POST OFFICE BILL

HL Deb 12 June 1969 vol 302 cc789-828

3.58 p.m.

LORD BOWLES

My Lords, I beg to move that this Bill be now read a second time. The main purpose of the Bill is to transfer what I believe is the biggest business in the country from having been a Department of State for over 400 years to a public corporation. This corporation will be known as the Post Office and will have a staff of over 400,000, as well as 23,000 sub-postmasters; a capital investment programme of £2,000 million in five years; a total turnover of about £9,000 million; 10,000 buildings and 25,000 retail counters. I think noble Lords will agree that I have not exaggerated in my claim that this is the largest business in the country.

While I was considering my speech during the Recess I happened to come across an article by Alistair Cooke in the Guardian dated May 29, and perhaps I may quote one or two of his sentences. He is talking, of course, about the United States Post Office. He said: A tiny crack of light appeared to-day at the end of the dark and tortuous tunnel which 82 billion pieces of U.S. mail pass through every year and wind up some times at the proper address. President Nixon has asked Congress to abolish the Post Office as a Government agency and set it up as a public corporation run by a board of nine directors … What has long been plain to the public and only reluctantly conceded by Congress, is that the Post Office is the most decrepit of public services … He goes on to say, There is only one postal delivery a day in this country, and none on Saturdays and Sundays. The misadventures and misdirection of ordinary mail would provide enough agonising material for a comic strip series. The outlook for early legislation along the lines the President has laid down is dim. But sooner or later, the Administration believes, the operating deficit of a billion dollars a year"— that is, nearly £400 million a year— and the consequent further decay of the post offices and their laborious handling of the mail, will force a change. I should like very much to congratulate my noble friend Lord Hall on becoming Chairman-designate of the new Post Office. According to the Press he is making a considerable financial sacrifice, but against that is this superb challenge. We all wish him good luck. Over all the years up to 1933, this great business organisation was treated as a Revenue Department of the Crown. This meant that any surplus of income over expenditure was automatically absorbed into the central revenue and used in the same way as the proceeds of taxation. This financial status for Post Office services was, of course, never really appropriate. And indeed this was recognised as long ago as 1912, when separate commercial accounts balancing income against expenditure were published for the first time. But the special case of the Post Office, as in truth a business on a vast scale, was fully accepted for the first time by the Committee of Inquiry into the Post Office in 1932. As a result of their Report, a limited contribution for the Exchequer was fixed, beyond which any net savings were at the disposal of the Post Office.

These arrangements were suspended during the war, but in 1955 the Post Office was encouraged to conduct its business as a commercial enterprise. Since then, the commercial accounts have governed the Post Office financial policy. Nevertheless, no radical change was made at that stage in the Parliamentary accounting procedures.

The last step in the history of the status of the Post Office so far was taken in 1961. In the light of their experience of the 1955 arrangements, the then Government decided that they should be carried a step further and that the commercial character of the Post Office should be recognised by Parliament in statutory terms. The new arrangements were embodied in the Post Office Act 1961. Their effect, as your Lordships will know, is in broad terms that from the financial point of view the Post Office is in much the same position as the recognised nationalised industries. But constitutionally it is still a Government Department with a Minister of the Crown at its head, who answers to Parliament for its day to day operation. As soon as they came to power in 1964, the present Government set in hand a fundamental review of the situation. Such a review we felt was essential

As I have said, the principal object of the Bill is to change the methods and structure of the Post Office. It is most important that we should all recognise the influence which the terms of the Bill itself will have on the success with which this result is produced. We shall be making a heavy demand on Post Office managers in asking them to accustom themselves overnight, as it were, to a brand-new world and fully to exploit its potential. Yet this is what they will have to do if the new undertaking is to succeed. We must never forget that it is to this Bill, if it becomes an Act, that they will look as their primary guide to their new role. The chances that they will respond as we all hope to the change depend very largely on the sense of independence and of implicit public trust which the Bill will give them.

Her Majesty's Government have given very careful thought indeed to the implications of these aspects of the change. They have weighed them most carefully against the need for independent management which I have emphasised so far. Your Lordships will have noted various provisions in the Bill which bear upon these very points. They are the result of considerable heart-searching to find what we believe to be the right balance between the freedom which the management of the new Post Office will share with the existing nationalised industries, and these rather special features of its responsibilities.

I have already dealt with Part I of the Bill, which is concerned solely with the abolition of my right honourable friend's present office. Part II provides for Her Majesty to appoint his successor. He will be known as the Minister of Posts and Telecommunications and provision is made for him to be supported by a Parliamentary Secretary in the usual way. This Part of the Bill also provides for the transfer to the new Minister of a number of the Postmaster General's present functions in the wireless telegraphy and broadcasting fields. There will, of course, be no change in the constitutional position as regards the arrangements for the regulation of wireless telegraphy and the oversight of the broadcasting authorities. In addition, the new Ministry will have an important role as the successor to the Post Office in the field of international affairs concerned with posts and telecommunications.

The Post Office is given power to manufacture for its own consumption by Clause 7(2)(a), to acquire by Clause 7(2)(f), or to promote research and development work by Clause 7(2)(k) and (l). A second category of power is concerned with minor ancillary activities, such as Clause 7(2)(d) which authorises the provision of consultancy services to other countries. This is a worthwhile activity which the Post Office is doing on an increasing scale. Finally, Clause 7(2) provides for the Post Office to turn any spare resources which it may have to account. I should emphasise to your Lordships that it is not the intention of Her Majesty's Government that the Post Office should engage in its own right, and separate from its main activities, in a whole range of activities which take it well out of the spheres referred to in Clause 7(1). But like other nationalised industries the Post Office must be able to get an adequate return on the money invested.

Clause 11 incorporates the Minister's principal powers of control over the Post Office. It is these powers, of course, which provide the statutory basis for his sponsorship of the new authority. The powers broadly reproduce those possessed by the sponsoring Ministers of other industries. Clause 12 of the Bill incorporates powers of direction for the Minister, which provide the safeguard for the Post Office's key role in giving services for the Government, like payment of pensions at post offices. Your Lordships should know that the future relationship between the Post Office and the Departments which employ it will be, in principle, a business one. It is intended that the payments which the Post Office receives should include a margin above cost designed to make an appropriate contribution to the current financial obligations of the postal service. But the Government felt it essential that there should be a safeguard against the possibility, however unlikely, of a dispute between the Post Office and the Government about these services.

Clause 13 provides that before the Post Office undertakes manufacture for its own use or for use by others in connection with its service on a scale substantially greater than that which it will inherit on vesting day, it must consult with the Minister. If the Post Office has it in mind to go into manufacture for supply to other people for other purposes, it is required to seek the approval of the Minister before it does so.

The Bill also provides for the establishment, functioning, rights and duties of the Post Office Users' National Council and Users' Country Councils for Scotland, Wales and Monmouthshire and Northern Ireland. These consultative councils will be wholly independent of the Post Office. Unlike those of some of the existing industries, they will not be dependent on it for secretarial and other services, but will get these from the Minister. The Users' National Council shall have direct access to the Minister on any matter which it wishes to take up to do with Post Office services. Clause 15 gives the Users' National Council important statutory rights to be consulted in advance about any major Post Office proposals affecting any of the main services.

Clause 28 will confer power on the new authority to make schemes for determining the charges and conditions for its services. The purpose of these powers is to enable legal effect to be given to the charges and conditions. Your Lord-ships will naturally be interested, however, in the wider question of the freedom of the Post Office to fix its charges from the policy point of view. Broadly, it will be in the same position in this respect as the other nationalised industries. Your Lordships will be aware of the arrangements for the charges of nationalised industries referred to in paragraph 26 of the White Paper, Nationalised Industries—A Review of Economic and Financial Objectives (Cmnd. 3437). In particular, the Government decision that all major price increases in the nationalised industries should be referred to the National Board for Prices and Incomes will, of course, apply to the Post Office. In addition, Clause 15 of the Bill will oblige the Post Office to consult the National Users' Council in advance about major tariff proposals affecting the main services.

I should now like to refer to the staff of the Post Office. When all the technological possibilities are realised, the Post Office will still be an organisation of people. The service the Post Office gives will depend ultimately on its staff. There are many matters affecting them which are the subject of discussions with the staff associations, and until these are decided there are bound to be uncertainties and possible anxieties about the changeover. I do not think that it is appropriate for me to go into detail on these points because of the discussions going on, except to say that as your Lordships will be aware the Government gave certain assurances which are set out in paragraph 50 of the White Paper, Reorganisation of the Post Office. These assurances will be honoured.

As regards the position of Parliament, the constitution and responsibilities of the Corporation will be embodied in legislation. Its accountability to Parliament will be different from that at present. There will no longer be a Minister answerable to Parliament for its day-to-day activities; but both Houses will have the opportunity to consider the Report and Accounts of the Corporation when these are laid before Parliament every year. The work of the Corporation will be subject to scrutiny by Committees of the House of Commons. Increases in the total amount it may borrow will need to be approved by the House of Commons.

The Minister responsible for the Government's functions in relation to the Corporation will be answerable to Parliament for the discharge of these functions and for the exercise of his powers.

In conclusion, I should like to quote the final paragraph of the White Paper, which says: The services which the new Corporation will take over from the Post Office have an exciting future. The technologies on which they draw are advancing at unprecedented speed and economic and social progress will continually create new openings for their exploitation. The changes set out in this White Paper are being made to meet this challenge. They will provide a context in which the spirit of service which has inspired the Post Office in the past can be carried forward successfully into the future. On behalf of the whole House, I wish my noble friend Lord Hall, the Chairman, other members of the Board and the staff the very best of luck in the future. I beg to move that this Bill be now read a second time.

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

4.13 p.m.

LORD NEWTON

My Lords, it is a year and a day since the Second Reading in your Lordships' House of the Transport Bill. That Bill was, I believe, the longest Bill in the history of Parliament. The Bill before us this afternoon is even longer, which is another record. I suppose I might therefore be justified in making the longest speech I have ever made in my life; but your Lordships will be relieved to know that I am not going to do that. I shall do my best to follow the admirable example of the noble Lord, Lord Bowles—and I am sure we are all grateful to him for telling us so much about the Bill in such a short time. I do not know whether I can be quite as quick as him, but I shall do my best.

Like the noble Lord, Lord Bowles, I want to begin by offering our colleague, the noble Viscount, Lord Hall, my congratulations and best wishes on his appointment as first Chairman of the Corporation. The noble Viscount is (dare I mention it?) an hereditary Peer. It is, I am sure, always a pleasure to your Lordships when one of our number is appointed by a Government to a highly important post, and all the more so when he is already a Member of the House and not just the recipient of a peerage which, so to speak, came with the job. That said, I must make a mild protest that the name of the Chairman should have been announced even before the Bill received its First Reading in this House, let alone its Second Reading. I can, of course, see the practical advantage of having the Chairman-designate unofficially in the saddle some time before vesting day, but that does not seem to me to excuse discourtesy to this House, and it is discourteous to take it for granted that it is a foregone conclusion that this House is going to pass the Bill. I also think it is rather extraordinary that the Government should now be treating the House as a rubber stamp, in view of their attitude and behaviour towards your Lordships' House during the last year, since the disagreement over the Rhodesia Order.

However, as I say, we welcome the appointment of the noble Viscount, and wish him luck. He will carry heavy responsibilities and will wield colossal power. I strongly suspect that if the Bill becomes law in its present form he will be the most powerful single individual in the country, more able to exert his personal will over the lives of all of us than even the Prime Minister himself. He and his board will be as god-like, it seems to me, in their potentiality as Zeus and the other ancient deities of Mount Olympus. Indeed, so Zeus-like will the noble Viscount be that if he thought it a good method of telecommunicating he could manufacture and hurl thunderbolts and, so far as I can see, nobody could stop him, unless, I suppose, he committed some damage to life or property. If your Lordships think I am exaggerating absurdly in saying this, please reserve judgment until I have finished speaking.

As I see it, at any rate, the fundamental objectives of the Bill are: first, to transfer what has up to now been mainly a service industry from a Government Department to a national Corporation—and the noble Lord, Lord Bowles, made that point himself; secondly, to create the lightest possible monopoly, much tighter than the General Post Office at present enjoys; and, thirdly, to permit the Corporation to diversify its activities in virtually any way it chose—or so it appears to me, whatever the noble Lord, Lord Bowles, may have said about the intentions of the Government. As I shall go on to explain, we on this side are apprehensive about the second and third objectives, but we support the first in principle.

I think that most people now agree that the time has come when the Post Office should be run on more commercially businesslike lines—and that is one way of saying that Ministers, who are often and inevitably swayed by political considerations, should cease to be responsible for day-to-day managerial decisions. But, my Lords, when you create a gigantic State monopoly such as this, there are grave risks in not keeping adequate Ministerial control, and that is why I and some of my noble friends are not really happy about giving one Corporation responsibility for both telecommunications and posts.

The telecommunications industry is a growth industry with almost unlimited scope for profitable development, but that is not true of the postal service—or so it seems to me, at any rate. There is, therefore, the danger of hidden cross-subsidisation of the post by telecommunications, which I think would be the worst possible solution. I do not want to be unkind, so I shall put it mildly and say that from time to time the Post Office provides opportunities for criticism of the postal service—and I am thinking particularly of its inept public relations handling of the two-tier letter and the disingenuous attempt, initially, at any rate, to persuade the public that the two-tier system was really a boon and a blessing because it offered the opportunity for individual choice. Nevertheless, I agree with those who take the view that our postal service is probably the best in the world. I only hope that it is going to remain so. One reason why I think this has been the case in the past is that the labour content is so high.

I am sure that the postal service will be the Corporation's biggest challenge. If the Corporation can improve, or at least maintain, the present standards, and do so profitably without imposing unreasonably high charges, it will deserve the thanks of each and all of us. If it cannot do that it will be faced with four possible courses, all of them undesirable: subsidising the postal service by making unduly high profits on its other activities; perpetual borrowing from the Minister and the banks; putting up postal charges to unreasonable levels, or lowering the standards of the service. I do not want, any more than anyone else does, to see the standards of the postal service lowered. I recognise that in years to come, as wage costs rise, a subsidy may be necessary, although I hope not. But if it is it should be a perfectly open subsidy from the Exchequer. There is an element of social service in the postal service and it is easier to make a case for subsidising it than one for subsidising uneconomic railway lines, since rail is not the only means of travel open to the public.

I come now to the second fundamental objective of the Bill, which is to create the tightest possible monopoly in the field of communications. It is the Post-master General's frankly admitted intention that the monopoly should be 100 per cent. complete. Thus the Corporation will, as I see it, be in a position to define and administer its own monoply. It will anticipate all inventions in the field of communications and monopolise them from birth. Mr. Stonehouse explained in a Standing Committee of the other place that he wishes possible technical developments to be caught within the monopoly before they are even in-vented. To quote his own words: The monopoly is the monopoly is the monopoly. That is the whole point. We say there must be a monopoly. If there is a monopoly, there is a monopoly—that is all there is to it. I do not know how your Lordships regard this; but I find it all rather frightening. I will try to explain why. So far as other national corporations are concerned, from the point of view of the customer there is at least some element of competition and choice. If one travels abroad one does not have to fly by B.E.A. or B.O.A.C.: one can go by boat, by rail, by car, or even by bicycle. If one travels at home, one does not have to use the services of British Rail. If one is dissatisfied with the quality or the price of the coal one buys from the National Coal Board one can burn oil, gas or electricity. But if one wants to communicate by letter or telephone one has to use the Post Office. There is no competition, no choice. The customer has to "like it or lump it".

It is true that the Post Office has always enjoyed a position of monopoly. What is new is that the Post Office is to cease to be a Government Department, so that its customers will no longer have the very real protection against abuse of monopolistic powers. The Postmaster General has been the head of the industry, responsible and accountable to Parliament for every decision and every activity, down to the smallest detail of day-to-day administration. This protection is now to go, under the Bill. Members of the other place will no longer be able to question the Government about the grievances of their constituents. It is not for me to comment on the rights and privileges of another place; but the proceedings on this Bill in the other place clearly indicated the anxiety of members of all Parties there; and I cannot say that I am surprised that this should be so.

What safeguards then are there to be? What protection will there be against abuse by the Corporation of its unrivalled powers or against its failure to carry out the duties expected of it? The answer, as I see it, is pretty little. I am aware of the elaborate machinery that is to be set up, the machinery of the users' councils. But so far as I can see they will be purely consultative bodies, and quite toothless if their views are ignored.

Take Clause 9 of the Bill, which purports to define the general duty of the Post Office. Subsection (1) says: It shall be the duty of the Post Office (consistently with any directions given to it under the following provisions of this Part of this Act) so to exercise its powers as to meet the social, industrial and commercial needs of the British Islands in regard to matters that are subserved by those powers and, in particular, to provide throughout those Islands (save in so far as the provision thereof is, in its opinion, impracticable or not reasonably practicable) such services for the conveyance of letters and such telephone services as satisfy all reasonable demands for them. Note the words of the saving—because they seem to me to make this subsection virtually useless from the point of view of protecting the public. I will read the saving again. The words in brackets are: … (save in so far as the provision thereof is, in its opinion, impracticable or not reasonably practical) … The words used are "in its opinion"—not the opinion of the Minister, not the opinion of Parliament, not the opinion of the Users' Councils, but the Corporation's own opinion.

Furthermore, let us look at the ominous words in subsection (4) of the same clause: Nothing in this section shall be construed as imposing upon the Post Office, either directly or indirectly, any form of duty or liability enforceable by proceedings before any court. Even this amount of immunity granted to the Corporation is not considered to be sufficient; for later on in the Bill we have Clause 29 which confers upon the Corporation a large degree of immunity from liability at law enjoyed by a Department of the Crown.

My Lords, since the courts cannot require this gigantic monopoly to fulfil the duties or honour the liabilities laid upon it in Clause 9, who can? The theoretical answer, I suppose, is the Minister—but only to the limited extent to which I will come in a moment. The Minister may give limited directions, and the Bill says that the Post Office shall comply with his directions. But the Bill does not appear to me to say (I am open to correction on this, and I hope that I am wrong) what the Minister can do if the Corporation does not comply with his directions. Under Paragraph 5 of Schedule 1, he can sack individual members of the board for specified reasons. But I do not believe that that paragraph in Schedule 1 covers refusal of the board to comply with his directions. I would ask the noble Lord, Lord Beswick, who is to reply, whether he will be good enough to tell us exactly what action under the Bill as drafted the Government can take in the case of non-compliance by the board.

Please do not think that this is just a frivolous debating question asked by a fractious Opposition: because here Parliament is being invited to create the largest and most carefully entrenched monopoly that this country has ever known, and I do not think it is good enough to be told by the Government that reasonable people—and reasonable people will be appointed to the board—behave reasonably. Reasonableness is a matter of opinion, and a man's opinion of what is reasonable is often determined by the calculation of what the consequences to him may be if he is unreasonable. It is not inconceivable that the Post Office Corporation, in its impregnable tower, may consider a Ministerial direction to be unreasonable. What then, I am asking the Government, would happen?

Whether or not Ministerial directions are in fact enforceable under the Bill, to see actually how limited is the power of Ministerial direction, and therefore how limited is the power of Parliament, one has to study Clause 11. Subsections (1) and (2) of that clause say: (1) The Minister may, after consultation with the Post Office, give to it such directions of a general character as to the exercise by it of its powers as appear to the Minister to be requisite in the national interest. (2) If it appears to the Minister that there is a defect in the general plans or arrangements of the Post Office for exercising any of its powers, he may, after consultation with it, give it directions of a general character for remedying the defect. I ask your Lordships to note the careful use of the word "general" which I take it to mean that the Minister will not be able to issue directions about matters of day-to-day management.

Suppose, my Lords, that the Post Office was to decide—and for the illustration of this argument, I am going to take a fairly extreme example—that it was no longer "practicable" (that is the word in Clause 9) to deliver second-class mail except on Tuesdays and Thursdays; and that the minimum rate for first-class mail would go up to 9d. Presumably there would be a considerable outcry both inside and outside Parliament, but what could the Minister do? Would he have to shrug his shoulders and say that it was none of his business, or would he be able to issue a direction? I hope again that the noble Lord, Lord Beswick, will give us the answer to that question in his reply to the debate.

Before I leave the subject of monopoly, I must mention two other points. The first is the proposed treatment of the relay services. As your Lordships will know, relay services are the means of providing reception of radio and television programmes without the use of individual aerials. They are not broadcasting systems, the signals being piped by vires. Since the 1920s these services have been provided by commercial companies under licence from the Postmaster General. However, it Is proposed in the Bill that when the current licences expire in 1976 the licensing authority shall be the Post Office from whose decisions there shall be no appeal whatsoever. By then the Post Office will be in substantial competition with the relay companies and yet the Corporation is to be judge and jury in its own cause. The Postmaster General admits this, indeed he revels in it. This may be the milk of Socialism pure and un-defiled, but to my mind it is a gross breach of natural justice and we shall have to return to it at a later stage in the proceeding on this Bill.

Secondly, my Lords, there is the question of optical broadcasting, a system of broadcasting by means of light wives instead of electromagnetic waves. It has been invented by Mr. David Williams, of Leicester University. It could become of world-wide importance, and we could be the leading country in this field. Mr. Williams wants to facilitate his research and develop his own invention by operating his own broadcasting station; but under the provisions of the Bill optical broadcasting will come within the Post Office monopoly and Mr. Williams's proposed station will be put out of business. This seems to me to be quite monstrous and one can hardly credit it happening anywhere this side of the Iron Curtain. The third fundamental objective of this Bill, as I see it, is to permit the Post Office to diversify its activities. At present the Post Office has eight small factories. They are mainly devoted to repair work although they are, I understand, increasingly extending into the field of manufacture.

Clause 7 empowers these factories to expand to any extent and indeed to manufacture anything, even sweets for example. At any rate that is my reading of the clause. I may be wrong—I understood the noble Lord, Lord Bowles, to say that it is not the Government's intention that they should do that. But what matters is not what the Government intend—they have precious little power as I have already indicated—but what the Bill as written empowers the Post Office to do. The powers that I have mentioned were originally restricted, when the Bill received a Second Reading in another place, by the then Clause 13, which did not permit any significant expansion of present manufacturing activities or any entry into new fields without a particular authorisation by the Minister. But later, under considerable pressure from his own supporters in another place, the Postmaster General introduced the present Clause 13 which, so far as I can see, merely requires the Post Office to consult the Minister before extending its manufacturing activities.

I do not need to emphasise the difference between consultation and obtaining authority, but if I am wrong about this, and the Post Office will still need the authority of the Minister before branching out in this way, I should be very glad to learn from the noble Lord, Lord Beswick, precisely under what clause and subsection the necessity still to require the authority of the Minister is to be found. Meanwhile, naturally many firms fear that contracts on which they are largely dependent may be abruptly ended, and others fear that competition from Post Office factories might be unfair since there would be no guarantee that their activities would not be subsidised. So this is another matter to which we shall have to return later.

Meanwhile, may I ask the noble Lord, Lord Beswick, this question, which is related in a way, and of which I have given him notice. On May 15, during Question Time in another place, the Postmaster General stated that he was having talks with manufacturers about the direct supply of equipment to consumers. I should be very grateful if the noble Lord could clarify that statement of the Postmaster General.

I am afraid that I have spoken for a little longer than the noble Lord, Lord Bowles. I have sought to confine myself to what seemed to me, at any rate, to be the major features of this long and important Bill and indeed I would think the more controversial ones. Unlike the Transport Bill, which was similar in certain ways, this Bill was not guillotined in another place. On the contrary, it was very fully discussed, and I do not think, therefore, that so far as the Opposition is concerned a long Committee stage will be needed. But my noble friends and I will seek to move some Amendments in order to try to improve the Bill.

4.39 p.m.

LORD BEAUMONT OF WHITLEY

My Lords, I find it difficult to work up much enthusiasm for this very long Bill. I did not find it very exciting when it was first published, and the perusing of the long proceedings in another place has rather taken the edge off any appetite for it that I originally had. In fact, possibly the most one can say in favour of it is that, unlike some legislation, it will probably not do much positive harm. In spite of the admirably concise and informative speech of the noble Lord, Lord Bowles, I am still unable to find much that may be said in favour of it. It is true that it will enable the present Government to claim at the next Election that it has halved the Civil Service. It is true that it will relieve the noble Lord, Lord Bowles, from the sometimes difficult task of trying to explain to your Lordships the principles of the 4d. and 5d. post. But these, although good in themselves, are, it would seem to me, insufficient reasons to take up the time of Parliament.

Although I intend to be short, if I may I would digress for a moment here. I am amazed at the appetite of the Government for producing Bills which take up a great deal of time and often put the Government in jeopardy and which promote irrelevant, unwanted, turgid and marginal legislation. They started, as your Lordships will remember, with the Bill for the nationalisation of steel, a subject which awoke no interest or enthusiasm except in the hearts of a few steel masters, on the one hand, and of a few dedicated Socialists, on the other. It nearly brought the Labour Government down. We find it reaching a climax in the Industrial Relations Bill, a Bill which, I would certainly argue, is totally marginal for the whole problem of industrial relations in this country and which looks like taking up so much time that there is the rumour that your Lordships' House may even be recalled in the middle of the Summer Recess to deal with it.

Now we have this Post Office Bill. As I said, I can find little to be said in favour of it; but when I consider that the reform of your Lordships' House, a highly important constitutional move which would have had a great effect on the whole future of government in this country and which was agreed upon more or less by all three political Parties and approved in principle by an overwhelming majority of your Lordships, went by the board because, we were told, of the shortage of Parliamentary time, and that therefore presumably this Bill is one of the substitutes for it, I feel positively antagonistic.

I should be much more positive in my reaction if I could detect any consistent principle in this Bill, even that of the common ownership of production, distribution and exchange and the best obtainable system of popular administration and control of each industry or service, as Clause 4 of the Labour Party Constitution has it. Because unless we get down to the basic principle of how to run the nationalised industries, those industries which need social support, and the natural monopolies, and try to establish some coherent basis for dealing with them logically, there is little point in all this monkeying about with changes in name and function.

Again, one of the feelings one has about this Government is that they have invented departments, boards, commissions, corporations and bodies of one kind or another to fill every individual gap, without much kind of rhyme or reason about the overall plan. I believe that there is an important principle which should be established and which we are far from establishing. It is a principle which came up in the Transport Bill and which I think is absolutely right. It came up again this afternoon in the speech made by the noble Lord, Lord Newton. The principle is this: all industries and services must be in some way answerable to the public.

The private enterprise system is. not perfect for this purpose but it is at least reasonable. In the case of the great majority of goods and services where there is not a public monopoly, the consumer can vote with his feet and his money and thus exercise some form of control. But where this cannot happen, where there is a natural monopoly or where there are social services, social benefits and social costs which are difficult to account into the free enterprise system, I maintain that we have not tried hard enough to do this; these services should be provided by public bodies, which should be totally answerable to the public. And where the monopoly is absolute—as the noble Lord, Lord Newton, has pointed out, is the case With the Post Office—the more need there is for answerability. In these cases of total monopoly there should be answer-ability through Parliament to Members of Parliament.

It appears to me that the worst of both worlds is incorporated in the present decision, which does not make the Post Office in the slightest bit more competitive but merely removes some, or a large proportion, of its accountability. Whereas I welcome the provision for Post Office Users' Councils, the record of experience of the consultative bodies already established in various industries and the amount of attention paid to their recommendations or complaints provide not a very good precedent.

There are one or two sections of the Post Office which might be more seriously considered for handing over to private enterprise. This is true of the telephone system. A system of regional telephone networks, coming up for tender every few years, as is the case with the independent television authorities, would produce some form of competition which would keep prices down and services up. It would have the extra advantage of being able to tap private capital. Where schemes like this are not applicable, it seems to me right that the Post Office should be very closely under the eyes of the elected and the nominated representatives of the people in Parliament.

I think it is not too late to insert some form of greater public responsibility into this Bill. I do not see why we should not have, instead of one Post Office board, one for each country. That seems to me to be an advantage. Whether or not that is so, why should not the members of the board be elected instead of being appointed? Their electorate could well be the Members of Parliament representing the constituencies in each particular country, voting by proportional representation. That is unprecedented in British constitutional history, but it is a perfectly workable system, which would at least keep some control in the hands of Parliament. That is merely one suggestion, and there are plenty of other ways by which this answerability could be brought about.

I do not prophesy doom for this Bill. I do not forecast that we shall see a tremendous falling-off of the Post Office services if the Bill goes through. I merely think it is a shadow measure, with which it is a great pity to take up the time of Parliament. I can only wish that before long a Government of this country will try to impose a coherent and rational attitude towards the relative roles of State and private enterprise instead of the present jungle. That day does not yet look as if it is anywhere near.

4.48 p.m.

LORD BLYTON

My Lords, I want to thank my noble friend Lord Delacourt-Smith, who has agreed to allow me to precede him because I have another engagement later to-night, and I apologise to the House if I have to leave before the end of the debate.

I wanted particularly to speak in this debate, and I was pleased that I intended to do so when I listened to the noble Lord, Lord Newton, speaking from the Opposition Bench. My mind went back to the days when the same arguments as he used to-day were brought forward on the Bills to nationalise coal and gas and electricity. The argument then was that the monopolies given to the national Boards would mean that the Boards would exploit the public; there would be no Government control over the work they did. But in all those nationalisation Acts, and in this Bill the Minister can by direction in the national interest protect the public against anything he may consider an outrage upon them. When I sat on the Select Committee in another place the Conservative Party four times refused to allow the Coal Board to increase the price of coal, and this resulted in a huge deficit in their accounts in four years in the 13 years the Conservatives were in office. So the argument put forward to-day, that monopolies are no safeguard for the public, falls by the board because of the past history that is embodied in all the nationalisation Acts.

The noble Lord who preceded me talked about accountability. I agree that this has been a thorny problem in the whole of the nationalisation Acts, and Parliament has tried to get over this by giving to a Select Committee in the House of Commons great powers to examine witnesses of all the nationalised industries each year, and to issue a Report that is debated in Parliament if the Government of the day has a mind to bring it forward for debate. That is the method of accountability that we have been able to reach over the period of the nationalisation Acts.

I listened with great interest and attention to my noble friend Lord Bowles. I am sure we all are grateful to him for the clear exposition he gave us of the reasons for the change and of the Bill itself. It is a long and complex Bill, I agree, but I think his speech went far in clarifying it and helping us to understand it. It is not my intention to speak at any great length, but this is such an important Bill that I should like to address myself to the issues.

I do not know of any other organisation in this country that is in a similar position to the Post Office. On the one hand, it is an enormous employer, with a very large turnover, a huge capital investment programme, and an industry that has to be equipped to meet the technological changes of the future; on the other hand, what the Post Office does makes a difference to every single person in the country on almost every day of the year. I should be surprised if there were many of your Lordships here to-day who have not had some service or other from the Post Office during the course of the day. It is not just the sheer size of the Post Office operations that strikes one, but the many different things they cover. There are letters, parcels, telegrams; the telephone service; the issue of pensions, family allowances, sickness pay, wireless and television licences, car licences; radio interference, and many other services. I am sure that one could talk for a long time about the things that everybody knows the Post Office covers.

What matters to the man in the street, I suppose, is whether the Bill before us will make any difference. We have had complaints about the Post Office from time to time in the past, and probably we shall have them again in the future; and it would be surprising if we did not have complaints about such a huge organisation doing all these things in society. Nevertheless, I think we shall all agree that there is a tradition of service in the Post Office and that over the years it has done a wonderful job for us all.

As I see it, the question which the Government faced was whether the Post Office could be expected to go on doing as good a job in the future if it remained as a Government Department. The noble Lord who opened the debate has explained clearly why it could not; and in my opinion the Government are right. These are technically based services which must be run by professionals and experts in that field. They need to work out their own methods, organisation and skills, especially for Post Office needs. With all its virtues, the Government machine cannot be the right place to do this for the future, especially in the changing technical world that we see around us. I believe that once they are set free in this way, and led, as they will be under the hoard, whose principal members have been announced, Post Office management, under my noble friend Lord Hall, will have an opportunity to do a really first-class job for this country. This will be what the man in the street will expect and what I am sure he will see.

The main purpose of this Bill is to set up a new national Corporation to join the great statutory authorities that we already have. For my part, I am proud of the British nationalised industries and of the part that my Party and the distinguished members of my Party have played in bringing them into being. This Bill is largely based on the previous nationalisation Acts, and it is all the better for that. Some people, and especially Members in another place, have complained on various occasions that the Bill contains little in the way of innovation on the constitutional side. To me, this is a good thing, and not a bad thing.

The general framework of the nationalisation Acts has now been tested over many years and has been shown to work successfully, and it is absolutely right to apply it to the latest industry which is to be set up under this Bill. There is, in fact, an important feature of this Bill which is an improvement on the earlier nationalisation Acts, and that is the new arrangement for users' councils to be completely independent of the industry and to have important statutory rights of their own. We are all naturally concerned to make sure that the interests of the consumer are properly provided for in Acts of this kind, and I am sure that, from that point of view, this is an important step forward. I draw the attention of the House also to the care which the Government have taken to protect in the future the social security and other welfare services in which the Post Office is involved.

There is another side to this whole operation which we should not forget. We are witnessing a hiving-off of a major function of Government, and one involving a large part of the Civil Service. I am sure that many will recognise the enormous problems which have had to be solved, and we should not overlook the importance of the Bill itself as an experiment in transferring to independent statutory authorities the functions hitherto carried out by the Government. The Fulton Report (Cmnd. 3638, paragaphs 188 to 191) proposed that the possibility of further hiving-off of this kind should be studied, and the Post Office under this Bill will provide most valuable experience in this connection.

I should like now to say a word about the staff. There are more than 400,000 people in the Post Office. That is something like one in every 130 of the whole population of this country. Every one of us must realise how important this change is to them, and in many cases their fears as to what will happen to many of them as a result of this change. We all know the work that postmen, telephone operators and post office engineers put into their jobs. From my own experience in life I can understand the questions which must be in their minds at this moment. But I believe they will find that this change is a good thing for them. I know that it is easy to talk about great new horizons, great opportunities, and all that sort of thing. Yet I consider that this Bill will bring all these to the Post Office staff.

What the ordinary employee wants to know is whether he is going to have a good job, a secure future and a good employer, with promotion based on merit. As I have looked at the Bill, I am quite sure that it will make certain of this; indeed, those in the Post Office are lucky, because, unlike some other nationalised industries, the Post Office is growing and not contracting. Further, in the noble Viscount, Lord Hall, we have a man who understands the feelings and aspirations of working people. He had his grounding in the mines in his early life, and he was brought up in a trade union atmosphere. I am certain that the staff and the trade unions will receive every help and sympathy from him in all the changes that the Bill proposes.

Finally, I would say that the Bill should be examined very carefully in its further stages, but I am confident that the principles embodied in it are right. It is because of this that I am happy to offer this Bill, and the great project which it authorises, my warm support.

5.5 p.m.

LORD DELACOURT-SMITH

My Lords, this is a big Bill, as has already been said. That is indeed apparent at the most casual glance. I cannot agree with the noble Lord, Lord Beaumont of Whitley, that it is not also an important Bill, raising very many interesting and important issues. I have been associated all my working life with the trade union organisation of Post Office staff. I am still deeply involved as an officer of one of the trade unions, and associated with a number of others.

I must confess that if I developed all the points which come to my mind, even as appropriate for Second Reading, I should strain to the point of abuse even the tolerant rules of your Lordships' House. I, too, like others, must confine myself to a relatively few observations. Naturally, I must begin by adding my congratulations and good wishes to those of other noble Lords to my noble friend Lord Hall on taking up the post as Chairman of the Corporation. In this hard and challenging post he will, I believe, have the good wishes and good will of Post Office staff from the highest to the humblest ranks. He will be taking over a going concern, one which has already developed marked characteristics and traditions. It is an organisation with great strengths and great weaknesses. Its greatest strength is perhaps that which my noble friend Lord Blyton touched upon, the tradition of service, and the remarkable tradition of loyalty which it has enjoyed over so many years from its staff at all levels. Although that tradition may to some degree have been weakened by changing circumstances, and may often have been strained, it is a tradition which still exists. It did not come about by chance; it derives in part from the fact that the work which the Post Office performs is done for the public. Post Office staff know that their efforts do not add to profits which go into private pockets—they add to the public good.

The Post Office also recognised, long before many other employers, the value in building up staff morale, of seeking to ensure permanence of employment for all their staff with a pension at the end. Moreover, its policies in respect of negotiation with the staff on their conditions have always been subject to scrutiny. People are not paid or promoted in the Post Office in an arbitrary or an invidious way, but in accordance with procedures which have normally been negotiated, which are recognised, are clearly stated and honourably observed by the employer.

The Post Office, in face of the task which now confronts it, has also, I believe, large weaknesses. Perhaps the most serious is the character and atmosphere which its condition as a Government Department has almost inevitably created. Post Office staff have always had to observe certain criteria in doing their work and exercising their responsibilities. They have always been expected to have in mind that the Postmaster General in Parliament might be called upon to answer in question or debate for anything they may have done. If a Department is operating in the field of social policy, or is deeply concerned in all that it does with the rights of the individual, this preoccupation with Parliamentary responsibility of a most detailed day-to-day kind is right and necessary. But for a body which is more and more analogous in its tasks to an ordinary commercial concern (certainly to another nationalised industry), Parliamentary opinion in day-to-day matters, or reliance on Parliamentary opinion in day-to-day matters, can be inhibiting. If I may say so, I think the noble Lord, Lord Newton, did less than justice in what he said as to the degree to which Parliament will retain a very firm control over the broad policies which the Corporation follows.

Whatever changes may take place, certainly there should be no impression that this piece of legislation weakens in any way the fundamental principle that the operations of the Post Office should continue to be conducted on the basis of public ownership and public accountability. In another place there has been a good deal of reference to the possibility of private enterprise providing better services than the Post Office provides. There is, if I may say so, an element of humbug in this argument. It is never advanced in respect of the postal service. Whatever criticism may be made of the postal service, it is always in respect of the telecommunications service that this argument is advanced. The greater the prospects of profit in the telecommunications service have become, the keener has become the cry that those profits should go, at any rate in part, into private pockets.

Perhaps the most remarkable thing of all is the view now being expressed by a section of opinion that these profits should go into American pockets. I had hardly taken this seriously until I read an article last month in the Investor's Chronicle which suggested; that it was an idea which was commending itself seriously to a section of Conservative opinion. But there is the other idea, that there can be injected some element of competition in some telephone functions: for example, in the actual installation of telephones as distinct from the operation of exchanges and trunk lines.

There are some serious administrative and technical objections to a policy of that kind. But more serious still is the fact that such a partial injection of private competition would mean that the private firms which engage in this work would naturally choose to do so in the large centres of population where, for obvious reasons, installation is a cheaper and easier job, no doubt leaving to the public enterprise the duty—the statutory duty—of providing the service in the remoter and more sparsely populated parts, where private enterprise would not flourish and where public enterprise could be left to stand the losses.

It is not, though, the right course for us to be discussing this matter in terms of competition between private and public enterprise. There is on the telecommunications side of the Post Office a field of immensely exciting and a field development. This whole field of telecommunications is a vast, constantly changing and constantly expanding one. To take only the Post Office part of it, there is the tremendous growth now going on in the conventional telephone service, with new telephones being installed at something like the rate of one million a year. There is the development in Telex; there is the immensely important involvement with the transmission of data and links with computers, likely to become so important that in a few years the number of communications in this form will exceed the number of communications by voice. Or, to put it less accurately but more graphically, there will be more telephone conversations between computers than between human beings.

In addition (and this point was touched upon by the noble Lord, Lord Newton, who indicated that he would pursue it in Committee), there is the experiment which is going on with the possibility of providing a single communications inlet in a citizen's residence catering for telephone, piped television, piped radio and other services which can be associated with a network of this kind. Lastly, telecommunications represents—and I hope we shall never forget it—one of the most rapidly growing items in international trade. It therefore seems regrettable that, so far as the figures indicate, this country, which has such a significant place in world telecommunications, has been failing to hold its share of the rapidly expanding world market.

So, my Lords, this piece of legislation which we are considering to-day is relevant to all these, and to the other immensely important, developments in this field. It is, I am sure, a short-sighted policy from a national point of view, and from the point of view of the many important private interests in this field as well, to look askance at the powers which the Corporation will have. This is a field so vast, so important, so rapidly developing, that there is room for all. It would indeed, if I may submit the view, be to the detriment of the private interests themselves, as well as of the nation, if the Corporation which this Bill establishes were to be subject to artificial confining restrictions; if it were to be pressed to interpret its powers in the narrowest and most restrictive way, or if anything were to be done to inhibit its initiative or to inhibit the vigorous use of all the assets which it will have.

Related to this there is the issue of the manufacturing powers which the Corporation will have. Nobody wants to see manufacturing capacity built up in a reckless fashion, ill-advisedly on some doctrinaire basis, where there is no need for it. But there are reasons why this is a very important aspect of the powers which the Bill confers. Let me mention only two. It is by no means established that we have as yet in this country manufacturing capacity for the most modern types of telecommunications equipment and apparatus, completely adequate to meet our own rapidly growing needs here at home as well as to meet the important possibilities of the export trade. If indeed there is a suggestion that the Corporation should not as a matter of principle exercise the powers which this Bill confers, it is I think the very minimum requirement of the critics to show that the existing capacity is adequate for prospective needs.

But there is a further consideration, and that is that experience has shown that it is beyond any reasonable doubt advantageous to a large organisation operating a telecommunications system both to play a substantial part in research and development and to have a substantial direct stake in manufacture. This is not an argument that the Corporation should have a monopoly of manufacture, still less a monopoly of research, but that it should have at least a share in the manufacturing task. The absence of this share, this capacity, has without a shadow of doubt on past occasions put the Post Office at a disadvantage with the sellers from whom it purchases much of its equipment. That I think cannot be denied. It is also true that if a large operating organisation has a stake in manufacture there will be a feedback of information which is valuable both to the manufacturing component and to the operating system. A Select Committee drawn from another place which examined this matter was impressed by the fact that both the most efficient and progressive privately owned system in the world—the American—and the most efficient and progressive publicly owned telephone system in the world—the Swedish—have a substantial stake in the manufacture of the equipment which they require.

However, my Lords, what I want above all to do is to revert to a point I made earlier: that there is in this field of telecommunications scope and room for all—for private concerns and public concerns. We need, I suggest, what we do not so far appear to have had: a great national telecommunications policy in which both the public concerns and the private concerns can play a part. That is what I mean when I say that I hope the Post Office will retain the monopoly envisaged under this piece of legislation. But it must operate that monopoly with the very extensive powers which that monopoly gives and the other very extensive monopoly powers which it will have. It must operate those policies with efficiency, with foresight and with a great breadth of vision to promote, I hope in conjunction with the Ministry of Technology, a national telecommunications policy which can assist us, not only in meeting our telephone needs as we conventionally think of them but, as a nation, in developing our industry by all the varied new types of telecommunication devices which are coming along, and which can also make a most valuable contribution to our international position by a more substantial and more successful effort in the export trade.

Before I conclude (and I think I have already gone to the length of your Lordships' patience) I should like, if I may, to say a word on the question of the position of the staff and the industrial relations, on which again my noble friend Lord Blyton has touched. The nature of the work which is done in the Post Office is such that for the great part one cannot have a supervisor breathing down men's necks. One cannot have a supervisor breathing down the neck of the postman as he delivers his letters; one cannot have a supervisor breathing down the neck of the engineer as he installs or repairs a telephone in somebody's house or office. It is for this reason, if no other, that morale is of such immense importance, and has always been recognised as such, in Post Office operations.

It has been valuable to the Post Office to have the tradition of loyalty and devotion to the public service which I mentioned. But circumstances have been straining that tradition. Permanence and pensionability are important, but they are not of course nowadays respects in which Post Office employment represents such an immense relative advantage for the general run of workers as they did a generation ago. Therefore it is inevitable that more and more Post Office workers tend to compare, not their conditions as a whole but their pay packets with those of workers in outside employment. The wages of a fully skilled telephone craftsman, sometimes called on to exercise two or three skills, outside London rise to £19 10s. a week at the maximum of his scale. Those of a postman outside London, at the maximum of his scale, rise to £16 8s. Noble Lords who are conversant with the wage levels that apply in many fields of employment for skilled and responsible workers will recognise that these figures speak for themselves.

Further, the Post Office is not yet evoking to the full degree that it could the enthusiasm and the pride in craft of the staff that it employs. Some two years ago the Government published a White Paper setting out their plans for the Post Office Corporation. That White Paper had a section on staff relations—a very well conceived section—which concluded with this sentence: The Government indeed believe that the change in status presents an opportunity for developments in industrial democracy within the Corporation leading both to increasing the contribution of the staff to the efficient running of the services and to increasing the satisfaction of the staff with their conditions and place in the organisation. In the preparations in the past two years for the change of status there has been little sign that the activating and energising principles set out in the short passage I have quoted have yet had much effect. Indeed, there are some fields in which the new Corporation will find itself faced with difficult and serious industrial relations problems. But the underlying loyalty, the underlying good will, the underlying devotion to the service, and the opportunities which are inherent in the passage from the White Paper which I have just quoted are still there if the Corporation which this Bill brings into existence will recogonise their existence.

5.25 p.m.

LORD DENHAM

My Lords, my noble friend Lord Newton has dealt fully and clearly with the attitude of my noble friends on these Benches to this Bill, and it only remains for me, at the end of this relatively short but comprehensive debate, to underline our main reservations Before I do so, I should like to join other noble Lords in congratulating the noble Viscount, Lord Hall, and welcoming his appointment.

With regard to the Corporation itself, we are not quite convinced that Her Majesty's Government were wise to miss the opportunity of separating the two functions of the Post Office, post and telecommunications. The pamphlet prepared by the Post Office Preparing for Corporation Status, which was written only about two years ago, suggested that these two functions should be separated as quickly as possible. If the post business had been kept as a Government Department and the telecommunications business alone handed over to the Corporation, it would have got rid of a lot of the criticism of this Bill—criticism of its enormous size, enormous monopoly, and so on—while keeping its obvious advantages.

We are worried about some of the consequences of retaining and extending the monopoly. There is a danger that "catching developments within the monopoly before they are invented" may well prevent an invention from being invented at all. For an invention one must have incentive to the inventor and one mast, if necessary, have others to take advantage of, and develop, the invention, if the most obvious users are too short-sighted to take it up. We all of us know many examples in recent years of other countries reaping the benefits of a break-through made in this country because people here were too blind to take advantage of it. I hope the suggestion made by the noble Lord, Lord Beaumont of Whitley, that this Bill probably will not do any actual harm, will be true in this case.

My Lords, we do not like the back door nationalisation provisions of this Bill, any more than we liked them in much the same form in the Transport Bill. The noble Lord, Lord Delacourt-Smith, defended the manufacturing powers in the Bill, but we feel there is no need for these powers to be as enormously wide as they are. However, perhaps the aspect of the Bill that worries me more than any other is the fact that Post Office matters generally will no longer be under such close scrutiny and control of Parliament. It is right that the new Corporation should be as free as possible, so that it can make a commercial "go" of things. But where there is a monopoly there must also be a firmly entrenched responsibility to provide the services the public need in the way that they need them. Because if the holder of the monopoly does not provide those services, no one else can. The Post Office monopoly, which the Corporation will continue to hold, is a more drastic one than that held by any other nationalised industry. In the first place, it plays a more intimate and indispensable part in the life of every family in the country, and in the second place, it is a more complete monopoly. Every other nationalised industry with which the general public is directly concerned has competition at least from other nationalised industries, and usually from private enterprise. My noble friend Lord Newton enlarged on that point. If you do not like a train service you can take a bus, or use a car. If you are "fed-up" with the electricity supply service you can turn to gas or oil. In the last resort you can even install your own oil-fired generator. But if the various methods of communication provided by the Post Office—telephone, telegraph, post—should seem to you to be inefficient or over-expensive, what other recourse have you? Carrier pigeons?

The Post Office has always had this monopoly, but up to now the Postmaster General has been answerable to Parliament for their stewardship. The noble Lord, Lord Delacourt-Smith, says that we shall still have the protection of Parliament for general policies. But what will happen in the future if something happens like last year's proposal to do away with the London telephone book? Questions in Parliament will get the answer, "It is not the policy of Her Majesty's Government to interfere with the day-to-day running of nationalised industry corporations". Will Her Majesty's Government try during the passage of this Bill through your Lordships' House to work out some means more effective than those envisaged at the moment, whereby the wishes and needs of the consumer, the British public, will be known and acted upon?

5.30 p.m.

LORD BESWICK

My Lords, I wish that I could follow the example of brevity set by the noble Lord, Lord Denham, but in view of what has been said I fear that it will be necessary for me to take up a little longer of your Lordships' time. I am deeply grateful for what has been said by my noble friends Lord Blyton and Lord Delacourt-Smith. They have spared me the necessity of replying to some of the points made by noble Lords opposite.

It would be an exaggeration to say that the Bill has received a wildly excited welcome from the other side of the House; on the other hand, no one has seriously suggested that the proposed change is mistaken. The noble Lord, Lord Beaumont, said that he thought the Bill as a whole was turgid. I agree that it is not quite so exciting as some of the matters in which the noble Lord interests himself, properly, and I hope that I am not doing him an injustice when I say that possibly he might find anything solid and constructive to do with administration a little turgid. But these are important areas of our national life which we have to look at. It is not the Labour Government or the Labour Party which has thought up boards and corporations. These things become necessary by the economic facts of life: the great accretions of capital, the necessity for larger-scale enterprise. All these have led us into the formation of these new economic forms, and I am afraid that the noble Lord will have to learn to live with them.

LORD BEAUMONT OF WHITLEY

My Lords, I think the noble Lord does me a slight injustice, if I may say so. I am not objecting to the turgidity of the administration, and I realise that a very great deal of extremely detailed work has to go into this—indeed, this is one of the kinds of things that interest me immensely. The turgidity I was complaining of is the turgidity in trying to decide on what principles these relationships should be allocated.

LORD BESWICK

My Lords, I expressed the hope that I had not done the noble Lord an injustice. I see that I did, and I am sorry.

I was going on to say that I appreciate that some of the fears expressed by the noble Lords, Lord Newton and Lord Denham, and the noble Lord, Lord Beaumont, were understandable. They may have exaggerated their fears but, as I say, I think they are understandable. Here we do have this gigantic monopoly; a monopoly, as they say, quite unique in our economic system, including an organisation which has in recent years been the subject—let us face it—of a certain amount of public criticism, being handed over to a body which is less and not more under direct control of Parliament. I am glad to see, however, that they do not challenge the administrative idea of monopoly. I do not really see how you can get away from the conception of administrative monopoly here. You cannot have two lots of telephone cables down any particular street; you cannot have two postmen coming along and competing firms delivering letters. There must obviously be a monopoly in this field.

However, I see the noble Lords' point about putting this gigantic monopoly further away from immediate public control through Parliament. This normally is a step which requires very careful thought, and it does not require me to say that careful thought has, of course, been given to this before the step was taken. I am greatly impressed with the fact that members of all Parties in the Select Committee, and people with great knowledge of public administration—men like my noble friends Lord Delacourt-Smith and Lord Blyton—and some who have been insisting over the years that some of the other public corporations should be brought back under Parliamentary control, under the control of a Minister in the House, have all gone on record, as my noble friend Lord Delacourt-Smith has to-day, in saying that the proposals in this Bill are correct; that they accept them as being the best in the circumstances with which we have to deal.

But there is a conflict between the idea of giving greater independence of managerial control and yet having at the same time Ministerial Parliamentary responsibility. I suppose that the conflict of considerations was stated nowhere more clearly than in the Select Committee's Report on Nationalised Industries. I would remind noble Lords of what the Select Committee said on this subject: It was clearly intended by Parliament that Ministers should to some extent or other exercise control over the nationalised inclustries: for this was one of the major purposes of nationalising them. On the other hand, it was equally clearly intended that the industries should benefit from some degree of managerial autonomy, and that some limit should thus be set to Ministerial control: otherwise there would be no point in establishing public corporations with 'high powered chairmen' and their own independent staff. My Lords, the claim which I would make, and which the Government make, is that a real balance has been struck by the terms of this Bill. After all, the Post Office will not, after the Bill becomes law, be entirely disembodied: it will be responsible, in the final count, to Parliament through the Minister. There are controls; there are general powers of direction, as Lord Blyton said, in Clause 11; there are specific controls in other parts of the Bill. Indeed, if I were to list all the different provisions that are made for formal powers of direction—Clauses 11, 12, 32, 42—and the provisions for Ministerial control in Clauses 6, 11, 13, 23, 27, 35, 42, 43, 49, 55 and 56—one wonders not that there is going to be no Ministerial control but whether we are not riveting on to this new body too much power of Ministerial control.

On the other hand, I agree that it will be no longer possible for an aggrieved individual who wants a telephone Kiosk at the end of his street, or thinks that the mail was delivered too late on Tuesday and Wednesday, to put to his Member of Parliament that these things should be rectified and have the matter raised on the Floor of the House. I agree, too, that it will be no longer possible for noble Lords in this House on the Benches opposite to put to my noble friend Lord Bowles Questions about particular deliveries to particular Squares in London.

LORD NEWTON

My Lords, surely it will always be possible in this House for these Questions to be asked. Whether they are answered is another matter.

LORD BESWICK

My Lords, it is always possible to do things which are not productive, but I should not have thought it would be worth while to put down such Questions in your Lordships' House. But do noble Lords opposite really want, in the modern world, this kind of control? I do not think that that is what they seek.

I was asked by the noble Lord, Lord Newton, accepting what I have said, that the Minister could give a direction, what would happen if the Post Office declined to comply with a direction; and he quoted from Clause 11, which he thought was insufficiently powerful so far as the Minister was concerned. But if he looks at subsection (5) of the clause he will see that it states: The Post Office shall comply with directions given to it under any of the foregoing provisions of this section.

LORD NEWTON

My Lords, I quite agree with that. I said in the course of my speech, although I did not quote subsection (5), that the Bill says the Post Office "shall comply with directions". The first question I asked the noble Lord was what would happen if the Post Office declined to comply with a direction.

LORD BESWICK

My Lords, it is inconceivable to me that a public organisation in this country should refuse to comply according to law. This really is pursuing a bogey which I would have thought, is too far under the bed to bother about.

LORD NEWTON

That is the whole point of my asking. When this gigantic organisation is set up it will be impossible to take action in the courts against the Post Office. That is quite clearly so.

The noble Lord is now telling me that there is nothing that could be done if, in its folly, the Post Office declined to comply with the direction.

LORD BESWICK

What I am telling the noble Lord is that in my judgment he is getting unnecessarily fearful.

LORD NEWTON

That is another matter.

LORD BESWICK

But if that contingency did arise; if, for example, my noble friend Lord Hall went berserk and, as the noble Lord said, overnight put up the price of the first-class mail to 9d., abolished the second-class mail, and did a lot of other extraordinary things of that kind, there are ways and means if one looks at the control—

LORD NEWTON

Are there? This is what I am asking about. What are they?

LORD BESWICK

I should have thought it was very doubtful whether the Chairman's position on the board would be very secure. I should have thought that the control which rests with the Minister over the accounts of the Post Office could be used here most effectively. I would invite the noble Lord to look at all the controls vested in the Minister. If he will do so, he will see that it would be a most peculiar—let me put it no higher than that—Chairman of the Post Office who would refuse to act according to law.

LORD NEWTON

May I say this? Of course I quite accept that I have to try to settle all these matters for myself. I have done my best. But I am entitled, and so is any noble Lord in this House to ask a Minister of the Crown responsible for the Post Office to answer these questions; and, with the greatest respect, I think I am entitled to an answer.

LORD BESWICK

I am sorry. I will endeavour to spell it out. The noble Lord seemed to think that there was sufficient latitude in Clause 11 to enable the Post Office to disobey a general direction. I am saying that in Clause 11 it is laid down—and it is mandatory—that the Post Office should obey a general direction. I am saying that in the first place. The noble Lord then went on to pursue the matter further, asking what would happen if the Chairman refused to obey what the law required. I have pointed out to him that the whole position of the Chairman would come under review, and I say to him that the powers of Clause 32(4) would be important, the powers of the appointment of the members of the authority would be concerned, the powers of control over capital programme and powers to call for information would also be relevant, and that in Clause 35 there is power over the control of borrowing. Really, it is quite inconceivable that with all those powers any Chairman would set himself up in defiance of the Minister of the day.

The noble Lord then went on to ask another question, that is, whether it was possible to make a direction on a matter of day-to-day management. That was a more reasonable question to put to me. The answer is, No, that it would not be possible to make a direction on a matter of day-to-day management. On the other hand, if this matter of which complaint is made went on day after day, then it would become not a question of day-to-day control, but one of more general interest; and then, of course, it would be possible for the Minister to make a direction.

LORD SOMERS

My Lords, I am sorry to interrupt the noble Lord once more, but I will be brief. We are all familiar with another public Corporation, the B.B.C. Quite frequently I have asked Questions in this House about their policy, and the answer that I have always received was that the B.B.C. were an entirely autonomous organisation and that they must decide their own policy. Can the noble Lord give us some assurance that that will not he the case with regard to the Post Office?

LORD BESWICK

My Lords, it is difficult for me to say in advance what reply there would be on any particular issue. The power of control contained in this Bill is rather greater than is vested in the present Postmaster General in regard to the B.B.C. That is quite clear. I was also asked by the noble Lord, Lord Newton—he was kind enough to give me notice of the question—about the talks which the Minister, in an Answer given in another place, indicated that he was having with the manufacturers about the supply of equipment to consumers. He asked whether I would clarify that statement. The purpose of these discussions is to explore the widening of the range of approved designs of equipment which the public can obtain direct from the manufacturers. The aim also is to wider the range of designs of apparatus which are purchased from industry by the Post Office for retailing to its customers. In both cases, the aim is to give the customer a wider range of choice of apparatus and a greater opportunity to influence the trend of design through the exercise of that choice. I am given to understand that these discussions are proceeding satisfactorily, and I am sure that the noble Lord would be in agreement with the intention of the discussions.

The noble Lord made one point about the manufacturing clauses of the Bill, which I thought indicated a slight misunderstanding. He said that that was the only consultation that the Minister would require for any kind of manufacturing. That, of course, is not quite so. In fact the Post Office cannot manufacture things to sell to outsiders in ways unconnected with the Post Office, without the permission of the Minister. In this respect the clause is quite stringent.

LORD NEWTON

Can the noble Lord tell me under which clause that is required?

LORD BESWICK

It is Clause 13. I was also asked about the matter of relay services and a letter on this subject in The Times. On this there seems to me to be a certain amount of misapprehension. I do not think that the details of this are such that I can go into them at this point. I should be happy to go into them later, but I would say that the Report to which reference is made in that letter has not yet been published and it is therefore difficult to comment upon it. My understanding is that the letter made assumptions about the contents of the Report which are not entirely justified. But that is something to which possibly we could return at a later sage of the Bill.

I was also asked about this matter of Radio Love and optical broadcasting. This circular from Radio Love, which was sent to me and, I suppose, to noble Lords opposite, argues that since optical broadcasting cannot involve interference as can broadcasting by means of wireless telegraphy it should not be liable to control by Government. This argument is totally ill-conceived. Successive Governments have taken the view that the social and economic implications of broadcasting, in the sense of transmission by means of wireless telegraphy, are such as to require that the right and duty to provide a service should be vested in public corporations answerable to Parliament. Therefore, the promoters of Radio Love are wrong in supposing that the policy follows from the technical need to control the allocation and use of frequencies so as to prevent, or minimise, interference. It would be perfectly possible to allocate a VHF frequency for Radio Love for use in a way which would not involve interference, but the policy pursued by successive Governments precludes this. Indeed, it may well be that later development of this system is something which the national organisation will wish to develop.

I have referred to the appointment of my noble friend Lord Hall, but I have not, I fear, added my congratulations and good wishes to those already expressed, and this I wish to do. He has taken on an immense task; he is faced with a wonderful opportunity, and I have no doubt that he feels it a tremendous privilege. No service has so consistently enjoyed over the years the same affection from the public as the Post Office. Here I refer to what was said by my noble friend Lord Delacourt-Smith. In the Post Office they have been absolute pioneers in the conception of participation and joint consultation. I know with what great interest I read the works published some twenty years ago, and I pay my tribute to their pioneering work in industrial democracy. I think it would be a great tragedy if all that was to go. My noble friend asked me questions about this point. As he knows, discussions are now taking place, and I think it would be wrong for me to say anything at this stage, except that I will ensure that what he has said will be studied both by my right honourable friend and by my noble friend Lord Hall.

I saw a phrase somewhere in the notes connected with this Bill about a radical change of attitude being required from the former civil servants who will now move over to this new Corporation. I only hope that the change will not be all that radical. I think that the sense of public service which they have had will be maintained. If we can get the right combination of public service to go with the proper exploitation of the new electronic and telecommunication devices, then this new Corporation can serve this country well; and I hope that under the Leadership of my noble friend we shall see them develop in the way we wish. My Lords, I now hope that we can give this Bill a Second Reading.

On Question, Bill read 2^a, and committed to a Committee of the Whole House.