1996, if we are to judge by the progress made on the post office. To convert a little departmental store has taken over four years. Supermarkets can push themselves up across the road in eight or nine months. The poor Ministry of Works gets the blame. I do not blame the Ministry of Works and all its good staff. I am sure that this has just been another of the cases of complete starvation of capital.

But if one wants to look at the other side of the matter, even the postal side, one has only to look over the river to see the starvation of capital. I represent a public Board which has its offices over there. There are great commercial concerns over there, and there are other public Boards and Civil Service Departments. Your Lordships have seen that ancient area between Lambeth Bridge and Vauxhall Bridge completely changed in recent years by great new buildings, buildings which house thousands of people working in offices. The only concern that has not been provided in the district is a post office. The only provision at all is a sub-post office, part of a shop near the Lambeth Walk. I have no doubt it was plenty good enough before the advent of the modern buildings, the construction of which the Government encouraged there, when we were dealing with a population which would want to send only ordinary letters of the ordinary homely type.

Now what have we got? When Decca Limited, whose building is over there, are handing in a large number of parcels there are long queues, annoying to them and annoying to the rest of us. There is not even a full-time assistant. Even as regards the purchase of stamps, there are again and again such limited quantities that one's office staff cannot buy them, and they have to take a taxi or a bus to go and buy their stamps. If the thousands of office workers now along that front—which your Lordships can look at from the Terrace—want to buy a stamp or a postal order or transact any business in the post office, hardly any of them can ever do so, if only for the reason that the door is bolted at 12.30 p.m. and remains bolted until 1.30 p.m., while the couple of people who run the show have their lunch. If you hand in from a great business an express packet or a registered packet at 4.46 p.m., it is one minute late, and it stays there till 10 o'clock the next morning; and in one recent instance of mine it stayed there until 2 in the afternoon before it left. We have a committee of all those trying to run offices on that front, and we are rather tired of this business. The best we have got in recent weeks—five weeks ago—is the bland statement of the assistant district postmaster, There is a broad assessment of what may be required, but no firm proposal at the moment. I think it is five years ago, maybe six, that I first wrote to one Postmaster General, then to an Assistant Postmaster General and then to another Postmaster General.

Nor is the delivery nor the collection of mail any better. My staff dare not post letters to anyone after 4 o'clock on Fridays if they want them delivered on Saturdays—and that includes letters to my own home twelve miles away. Nobody in the post office seems to know the reason. We have had letters blaming the railway for dropping bags and forgetting them, and for transferring them on to the wrong train. I am tired of day after day getting these little labels that I hope most of your Lordships never see—the little label stuck on a letter when it is delivered to your door and which says: The Postmaster would like to have this envelope together with the name and address of the sender for official purposes. Please hand it to the postman or send it to your local post office. Why send them? There is always at least one every week, and sometimes two in one morning, according to the nature of the happening over on the Embankment.

The difficulty is the same with the morning deliveries. It is past 9 o'clock before business firms can get any of their mail, unless they happen to be the Telecommunications Region of the Post Office. They get a special delivery before 8 o'clock. I say to the noble Lord: what is good enough for the Telecommunications Region of the Post Office as regards postal deliveries is good enough for me and for the rest of the concerns on that Embankment.

My Lords, I have probably spoken for too long. There is much more I could have said and should have liked to say. I was very interested in what the noble Lord said about satellites. Had my noble friend Lord Listowel been here, I have no doubt he would have wanted to say something about them, because ever since the problem of Blue Streak there has been doubt and worry about where we were going. I do not want to press the Minister in any way. or to embarrass him, but I know how good we are. I have a tremendous admiration for every single side of the post office officers, and for the inventive methods they have. When I was in New York in October I saw to a marked degree how successful "Telstar" was, owing to Goonhilly. I also saw the cheering people at the centenary celebration of a Roman Catholic university, who were having their celebrations opened by His Holiness the Pope in person, as it were, on the huge screen inside the main hall of the university. Everybody said, "This is by land line over Italy to France and via Goonhilly"; and so America saw it.

I should be second to none in tributes to those who operate Goonhilly, and I am extremely glad to hear the noble Lord say formally that there are to be extensions there. I do not know whether it is possible for him to tell us anything more about this. The Minister in the other place seems to have been a little "cagey" about it. I have heard that the Royal Aircraft Establishment at Farnborough has sent a memorandum or a report to the Minister, and I know there are arguments about the type of satellite to be put up.

We know that "syncom" was originally talked about, which would have had stationary satellites, but I suppose it is true, as rumoured, that the delay of two or three seconds between a voice asking a question and getting a reply would be likely to make conversation so difficult that the system might not work. I wonder whether the Minister is able to tell us whether it is the multi-satellite system, orbiting some 10,000 miles up, that is going to be used. I do not want to press him to say anything that is unwise—I know there have been many conferences in Europe and that there are going to be more—but we are getting a little more interested than we were. But I want to say to him that no one on these Benches is suggesting that we should set out on a status symbol march against France or on a competitive, "try to make money" march against the U.S.A. I understand both those countries have their own very clear ideas where they want to go. What I do want to say is that we have great experts on this subject—some of the greatest in the world, if not the greatest and I do not want the British Post Office, which has gone on and on in strength, to be left behind in any of these things.

That has made me mention, in passing, the question of staffing, and I think it would be wrong of me not to mention before I sit down the question of staff relations in the Post Office—and I shall attempt to do that in only two minutes and in the most cautious of terms. I was for 25 years. a member of the National Whitley Council for the Civil Service, and of a Departmental Whitley Council. I went through the experience of helping to build up Whitley procedure, and I know that the Post Office Departmental Whitley Council built up a Whitley system of negotiation and staff relationships that was the envy of great industrialists suffering, as they did, from some of the difficulties to which they were accustomed inside their own factories or manufactories.

I am quite clear that the staff relationships in the Post Office to-day are not as good as they were. I think they are probably better than they were a year ago, but they got a very bad rupture, and decisions were imposed by the Postmaster General and his staff (in particular the decision to withhold part of an arbitration award during the period of the pay pause) which antagonised some of the staff concerned. I am speaking with great caution, and am deliberately trying not to say any words that might make things worse. I want to say that I desire to see the recovery of the relationship which existed previously inside the Post Office amongst all sides, of the magnificent co-operation between the trade unions—the two great trade unions, the Union of Post Office Workers and the Post Office Engineering Union, in particular—and the Post Office management for their part.

Perhaps I may end on the subject of staff because one cannot help but appreciate, whether it is on the highly-qualified technological side or on the ordinary "foot-slogging" side of the postmen, what a grand lot of fellows we have got. On the technological side, as we watch the tower, with its revolving restaurant, going up near the Tottenham Court Road, we see one of the great triumphs of British Post Office engineering; and many other towers are going up all over the country similarly. The Australian cable, which Her Majesty inaugurated in December, is another great tribute to what can be done by the British Post Office. The noble Lord, in introducing this Bill, referred to the electronics exchange, to push-button telephones and to the memory-storing one, all of which I know have their roots in Dollis Hill and associated research stations of the Post Office. The great firms who are manufacturing this equipment usually get their best ideas from the excellent Post Office staff.

If we come to the lowest of the Post Office staff what do we find? We find that, when they have an exchange which is rotten to operate manually, such as my own one, to which I have already referred, they still have to keep their temper with the irate customers who cannot find a line—and they do it very well. The postmen who get the job of trudging through the snow, of working overtime and doing other people's jobs during Christmas—they are all people to whom we take off our hats. Therefore, my Lords, anything we can do by putting through a Bill like this, to help the Post Office obtain better buildings for those staffs and to give them better equipment and tools for their job, is something which deserves the praise of everyone in this House.

4.16 p.m.


My Lords, I must apologise to the noble Lord, Lord Newton, for confronting him for the second time in two days, but I can assure him that, even supposing he feels a trifle strange in his present rôle, I feel equally strange myself. But I am afraid that that is where the comparison between us is going to end. At least I should like to say that I hope that the noble Lord will give me a more comforting reply than he gave me yesterday. I rather fear he will not.

There is just one small point that I want to raise about the Post Office, but before I do that I must declare an interest, because I am closely associated with a firm which does both printing and publishing and sends a certain amount of magazines to foreign countries. This is the point which I really want to draw to the Minister's attention very briefly now. Upon July 1 last there was a big increase in postal rates to Canada, and I think one of the most extraordinary things was that the postage for magazines went up—and I am assured this is true—by the staggering figure of 1,100 per cent., which is a very great sum. I admit that the former figure had been agreed in 1907 and that there had been no further increase since then. But, my Lords, what is said is that a particular branch of the Department does not pay and that it must be made to pay. The sum involved is really very small from the general point of view, and one wonders whether it is necessary for each branch of a big Department to be made to pay its own way.

The move that I have mentioned will have certain rather grave effects. The first is that it will mean the virtual loss of the Canadian market for magazines. In fact, in the case of one magazine of which I know bookings from Canada have dropped already by 10 per cent., and probably a further decline will occur at the end of the year when people renew their subscriptions. And, of course, it makes it much more convenient for British printers and publishers to get their work done in Holland and France, where it does not cost so much to get it printed and published, and where the postage rates are nowhere near so high.

One of the real troubles that I think occur in Canada is that they are the next-door neighbour of the United States of America, and therefore magazines coming from this country must be in direct competition with magazines coming from America, and these are generally rather bigger, fatter, glossier, shinier (call them what you will) than the magazines we produce. But, at the same time, they turn out something which, because of the postage, turns out to be considerably cheaper.

I will just quote one or two examples. There is an American magazine called Good Housekeeping—not the same as as the one we have in England—which has 264 pages and sells in Canada for 50 cents. The Woman's Journal from Great Britain, which was doing quite well but contains no more than 124 pages, was selling for 60 cents. Now, because of the postal increase, the price has had to go up by 15 cents, and I should think people will not buy that magazine as much as they did before. The same thing occurs with respect to various technical and trade journals, because the price of them has gone up by something like 10 dollars to 12 dollars a year, which means that people will not buy them as much as before.

There is a further matter which I think is very serious. The British magazines exported to Canada contain advertisements for British goods; and if that source of information is to dry up, people will not know what British goods there are on the market, and this cannot be a good thing when one is trying to export as much as possible. One wonders whether there is between the Board of Trade and the Post Office the type of co-operation in this matter which there should be. The fact that the cost of the magazine post has gone up by such an enormous amount does not, I think, represent the actual cost of what might be called the subsidy before the change was made. I am not entirely sure what that total figure was; but I think it was something in the nature of £8,000 a year, which is less than the amount being charged now or which would be charged if the magazines were to be sent to-day. I gather from the trade in general that they would have been pleased to find that money to get rid of the subsidy, but that this idea was not well-regarded.

The second part of our export trade which might be affected is the export of books. Exports to Canada have risen from about £6 million in 1939 to £31 million in 1963. The new postal rate is going to put a 1s. on the cost of each volume published in Canada. I cannot feel that that will be a way to encourage people to buy books published and printed in this country. I suggest that if it were not possible to go back to the 1907 agreement, there was a case for some special Post Office rates for bulk consignments of British magazines sent abroad, provided they were all destined for one fixed address and could then possibly be distributed on arrival by the local people. It would not involve the British posting rate. Whether that is possible I do not know. Before I sit down I should like to associate myself with what the noble Lord, Lord Crook, said about the staff of the Post Office. I think the staff and the people who work in all Departments are very conscientious, hard-working and intelligent, and if they were not doing their work in all sorts of bad weather we should not be living as comfortably as we do now.

4.25 p.m.


My Lords, my noble friend Lord Crook has dealt with all the major questions on this subject. I am going to call attention to only one thing, and that is to the silliest proposal I have ever heard put forward by this or any other Government. That is the proposal that unaddressed advertising matter should be placed in all our letter boxes and delivered through the agency of the Post Office. This is a most astounding proposal. First of all we do not want these advertisements; there is quite enough advertising matter which is addressed thrust on us already. Moreover, there is the constant danger of anybody in the house switching on the wire-less and probably having a mass of synthetic enthusiasm for some saponaceous substitute poured in their ears. When one buys a Sunday newspaper nowadays it is full of advertising matter; and there must be a great national waste in all this.

Look at what this is going to do to the postal service. The postman has his round; he has worked out what his round is going to be and it may include calling at the houses of some unfortunate people like myself to whom the postman has to come every day with a mass of addressed nonsense. But many people are spared that; and the postman's call is usually to some houses but not to every house. Now they are going to shove this matter into his bag and the poor fellow will have to look into every house—and he will have a very heavy bag. I wonder whether this proposal has been worked out in terms of staff. I wonder whether it has been worked out in terms of expense. In fact, I wonder whether it has been worked out at all. I do not know what remuneration the Post Office will have for this service. I have been advised by Members of your Lordships' House that the best thing to do if this should occur is to shove all this stuff straight back, addressed to the Postmaster General. I think a lot of people will do that. Why on earth do the Government want to do a thing like this? Why should they?

It is a long time since I was Postmaster General; it is 33 years. I was told then that my job was to serve the convenience of the public, not to act as an internal irritant; my job was to save trouble and not to make it. I hope we shall hear of the withdrawal of this proposal. If not, it will be a great annoyance to very many householders. A mass of labour that might be employed elsewhere would be diverted to delivering a mass of printed matter which we do not want. This is a national waste and a private annoyance, and I hope it will be dropped and that no such stupid proposal is ever brought forward again.

4.28 p.m.


My Lords, I was glad to hear the noble Lord, Lord Crook, say that this is a very good Bill and that he welcomed it. I do not see how he could have said anything else. It shows a massive programme of expansion before us. I quite understand that one could always suggest that it is too late and too little; but there has not been anything quite like it before, and I think the noble Lord appreciates that. I will try to deal with such matters as have been raised in the debate and on those matters on which I did not touch in my opening speech.

First, I should like to say something about bulk supply agreements against which the noble Lord, Lord Crook, directed some criticism. My right honourable friend is not wedded to the bulk supply system where other methods of purchase offer greater advantage. As the noble Lord said, in 1962 it was decided not to renew the bulk supply agreements for cable and loading coils when they expired last March. Since then these supplies have been obtained by competitive tender, and the bulk supply method now applies only to telephone apparatus and exchange equipment. In these fields it continues to provide an admirable means of pooling resources, under the leadership of the Post Office. I should like the noble Lord to consider this point, because it is of the greatest importance, not only for progress at home but also for our exports of telephone equipment, that we should put these resources to the best possible use. I believe that this is truer than ever to-day, when we are moving into the era of the electronic telephone exchange.

As to the noble Lord's suggestion that a great part of Post Office orders for exchange equipment will be given to a small ring of manufacturers, I would say that what one has to recognise is that the so-called ring represents virtually the whole industry qualified to meet the requirements of the Post Office in this very complex field. In the field of telephone apparatus there is greater outside competition, and to give encouragement to this, the proportion of orders that may be placed with out side firms was increased last April from 10 to 25 per cent.

The noble Lord, Lord Crook, also criticised the system of pricing and suggested that, because prices are fixed for a period, the benefits of increased efficiency accrue to the manufacturer and are not passed on to the Post Office—I think that was the gist of his argument. What is true is that, because prices fixed in the agreements allow only a moderate profit, all the manufacturers have an incentive to improve their efficiency and so increase the profit margin. But these improvements in efficiency will be reflected in lower costs at the next cost investigation, and it is then that the Post Office will reap the benefit It has also been suggested, I know, that the prices fixed under present agreements are based on out-of-date costings. It is true that the normal rhythm of cost investigations was broken during the time when the whole system was under review in 1961-62, but the Post Office has a good deal of information about changes in overheads and efficiency that have taken place since costs were last established. All this has to be taken into account in arriving at the current prices. Further cost investigations now under way will provide a basis for new prices which will come into force in October of next year.

The noble Lord made some observations about the quality of the telephone service to-day. As a normal part of mangement by the Post Office, maintenance costs and quality of service are checked constantly. I would say without any hesitation that there have been no deliberate attempts—indeed, no attempts of any kind—on the part of my right honourable friend to allow the service to get worse. In fact, in many respects, it has improved. For example, the number of faults reported per telephone per annum has shown a steady decline in recent years: from 1.34, in 1956, to 1. in 1962; and about 70 per cent. of faults reported on weekdays are cleared on the day on which they are reported.

During the course of the last winter there was a tendency for the number of call failures to increase in the automatic networks and on S.T.D. I am told that no one cause was responsible for this, but the high rate of increase in traffic certainly played a part in it. Remedial measures and investigations were set in hand at once, and as soon as it was realised that the state of affairs might not be just a temporary one the rate of the provision of additional trunk circuits was stepped up and special equipment overhauls were instituted in a number of centres. These are still going on, and I am advised that they are achieving results. As announced in the recent White Paper, the pace of replacing old automatic exchanges will be increased. It is, of course, in these older exchanges that failures are most likely to occur. In the light of what I have said, I hope that the noble Lord will believe that my that my right honourable friend is anxious not only to maintain the quality of the also to improve it

The noble Lord also discussed the waiting list and the shared service. I do not think I can add much to what I said in my first speech. So long as there is a waiting list and shared services, it will be possible to attack both. But my right honourable friend proposes to eliminate the waiting list, at the latest, by about March 31, 1966; and, so far as the shared service is concerned, I can only repeat that the task of eliminating the waiting list should be given priority. Neither the noble Lord nor any other speaker to-day has suggested that that is a wrong policy decision.

The noble Lord asked my right honourable friend to realise the possible utility of telephone kiosks. There are 75,000 of them in the United Kingdom, and the number has grown by 19 per cent. in the last ten years. In these circumstances, is it possible to argue that the value of the telephone kiosks has been underrated? New kiosks are being provided in both urban and rural areas whenever they will reasonably pay their way. In rural areas, in addition, kiosks are usually situated outside village post offices, and a sum of money is allocated periodically for the provision of unremunerative kiosks in other places in the country. The distribution of this allocation between the counties of England and Wales is agreed with the Rural District Councils Association, and similar schemes are operated in Scotland and Northern Ireland. Local telephone managers are empowered to treat every case on its merits, taking into account not only the commercial prospects but also the public need. They will consider sympathetically any particular case put to them, but I would suggest to your Lordships that it would be unreasonable to expect the Post Office to agree to every proposal, regardless of economics, because the loss on all kiosks was over £3 million last year.

Then the noble Lord discussed some rather more personal problems, if I may so put it—for example, the service he obtained from his own exchange at Wallington. This is a manual exchange, and conversion to automatic working is dependent on the provision of a new building. I am informed that there have been, unfortunately, acute planning difficulties. Wallington is one of 550 manual exchanges in the country, and it is the aim of the Post Office to complete the conversion of virtually all these exchanges to automatic working by 1970. On average, two exchanges are now being converted every week. At Wallington, and elsewhere, the Post Office is making every effort to give a satisfactory service from the exchanges which are now in use. Wallington, I am told, is a large exchange, and provision has to be made for 14,500 connections. I am afraid that I cannot give the noble Lord any more encouragement about Wallington than that.

The noble Lord also discussed the postal service on the Albert Embankment. I cannot claim any personal knowledge of this, but I am told that the Post Office has had little complaint about it. I expected to hear that there had been a good deal of complaint.


My Lords, may I suggest to the noble Lord that they got out the wrong file? Mine alone would have been sufficient.


My Lords, I think that possibly by "little complaint" is meant little complaint from more than one person. The position is, I am told, that there are already five post offices—three branch post offices and two sub-post offices—within half a mile of the Albert Embankment, and that the Post Office keeps a close watch on the development of new buildings in order to see that Post Office services and facilities keep in step. The view of the Post Office up to now, at any rate, has been that the provision in the area is up to scale; but in view of what the noble Lord has said the Post Office will have another look at it.

The noble Lord asked me whether I could say anything more about satellite communications, but he was kind enough not to press me on this matter. I was glad to hear what he said about the skill of the British Post Office engineers: I am certain that this is true. I have always held that view, and being, in a modest way, a mechanically minded man, I came to that opinion long before it became necessary to ascertain the official view of my right honourable friend. The only thing I can say (and the noble Lord may know this already) is that on March 29 last my right honourable friend the Minister of Aviation announced that the Government had decided that his Ministry, in collaboration with the Post Office and the communications branch of the Armed Forces, and in consultation with industry, should carry out a detailed design study to determine a suitable design for a communications satellite. That work has now been carried out, and the results are being studied.

The noble Lord, Lord Crook, ended his speech by discussing staff relations. I do not think that is a matter about which it would be appropriate for me to say much, but I would assure the noble Lord that on the question of staff relations my right honourable friend continues to attach the utmost importance to the maintenance of good relations in the Post Office.

The noble Lord, Lord Amulree, said that he hoped he would receive a more comforting reply from me to-day than he had yesterday. I am not the judge of that, of course, but I cannot help thinking—this is only a reference to what I said yesterday—that the noble Lord and I must define the word "comforting" in different ways. I will leave it at that. It is true, as the noble Lord said, that the postage rates for overseas printed papers, commercial papers, small packets and samples posted to Canada were increased on July 1 last year. The reason for this was that rising costs had resulted in the postal services running at a loss, and those particular services were selected for increases because they were losing heavily. My right honourable friend considered that it was unreasonable for users of other Post Office services to continue subsidising them to the considerable extent that they were.

At the same time, the special concessionary Canadian magazine post was withdrawn, and the rates for magazines and newspapers to Canada were brought into line with those for the rest of the world. In other words, the old rate was either a very fine concession or an anomaly, according to which way you cared to look at it. The rates for the Canadian magazine post had been virtually unchanged since 1907, which is a long time. The average postage paid per item in 1962–63 was only about 1½d., while the average cost to the Post Office was over 1s. That is a great difference; it means that the Post Office lost over 10d. on each item. The loss on the service was running at over £250,000 a year, on an income of less than £50,000. So, looking at this question objectively, although I can sympathise with the point of view of those who have benefited from this concession for so long, on the whole, I feel that it was not an unreasonable decision for my right honourable friend to take. The noble Lord asked whether it would be possible to have a system by which books (I imagine that is what he must have been thinking of) could be posted in bulk. I cannot give an answer on that point, but I will ask my right honourable friend to consider it.

The noble Earl, Lord Attlee, delivered a forcible attack on what is known as the Household Delivery Service, and I think I had better tell your Lordships why my right honourable friend decided to introduce it. I am told that in recent years from time to time there have been periods when the lack of buoyancy in postal traffic has given rise to some concern, and that a possible contributory cause has been the growth of house-to-house delivery of unaddressed items by private circular delivery companies. This is believed to have drawn traffic from the printed paper post. In the past the Post Office have on occasion carried out distributions of unaddressed matter—for example, the Highway Code, and lately on behalf of a water company wishing to circulate its users. Moreover, in the last year or two there has been pressure by individuals and organisations for the Post Office to introduce its own house-to-house delivery service for unaddressed matter. My right honourable friend came to the conclusion that such a service could be run without affecting adversely either postal services or the interests of the staff. The Post Office was encouraged in this view by the fact that several overseas administrations successfully run such a service. It was also felt that if it was not started there was a real danger that traffic already lost from the post would never be recovered, and that further traffic might gradually be attracted away. So the decision was taken to introduce the service, which was begun last Monday.

In view of what the noble Earl said, perhaps I should mention that during a Post Office debate in another place last March the late Mr. W. R. Williams, who was at that time, the principal Opposition spokesman on Post Office matters, suggested that the Post Office should run just such a Household Delivery Service. I think I should quote exactly what he said, and I understand that I am in order in doing so because his speech was delivered during the last Session of Parliament. He said [OFFICIAL REPORT, Commons, Vol. 674, col. 1007]: I am going to suggest something very seriously. I am sure that my honourable friends and honourable Members on the other side of the House will have noticed the number of men and women, scores of them, who are tramping the streets every day delivering stuff which in my young days the Post Office exclusively delivered—bills, notices, rates, notices from local authorities, notices from private commercial firms, from insurance firms and all the rest. They are all making use of this form of delivery. Why should the Post Office allow all this business to go away from it without a real fight and without a real effort? I ask the right honourable Gentleman, will he seriously consider whether we can do something to open a new seam there? My right honourable friend has done so, and he hopes that through the introduction of this service he will fill a gap in the service which the Post Office offers to its customers. It is thought that the new service will not only be attractive to the large business organisations but will appeal to small shopkeepers, charities and local organisations of various kinds—in fact, to anyone wishing to contact all the householders in a particular locality. Among the first distributions was one on behalf of a local council in Wales seeking the views of its residents on a proposed railway line closure.

The Post Office will not, however, be doing anything which the private circular delivery companies have not been doing in the past. Of course, the Post Office already delivers large quantities of advertising matter through the ordinary printed paper post. Like a great many other people, I suppose, I have wondered how I, as an ordinary customer of the Post Office, may be affected by this new service, and it occurs to me—I shall have to wait and see—that it may even be advantageous. Although I am extremely allergic to all forms of advertisements, I nevertheless receive through the post envelopes bearing a 2½d. stamp—or nowadays, frequently, a 3d. stamp. Such communications have to be opened and read before one realises that they are advertisements—and then they go into the waste paper basket. Now, one can see immediately what they are, and one puts them straight into the waste paper basket. So it seems to me that people like me, who do not like advertisements, will benefit. I hope that I have explained clearly why my right honourable friend has decided to introduce this service. My Lords, I think I have now dealt with all the matters that have been raised in this debate, and I hope that your Lordships will now feel able to give the Bill a Second Reading.

On Question, Bill read 2a: Committee negatived.