HL Deb 20 July 1966 vol 276 cc444-73

3.38 p.m.


My Lords, with permission, I should like to repeat a Statement which my right honourable friend the Prime Minister has just made in another place. It is a long Statement, and the House, I am sure, will bear with me while I repeat it. The words of the Prime Minister were:

"Sterling has been under pressure for the past two-and-a-half weeks. After improvement in the early weeks of May we were blown off course by the seven-week seamen's strike, and when the Bill for that strike was presented in terms of the gold and convertible currency figures in June the Foreign Exchange markets reacted adversely. But there were deeper and more fundamental causes. Many of these have been at home and of these I shall speak in a moment. Several have been overseas. For several weeks past there has been an increasing pressure on liquidity in the world financial centres. Action taken by the United States authorities to strengthen the American balance of payments has led to an acute shortage of dollars and Euro-dollars in world trade and this has led to a progressive rise in interest rates in most financial centres and to the selling of sterling to replenish dollar balances. Last Thursday action was taken by the Bank of England to raise its discount rate and to double its call on the clearing banks for special deposits. On that day I informed the House that I would shortly be announcing further measures to deal not only with the short-run pressure on sterling but also with the underlying economic situation.

"Action is needed for the purpose of making a direct impact on our payments balance, and particularly on certain parts of our overseas expenditure which in recent years has been growing rapidly. Action is needed equally to deal with the problem of internal demand, public and private, and to redeploy resources, both manpower and capacity, according to national priorities and check inflation.

"Exports until the seamen's strike have been rising. By value in the first five months of this year they were 9 per cent. higher than in the same period last year. By volume the increase over the same period last year was 6 per cent. a rate of increase higher than that laid down in the National Plan. But abundant market opportunities abroad for British products—which are competitive enough in terms of quality, performance and price—are being lost owing to the shortage of labour. Order books are too long and delivery dates excessively protracted. Hours of work have been reduced and incomes have been rising faster than productivity.

"What is needed is a shake out which will release the nation's manpower, skilled and unskilled, and lead to a more purposive use of labour for the sake of increasing exports and giving effect to other national priorities.

"This redeployment can be achieved only by cuts in the present inflated level of demand, both in the private and public sectors.

"Not until we can get this redeployment through an attack on the problem of demand can we confidently expect growth in industrial production which is needed to realise our economic and social policies.

"I will begin with the measures needed to restrain private demand at home. The economy is carrying too heavy a burden of production financed by hire purchase, which means that too high a proportion of to-day's production is being paid for by a mortgage on to-morrow's earnings.

"My right honourable friend the President of the Board of Trade has to-day made Orders, which will come into effect at midnight to-night, tightening up still further the regulations governing hire purchase. The down payment on cars, motor cycles and caravans is raised to 40 per cent. and the repayment period shortened to 24 months. The down payment on furniture is raised to 20 per cent. and the repayment period shortened to 24 months. The down payment on domestic appliances is raised to 33⅓ per cent.; the repayment period remains at 24 months. There is no change in the present regulations for cookers and water heaters. Corresponding changes are made in the regulations governing rental payments.

"It is estimated that this will cut hire purchase borrowing by £160 million.

"This of itself is not enough. The Government have therefore decided to activate the regulator created under Section 9 of the Finance Act of 1961, renewed in successive Finance Acts and given greater flexibility in Section 8 of the Finance Act 1964.

"The Treasury has to-day made an Order the effect of which is to put a surcharge of 10 per cent. on the duties on beer, wines and spirits; on hydrocarbon oils, petrol substitutes and power methylated spirits; and on purchase tax.

"I wish to make it clear that in the case of purchase tax the increase is the equivalent of 10 per cent. of the existing rates. Thus for goods now chargeable at 10 per cent., the new effective charge will be 11 per cent.; for goods chargeable at 15 per cent. it will be 16½ per cent.; and for goods chargeable at 25 per cent. it will be 27½ per cent.

"The surcharge will take effect from midnight to-night.

"Its effect will be further to increase the revenue at the rate of about £150 million in a full year. This is a net figure after allowing for the effect of the hire purchase proposals and for the additional export rebate which will become payable following the increases in oil duty and purchase tax.

"The increase in the duty on petrol and derv. will, following the precedent set last year, be refunded to bus operators. The necessary administrative arrangements will be made as soon as possible and Parliamentary authority sought in the ordinary way. In addition a further £20 million will be taken out of the economy as a result of changes announced to-day by my right honourable friend the Postmaster General in certain postal and telecommunications tariffs; parcels, registration and overseas rates will be increased from October 3. The telecommunications changes affecting certain call charges will involve no net increase in Post Office revenue but will be designed to rationalise charges on a basis more closely related to costs. These will take effect from January 1 next. In addition my right honourable friend will be requiring a year's rental in advance for new telephones instead of a quarter's rental as at present. This will apply to orders accepted from to-morrow. Details will be published in the OFFICIAL REPORT and are now available in the Vote Office.

"In the field of direct taxation the Government propose that a one-year surcharge of 10 per cent. be imposed on surtax.

"This will be levied on surtax liabilities for 1965–66 for payment on the 1st September, 1967. The necessary legislation will be introduced in next year's Finance Bill. The extra yield is estimated at £26 million.

"These measures on private current expenditure will be reinforced by action to restrain private sector building outside the housing and industrial fields and outside the Development Areas. The Government have decided to intensify the control on less essential building work and thus to reinforce the priority accorded to building programmes in the fields of housing, schools, hospitals—and new factories.

"When the Building Control Bill now before Parliament receives the Royal Assent, the Minister of Public Building and Works will make an Order reducing the cost limit above which a project is subject to control from £100,000 to £50,000. The Order will require an Affirmative Resolution by both Houses. As before, this control will not apply in the development areas as now defined.

"With a cost limit of £100,000 the control would affect about 500 projects worth £180 million in a year. The lowering of the limit to £50,000 will extend control to cover a total of about 1,000 projects worth £220 million in a year.

"This will give the Government more power to adjust the volume of privately-sponsored construction work as the economic situation develops. Hitherto, approval has been withheld from less than 10 per cent. of the projects about which the Minister has been consulted, but it will be necessary to defer a larger proportion of privately-sponsored work in future. The lowering of the limit will give the Minister scope to concentrate the postponement control on less urgent smaller schemes instead of having to rely on deferring some of the larger projects which are more in the public interest.

"This measure will be supplemented by a tighter control on office building.

"My right honourable friend the President of the Board of Trade has made an Order, coming into force at midnight, extending control of office building to the whole of Britain South of a line from the Wash to the borders of Hampshire and Dorset, by including within the control the whole of the East Midlands, the West Midlands and the South East Region. Projects for buildings of more than 3,000 square feet of office space which were not the subject of an application for planning permission at the time the Order comes into operation will require an office development permit. In addition to tightening the control on building, this measure will reinforce those already taken by the Government for the prevention of undue congestion in these parts of the country and will supplement the strict policy which is being applied to the issue of industrial development certificates.

"Now I turn to public investment programmes. The investment programmes in the public sector have been reviewed and the Government are introducing a number of deferment measures which will reduce demands on resources in this field by £150 million in 1967–68, though these steps will also lead to significant reductions in demand in the current year. While they will involve forgoing for the present a number of desirable projects they will be concentrated on those activities which are not vital to our production capacity and for the development of the economy as a whole. Housing, schools, hospitals, Government financed factories built in development areas, including advanced factories, will not be affected. On investment by Central and Local Government, we are making cuts amounting to £55 million in 1967–68. This will mean cutting back projects designed to contribute to local amenities but which in present circumstances must be postponed without any set-back to our major projects. These will cover such items as swimming baths, new local government offices. The Covent Garden Market project will similarly be deferred.

"The programme for investment in nationalised industries has been carefully scrutinised to ensure that essential industrial investment within the public sector shall go on. Nevertheless, the Government are arranging, in consultation with the Chairmen of these industries, for a reduction in the total demand on resources made by public industry investment to be reduced by £95 million in 1967–68. This is in addition to programmes which have fallen behind schedule owing to slippage in construction, or in the delivery by contractors of the necessary plant and machinery.

"The measures I have so far announced, by reducing the level of demand within the domestic economy, will make a vital contribution to our balance of payments by freeing resources, particularly labour, for work on exports and essential investment.

"But this of itself is not enough, more direct action on the balance of payments is required.

"In accordance with the policy foreshadowed in the Defence White Paper, we have been urgently reviewing how far we can make a major saving in overseas Government expenditure without altering the basic lines of external policy on which the Defence Review was founded. We have also reviewed the level of military and economic aid which we can afford next year. The Government have decided on firm programmes which will reduce our overseas Government expenditure, military and civil, by at least £100 million.

"I will come in a moment to the cost of our forces in Germany. Elsewhere we are pressing ahead with measures designed to ensure a substantial and early saving compared with the present level of expenditure. Given an end to confrontation, the plans made by my right honourable friend, the Secretary of State for Defence, during his recent visit to the area will secure a major contribution towards this saving.

"As regards Germany, in the Defence White Paper published in February we said that we thought it right to maintain our ground forces in Germany at about their existing level until satisfactory arms control arrangements had been agreed in Europe provided, however, that some means was found for meeting the foreign exchange cost of those forces. In my right honourable friend's Budget statement on May 1 he made clear our intention to negotiate with the Federal Government a new settlement aimed at eliminating the foreign exchange cost of our troops in Germany. In a few minutes my right honourable friend will be leaving for Bonn to continue these negotiations. In the light of these discussions, the Government will immediately consider what, if any, further action is called for, including the question whether this would mean proposing forthwith through the prescribed NATO and W.E.U. procedures very substantial cuts in our forces in Germany, sufficient to bring the foreign exchange costs down to the level covered by offset and other payments.

"The figure of £100 million that I have mentioned includes, in addition to the savings on defence expenditure, reductions on military and civil aid expenditure and in the cost of our representation and information services overseas.

"Private and overseas expenditure must also make its contribution. Expenditure on holiday travel outside the sterling area has been rising rapidly and the deficit on travel account with non-sterling countries has risen from £38 million in 1961 to an estimated figure of £95 million in 1966 and is expected on current trends to reach about £105 million next year. We cannot allow this formidable deficit to go on mounting without restriction, but the change requires consultation with the International Monetary Fund which we have initiated. For the twelve months starting on November 1 next there will be a basic allowance of £50 per person for travel to countries outside the sterling area. This allowance will have to cover all the foreign exchange requirements of the traveller, whether paid for in sterling or a foreign currency, except for fares paid for in sterling. There will be special arrangements for business and health travel and for those who, instead of paying fares abroad, take their cars abroad.

"From to-day up to October 31, the amount of foreign exchange which may be bought for journeys to be started during that period will normally be limited to £50 per person. Special arrangements will, however, be made for people who have already made their holiday bookings to acquire a reasonable amount of foreign exchange, and sterling payments through travel agents may continue to be made as under existing arrangements.

"The Treasury is announcing full details this afternoon.

"On the positive side of encouraging tourist expenditure in these countries the Government have decided to introduce, for an experimental period of one year in the first instance, a scheme under which development loan assistance can be offered for the building, expansion or modernisation of hotels which can show that this will result in a significant increase in their earnings from overseas visitors. The President of the Board of Trade will be making a full announcement before the Recess.

"There is another field of private overseas expenditure lying between current and capital expenditure, which has imposed an increasing charge on our balance of payments—the remittances of emigrants to non-sterling area countries. In addition to the genuine transfers of capital by emigrants, there has been evidence of evasion of the control of capital movements. We have decided that, while the existing allowance of up to £5,000 in official exchange for each emigrating family should stand, any balance over and above this should be transferred through the investment currency market and not through the security sterling market. Also from to-day, the total amount which may be sent by way of cash gifts to residents outside the sterling area will be reduced from £250 a year to £50.

"The net direct saving on our overseas payments from all these measures, Government and private, amounts to £150 million. This is a direct saving on our overseas outgoings and therefore on the balance of payments deficit.

"To sum up the measures I have so far outlined, I estimate that they will reduce demand on the domestic economy by more than £500 million. This is in addition to the earlier budgetary measures by this Government reducing the pressure of demand in the private sector by over £700 million. They are in addition to the monetary policy which has been in force and which was reinforced by the three further measures announced last week. They are in addition also to the impact of this year's Finance Bill, yet to have its effect on the economy and which is due to reduce demand and which will extract a further £300 million from the economy, with all this means in terms of imports and of redeployment of labour towards exports and other essential industries.

"In addition to the measures designed to reduce the domestic pressure, the economies in overseas expenditure, public and private, will as I have said make a direct saving of £150 million.

"But the House will recognise that the whole operation stands or falls on the extent to which we can keep our costs and prices under control.

"In recent years money incomes have been increasing at a rate far faster than could be justified by increasing production; in 1965 we paid ourselves increases in money incomes of about £1,800 million compared with in the previous year. About £1,300 million of this represented increases in wages and salaries. Over the same period we earned only £600 million by way of increased production. These trends are continuing. The Declaration of Intent of December 16, 1964, was a great landmark when for the first time in our history, employer, trade union and Government signed a compact designed to restrain the growth of incomes to a norm within the national capacity to pay. Yet ever since that time wage increases have outrun the figure allowed for, and pre-empted the amount available for such increases for a considerable period ahead. The time has come to call a halt.

"The Government are now calling for a six-month standstill on wages, salaries and other types of income, followed by a further six months of severe restraint, and for a similar standstill on prices.

"Where a definite commitment already exists to increase pay or reduce hours, its implementation should be deferred for six months. New commitments should not be implemented during the rest of 1966, and in the following six months only if the grounds for exceptional treatment are particularly compelling. In this way it is intended to secure a virtual stability in incomes for a period of six months followed by a limited growth of incomes in accordance with national priorities during the first six months of 1967. Thereafter it will be essential to secure that the growth of incomes is resumed in an orderly manner in step with national output.

"The same principles apply to other types of money income. Companies, for example, must hold down their dividends during the twelvemonth period.

"The Government similarly call for a twelve-month standstill on prices of all goods and services, except to the limited extent that increases are necessitated by increases in the cost of imported materials, by seasonal factors or by the action of the Government, for example through increased taxation.

"It is not our intention to introduce elaborate statutory controls over incomes and prices. This is a situation in which the Government look with confidence to everyone concerned with these matters to act in accordance with the public interest. Many individual salaries and other forms of remuneration are fixed outside the normal process of collective bargaining. Here, too, the same canons of restraint must apply. This applies also to emoluments of directors and high executives: companies will be required to publish details of these fees and salaries with comparable figures for the previous year.

"Within the main field of collective bargaining we shall rely in the first instance on voluntary action.

"Nevertheless in order to ensure that the selfish do not benefit at the expense of those who co-operate it is our intention to strengthen the provisions of the Prices and Incomes Bill, to speed its passage and to redefine the role of the National Board for Prices and Incomes, which will not hesitate to act within the powers it enjoys, or may further seek, to deal with any actions involving increases outside and beyond this policy.

"The Government will be consulting the T.U.C., the C.B.I. and other interested organisations on the detailed application of the standstill within the next few days and a White Paper will be issued in the near future.

"The House will not underrate the deep significance of what I have just announced. Its implications for industry and the degree of co-operation and restraint which will be required on the part of those affected by it. But equally the House, and I believe the country, will recognise the urgency of these measures if we are to get our economy into balance and to keep our costs under control.

"I should not feel justified in making this demand on industry, if I did not feel we had done everything in our power to secure social justice in the broader fiscal and social policies of the Government. For no Government has the right to ask for restraint, still less for an effective standstill, unless it has done everything a Government can do to create a climate of social justice, which alone can justify such a policy. Inevitably to-day I have dealt with measures which, taken by themselves, involve restriction and restraint. But the House will realise that their whole purpose is to provide industry with the opportunity to achieve a major increase in productivity by streamlining production and labour utilisation. They must be seen against a background of policies designed to speed the application of scientific methods and techniques—already well known to progressive

(New charges will take effect from 1st January, 1967)
(The full rates shown below apply from 6.0 a.m. to 6.0 p.m. Monday to Saturday and the cheap rates from 6.0 p.m. to 6.0 a.m. Monday to Saturday and all day Sunday.)
Present Revised
(a) STD: Time allowed for each 2d. charge unit:
Cheap rate: up to 35 miles 45 secs 60 secs
from 35 to 50 miles 22½ secs 30 secs
over 50 miles 15 secs 20 secs
(b) Non STD: Charge for 3 minutes:
Cheap rate: up to 35 miles 9d. Unchanged
from 35 to 50 miles 1s. 3d.
from 50 to 75 miles 2s. 0d. 1s. 9d.
over 75 miles 2s. 3d. Unchanged

managers—to increase efficiency in private industry and in the public sector. Industry by industry, the economic development committees are tackling the practical problems of raising efficiency and spreading knowledge of how performance can be improved in individual companies. Industry by industry—shipbuilding, printing, the docks, rail transport—the Government are engaged in urgent discussions designed to increase productivity and eliminate over-manning and restrictive practices. We have sought to proceed by voluntary agreement. Where this is not forthcoming, other action must be taken. The Government have indicated to all concerned their determination that the freight liner train service shall go ahead on the basis of open terminals.

"The problems with which I have been dealing are problems that have beset Britain's economy virtually since the end of the war. The unsung achievements of keen executives and of hard-working responsible trade unionists, of inventive scientists and creative designers, are all often overshadowed by attitudes of selfishness and indifference, of indolence and indiscipline on both sides of industry.

"For while the Government can and must do all in its power creating conditions to lay down the rules within which the economy must operate, the determination and resolve which today's measures demonstrate must be matched by effort and endeavour on the part of the whole British people."

My Lords, that concludes the Prime Minister's Statement.


Following are the new Post Office Tariffs referred to in the Statement:

Present Revised
(a) from Great Britain, Channel Isles and Isle of Man:
Charge for 3 minutes:
(i)Full rate: up to 75 miles 5s. 3d. 5s. 0d.
from 75 to 125 miles 5s. 9d. 6s. 0d.
from 125 to 200 miles 6s. 3d. 6s. 0d.
over 200 miles 6s. 9d. 7s. 0d.
(ii) Cheap rate: up to 75 miles 3s. 6d. Unchanged
over 75 miles 3s. 9d. 3s. 6d.
(b) from Northern Ireland:
Cheap rate As for 1 (b) above
(a) STD: Charge unit 3d. 6d.
Time allowed for each charge unit:
Full rate 3 mins 6 mins
Cheap rate 6 mins 12 mins
(b) Non STD: Charge for each call 4d. Unchanged
(a) STD: Charge unit 3d. 6d.
Time allowed for each charge unit:
(i) Full rate: up to 35 miles 30 secs 60 secs
from 35 to 50 miles 15 secs 30 secs
over 50 miles 10 secs 20 secs
(ii) Cheap rate: up to 35 miles 45 secs 120 secs
from 35 to 50 miles 22½ secs 60 secs
over 50 miles 15 secs 40 secs
(b) Non STD: Charge for 3 minutes:
(i) Full rate: up to 35 miles 1s. 3d. 1s. 6d.
from 35 to 50 2s. 3d. 2s. 6d.
from 50 to 75 miles 3s. 3d. 3s. 6d.
from 75 to 125 miles 3s. 9d. 4s. 0d.
from 125 miles 4s. 3d. 4s. 6d.
(ii) Cheap rate: up to 35 miles 1s. 0d. Unchanged
from 35 to 50 miles 1s. 6d.
from 50 to 75 miles 2s. 3d. 2s. 0d.
over 75 miles 2s. 6d. Unchanged
(a) from Great Britain, Channel Isles and Isle of Man
Charge for 3 minutes
(i) Full rate: up to 75 miles 5s. 6d. Unchanged
from 75 to 125 miles 6s. 0d. 6s. 6d.
from 125 to 200 miles 6s. 6d. Unchanged
over 200 miles 7s. 0d. 7s. 6d.
(ii) Cheap rate: up to 75 miles 3s. 9d. 4s. 0d.
over 75 miles 4s. 0d. Unchanged
(b) from Northern Ireland
Charge for 3 minutes:
(i) Full rate: up to 35 miles 1s. 3d. 1s. 6d.
from 35 to 50 miles 2s. 3d. 2s. 6d.
from 50 to 75 miles 3s. 3d. 3s. 6d.
over 75 miles 4s. 3d. 4s. 6d.
(ii) Cheap rate As in 4 (b) (ii) above
(a) Personal call fee (cheap rate period) 9d. 1s. 0d.
(b) Alarm call fee:
Calls booked from STD coinboxes 9d. 1s. 0d.
(c) Transfer fee for transferred charge calls when the person to whom the call fee is transferred inserts the money in a coinbox 3d. 6d.
(a) Rental (all types of coinbox) £1 per quarter £2 10s. per quarter
(b) Call charges:
(i) Local calls:
STD: charge unit 2¾d. 4d.
Time allowed for each charge unit:
Full rate 3 mins 6 mins
Cheap rate 6 mins 12 mins
Non STD: Charge for each call:
Business line 3½d. 3d.
Residential line 3½d. 2½d.
Present Revised
(ii) Trunk calls: Inland:
STD: Charge unit 2¾d. 4d.
Time allowed for each charge unit:
Full rate As in 4 (a) above
Cheap rate
Non STD: Charge for 3 minutes:
Full rate: up to 35 miles 1s. 2d. 1s. 0d.
from 35 to 50 miles 2s. 2d. 2s. 0d.
from 50 to 75 miles 3s. 2d. 3s. 0d.
from 75 to 125 miles 3s. 8d. 3s. 6d.
over 125 miles 4s. 2d. 4s. 0d.
Cheap rate: up to 35 mile 11d. 9d.
from 35 to 50 miles 1s. 5d. 1s. 3d.
from 50 to 75 miles 2s. 2d. 1s. 9d.
over 75 miles 2s. 5d. 2s. 3d.
(iii) Trunk calls: to Irish Republic
from Great Britain, Channel Isles and Isle of Man
Charge for 3 minutes:
Full rate: up to 75 miles 5s. 5d. 5s. 0d.
from 75 to 125 miles 5s. 11d. 6s. 0d.
from 125 to 200 miles 6s. 5d. 6s. 0d.
over 200 miles 6s. 11d. 7s. 0d.
Cheap rate: up to 75 mile 3s. 8d. 3s. 6d.
over 75 miles 3s. 11d. 3s. 6d.
from Northern Ireland
Charge for 3 minutes:
Full rate: up to 35 miles 1s. 2d. 1s. 0d.
from 35 to 50 miles 2s. 2d. 2s. 0d.
from 50 to 75 miles 3s. 2d. 3s. 0d.
over 75 miles 4s. 2d. 4s. 0d.
Cheap rate: up to 35 miles 11d. 9d.
from 35 to 50 miles 1s. 5d. 1s. 3d.
from 50 to 75 miles 2s. 2d. 1s. 9d.
over 75 miles 2s. 5d. 2s. 3d.
(iv) Foreign, radiophone and certain other calls 2d. per call in addition to the fee paid by a subscriber who does not rent a coinbox No additional fee
(a) Speeds up to 50 bauds (Tariff H):
Annual Rentals:
Present Revised
£ £
Up to 20 miles No change
Over 20 miles up to 21 miles 344 Over 20 miles up to 21 miles 340
Over 21 miles up to 22 miles 360 Over 21 miles up to 22 miles 350
And so by steps of 1 mile and £16 And so by steps of 1 mile and £10
Over 24 miles up to 25 miles 408 Over 24 miles up to 26 miles 380
Over 25 miles up to 30 miles 420 And so by steps of 2 miles and £10
Over 30 miles up to 35 miles 440 Over 30 miles up to 40 miles 410
And so by steps of 5 miles and £20 Over 40 miles up to 50 miles 420
Over 50 miles up to 60 miles 520 Over 50 miles up to 75 miles … 440
And so by steps of 10 miles and £20 And so by steps of 25 miles and £20
Over 150 miles up to 175 miles 750 Over 150 miles up to 200 miles 520
Over 175 miles up to 200 miles 800 And so by steps of 50 miles and £20
Over 200 miles up to 250 miles 860
Over 250 miles up to 300 miles 920 Over 250 miles up to 300 miles 560
Over 300 miles 1,000 Over 300 miles 600
(b) Speeds up to 100 bauds (Tariff J):
Annual Rentals. (An additional charge may be payable in certain circumstances for speeds above 75 bauds)
Up to 30 miles No change
Over 30 miles up to 35 miles 550 Over 30 miles up to 40 miles 530
Over 35 miles up to 40 miles 590 Over 40 miles up to 50 miles 570
Over 40 miles up to 45 miles 620 Over 50 miles up to 75 miles 610
Over 45 miles up to 50 miles 650
And so by steps of 10 miles and £30 And so by steps of 25 miles and £30
Over 140 miles up to 150 miles 950 Over 125 miles up to 150 miles 700
Over 150 miles up to 175 miles 1,000 And so by steps of 50 miles and £30
Over 175 miles up to 200 miles 1,060
Over 200 miles up to 250 miles 1,140
Over 250 miles up to 300 miles 1,220 Over 250 miles up to 300 miles 790
Over 300 miles 1,320 Over 300 miles 850
(c) Connection charges (Tariff H and J)—no change
(including services to the Irish Republic)
(new charges will take effect from 3rd October, 1966)
No change up to 1 lb. 8 oz. and then:
Present Revised
s. d. s. d.
Up to l lb. 10 oz 2 9 Over 1 lb. 8 oz. up to 2 lb. 3 6
12 oz. 3 0
14 oz. 3 3
2 lb. 3 6
Then for each additional 2 oz. add 3d. Each additional 1 lb. thereafter 2 0
Present Revised
(1) Ordinary Parcels (2) Local Parcels
s. d. s. d.
Not over 2 lb. 2 9 Not over 1½ lb. 2 6 As in (1) less 1s. 0d. at each step.
Not over 3 lb. 3 0 Not over 2 lb. 3 0
Not over 4 lb. 3 3
Not over 6 lb. 3 6 Not over 6 lb. 4 6
Not over 8 lb. 4 0
Not over 10 lb. 4 6 Not over 10 lb. 6 0
Not over 14 lb. 5 6 Not over 14 lb. 7 6
Not over 18 lb. 6 6 Not over 18 lb. 9 0
Not over 22 lb. 7 6 Not over 22 lb. 10 6
Note:The Local Parcel Delivery Area comprises all places which have in their postal address the same post town name as that of the office of posting.
11. REGISTRATION FEE (for letters and parcels)
Present Max. Compensation Revised Max. Compensation
s. d. £ s. d. £
1 9 20 3 0 100
1 10 40 3 3 200
continuing by ld. for each £20 compensation up to 3 6 300
3 4 400 3 9 400
Present Revised
6d. 9d.
for registration and recorded delivery services:
Present Revised
s. d.
6d. (a) Requested at time of posting 9
(b) Requested after time of posting 1 0
Present Revised
6d. 1s. 0d.
Trade Charge not exceeding Present Revised
£ s. d. s. d. s. d.
1 0 0 2 2 3 6
2 0 0 2 4
5 0 0 2 6
10 0 0 2 8
15 0 0 2 10 0
20 0 0 3 0
25 0 0 3 2
30 0 0 3 4 4
35 0 0 3 6
40 0 0 3 8
45 0 0
50 0 0
Present Revised
Single Packs Single Packs
Postcards 3½d. 3s. 1½d. for 11 4d. 3s. 0d. for 10
Postcards (reply paid) 7d. 6s. 3d. for 11 8d. 6s. 6d. for 10
Letter cards 5d. 3s. 2d. for 8 5d. 4s. 0d. for 10
A … 4¾" X 3¾" 5d. 3s. 2d. for 8 5d. 4s. 0d. for 10
B … 6⅜" X 4½" 5d. 3s. 2d. for 8 6d. 4s. 4d. for 10
Registered envelopes:
F … 5¼" X 3¼" 2s. 2½d. £1 6s. 6d. for 12 3s. 7d. £2 3s. 0d. for 12
G … 6⅛" X 3¾" 2s. 2½d. £1 6s. 6d. for 12 3s. 7d. £2 3s. 0d. for 12
H … 8" X 5" 2s. 3d. £1 7s. 0d. for 12 3s. 8d. £2 4s. 0d. for 12
K … 11½" X 6" 2s. 5½d. 14s. 9d. for 6 3s. 11d. £1 3s. 6d. for 6
Present Revised
Commission (percentage of face value) 10% 12½%
Minimum Charge 2d. 4d.
Minimum amount of stamps accepted at one time:
Spoiled stamps 1s. 0d. 2s. 6d.
Unused stamps £1 No change
III.—inland remittance services
(new charges will take effect from 3rd October, 1966)
Value Present Poundage Revised Poundage
1s. 0d. 2d. 3d.
1s. 6d. to £1 1s. 0d. 3d. 4d.
£2 to £5 6d. No change
Note: The 6d. order has been abolished.
(new charges will take effect from 3rd October, 1966)
19. LETTERS (excluding Commonwealth)
Present Revised
Not over 1 oz. 6d. 9d.
Each additional oz. 4d. 5d.
20. POSTCARDS (excluding Commonwealth) 4d. 5d.
(i) Posted singly—Not over 2 oz. 2½d. 4d.
Each additional 2 oz. 1½d. 2d.
(ii) Posted in bulk—First lb. 1s. 1d. 1s. 6d.
Each additional lb. 1s. 0d. 1s. 4d.
(less 5% rebate)
Note: PRINTED PAPERS REDUCED RATE. Present tariffs for single and bulk postings are unchanged.
Not over 2 oz. 5d. 7d.
Each additional 2 oz. 5d. 7d.
Not over 2 oz. 2½d. 4d.
Each additional 2 oz. 1½d. 2d.
Not over 8 oz. 1s. 0½d. 1s. 6d.
Not over 10 oz. 1s. 0½d. 1s. 8d.
Each additional 2 oz. 2½d. 4d.
Not over 10 oz. (minimum charge) 1s. 8d. 2s. 11d.
Each additional 2 oz. 4d. 7d.
(new charges will take effect from 3rd October, 1966)
Present Revised
Letters (excluding Malta and Gibraltar):
Not over 1 oz. 6d. 9d.
Each additional oz. 4d. 5d.
Postcards (excluding Malta and Gibraltar) 4d. 5d.
Zone A Zone B Zone C
Present Revised Present Revised Present Revised
d. s. d. s. d. s. d. s. d. s. d.
Letters, per ½ oz. 9 1 0 1 3 1 6 1 6 1 9
Air Letter Forms 6 9 6 9 6 9
Postcards 5 6 8 9 9 10
Printed Papers per ½ oz. 5 6 6 7 7 8
Small Packets
Minimum charge:
present 1s. 0½d.
proposed 1s. 6d.
Insured Boxes
Minimum charge:
present 1s. 8d.
proposed 2s. 11d.
Phonopost Packets, per ½ oz. 6 7 7 8 8 9
(new charges will take effect from 1st January, 1967)
28. The rates to most destinations will be increased. Details will be published separately.
(new charges will take effect from 3rd October, 1966)
Present Revised
(a) Requested at the time of posting 6d. 9d.
(b) Requested after the time of posting 6d. 1s. 0d.
30. INQUIRY FEE 6d. 1s. 0d.
Letters 1s. 0d. 1s. 6d.
Parcels (a) on which custom charges are 10s. or less 1s. 0d. 2s. 6d.
(b) on which custom charges are over 10s. 2s. 0d. 2s. 6d.
Letters and Parcels 1s. 0d. 2s. 0d.
Fees for miscellaneous services:—
Number of packets Special search to provide expedited customs examination Re-addressing by PO at addressee's request Provision of facilities for inspection of packet by addressee* Provision of facilities for re-addressing by addressee
Present Revised Present Revised Revised Present Revised
£ s. £ s. £ s. £ s. £ s. £ s. £ s.
1 5 10 5 10 10 2 6 5
2 7 14 7 14 14 3 6 7
3 9 18 9 18 18 4 6 9
4 11 1 2 11 1 2 1 2 5 6 11
5 12 1 4 12 1 4 1 4 6 0 12
6–10 14 1 8 14 1 8 1 8 7 0 14
11–20 18 1 16 18 1 16 1 16 9 0 18
21–30 1 2 2 4 1 2 2 4 2 4 11 0 1 2
31–40 1 6 2 12 1 6 2 12 2 12 13 0 1 6
41–50 1 10 3 0 1 10 3 0 3 0 15 0 1 10
Each additional 25 or part thereof 5 10 5 10 10 2 6 5
* New charge.
Present Revised
34. REGISTRATION FEE 1s. 9d. 3s. 0d.
For letters, boxes and parcels not over £24 compensation 1s. 11d. 3s. 2d.
for each additional £12 compensation (up to the limit of £400 compensation) 2d. 2d.

4.8 p.m.


My Lords, it is the duty of all of us, in all Parties, to support the Government in measures which will remedy what is obviously a serious situation; and in so far as these measures which have been announced will achieve that object, they will have the support of noble Lords who sit on these Benches. But, my Lords, it is always difficult for those of us in Opposition, and not in full possession of all the facts, to know exactly how bad the situation is. This is a very long and complicated Statement, of which we have had no preview at all. It will need very careful examination before any of us who sit on this side of the House can say whether or not the proposals are right: whether they are enough or too much; and, in particular, whether the control of Government expenditure at home has been sufficient. But one thing is clear, and I must make it plain at this stage: in the view of those of us who sit on this side of the House this crisis is entirely of the Government's making.



It is a question of confidence—the confidence of those abroad in the ability and determination of the Government to take firm measures to control the economy.

My Lords, accentuated by the bungling of the last few weeks, the advance notice that serious action was to be taken has only had the effect of increasing the uncertainty; and, indeed, the events of the last few days—the increasing weakness of sterling—have probably meant that the measures taken have had to be more serious than they would have needed to be if the Government had not been taken completely unawares and taken a week to decide what they were going to do. The people of this country will suffer as a result. So much for all the Election promises of so short a time ago!



And so much for the incredible speech made by the Prime Minister at the Australia Club last week! Six Budgets, I think it is, in under two years of Socialist government. I do not believe that they have yet tackled the underlying difficulties in our economy, and I hope that we shall have an opportunity next week of having a debate on that.

There are many questions one could ask on the Statement that has just been read by the noble Earl the Leader of the House, but I will confine myself to two. First, may I ask him whether it is the intention of the Government to continue with the nationalisation of steel? This is a measure relevant to our situation only in so far as it is inflationary. If it is their intention to continue with this measure then I must tell them that this will not be taken by our creditors overseas as very encouraging evidence of a return to a sensible economic policy.



Secondly, may I ask the noble Earl whether, when he said that it was the intention of the Government to save £100 million on overseas defence expenditure, this is in addition to the £100 million which they have already taken into account in the Defence White Paper; and, if so, what additional cuts do they intend?


My Lords, I should like to thank the noble Earl for repeating this long and very important Statement made in another place by the Prime Minister. May I say straight away that my noble friends and I feel that the Government are at fault in not having tackled at an earlier date the very serious problems before this country. Secondly, I would say that, in view of the many important considerations in this Statement, I do not feel in a position at this moment to criticise them individually. We shall need further time to consider the whole of the Government's proposals, and we shall look forward to a debate, which I understand is to be next week, when we can go into them in more detail.

There is just one point, which I missed in the Statement, but which we think is very important. Is the only Government saving to be on the lines suggested by the noble Earl; that is, in defence and aid?—because to our mind there are many other fields where Government saving should come into effect. It is not fair to impose so much on the private sector and leave the nationalised industries and the Government's own expenditure scot-free. I have particularly in mind the expenditure on Embassies abroad; for the Embassies, the overseas services, cost us as much as the whole income of the Indian Empire before the war. I know that the difference in the value of money is considerable, but it is not nearly so considerable as that. I feel that to place the whole burden on the private sector and the underdeveloped countries, without any contribution from the Government in fields such as I have mentioned, throws a completely false light on the whole picture.


My Lords, perhaps I may first answer the noble Lord, Lord Ogmore. There will be some reduction in the expenses of our representation abroad, but I should not like to suggest that, amid these vast sums, it will loom very large. I thought I did explain the situation, but I realise that in a Statement which took me, reading rather fast, half an hour to deliver probably everything would not be readily taken in. In fact there are, as I explained, considerable reductions in the public sector, or postponements in the public investment programme, whether we are talking of public service programmes or the programmes of the nationalised industries, so it would not be right to conclude that nothing is being done about those topics to which the noble Lord referred.

The noble Lord, Lord Carrington, asked me two specific questions: first, whether we intended to proceed with the nationalisation of steel. The answer to that, and it will come as no surprise to him, is Yes. Indeed, I assume that the noble Lord would think much worse of us if, because there was a run on the pound, we abandoned something which we believe to be of very great long-term value to the country. I can hardly believe the noble Lord would seriously argue that in our long-term social and economic programmes we have got to be dictated to by foreign creditors. I can hardly believe he would seriously suggest that. He shakes his head, so I am in confusion as to where he stands.


I am shaking my head at the noble Earl's answer.


One need not agree with me, but I would hasten to go on to say that I thought his own remarks represented a confusion of mind which we seldom find in the noble Lord, who is usually a model of clarity. Members are laughing when I say that we find confusion in the noble Lord; but certainly we did to-day. At one moment he was saying that the Government have produced this crisis and that it is all due to some lack of confidence; at another moment he went on to refer to deep-seated problems. His Government were in power for thirteen years, and there were during that time very deep-seated problems which they did nothing to tackle. They handed over the greatest deficit in history. So if the noble Lord wishes to concentrate on Party politics he is not the only one capable of making observations of this kind. I should hope that when we come to debate these matters in a calm atmosphere, the noble Lord will climb back on to that pedestal of sound and dispassionate judgment, on which we always admire his performances in this House.


Can the noble Earl answer my second question?


I was led astray by the noble Lord shaking his head; that put me off at one critical point. The noble Lord asked me whether the £100 million to be saved on overseas Government expenditure would be in addition to the figures mentioned in the Defence White Paper. I should point out that this £100 million is not all military expenditure; it includes some other items. And I should also point out that it is "at least" £100 million. That is explained in the Statement. If I am asked whether this is an addition to what has already been announced, the answer is, Yes: that is quite definitely so. If he asks me: "Does this mean abandoning some commitments, or breaking some promises made?", the answer is definitely, No: it is not a question of abandoning commitments. Leaving out one or two aspects, including the whole question of Germany, which is very important, but sticking to the areas East of Suez, the economies would come from speeding up the steps envisaged in the Defence Review: the steps indicated in that Review will be taken earlier. In that way the economies will come about in 1967–68, instead of a later year. I hope that makes it plain.


May I ask the noble Earl one question? He made a very long Statement, and I may not have caught one of his observations towards the end. He said that certain things would come into force, I think at midnight to-night. He also said that the Government were going to insist on the full operation of liner trains in the way they have always advocated. Did he say when that was going to happen?


I did not actually say, but the noble Lord will soon find out.


How soon? The statement about liner trains is almost identical with one made about two years ago, so it would be rather interesting to know, for example, whether these liner trains are going to be operated fully before Parliament adjourns.


I realise that the noble Lord enjoys his own form of dialectics, but the precise date of the coming into operation of liner trains is not one of the leading questions. I can assure him that it will not be very long.


My Lords, as regards cut-backs in public expenditure, I think the noble Earl said that in the year 1967–68 there would be a postponement of projects costing something like £150 million. Would this include large cut-backs in the road programme, or is that to be left? The other cuts in the public sector about which he said nothing were in public services and in Whitehall. Are there to be substantial cuts there?


I do not think I said anything about cuts there. If the noble Lord has any ideas, I will gladly discuss them with him, but to the best of my belief I did not make any statement about Whitehall. The noble Lord asked about the road programme. Details of these postponements will emerge, but certainly some attention will be paid, as he realises, to the road programme.


My Lords, I have the impression that this large collection of severe restrictionary measures is going to hurt a great many people but that it will not be sufficient by itself, unless the public are willing to give a measure of confidence to the Government and show the restraint for which the noble Earl called. Does the noble Earl really think that the Government, acting as they do in one way and speaking in another, will mend their ways and give us a consistent lead? I wish as much as any other noble Lord that we could get out of these difficulties, but we cannot when we have a Government that give the impression they do not know where they want to go. Therefore, I ask the noble Earl to press upon his friends in the Government that they be consistent and tell us what kind of England they want to have—not one day suggesting it is Socialist, the next day capitalist—muddling the whole thing up. We do not know who govern us or where they want to go.


My Lords, the noble Viscount will forgive me for not following him to-day very far along that line. He will recall that there were at least six Chancellors of the Exchequer during the period of his Government—


That is not an answer.


My Lords, I am only telling the noble Viscount that there were, as the noble Lord, Lord Carrington, said, deep-seated problems that he himself and his noble friends were not able to solve. Simply to turn to the other side and say, "Why do you not give us a lead?" is of no help to anyone.


My Lords, as I understand it the noble Earl, or the Prime Minister through the noble Earl, said that the seamen's strike was materially responsible for the present situation. I did not notice in the Statement any proposal at all for dealing with that type of situation, or for preventing such a situation from arising again. Have the Government any ideas upon that subject?


My Lords, I do not think you can pick out one particular strike and use this as an argument for dealing in some revolutionary way with the whole trade union movement. The Government have come forward with a Prices and Incomes Bill, and a new philosophy, for that matter, which should mark a new era in industrial relations in this country, and, as the noble Marquess will have realised, they are calling for a voluntary freeze both in wages and in other forms of income during the present year. No one can accuse the Government of lack of initiative. The noble Marquess may say that these measures have not yet worked, but I feel sure they will work if we can get full co-operation, even fuller co-operation than we have had, from noble Lords opposite.


My Lords, the noble Earl has referred to foreign creditors. Is not the largest foreign creditor the International Monetary Fund, an organ of the United Nations? Could the noble Earl say whether the Government are acting on the advice of the International Monetary Fund in these measures, or how far the measures that they have suggested are in accordance with the views of the International Monetary Fund?


My Lords, I am sure we are in close touch with the views of the International Monetary Fund; but I do not think any Government in this country would reach a point where they would simply go to some international power, however exalted and however strong in their accredited position, and ask them what exactly the Government of this country ought to do.


My Lords, is it not the function of the I.M.F. to place their experience at the disposal of countries who have got into the sort of trouble we are in?


My Lords, I have no doubt whatever that that experience is being fully availed of.


My Lords, the noble Earl has referred to cuts in Defence expenditure. Can he tell us whether it is the Government's intention to proceed with the great programme of the purchase of military aircraft from the United States?


My Lords, on that subject I have nothing further to add to what has been said before.