HL Deb 26 July 1979 vol 401 cc2128-38

7.37 p.m.

Lord AUCKLAND rose to ask Her Majesty's Government whether they are aware of the detrimental effect to our export trade caused by the very high postal charges upon magazines, especially those connected with trade and professions, being sent overseas and whether they will take steps to investigate this situation. The noble Lord said: My Lords, I beg leave to ask Her Majesty's Government the Unstarred Question which stands in my name on the Order Paper. Examined beside the extremely controversial and vital legislation of the past few days, I suppose this must seem rather a mouse of a Question, and it is certainly not one of a party political nature—at least, not so far as I am concerned. This problem has been a matter of concern over some years. I might add that I have no financial interest whatever to declare in this matter. I am not myself employed by any of the periodical magazines or newspapers which may be embraced by this Question, but I happen to know one or two people who are involved in this particularly valuable industry.

My noble friend will no doubt argue—and not unreasonably—that this Government are employed at the present time in making some considerable economies, and I think it is generally accepted that any incoming Government would have to make economies of some kind. There is, of course, a certain difference of opinion, which covers the length and breadth of the House, as was shown earlier today when we discussed overseas broadcasting, as to how and where these economies should be made. There is one crumb of comfort which has been given by the Post Office, and that is that, as I understand it, the increased charges at least for surface mail will come into operation in October instead of August. So I suppose that, if one were to look at this a little cynically, it would mean that the surgeon's knife will not be in operation for perhaps two or three months to come.

I should like to take as an example one particular magazine—and it is not a magazine in which I have any personal interest, except for my particular non-financial interest in the medical profession, being a reader of The Lancet, a journal which is 155 years old, and one of the oldest of all the periodicals. Its contributors consist of doctors and other distinguished people in the medical services covering the length and breadth of the world. It is an invaluable magazine for dispensing medical knowledge and for the interchange of ideas on a number of matters in surgery, both for children and for adults, and for medicine right across the board. This magazine is sent to many countries throughout the world, not only in Europe but, I believe, as far as Australia and New Zealand. Looking, as I did this afternoon, at one of the current copies of The Lancet, there were in it case studies from Pennsylvania in the USA and from the Netherlands; there was, in the letters section, correspondence from France, Spain, Texas and Canada. In another distinguished medical publication—I will not say its rival publication—the British Medical Journal, there was an important article from Western Australia. These articles are written with the prime aim of extending medical knowledge between this country and other countries of the world. It would be a very great pity if postal charges were to have a detrimental effect on this operation.

Some £400-million of books and periodicals of all types are exported from this country every year. The profits of the Post Office at the present time are, I believe, fairly healthy. I can assure your Lordships that, particularly at this late hour, I am not going into the whys and wherefores of whether part of the Post Office should be hived off to private enterprise. That is not part of this Unstarred Question. But I should like to put to my noble friend the hope that he will consult with his right honourable friend as to whether, in view of the profit which the Post Office is making—and I pay my tribute to Sir William Barlow for this —sympathetic consideration could be given at least to scaling down the increases which, as I understand it, are to come in October.

I believe that our charges from the United Kingdom to Australia are some 150 per cent. higher than the charges from the USA to Australia. Of course, distances come into this but, I would submit, not to the same extent. One wonders whether these charges are not unduly high. It is not only in medical magazines that this is the case. I could mention a number of other magazines. One in particular, which deals with an exercise very much connected with medicine, is Slimming, which I have read though not entirely practised. I believe this magazine has a very large circulation, not only in this country but overseas and earns valuable currency. One can name also all kinds of trade magazines. Now, at a time when Government after Government have exhorted this country to export, we have an example of a positive disincentive to do so being placed upon us. As I have said, the Government, any Government, are in a difficult situation at the moment in the field of economies; but particularly when we come to subjects such as health and technology and magazines dealing, for esample, with tourism—a subject of which I know the noble Lord, Lord Ponsonby of Shulbrede (who is to speak in this debate) has an interest—this is a matter of vital importance.

My Lords, I do not know whether one could have a kind of two-tier system. One does not want to be too discriminatory, but there are certain journals and periodicals with distinguished contributors which are exported overseas. I think there is a very serious situation here and I should like Her Majesty's Government to look into the situation carefully. There is a famous saying in the publishing world which I think could be used in almost any industry: " Trade follows the book ". If we are to encourage the exports, whether of consumer goods, of invisible exports (in which I am involved) or of the spoken word, we must recognise that all this costs money. While appreciating the fact that horns have to be drawn in at the present time, there are examples—and I believe this to be one of them—where a great deal can be done to get our balance of payments into a very much more equable condition if the export of our periodicals can be carried out without the (as I submit) unreasonably heavy postal charges which are proposed to be enforced after October. I plead with the Government to look into this matter very carefully.

7.50 p.m.


My Lords, I certainly do not wish to detain the House too long at this fairly late hour; but it is ironic that on the day when the Post Office announces a profit of £375 million we should be debating the noble Lord's Unstarred Question. Of that profit, about £33 million is derived from the postal services.

First, I should like to thank the noble Lord for raising this evening the Question of postal charges on magazines sent overseas. Certainly heavy postal charges on learned magazines act as an additional charge on the publishers of those magazines whose financial viability is often extremely precarious. As a publisher for a number of years of Fabian pamphlets, I am very well aware of the devastating effect which increased postal charges can have.

Unfortunately, non-commercial magazines cannot recoup additional costs by raising charges for advertisements included within those magazines, and such charges can ultimately only be recouped by raising the subscription charges or the individual charges for the particular copies of the magazine. In raising this Question, the noble Lord pointed out that the heavy postal charges meant that one was almost moving to a situation where the charges for postage equalled the printing costs of the magazine. That is, of course, a very ironic situation, as well. I think that he was certainly right to point to the effect on our export trade of the charges, and I certainly hope that this effect can be looked into.

I am sure that there must be a case to be made for a cross-subsidisation of costs. One can think already that the telegrams service and the parcels services are being subsidised, and whether an investigation would show that the cost of the overseas postal services for magazines should also be subsidised is something which would be of interest. I do not know whether it would be possible for such a case to be made out, but one is certainly reminded that when the Penny Post was first introduced in the last century that the great benefit people received by the introduction of the post was that they were able to post a letter to any part of the United Kingdom for the same charge. That idea never has referred to items posted overseas which bear an additional charge.

There might be a case for looking into the question of whether the idea which we had in the Victorian era of a level postage charge for any item posted within the land boundaries of the United Kingdom could not in fact, in the changed world in which we live, now be expanded so that we might again have a level charge throughout, whatever the destination of one's package. Certainly there may well be advantages, in that it could encourage more mail to be posted overseas, and of course, as has been said, subscriptions of journals being sold overseas are other forms of invisible currency earnings. I shall be very interested to hear Lord Lyell's reply to the Unstarred Question raised by the noble Lord, Lord Auckland.

7.55 p.m.


My Lords, the House will be grateful to my noble friend Lord Auckland for raising this very interesting and important issue this evening. I should say immediately to my noble friend and the House that, although what I shall have to say in reply to my noble friend's Question will be fairly brief, neither I nor indeed the Government regard the Question or its subject matter as unimportant.

My noble friend Lord Auckland made a very amusing reference to the dogs. I always think that after such esoteric subjects as dogs there is always something new. We heard learned discussion by my noble friend about various medical journals. I am pleased that he did not regale your Lordships with some of the more esoteric things that can go into medical journals. A few letters from Western Australia and other parts of the world would certainly have livened up your Lordships' House. It would be well that I and the Government kept our sights a little lower at this stage of the evening.

As to the Question which has been asked by my noble friend, the effect of the proposed postal tariff increases on the export trade in various books, periodicals and especially in magazines to which my noble friend referred, the Government are aware of the concern which has been expressed by my noble friend and by the noble Lord, Lord Ponsonby of Shulbrede. This concern is felt throughout the magazine publishing industry and especially in those magazines which travel across the world and are concerned especially with trade and professions.

We know that a very large number of people have made representations through the Mail Users' Association to the Post Officer Users' National Council. I shall refrain from regaling your Lordships with the acronym which is more akin to dogs, or felines.


My Lords, may I thank the noble Lord, Lord Lyell, very much for that innovation of not introducing the acronym. For many years I have waged a campaign against new-fangled words which none of us understand.


My Lords, not only do I understand it, but I am interested in the spelling because it seems that the acronym does not come out as it should. Never mind, my Lords! Representations have been made through both the Mail Users' Association and the Post Office Users' National Council and also directly to Ministers and the Government, especially tonight. I shall have time, I hope, to explain that the Government do not think that it would be right to subsidise the postal charges on these special items. My noble friend pointed out that the United States gives, it seems, much better rates on the postage of periodicals and magazines. My noble friend quoted the particular instance from the United States to Australia—probably Western Australia, or perhaps the whole Continent of Australia. I certainly believe his claim.

Also, the Government recognise the significance of competition from the United States for the exporters of United Kingdom books and periodical magazines especially in the field of trade and professional magazines, because as noble Lords have pointed out, the United States is our main competitor—one of the only competitors—in the English language market. The Government are of the view that because one country deems it right to give a subsidy in this particular area, it would not necessarily follow that this country should follow suit. If that were to happen, we believe that there would be a never-ending chain of subsidies.

What the Government are seeking to achieve is the opposite, which is the limitation of subsidies so far as possible. It has been said in your Lordships' House tonight and outside that the proposed increase in tariffs for overseas mail seems a little unreasonable. Those were the terms used by the noble Lord, Lord Ponsonby, and I think by my noble friend, also. If noble Lords believe this, they are entitled to their opinions. We admit that the charge and increases in tariffs for these overseas mails is greater than that proposed for inland mails.

There have been complaints that, contrary to the undertaking of the Post Office in its sales literature, the period of notice for these particular increases has been less than three months. I should like to confirm tonight that the Post Office has agreed to defer implementation of these proposed increases until three months from the date of the announcement. I understand that the date for the increase in charges and tariffs referred to by my noble friend will be 29th October 1979. As to the amount of the increases in overseas tariffs, we have to admit that these are, in percentage terms, greater than those proposed for inland mails. The Post Office tells us that there are two main causes for that. First, charges for other countries for conveying our mail have risen steeply. Secondly, what are termed " imbalance payments " have risen sharply also. These payments represent compensation to countries which receive more mail from us, either for onward transmission or final delivery, than they send to us.

We believe that it is for the Post Office, subject to the requirement to meet its financial objectives, to structure its charges in a way which seems to it to make the best commercial sense. If we take that point, I have thought it right to investigate some of the claims which have been made —not necessarily here, but in representations made direct to Ministers and also through the two organisations I referred to earlier—that these overseas mails were subsidising the inland letter service. In fact, the noble Lord, Lord Ponsonby, used a very imposing word, and I am anxious to get it right: he called it " cross-subsidisation ". The information we have from the Post Office is that the overseas printed paper services would still run at a loss even after the 29th October, when the new charges are implemented. In fact they are now, and have been, subsidised by the inland letter service.

I am sorry that my remarks are not very helpful. Perhaps I could conclude my remarks on this topic by saying that I recognise the strength of feeling which lies behind the representations made so nicely by my noble friend, on behalf of magazines and professional publications. But I do not think it would be right for the Government to step in with a subsidy particularly when these services are already running at a loss.

The Post Office Users' National Council report has been presented to my right honourable friend the Secretary of State, particularly as far as the proposed tariff increases are concerned, and also as regards the suggestion that the increases should be restricted to 15 per cent. in the first instance. This applies very much to the overseas trade. My right honourable friend has perused a copy of this report and in reaching his decision he has to bear in mind the need for the Post Office to meet its financial objectives.

This brings me to the point which has been made that tariff increases might be deferred until the Post Office is able to improve its efficiency. This suggestion has not been made in your Lordships' House, but it has been made in various representations put to us. In an ideal world we might try to proceed on these sort of lines, but the postal business is run as a business with its own financial target, which is separate from the rest of the Post Office. This particular section is required to meet its own financial objectives. We believe that if the increases were deferred until the efficiency of this service was improved, the postal business would be faced with the likelihood of running at a loss.

I hope the House will permit me to say a word or two on the subject of efficiency. I accept that there is a need for a very considerable improvement, in both the long term and the short term. As far as the short term is concerned, we understand that there has been a significant reduction in the backlog of mail, and that will also include onward transmission of mail which is dear to the heart of my noble friend Lord Auckland—that which goes all round the world. It is understood that first-class mail is now almost back to normal, except where mail passes through London, where there are still some minor delays. The second-class service is generally operating normally again except in some parts of London, the Midlands and the South-East.

We ought to add that, although industrial action in the Post Office has contributed to the backlog, there were a number of other causes, many of them being outside the control of the Post Office. However, we would admit that in the longer term there is scope for increased efficiency. The Secretary of State for Industry said in another place about three weeks ago that he, and indeed the Government, were dismayed to see that the membership of the Union of Post Office Workers had refused an offer of higher pay proffered to them in return for improved working practices, which had been recommended by their executive. Of course, the implementation of specific measures to improve efficiency must be for the management of the Post Office and it is not right for Ministers, even had they the power to do so, to intervene in matters concerned with the day-to-day management of the Post Office.

The job of the Government, we believe, is to set the statutory framework within which the Post Office operates; and should it prove to be the case that the framework is such that the Corporation cannot operate in the public interest—indeed there might be an argument there which would suit the case put forward by my noble friend Lord Auckland—the Government may have to take steps to alter that framework. For example, I think that my right honourable friend has announced the Government's intention to consider introducing legislation to separate the telecommunication business from the postal business. He pointed out in another place earlier this month that co-operation to improve services was very necessary, and indeed if that were not forthcoming we might have to review the Post Office's monopoly of the carriage of letters, packets and magazines. But I hope the House will accept that the Government have no power to give the Post Office directions on matters which, as I am sure my noble

friend will accept, relate to the day-by-day operations. If we started to try to do that with the Post Office we should end up in a position of serious confusion.

The Government can well understand the frustration of noble Lords over problems they are encountering and in particular in connection with the service mentioned by my noble friend; but the management, right from the chairman downwards, is very much aware of the need to bring the service back on to a better footing. In trying to do that, the chairman has the full backing of the Government in his efforts: and we believe that considerable progress is being made.

The noble Lord, Lord Ponsonby, mentioned the fact that the postal section of the GPO had produced a considerable profit, according to the figures announced today. I have not studied the accounts but I have a report from a very reliable journal, which has come not from Western Australia, Fiji, or anywhere else: it is to be found in your Lordships' Library. There is indeed a healthy profit but it is pointed out that the profit is down by approximately 15 per cent. from last year. It is always very nice to hear that a profit is being made, but 1 hope that noble Lords will accept that, although there may be a profit on one section, the particular section referred to in my noble friend's Question tonight is showing a loss and indeed the increased tariffs, which are being only temporarily postponed, will mean that there is a reduced loss.

There has been justified complaint directed at the Post Office, but we believe that there are a considerable number of men and women in that organisation who have a tremendous sense of loyalty and dedication, and we are all anxious to see things improve. The Government believe that if the Post Office can build on the tradition of loyalty among its employees, including management, we can get on the way to returning to a situation where the British postal service will once more be a shining example to the rest of the world, in the field referred to by my noble friend.


My Lords, before my noble friend sits down, may I thank him for his very full answer to my Question. While accepting that the Post Office must run as a separate entity, will he make representations to his right honourable friend to try to encourage continuing liaison between the Post Office, the Mail Users' Association and other bodies who are concerned with this very vital exercise?


My Lords, I shall be very pleased to do that. I take careful note of everything that has been said by my noble friend, as well as by the noble Lord, Lord Ponsonby. If there is anything that I have missed, then I shall certainly be in touch with them before your Lordships disappear to the far-flung areas mentioned by both noble Lords. My imagination was stirred by the thought of how much we might have to pay to send trade journals to the South Pole and other settlements. I shall be interested to hear the views of noble Lords when there is a fuller House. I hope we can leave it there tonight, and I undertake to see that everything that has been raised in your Lordships' House tonight is brought to the careful attention of both my right honourable friend and the Post Office, not forgetting the two organisations which the noble Lord, Lord Ponsonby, mentioned.