HL Deb 16 July 1980 vol 411 cc1796-807

3.50 p.m.


My Lords, with the leave of the House, I will now repeat a Statement made by my right honourable friend the Secretary of State for Industry in the other place on the postal monopoly. The Statement reads:

"The House will recall that on 2nd July 1979 I stated that if co-operation to improve postal services were not manifest it would he necessary to review the Post Office's monopoly for the carriage of letters, and that I would be calling for reports of possible modifications to that monopoly, their practicability and implications, by the end of the year.

"I have received a report from the chairman of the Post Office and a report from officials in the department who consulted widely with persons and organisations throughout the United Kingdom with an interest in the postal service. In addition, my right honourable friend the Secretary of State for Trade referred the Inner London Letter Post to the Monopolies and Mergers Commission. The Commission's report was laid before Parliament on 31st March, and published on 1st April. The Government have been discussing with the Post Office their response to this report, and I intend to lay before Parliament shortly the Post Office's programme of action to meet the Commission's recommendations.

"Members of the House will be aware of the widespread criticism of the postal service, particularly in the summer of 1979. I am glad to say that recently the quality of service to the customer as measured by the statistics furnished by the Post Office has shown a marked improvement, particularly in April and May this year. The service is now close to the Post Office's own target. It has moreover been encouraging to hear of the decision of the Union of Communications Workers to discuss with the Post Office measures to improve productivity and to bring about more efficient working.

"However, it has for some time been clear that the monopoly is more extensive than is sensible and that there are uncertainties in some of the key definitions in the Post Office Acts of 1953 and 1969. I have therefore decided that some changes are desirable. In coming to that decision I have taken into account the views expressed by those whom we consulted in the course of our review, the Post Office's own report on the monopoly, the views expressed by the Monopolies and Mergers Commission, and the quality of service received by the customer.

"There are certain categories of mail which it would be beneficial to remove from the monopoly. When the necessary legislation has been enacted I intend to relax the monopoly with respect to:

Time sensitive/valuable mail. Private operators will be free to carry such mail provided they charge a minimum fee subject to review by the Secretary of State. I propose that this minimum fee should initially be £1.

Document Exchanges. At present the document exchanges established in a number of the larger cities are able only to operate an exchange of mail at a common centre, and may not transport mail in bulk between those centres. It is intended to amend the law so as to enable them to do this.

Christmas Cards. The Government propose to amend the law so as to allow charitable organisations to deliver Christmas cards.

Inaddition the Government propose to amend the law relating to the monopoly in a number of other fields:

The Definition of a Letter. It is intended with the help of the Post Office to specify that a number of items are excluded from the definition of a letter so that those wishing to compete with the Post Office will not be deterred by confusion about the precise extent of its exclusive privilege.

Part Carriage by Private Operators. It is intended to amend the law to allow that where a letter at some stage goes through the Post Office network it may be carried for part of its journey by private carriers provided that it is first stamped. This will enable the large customer some freedom to avoid his mail being handled in those parts of the Post Office network known to give rise to delays.

Delivery by Wholly-Owned Subsidiary. At present there is no obstacle to individuals or companies delivering mail on their own account, but it appears that a wholly-owned subsidiary cannot deliver mail on behalf of its parent, or of other companies in the same group. It is intended to amend the law to rectify this anomaly.

Addressed Advertising and other new market demands. The Government will watch how the Post Office reacts to such market demands and will, if justified, make appropriate relaxations of the monopoly.

"In addition, the Government will seek to amend the law relating to the Post Office letter monopoly in order to provide powers for the Secretary of State to make further relaxations in respect of certain categories of mail. Moreover, we shall seek powers to remove the monopoly either in a local area or nationally. These powers will rest in my hands. I would intend to use them in the event of industrial action within the Post Office which resulted in a cessation or serious decline in the quality of service. I would also use the powers if, after due warning, the Post Office failed for reasons within its control to satisfy me as to its performance in serving the public. In deciding whether to use my powers I shall take into consideration the Post Office's record in relation to productivity unit costs, quality of service to the customer and its financial target. I am starting discussions with the chairman of the Post Office on whether the targets for the quality of service of first and second class mail are sufficiently rigorous.

"I believe these measures will stimulate greater efficiency within the postal service. Taken together, they clarify the law, open up to competition some parts of the postal monopoly and safeguard the general interest of the customer by making it clear that the letter monopoly is a privilege which the Post Office needs continually to justify through the quality of the service it provides.

"These changes will require legislation and the Government will bring proposals before the House in due course."

That is the end of the Statement.

3.57 p.m.


My Lords, may I thank the Minister for repeating the Statement made by the Secretary of State in another place. This Statement is notable not for what it actually says, but for what it implies. I think the House will be particularly concerned about the implications of the last part of the Statement. The powers which it is proposed to place in the hands of the Secretary of State concerning the removal of the monopoly are very worrying indeed. For example, the proposals could result in further inroads into the quality of the Post Office service provided in rural areas, particularly if the powers were used to do away with the Post Office's monopoly in the profitable urban areas. I am sure that this is a matter which the House will want to consider very seriously, when it comes to look at legislation in the next Session of Parliament.

The proposals made in the Statement must be looked at with suspicion. Certainly, they could represent a postal pirate's charter. With regard to the proposed amendments in the law which are included in the Statement, one wonders whether the Minister can give the House the definition of a "letter". I am told that even Victorian lawyers were unable to come up with an answer to that. One hopes that modern lawyers might be able to succeed in doing so. With regard to the paragraph concerning part carriage by private operators, the House will wonder exactly what this means. Does it mean that private operators can deliver to and collect from a Post Office, or does it mean that they can only deliver to a Post Office? The House would like some clarification of this particular paragraph.

I found this Statement very peculiar in a certain way, in that when the Minister was repeating it he said in his opening paragraph that the Secretary of State said that if there was no inprovement in the postal services it would be necessary to review the Post Office's monopoly for the carriage of letters". Later on the same page the Secertary of State acknowledged that the quality of service to the customer, as measured by the statistics furnished by the Post Office, had shown a marked improvement. One finds it difficult to balance those two statements, and why the various proposals are necessary at all, in view of the improvement of the service which is acknowledged by the Secretary of State. We view this Statement with considerable suspicion, and shall scrutinise very thoroughly any legislation which comes before this House.

4.2 p.m.


My Lords, as one who instinctively leans against monopolies, I very much welcome almost the last words in the Statement, that the letter monopoly is a privilege which the Post Office needs continually to justify through the quality of the service it provides.

The Post Office never cease to tell us that the key to a more efficient postal service is a more widespread use of the postcode. But if you are initiating a correspondence and have no letter to reply to, how do you discover the postcode of the person at the other end? You can go to the Post Office and ask, and the information can be unearthed, but you do not make yourself very popular with the other people in the queue at the counter.

Surely, the only practical answer is to print postcodes in telephone directories. Shortly, we are going to have a separate telecommunications corporation responsible for telephone directories. They presumably are going to say that it will not be their business to clutter their telephone directories with information which is of benefit to a completely separate hived-off postal corporation. Therefore, will the Government, before this hiving-off of the telecommunications corporation takes place, make certain that postcodes are going to be printed in telephone directories. May I say, in parenthesis, that it really is not necessary for the London telephone directory to have the dialling code 01 printed on every line, and in Birmingham their dialling code on every line, and so on. You could have the dialling code at the top and bottom of every page of the directory, and you could thereby provide more space on every line of the directory in which postcodes could be inserted. If the Post Office are right, that would be the best step towards creating a better postal service.

4.5 p.m.


My Lords, I thank both the noble Lords for their clear comments on the Statement. The noble Lord, Lord Ponsonby, commented not so much in terms, as he said himself, of the Statement, but what—if I may use the phrase—he thought it implied. I have known my right honourable friend the Secretary of State for Industry a long while. He has a habit of meaning exactly what he says, no more and no less.

The noble Lord, Lord Ponsonby, also said that they had to view the Statement with suspicion and with a feeling that it might be a pirates' charter. I can assure him that this is not the case. The comparatively small—and they are comparatively small—derogations, which my right honourable friend plans at the present time, are clear evidence of the fact that we have taken full note of the need to retain the postal service as a whole and not allow the creaming off of the most profitable services.

I cannot help you on the definition of a letter. As the noble Lord says, I understand it has baffled the legal profession for a very long while. What we intend to do, however, is to try and clear up some areas of anomaly by declaring what is not a letter. Whether or not this will make the situation clearer, time will show but I have listened to enthusiasts on the matter.

I understand that the partial derogation in order to avoid the temporarily vulnerable delay-prone areas in the postal network—the partial dispensation in that respect—is designed to allow a firm to take its mail avoiding the worst area and put it either into a post office or post boxes outside that area. I do not believe —if I am wrong I will let the noble Lord know—it is in any way intended that there should be a system whereby it can descend on a post office and collect its mail.

The noble Lord referred to the contradiction in his mind on the quality of the service, which is improving. It is improving, it is not up to the targets which the Post Office has itself set; nor is there absolute clarity as to the full meaning of the surveys carried out by the Post Office on its own delivery record. Leaving that on one side, the reconciliation of the quality of service with the need to take powers to be able at short notice to go further in order to protect this vital service for the consumer, I do not believe to be incompatible at all.

My right honourable friend has paid tribute to the improvements in the delivery service. He has also mentioned all the other things which are necessary: the levels of productivity and efficiency which affect both the cash limits and the prices that consumers will be asked and are asked to pay; he has mentioned all those things. Against the record of performance of recent years which, praise be!, is moving in the right direction and with the co-operation from the Union of Communications Workers at the present time, nevertheless the performance of recent years seems to me fully to warrant the Government taking the powers to be able to act further if and when that proves necessary.

In relation to the points made by the noble Lord, Lord Airedale, I will, if I may, leave the question of 01 until we come to make a Statement on the telecommunications side. He has raised the matter of postal codes before, and in a Post Office debate we have given fairly clear information on what is holding up the full utilisation of postal codes, which is a complicated subject which it would be wrong for me to go into this afternoon, but we note his repeated views on this point and will take them fully into consideration.


May I ask my noble friend whether he will confirm that, in the exercise of his powers by the Secretary of State, the exercise of those powers will be subject to an Affirmative Resolution by both Houses of Parliament.


I understand that to be the constitutional position.


My Lords, is my noble friend aware that the improvement referred to on both sides of the House is a recent improvement on a previous deterioration? People who remember that you could get a letter delivered the next day after writing it in practically the whole of the United Kingdom will welcome any attempt to get back again to the excellent service that we used to enjoy. Could the noble Viscount give an explanation of why the Government have put a minimum charge of £1 on the special letter? Will the £1 charge cover only one letter or several letters going to the same place at the same time? And what is the necessity for the minimum charge to be instilled into the Statement?


My Lords, if I may deal only, in the time available, with the last part of my noble friend's question, the reason we have put in a minimum charge is to make sure that this is not a pirate's charter. In a service where some parts of the carriage of letters are inevitably more economic than others—where a large traffic is involved over short distances, on the one hand, compared with smaller and dispered traffic in other areas on the other—if there were no minimum charge, the steps we shall be taking could be tantamount to a very far-reaching breach of the monopoly and could lead to private operators competing with the Post Office for the most economic parts of its service. Proof that the Government have considered all sides of the question is that they have put in this minimum charge.


My Lords, may I ask the Minister two questions. He has spoken of the concern of the Government for the consumer. Could I ask the Minister whether the Government would feel able to consider recommending cheap stamps for Christmas cards? This is a question which we have raised many times in this House. Is the Minister aware that, if we could have such a concession, if that be the right word, it would probably lead to a greater sale of Christmas cards, which would benefit the industry concerned? Is the Minister also aware that if such a concession were made, such cards could be posted well in advance—it might be even in October or at the beginning of November —to avoid the taking on of extra staff at Christmastime?

My second question is probably due to my misunderstanding of what the Minister said. I was not clear, when he spoke about private carriers being able to avoid stages where there was known to be delay in their mail, about whether they are first to stamp their mail. Could the Minister explain that further, because I am not clear about it? Does he mean that the private carriers should stamp their mail and should then do part of the Post Office's work by taking it to somewhere where there would not be delay? And how would one determine where there was delay?


My Lords, the noble Baroness is among many who have made recommendtions in relation to Christmas cards and I shall draw her recommendations to the attention of the new chairman of the postal services. Some proposals in the past to ease the position on Christmas cards have been opposed by the workers in the Post Office. I very much hope that, as cooperation in that respect improves—it is improving and they have agreed to operate trial services which are leading to increased productivity at the moment—schemes like this may be able to be discussed again. I cannot commit the Post Office to recommendations but I will draw the chairman's attention to the noble Baroness's recommendation.

So far as the necessity for stamping mail, where the private person or company does part of the Post Office's job, is concerned, Yes, that is the requirement in the Statement that I have read and, Yes, it is a little illogical, if that was the noble Baroness's implied point. A company in London, for instance, in the summer of last year knew very well that its mail for the North of England would probably get along a bit faster if it were posted in Birmingham or Manchester, wherever they happened to have people going. Under the existing law, that is not allowed, even though the mail is stamped. Under the new law, when enacted in the next session, that will be allowed.


My Lords, may I ask the noble Viscount whether—if we dismiss the details which have been omitted, many of which are objectionable, many of which will give rise to confusion, and certainly to increased charges—what he has indicated is the Government's general line of policy? Its purpose is to weaken the principle of nationalisation, if not to abolish it. The Government have succeeded in part in emasculating the National Health Service and they are now engaged upon stripping the assets of British Rail. Generally speaking, they are trying to dispose of the principle of nationalisation. However, they have not yet decided to denationalise the coal mining industry. I wonder whether that is a favour accorded to me, because I piloted the Bill through the House of Commons and through your Lordships' House. So far the Government have not attacked the principle of the nationalisation of the mining industry. When are they going to attack it? When are they going to attack and confront the miners? Why do they not admit that they are using a minority decision of the British electors at the last general election, for such it was, for the purpose of disposing of the high moral principles which were embarked upon by the Attlee Government? That is their purpose and they seem to be achieving it to a considerable extent, except for the likelihood of a great deal of disturbance and confusion in the community.


My Lords, I am sorry that the noble Lord feels that the proposals are objectionable and will result in higher charges. One of the main purposes of the proposals is to try to ensure that the charges do not continue to escalate and the service to deteriorate. The noble Lord said that our objective is to weaken nationalisation and to attack the nationalised industries and that we are doing this on a minority mandate. I expect that his reading of the opinion polls is probably the same as mine: that one does not read all for gospel. Nevetheless, on the subject of nationalisation, every opinion poll in recent years has shown quite clearly that the bulk of the public, even if noble Lords opposite have not realised it, realise that nationalisation is inefficient and does not give them a good service. Our object therefore is not to weaken nationalisation or national services. Indeed, we are supporting the armed services in every respect that we possibly can. There are things which can best be done by the State. However, there is quite a lot of international evidence that the carrying out of some industries' functions by nationalised means is not always the most efficient.

However, in this statement my right honourable friend has quite clearly recognised that a national mail service is vital. That is why there is to be a minimum charge of £1 to prevent the pirating of a vital national service. But my right honourable friend does believe—and so does the public, and so do I—that there is room for greater efficiency if a bit of competition can be brought into the fringes of this service and into special services which do not really compete with the essential network service. I shall draw the attention of my right honourable friend the Secretary of State for Energy to the noble Lord's remarks on the coal industry, I am not prepared, in answering questions on a statement regarding the postal monopoly, to go into that particular point.


My Lords, will my noble friend please accept that I really do not care too much about this particular argument about nationalisation but I have had the good fortune to live for 63 years in a very charming village in Scotland. Until the last two years we could post letters on Saturday and on Sunday up to five o'clock in the afternoon; now, with the modern Post Office, there is no possibility of posting letters after eight o'clock on Saturday morning, and that seems to me to be a most disgraceful situation in which no amount of private enterprise can come in and help.


My Lords, it is because of that situation that we are protecting the whole service and supporting the Post Office in all their efforts to improve the efficiency of the service again. The efficiency of the service is improving and they are moving towards their internal charter.


It is going down, my Lords.


My Lords—


My Lords, I think we are in danger of breaching our own Standing Orders and turning this into a debate, which Standing Orders do deprecate, and I wonder whether we might perhaps move on.


My Lords, before the House agrees to that, can the noble Lord tell us by what coincidence it is that he always rises to make that proposal at the same time as I rise?


My Lords, perhaps it is because the noble Lord always rises on the 30th minute after the Statement has been begun.