I call the Amendment in the name of the hon. Member for Weston-super-Mare (Mr. Webster), in page 1, line 12, and suggest that with it there can be discussed the remaining two Amendments on the Notice Paper. If desired, there can be a Division on the Amendment in the name of the hon. Member for Dorset, South (Mr. Wingfield Digby).
I beg to move, in page 1, line 12, to leave out '£1,750' and to insert '£1,500'.
I agree, Sir Eric, that it will be convenient to discuss at the same time the remaining two Amendments—in line 12, leave out '£2,200' and insert '£2,100'; and in line 12, leave out '£2,200' and insert '£1,900'.
I am sorry to see the Postmaster-General leaving the Chamber. The Bill asks the House of Commons to agree to the granting of an immense amount of money. I wish severely to reprove the Postmaster-General. Having just rebuked British manufacturers of television sets because their prices are too high, although he was unable to make the slightest comparison with prices on the Continent, he has now left the Chamber, having asked for this monstrous amount of money. I should now like to congratulate hon. Members opposite on making up the highest number that I have yet seen opposite at a morning sitting.
Certainly not. I noticed that, for once, the hon. Gentleman was present and made a very pleasant speech. I thought that I could read his speech just as well as could listen to it, and probably very much quicker.
I return to the point that the Government are treating the Committee with scant respect in the matter of raising money. This is being done in the context of a very serious squeeze on finances throughout the private sector. The Chancellor of the Exchequer has said in various statements, and the Prime Minister said in his statement of 20th July last, that all unnecessary expenditure should be scrutinised and pruned. For that reason, it is essential that we scrutinise and, if necessary, prune the expenditure of the public sector.
At the same time as the private sector is being squeezed and is finding the greatest difficulty in raising equity and risk capital, it is being made much easier for the public corporations—the Gas Council, the Electricity Council, the National Coal Board, the Public Works Loan Board—to have immense amounts of public money. It is the function of the House of Commons to scrutinise the expenditure of the taxpayers' money, the money of the British public.
I hope that the Committee will not treat this issue lightly. It is exceedingly important. The scrutiny of public expenditure is one of the things that hon. Members on both sides are here for. I again express my severe reprobation of the Postmaster-General for just walking out of the Chamber, having delivered a completely unnecessary rebuke to private industry—the usual tactic one expects from Socialists—without having been able to tell us the comparative costs of equivalent sets abroad, with all the experience continental manufacturers have. The Postmaster-General has not even taken the trouble to find out the comparative price.
As my hon. Friend the Member for Howden (Mr. Bryan) rightly said, we conduct this scrutiny in the light of what my hon. Friend called the endearing or engaging frankness of the Postmaster-General in expressing his pleasure that the Post Office would be freed from Parliamentary apron strings. I know that we do not want to interfere too much in the day-to-day running of the Post Office. On the other hand, there cannot be this complete liberty and licence with public money on the part of the Post Office. Today we are asked to grant money to cover Post Office finances until 1971, knowing full well that the Post Office will be made a corporation in approximately three years' time. This matter should be scrutinised very closely. There is a borrowing of £880 million to cover an investment of £1,500 million.
Before I talk about the various aspects of the investment, I want publicly to pay my tribute to the Post Office and all who work in it. They are doing a very difficult job, and they are doing it to the best of their ability and exceedingly conscientiously. I know from my own experience that they always try very hard indeed. On the other hand, it must regrettably be said that the last Report and Accounts stated that the quality of the service had certainly not improved during the last year.
We are well aware that the demand for Post Office services is increasing, probably, except for the current year, faster than ever before. In the last few years the number of postal deliveries and the number of letters going through the post has increased immensely. The number of telephone subscribers and the demand on the telephone service has increased immensely. We appreciate that much of this investment money is necessary, but we cannot let £1,500 million of new investment go unchallenged.
I have read the speech which the Assistant Postmaster-General made on Second Reading. He did not answer many of the questions asked by my hon. Friend the Member for Norfolk, Central (Mr. Ian Gilmour), who wound up for the Opposition. The hon. Gentleman seemed to think that my hon. Friend was rather offensive in asking those questions. I hope that the hon. Gentleman will be able to read the speech which my hon. Friend made and answer the questions today.
I should like to know about the progress of the McKinsey Report—[Interruption.]—not the Kinsey Report. That was on a different type of communication. I am talking about the McKinsey Report on the Post Office. Can the Assistant Postmaster-General tell us what savings in expenditure can be effected from the McKinsey Report? What increase in revenue does he expect to get from the increase made in the postage stamp rate over each of the next three years? I am sure that the Post Office has made estimates and will be only too glad to publish them because the increase on the letter rate and the heavy increase on the package rate have been in force for some time and it must be possible to give estimates for the next three years.
The Post Office slips through these increased charges rather slyly, like today, without my hon. Friend the Member for Howden being previously informed. The increases in the overseas postal charges were slipped through in the autumn without much attention being drawn to them. May we have an estimate of what increase in expenditure can be expected on the basis of the experience so far gained? I am not particularly optimistic of getting an answer because I see the Assistant Postmaster-General——
Before my hon. Friend leaves the point about the way in which the Post Office slipped through the increases in overseas postal charges, may I point out that young people overseas on V.S.O. have to pay the full postal price, which was increased at that time, and the Department was most curmudgeonly in refusing to allow young people on V.S.O. to enjoy the Forces' preferential rate? The Forces are comparatively well paid today compared with those on V.S.O. Therefore, this increase in overseas postal charges has had a very hard effect on them.
I appreciate what my hon. Friend says. Many of us have relatives on V.S.O. and we feel very strongly that since they are not only performing this service in Britain's good name but doing something useful abroad they should be helped. I hope that the Assistant Postmaster-General will give us estimates of the increase in revenue which can be expected and what effect it will have on the traffic. I am the first to admit that probably many of our postal charges are cheaper than the charges made abroad and that they are being brought more into line.
There is considerable expenditure on new buildings and new machinery. We know that it is extremely difficult to mechanise the postal collection and delivery service and that it is a highly specialised service. Many of the post offices were designed for conditions which operated many years ago. The sudden upsurge of traffic has made it almost impossible for the people in the sorting offices to work. I do not know how they do it. I respect their dexterity in the cramped conditions in which they work. At last, something is being done about the matter. New buildings are being erected.
What saving is it expected will be made from carrying out the labour-intensive side of these sortings by using great rotary sorting machines? Many of the old buildings which are becoming redundant occupy valuable sites. We wish to be assured on behalf of the taxpayer that when sold they are sold to the highest bidder, commensurate with the social necessities of the Post Office. We want to ensure that when Government property and buildings are sold the taxpayer gets a fair crack of the whip and that a proper price is paid for them. Like others who have served on the Estimates Committee, I know that in the sale of public buildings there frequently has not been adequate publicity of tenders. I am sure that my hon. Friend the Member for Harwich (Mr. Ridsdale), who is a crusader for the public good on this issue, would be one of the first to support me on this point.
I agree. It would also be useful if a professional valuation were made of the property before it was sold. I am not satisfied that this is done in every case. My hon. Friend is performing a valuable public service in this respect. We appreciate that the expenditure of £45 million on sorting equipment over the next 10 years is probably extremely necessary. However, we wish to ensure that when old and valuable properties in the centre of our cities are disposed of the taxpayer gets a good crack of the whip.
I wish to raise a point on a small matter which again did not receive much publicity when it occurred and which, because of this, has unfortunately, stirred up ill-feeling against the Post Office. What savings in overtime can be expected from the alteration in hours to 5.30 on weekdays and 4.30 on Saturdays? The public have been taken by surprise here. We appreciate that the Post Office is labour-intensive, particularly on the postal services side.
The Prime Minister stated on 20th July that there would be not unemployment but redeployment. Can the Assistant Postmaster-General tell us to what extent the Post Office has benefited from this alleged redeployment? Is the manning situation easier? Can the hon. Gentleman answer the question which was put by my hon. Friend the Member for Norfolk, Central on the subject of the discussions with the trade unions? Can he tell the House what progress has been made in the Post Office on labour relations? We need to know answers to questions of this sort before we accept the expenditure of this vast sum of public money—this is the last chance that we have to talk about it—and before the Post Office is freed from its Parliamentary apron strings.
There has been a spate of new postage stamps. Some of them are very attractive. With others, one wonders whether the additional cost involved is worth while. What additional revenue does the Post Office get from the sale of first-day covers? I am sure that the hon. Member for Carmarthen (Mr. Gwynfor Evans), from the Welsh Plaid Cymru, if I might be allowed to address the Committee in Welsh, will want to know whether any Welsh stamps are to be issued.
I now move to the more dramatic side of the Post Office—the telephone service. This is very much more capital-intensive. Bristol, as usual, is in the forefront in these matters, despite its Parliamentary representation on the benches opposite. It pioneered the S.T.D. service. The Queen, accompanied by the Duke of Edinburgh, opened the service and spoke to the Lord Provost of Edinburgh. We thought that this would assist the situation in Bristol, but what happened was that very much more traffic was deflected through Bristol and the problems of getting through from Bristol to London and other places became very acute. As more exchanges go on to S.T.D., we hope that these pioneering centres will have the burden taken off them so that the service is improved.
All this money is spent simply on getting a better service for the customer. I hope that the Assistant Postmaster-General will tell us whether the 800,000 subscribers, a record figure—I gather that the waiting list is becoming much more static—will have a better service in future. The expenditure on them is considerable—£65 million this year and about £130 million next year. One wants to make sure that that immense amount of money is properly used, and that it will generate additional revenue which can be put to reserve to enable the Post Office to try to do a little more self-financing, so that the unfortunate taxpayer and subscriber does not always have to foot the bill.
Despite the prices and incomes freeze, brought in with such bravado by the Prime Minister, we have seen a 100 per cent. increase in the lowest telephone charge, again done by the most extraordinary stealth. It is quite shocking that the Postmaster-General should brew up more schemes for imposing additional charges on a long-suffering public. We are told that, as a result of the change from a threepenny to a sixpenny call in public telephone boxes, there will be better value because there will be a longer call. Is that really a wise purpose? With an overloaded post office, we should keep calls brief and give a premium to the brief user.
Would the hon. Member not agree that, apart from the 100 per cent. increase, which many hon. Members on this side deprecate, there is also a loss of service? I had to use public telephones before I had a 'phone of my own and I then had a choice of a threepenny, sixpenny or shilling call. That choice is now reduced by a third, and therefore there is a loss of service to the public, quite apart from the increased charge.
I appreciate that point, and I hope that the hon. Member for Salford, West (Mr. Orme) will spread it, because so many trade unionists who are not allowed to have an increase in wages are being inflicted with a 100 per cent. increase in telephone charge. This is very serious. That increased charge was first introduced at London Airport, and the first thing one sees when one comes into the airport is that the cheapest charge has gone up by 100 per cent. What will the foreigner thing of the strength of sterling?
The hon. Member for Weston-super-Mare (Mr. Webster) said several times that there has been an increase of the cost of the telephone call. Would he explain that? Is he not aware that he gets sixpennyworth of call for the sixpence he now puts in, just as he did before?
I once fought the predecessor of the hon. Member for Bristol, North-East (Mr. Dobson) at an election, and I hope that I never have the change of fighting the hon. Member. His point is valid, but my point is that what we want is to keep calls to the greatest brevity, just as I am trying to make my speech as brief as possible. But the vast number of interventions from the other side of the House is making that difficult.
I am sorry to prolong my hon. Friend's speech, but was not one of the arguments when STD was first introduced that it would enable people to make long-distance telephone calls and speak extremely briefly and thus increase business efficiency, and also that it would be convenient for other people who wish to ring up and speak for a very short time. Although the hon. Member for Bristol, North-East is right to some extent, does not the increase from threepence to sixpence defeat one of the purposes for which STD was introduced?
I entirely agree. My hon. Friend the Member for Southend, West (Mr. Channon) has expressed the point much better than I tried to do. I appreciate the way in which he has clarified and distilled my thought on the matter. We want increased efficiency in the Post Office, and if we encourage our wives to have sixpennyworth of call instead of a threepenny call there will be a double burden on the Post Office. It is never the men who make the long calls but their wives.
Hon. Members have done me the great courtesy of taking so much interest in my speech. Because there is a little less room on the other side of the House than usual, it has become more protracted.
I am sorry that I must now go on to some very technical matters, which I am afraid will bore the House exceedingly. During his Second Reading speech, the Postmaster-General said that he very much regretted that so much technical modernisation was going on with machinery like the Strowger type of exchange equipment, which he hinted might be becoming obsolete. When one has equipment that has been in use for some time but is still very adequate, although there is a risk that it might shortly become obsolete, one is faced with a terrible alternative of expanding rapidly on equipment that has not been adequately proved. That would be a great mistake.
On the other hand, I hope that if there is some doubt of the equipment's obsolescence it will be possible for experiments on the other type of equipment to be speeded up. Dollis Hill is very good in the way it works that type of experiment. I hope that then there will be no risk that in a few years' time, or in 1971, the House will again be asked for a vast amount of money because the equipment put in now has been rendered utterly obsolete. That is a very great danger in massive investment of this sort, with the electronic type of equipment being introduced now, and it is probably a considerable risk to put so many eggs into one basket of the Strowger type of equipment. Can the Assistant Postmaster-General give an assessment of the risk that it might be rendered obsolete, and that complete new equipping might have to take place?
Both my hon. Friends on the Front Bench stressed the issue of quality in the Second Reading debate. In rural areas we have particularly the problem of the person who signs an undertaking with the Post Office in good faith but suddenly finds that he is asked to share a line some years later. There is a difficult problem for the Post Office in that if he does not share a line the other chap cannot have a telephone line unless more cables are laid. Many people are genuinely taken by surprise by this, and I agree that in many cases it is possibly their own fault that they are surprised.
I am very grateful, Sir Eric, and I immediately do so. How much of the equipment to be provided from the increase to £1,750 million will be devoted to increasing the facilities in rural areas to prevent people having to share a line? In many cases there is difficulty, and the people concerned are threatened with having their telephones cut off. It is a humane problem in which the Post Office sometimes appears to work in a high-handed manner, and I hope that some of that expenditure will prevent the necessity for that sort of thing having to continue.
The other side of the coin is a waiting list of 125,000 people, which is becoming static with the reduction of demand because of the prices and incomes freeze. Of the people on the waiting list, 24,000 are those for six months. One wants to introduce as quickly as possible the equipment for which we are asked to approve the money today, and to make sure that it is the right type, so that we do not have to ask the House in a few years for more money to put things right.
Yes, but I am also proposing on behalf of the taxpayer, with great generosity, to increase the amount from £1,120 million to £1,500 million. I know that that amount of money is chicken feed to the hon. Gentleman, and that is an attitude which all of us on this side of the House deplore and regret.
The purpose of the Bill is to make available to the Post Office this vast amount of money, which we wish the Post Office to have, with a further review of a higher amount up to £1,900 million without further recourse to Parliament except by the procedure of both Houses. However, before it goes beyond that amount, we want the Assistant Postmaster-General to come to the House again so that we can debate the granting of the taxpayer's money to the Post Office. That is a principle which he, as a very senior member both of the Estimates Committee and other Select Committees which look into these matters, would wish to be subject to thorough Parliamentary scrutiny every time that the Post Office wishes to have further borrowing powers. I am sure that in his heart of hearts he agrees with me.
Then there is the novel Giro system. Can we expect revenue from that system to reduce the amount of borrowing which will be necessary, or will the cost of it mean that it is not running in a profitable manner? If the Giro system is run at public expense and at a loss, one wonders how much it is using public money to cut into the normal banking facilities. That again would be an erosion of the private sector at the expense of the taxpayer. It is a dangerous principle into which we would wish to probe.
It is a matter of great principle. It is the first time that it has been done in this country. I see my hon. Friend the Member for Maidstone (Mr. John Wells) with a pile of books on the subject. I am sure that we will all want to look into it thoroughly to see that public money is not thrown away and that the taxpayer's money is not being used against the taxpayer to subsidise unfair competition against him.
I should like to know how much of this money is being spent on the European Launcher Development Organisation, on E.S.R.O. and the communications satellites which will be floating through the sky. I hope that the answer is a great deal and that we can contribute to those Organisations to further real technological co-operation in Europe and in the world. At the same time, we must be able to scrutinise the spending of this money. I have said both in this House and at the Council of Europe, on this and other technological subjects, that breakdowns in these matters—we know that E.L.D.O. was nearly abolished because of action by this Government—do not result from the failure of technicians but that of adequate budgetary control whereby costs escalate until someone digs in his toes and says, "This must stop".
It is even more important that there should be a reduction in the increased borrowing powers so that, in two years' time rather than four, we have the right in Parliament to find out how this money for E.L.D.O. and E.S.R.O. is being spent. If we do not do that, things escalate out of control, someone decides to withdraw unilaterally, and projects collapse. It is important that such matters should be scrutinised regularly to prevent that happening.
In Europe, we see a proliferation of communications towers, making increased communications possible because they get above the curvature of the earth. How many towers are proposed? I know that such a tower is thought to be a symbol of prosperity in a major city. However, to what extent are they absolutely necessary? One does not want to stop progress, but we must scrutinise how much is invested and what sort of savings we expect by abolishing previous forms of communications.
Those are some thoughts which the House might like to consider before joining me in granting this vast amount of money to the Post Office. We wish to increase its borrowing power to £1,500 million. We want it to have the money, and we hope that it uses it well.
I conclude by again paying tribute to the Post Office, but I say to the Assistant Postmaster-General that we want to know the answers to these questions before approving the expenditure of such vast sums of public money.
There are occasions when I wonder whether the House is being serious in debate or whether questions are being raised merely for the sake of talking, hon. Members having some other and different projects in mind. It may be that the discussion on this Amendment is such a situation. However, perhaps we can give hon. Members the benefit of the doubt and take it that they are genuinely concerned with the future of the Post Office services.
Does the hon. Gentleman recognise that we are also concerned with the future of the House of Commons? The House has a duty and obligation to probe when Governments ask for very much greater borrowing powers. We are concerned not only about the Post Office but that we should scrutinise proposals and ask Ministers their reasons for wanting large increases in borrowing powers.
I agree that it is right that we should be concerned with public money which is being spent. That brings me to the point which I intended to make. It seems strange that we should have a proposition in an Amendment which is likely to reduce the future development of the Post Office services. That is precisely what the Amendment does, unless hon. Members are not putting it forward as a serious proposition but merely as a probing Amendment to get certain statements from the Government. That is perfectly legitimate and within their rights——
I am aware of that, and that is precisely what I am saying. The point that I am making is that, within this context, some of the points which have been made appear to be not terribly serious but are merely probing questions.
Together with a number of other hon. Members, I am deeply concerned with certain aspects of Government policy in relation to postal and Post Office services. I want to speak about some of the problems this morning, though I hope at not quite the same length as the hon. Member for Weston-super-Mare (Mr. Webster). Nevertheless, there are very important points which I should like to get clear from the Government before unequivocally giving my support to the Bill. It is quite right that we should know precisely what the Government have in mind. We are being asked to vote for a considerable extension of borrowing powers. Whether it is the reduced sum, as suggested by the hon. Member for Weston-super-Mare, or the sum which the Government have in mind, it is a considerable amount of money.
There appeared on the front page of last Sunday's Sunday Express—a paper which I am not given to reading with any great enthusiasm—an interesting item which said:
£4 increase feared on phone rentals".
This is a very interesting and important item, if for no other reason than the fact that I have two telephones. This could mean to me personally, apart from my constituents and others who have telephones, a considerable increase in the annual charges.
Is the statement that appeared in the Sunday Express true? Have the Government any intention of increasing telephone rentals? If so, I should like them to bear the following comments in mind. Prior to entering the House, I was a member of the Liverpool City Council. I was an ordinary working man, working for the Mersey Docks and Harbour Board. I had to have a telephone in order to carry out my city council activities. I was not a chairman of a committee in the early stages, and therefore I did not receive any financial assistance, but it was essential for me to have a telephone in order to look after my constituents, as it were. As a working man, this meant a considerable strain on my financial resources. Other councillors and working people are now in the same situation, because their salaries have not increased as mine has. The position of those people will be very difficult indeed.
I am not saying that an increase, as suggested, is part of Government policy, but before I give my support to the Bill I would ask the Government whether an increase is intended as part of Government policy. We cannot have it both ways. The Postmaster-General said, in his extremely interesting and very good speech on Second Reading, that the Post Office did not get all the capital it needed from the Government. He said that the other element was composed of its profits.
If we know that we are making a profit, is it essential for us to have these increased rental charges? [HON. MEMBERS: "Hear, hear."] I know that I am getting great support from hon. Members opposite. It might well be a case of saving myself from my friends on this occasion, but hon. Members opposite should not be too enthusiastic in their support of what I am saying, because I could well do without their cheers.
I am concerned about the thousands of ordinary working people who have telephones and those who want telephones. We want to see an expansion of this service. I am deeply and sincerely concerned about those people and the provision of telephones for them. want an answer from the Government about whether it is true that they intend to increase rental charges on telephones.
When the Assistant Postmaster-General comes to answer this specific question, could he also tell us whether the Post Office intends to increase charges for telephone sockets. The hon. Member for Liverpool Walton (Mr. Heffer) said that he had two instruments in his use and had to pay a fee for each instrument. It would be interesting to know whether the charge for a telephone socket is also in jeopardy of being increased.
I am grateful to the hon. Member for putting that question, which is important. This is a matter on which we must have some clarification. The Postmaster-General said on 20th January, that due to the economy measures announced by the Prime Minister,
The growth rate is now slightly lower …
That is, the expansion of the telephone service.
… than we had previously budgeted for."—[OFFICIAL REPORT. 20th January, 1967; Vol. 739, c. 833.]
So there has been a slowing down of the actual expansion and development of the telephone installations. This will be further slowed down if there is an almost doubling of rental charges, and this could be a terrible burden on ordinary people.
Earlier, we were discussing colour television. Colour television will be a luxury for a relatively select group of the popu- lation. I do not want telephones to be a luxury service for a small group of the population. I take the view that everyone in this country has the right to a telephone in his house, whether it is the chap who sweeps the streets of Liverpool or a Member of Parliament. If we have this increase in rental charges, I very much fear that it will again begin to put the telephone out of reach of the ordinary working man. This is precisely at a time when there has been a wage freeze.
We have already had an increase in charges. I know that some of my hon. Friends do not entirely agree with me about this. They say that we now have six minutes for 6d. as against less time for 3d. The working-class chap who goes to a telephone kiosk may only want a couple of minutes, but he now has to put in 6d. as against the 3d. which he put in before. Whether we like it or not, that represents an increase to that man.
These are very important points. In relating them to the Amendment, before I give my full support to the Bill, I want some assurances that we will not have further increases of telephone rentals.
Would not the hon. Gentleman agree that this morning the Postmaster-General laid strictures on private industry which is likely to develop colour television, if it cannot bring down prices? He said that they must bring prices down. He expected that with the expansion of the market prices would come down. But for a year or two we have had an expansion of the telephone market with great potential and the price has been going up.
If the hon. Gentleman is strictly fair, he will agree that there is a lot of difference in the case of television and the possible suggestions—I do not know if the suggestions are true—which were made in the Sunday Express. Nevertheless, the point is reasonable and the increased charges will be an extra burden on the shoulders of particularly the lower paid sections of the community. That is what I am very concerned about.
I now wish to turn to another question: How much of the extra money is to be allocated towards the development of local radio services? I am a great believer in local radio stations and I particularly want such a station in the Merseyside area. I believe that on Merseyside we have a distinctive culture of our own. I was interested the other day to hear the hon. Member for Carmarthen (Mr. Gwynfor Evans), who represents the Welsh Nationalist Party, suggest that we ought to have a stand at the Canadian international exhibition specifically for Wales. It sprang to my mind that it would be a jolly good idea to have a stand specifically representative of Merseyside, because of our distinctive culture.
That is rather wide of the Bill. Another Bill is coming which will deal with Radio Caroline and similar stations. However, I agree that we should have a local radio service for Liverpool and its environs and we must have an assurance from the Government that a considerable amount of this money will be used for the development of such services.
I return to what I was saying about telephone rentals. I do not know whether it is true that there is to be an increase, or whether this was merely a story to help to sell the Sunday Express. I hope that the Government are not considering any increase in telephone rentals. It would be a seriously retrograde step which would have serious and long-term effects on the development and expansion of the telephone service.
My hon. Friend the Member for Weston-super-Mare (Mr. Webster) spoke for some time. I will therefore be comparatively brief since I know that several of my hon. Friends wish to take part in the debate.
I fully agree with what the hon. Member for Liverpool, Walton (Mr. Heffer) said about telephone rentals. In my intervention I made it clear that I thought that in this service the Post Office had failed to take advantage of the growing market and the growing possibilities for providing more telephones. This country probably has fewer telephones per head of the population than many other countries in Europe. If we are to go into the European Economic Community it is essential that we improve the availability of telephones. That is not done by a further increase in rentals following the increases in recent years.
I am especially concerned that the Bill appears to give very large borrowing powers to the Postmaster-General for a period not of two but of four years. These may be the last comments by the Committee or the House on the matter, for a corporation may be set up before we reach the stage when we consider further borrowing powers, or even before the time when this matter can be discussed again simply on an Order.
It is incredible that the Post Office should be asking for such borrowing powers and even more incredible that the Treasury should agree to an almost 30 per cent. increase in borrowing at this time. I understand that as the Budget approaches one of the matters concerning the Chancellor of the Exchequer is Government expenditure and the need for Government money to service Departments. I understand that the Chancellor is trying to cut down all round, and yet here lie has apparently agreed to this very large increase in these borrowing powers. I am concerned that the House of Commons will not be able to watch the use of this money over this period. The situation would have been happier if we had been able to consider the matter again next year and the year after.
It is also possible that before the four years are up we shall have another General Election, so that the Government may be providing enough money for the Post Office for the whole period of their office. I cannot think that that is something which will commend itself to the Committee. I understand that a good deal of reorganisation is going on in the Post Office—it is certainly affecting my own area—and we are having amalgamations of various departments, the cutting-down of staff and so on, and this is affecting, the services given to the public.
The Postmaster-General was in my county last week. We were very pleased to have him there. I understand that it was a very fine day. He presented prizes to school children and did it very well, and everybody enjoyed seeing him. He was shown the local post office, which is very old, dating back to the nineteenth century. He let slip the fact that in those started, postal services were more frequent than now. Yet he is asking for this great increase in borrowing power, knowing that the service provided today is not nearly as good as it was 50 or 100 years ago, at least in frequency of delivery and pick-up.
I accept that, but the cuts in deliveries arising from staff difficulties and so on, which are admitted by the Post Office, nevertheless mean a less frequent service and a less frequent pickup. Other Governments have had this same difficulty. But this increase in borrowing power is coming at a time when there is a reduction in the service provided for the public. I would like to hear in detail from the Assistant Postmaster-General what is to happen to this money.
This morning, the right hon. Gentleman made a statement about colour television, which is a great step forward. We were all pleased to have that statement for which we have been waiting for some time. We took the point that he made about the cost of a colour television set being too high, about £300. No one wants to be in the position of having to choose between buying a mini-car or a television set. The price of these sets must be brought down. The Postmaster-General said that it would cost £17 million for this reorganisation, to introduce colour television on B.B.C., and about £31 million for I.T.A. Since there are increased borrowing powers in this Bill, will some of the money be made available to the B.B.C. to meet these costs?
Is it the Postmaster-General's intention to press upon the Treasury that it should take less money from the independent television authorities, who are already paying it very large sums of money which they cannot continue to do if at the same time they must find £31 million to develop colour television? The Postmaster-General is not justified in asking for such large increases in borrowing powers if, at the same time, he says to the B.B.C. and I.T.A. that they must engage in this development without receiving further financial assistance, by borrowing, by grants or by some reduction in taxation. It is important that the Committee should probe such a grave matter, and I hope that my hon. Friends will continue this debate, if not today then during another morning sitting so that we can have a full answer from the Assistant Postmaster-General.
I welcome this opportunity of scrutinising the borrowing powers of the Post Office, especially when such a large sum of money has been asked for. We often ask for sums of money to be spent, and it is very good that we should scrutinise the expenditure in the taxpayers' interests. I welcome the speeches made on this side of the Committee and the speech made by the hon. Gentleman the Member for Liverpool, Walton (Mr. Heifer), who has been very concerned about the increase in telephone rental charges, coming at a time when the Post Office is asking for these increased borrowing powers.
We were told that increased productivity would pay for a great deal of all the necessary expansion needed in so many of our industries. It was a plank of the Government's platform at the last election. Yet here, in these nationalised industries, where there should be opportunity to increase productivity and absorb increased costs, time and again Ministers ask the House of Commons for more money, and greater borrowing powers.
When one looks at the amount of capital invested in the Post Office and some of the other public industries in the last few years, one is bound to ask whether one is getting value for money and what is the net return on the money being invested. The net return on the capital invested in the nationalised industries as a whole is not nearly as high as the net return on capital invested in private industry. For this reason we need to look very closely at what is happening, particularly since the Postmaster-General is unable to tell me what would be the cost abroad of a 625-lines colour television set. If he does not know the answer to that question, is he looking into the items of cost in the Post Office? It was amazing that he did not know that answer.
I want to discuss the level of expenditure in the Post Office and to see whether this amount of borrowing is necessary. Like my hon. Friend the Member for Weston-super-Mare (Mr. Webster), I wish to ask some very detailed questions about the spending and efficiency of the Post Office. Now that the Assistant Postmaster-General is here, he will be aware that I asked him a question earlier this year about the loss of a telegram, which caused a £47,000 loss in our invisible exports.
As the hon. Gentleman says, it was an invisible telegram. I do not want to go into detail, because I hope to have an Adjournment debate on it.
It is this challenge to efficiency and these sort of losses which make one want to scrutinise the accounts so carefully. It is said that the net return on capital for 1963–64 and 1967–68 should be 8 per cent. I wonder whether that return is being reached. I have a feeling that it was something of a day-dream to hope for that sort of return. One is extremely disturbed that people should ask the House of Commons for more money with the knowledge that that return is not being reached, at least on the postal services, although it may be reached on some of the telephone services.
What are the accumulated losses to date? Are the losses given in the last White Paper on the postal services in 1966–67 the losses to date, or will there be further losses? I hope that, when he replies, the Assistant Postmaster-General will deal with that point. What has been the yield on the increased charges, and can we expect more such charges, bearing in mind the enormous amount of borrowing power which the Post Office is now seeking? At a time of freeze, when prices must be kept stable, the Post Office, instead of asking for these enormous powers should be setting an example to the rest of the country and should have not increased its telephone charges 100 per cent. from 3d. to 6d.
It is iniquitous for a Government to attempt to fool the House of Commons and the country in this way. This is what is happening and we are allowing it. The sooner the country wakes up and realises the kind of Government that we have, and the way in which they are trying to fool everyone and to raise prices without setting an example to the country, the better.
I have interrupted on this point before, and perhaps the hon. Gentleman accepted the burden of my interruption. The hon. Gentleman said several times that the charge has been increased. Would he explain that? People are getting 6d. worth of telephone time for 6d. Where is the increase?
The corollary of what the hon. Member for Bristol, North-East (Mr. Dobson) is saying is that anybody who travels by rail should be compelled to buy a return ticket.
What is disturbing is the complete inconsideration of hon. Members opposite and their disregard of what 3d. means to ordinary people and retired people, particularly in my constituency and in the constituencies of many of my hon. Friends. They wave 3d. aside as though it means nothing, and yet if we do not take care of the pennies we cannot take care of the pounds or the thousands of millions of pounds in extra expenditure for which we are being asked.
What is so wretched is that, in spite of all the extra borrowing powers for which the Government are asking, there is a steady deterioration in postal services.
The hon. Gentleman says that that is not true. I should like to quote a personal example of how the services have deteriorated. I have my letters forwarded to my home in London from the post office in the House. I wished to collect them because they are not delivered on Saturdays as they used to be. I went to the sorting office in the Fulham Road and asked whether I could have my letters because I wanted to answer them so that my constituents could get a quick reply. I was told, "The sorting office is closed at 1 o'clock and you will have to wait for your letters". Although one wants to give service, one is prevented from doing so because of the closing of the sorting office.
I agree with what my hon. Friends have said about the work of the postmen and other Post Office officials. They are doing their best to work hard and to do their job. What we challenge is the management. We wonder whether management in the Post Office is efficient.
Would not the hon. Gentleman accept that if the Post Office workers are doing their job, as everyone in the House admits they are, there is an obligation on the management to give half days off on some Saturdays to some postmen? It is not very many who get them.
It is perfectly right that people should work and play. But we should be able to work and play and provide the same service. This is what is meant by productivity. Without an increase in productivity there will be a steady deterioration in the service. I protest against the steadily deteriorating service because I am concerned about the amount of money being spent. I do not believe that we are getting value for money in some of the publicly-controlled industries.
What was the reason for the increased charges? We were told last year that postal finances were expected to break even in 1966–67 and to show a return on capital of 5·4 per cent. Was that another of the Government's daydreams? Was that said because they knew that another election was coming soon and they wanted to dress up what was being done in the Post Office? We are most concerned about the return on capital in the nationalised industries. Has there been a return of 5·4 per cent. on capital in the Post Office? What is the net return on the capital invested in the postal services and in the telephone service?
The shortfall deficit of £8 million for 1966–67 related to the norm of an increase of 3½ per cent. in wage rates in the National Plan. What has been the norm in pay increases in the Post Office? What is the shortfall? What savings have been made through increased mechanisation? Has productivity increased? Has the estimated 2 per cent. average improvement in output per man been achieved? Has manpower—[Interruption.] I have no doubt that the Joint Parliamentary Secretary to the Ministry of Housing and Local Government, who has just come into the Chamber, will be able to give us better answers than the Assistant Postmaster-General.
We will leave that for the moment.
I was talking about increasing productivity in the Post Office. When I was Under-Secretary of State for Air, we were able to save considerable sums of money in the Defence Ministries, in spite of what hon. Members opposite said, by making cost effectiveness studies. [Interruption.] Would the Joint Parliamentary Secretary say that at the Dispatch Box, please? I wished to give way to the hon. Gentleman because he said something. I am surprised that we should still be getting from the hon. Gentleman electioneering which should have been done at the last election when we are discussing this very important matter.
Cost-effectiveness in the Post Office is very important. What has been done about the manpower report and about increasing efficiency? Are enough cost-effectiveness studies being made in the Post Office?
The hon. Gentleman says that there have been too many, but, in view of some of the borrowing powers to which we are being asked to agree, we wonder whether enough cost effectiveness studies have been made.
Like the hon. Member for Walton, I am most concerned about the increase in telephone charges. I agree with him that many more people should have their own telephones. He quoted the example of a councillor in Liverpool. Retired people living in country districts and lonely people who wish to telephone the doctor are denied the opportunity of having a telephone because of the increased charges. I am concerned about this. More and more of these services which should be made available are not being made available because productivity is not being increased and we are not getting value for money.
I hesitate to interrupt the hon. Member again, but he rather asked for it. He said it several times and I forbore to interrupt before, but now I cannot allow it to pass any longer. He said that productivity in the Post Office is not increasing. That is palpably untrue, and he must know that it is if he looks at the accounts.
I am grateful to my hon. Friend. A number of hon. Members wish to interrupt me, but this is Committee stage and I am sure that they will avail themselves of the opportunity if they catch the eye of the Deputy Chairman. I have no wish to prolong the discussion, but I wish to register my very strong feelings about the increases in charges, especially as the Post Office knew that it would come to the House to ask for authority to borrow vast amounts of money.
Productivity may be going up slightly, but I challenge some of the figures about the return on capital. I want to see a much more detailed return. I am talking about the net return, not the gross return. Many of these things are confused about net and gross returns. The Government pride themselves on being the protector of the consumers' interests. In this matter the Government are in no way being the protector of consumers' interests. They are putting increased charges on to the consumer and asking for more money from the taxpayer. This shows why we have to make a very close scrutiny of all these Bills. That is why I welcome the opportunity to intervene in this debate. Many people are most disturbed about the increases in charges at the same time that the Post Office is asking for huge amounts by borrowing.
I am rather surprised to hear this argument about productivity. It is distressing to hear the hon. Member for Harwich (Mr. Ridsdale) say that productivity is not increasing. He has now indicated, however, that he agrees there has been a slight increase, so he is moving in the right direction.
I should like to know what he means by productivity. Surely he cannot deny that postal services and telecommunications have been expanding. This Bill provides certain borrowing powers to improve that expansion. When we look at the Reports we discover that many miles of underground cables have been laid for the purpose of improving productivity. The hon. Member cannot deny that the new services provided in peripheral areas of cities have also been an improvement.
I have been cross-questioned about increased productivity, but the Report said that it was hoped there would be increases in productivity and that a 2 per cent. increase is equivalent to the saving of 3,000 men. I want to know whether that target has been achieved.
The hon. Member is bound to concede that we have made substantial progress in this direction. No doubt my hon. Friend the Assistant Postmaster-General will be able to quote the percentages. We must be proud of the fact that these services have been expanded during periods of difficulty.
Having caught the Deputy Chairman's eye I think it is for me to make my speech in my own way. I shall defer to another occasion the matter referred to, for we have far too many other matters to deal with now. If the opportunity should arise, I should be happy to indulge in debate with the hon. Member for Bristol, West (Mr. Robert Cooke) on that subject, but now we are dealing with the question of expanding the services. To do so we require money. Increased expenditure of any kind is always frowned upon, but generally the public have a sense of responsibility. They are anxious to ascertain whether they are getting value for money and that is the problem to which we should address ourselves.
I listened with deep interest to the discussion about increases in telephone charges. I wonder whether it is realised that there are large communities in some areas in which people cannot pay these increased charges. In some areas, if one wishes to telephone to a doctor, a nurse or a clergyman one cannot find a telephone kiosk which is available for use.
I am sorry to interrupt my hon. Friend when he is making a valuable and important point, but I wish to bring out a point which underlines the matter about which I was speaking earlier. In precisely the areas to which my hon. Friend has referred, large council estates, there is often a working man who has a telephone in his house. If we doubled the telephone rental charges it would mean that many of those people would be forced to withdraw their telephones. That would make the position in those areas even worse.
I appreciate that, but my hon. Friend must realise that I am not dealing with residential telephones but with kiosks. In my district we had the experience of a policeman being brutally attacked by thugs. This was on the perimeter of Glasgow. A young clergyman who came to his rescue went to three kiosks which were not in operation and could telephone only when he got within the boundary of the City of Glasgow. As we are giving the Post Office borrowing powers in order to provide these services, what is its attitude towards such a problem as that?
Many suggestions have been made. I made one myself, which has never been considered by local postal authorities. I know of persons who are willing to volunteer to have telephone kiosks on their doorsteps or in their council house front gardens and to accept responsibility for the supervision of them. However, for some reason, our postal authorities will not consider such suggestions. They reject that type of representation and give no logical reason why such requests should be refused.
I should like the Assistant Postmaster-General to give some indication how this indispensable service is to be maintained in an age when, unfortunately, we have a number of social discontents in our communities. There are cases of houses being burned to the ground because telephone kiosks were out of order and it was impossible to contact the fire service in sufficient time.
Is the hon. Gentleman aware that that is not an attitude on the part of the postal authorities which is confined to Glasgow? In the centre of Petersfield, there is an over-provision of kiosks, whereas in the developed outskirts there is a shortage. The Post Office authorities will not consider transferring some of the existing kiosks to more sensible sites. Equally, they have refused any explanation for not agreeing to this sensible rationalisation, which both I and the urban district council want.
If the hon. Lady is successful in catching the eye of the Chair, no doubt she will develop that point.
There is a need for a review of the general attitude to the provision of public telephone kiosks, irrespective of the size of the community, its nature or the distances involved. From time to time I find that, when a kiosk is provided, the Post Office determines unilaterally where it should be sited.
In certain circumstances, it is essential to have two kiosks in a given area. If that means that the money must be found, we are duty bound to find it. I assure my hon. Friend that there would be no objection from parts of my constituency if such kiosks were provided on the basis of increased charges being made, because I speak for people who have no domestic telephones and no public kiosks. I ask my hon. Friend to address himself to that very delicate problem.
Another matter which I have raised from time to time in Questions is the subject of colour television. It is very difficult to defend delay after delay in its introduction. It is galling to find that the vanquished nations of Germany and Japan have colour television, when the victors are not within sight of it. I understand that the 625-line system has been approved and generally accepted. For the life of me, I cannot understand why we do not aim even at having colour television phased over a period of time.
Unless there is some programming of its development, we will not get the association with manufacturers which is essential. There must be integration between the development of one and the operation of the other. It would be unfortunate if, as a result of the perfunctory introduction of a service, we found the manufacturers unprepared and still manufacturing the old sets.
I do not want to interfere with the way in which my hon. Friend is developing his speech, but I would remind him that my right hon. Friend the Postmaster-General made a statement this morning about colour television. I appreciate that my hon. Friend was not present at the time, and I advise him to read that statement.
May I seek your guidance, Mr. Irving? Is there any provision in this Bill for capital to provide colour television or, for that matter, any other sort of television? Is not the hon. Gentleman in danger of widening our discussion into a general debate on the White Paper on broadcasting? If that is so, can we widen this debate into a general discussion on that White Paper?
Order. I think that the most useful guidance which I can give to the House is to say that nothing which the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) has said so far is out of order.
I am grateful to my hon. Friend the Assistant Postmaster-General for intervening, but I had not reached the point of my argument. In passing, may I remind the hon. Member for Totnes (Mr. Mawby) that we have had a dissertation on colour television this morning from one of his hon. Friends. Is it intended to establish a liaison committee between the Post Office and the industry in general? What co-operation will exist, and what programming of its development will be considered? In the light of such consideration, is it the intention to ensure that the industry is represented fully, not at the culmination of discussions, but at a stage when they are at the elegant bones of consideration? I have asked that question from time to time, but still I have no assurance that there will be liaison between the Post Office and the industry on timing the introduction of the service.
I feel that we are entitled to improve the service. We understand that mistakes will be made. Mistakes are being made at present. However, I would not charge mistakes due to inefficiency in the management of the departments of the Post Office on postal services in general. However, it must be conceded that, in a period of relatively full employment, the postal services no longer recruit the cream of labour as they were able to in years gone by. During such peak periods as Christmas, they have to rely on certain types of labour which are not suitable and, sometimes, not reliable. Taking those matters into consideration, it must be said that the Post Office is doing an excellent job, in spite of one or two mishaps.
If I may give an example of the sort of mistakes which occur, for some time I have been trying to discover how it is that the telephone department can fail to send out accounts. The Assistant Postmaster-General should look into this matter. I learned yesterday that, in one area, several hundred accounts were not sent out. As a consequence, I am informed that a number of people were in danger of losing their residential telephones, not having paid their accounts.
In the town of Airdrie, which I represent, in Lanarkshire, Scotland.
Obviously there has been some mistake. These mishaps can occur. We all appreciate the old saying, "As for he who makes no mistake, there is no such man." It must always be remembered that:
To err is human, to forgive, divine.
This type of mishap may arise because we have not spent enough money in developing the department and recruiting the proper type of staff.
One can understand an individual case occurring, but it is difficult to understand when hundreds of cases occur. Obviously something is radically wrong. There has been an omission, or an error, somewhere and I hope——
These things are usually sent through a mechanised accounting scheme. Does the hon. Gentleman know of any new form of accounting scheme which is provided for under these new borowing powers?
At the moment we are unable to say what has caused the mishap, and I am asking my hon. Friend to inquire into it.
Will my hon. Friend assure the House that these increased borrowing powers for which he is asking will provide him with the necessary monetary support to increase the efficiency of our services? It is possible that the present inefficiency is due to a shortage of staff. It is possible, too, that there is a lack of up-to-date mechanical equipment. We know that considerable developments are taking place in the use of computers—one is being built for the Income Tax Department in Scotland—and there may be teething troubles. I recognise that these problems can arise from any, or many, of these developments, but what we are anxious to ensure is that under the provisions of this Bill there will be ample opportunity to improve efficiency, and that my hon. Friend will have at his disposal sufficient money for this purpose.
I listened to one hon. Gentleman opposite talking about the increased cost of the services, and demanding that economies should be made. He did not suggest how we should cut costs, and this is what we want to know. If it is intended to deny the Government these borrowing powers to provide the services which we require, hon. Gentlemen opposite should be courageous enough to tell us the things on which we should not spend money, what we can do without, and what we should ask the public to sacrifice in order to keep down costs.
I hope that we will take a responsible attitude about this. If we require the money, we must provide it, but we are entitled to ask my hon. Friend for an assurance that we will get value for the money spent.
I was gratified to hear that "Hear, hear" from the Joint Parliamentary Secretary to the Ministry of Housing and Local Government. I was going to congratulate him on his promotion to the Postmaster-General's Department. At one moment during the debate we were left with only the hon. Gentleman on the Government Front Bench, and it seems to me to be symbolic of the service provided by the Post Office, that, although for about two and a half hours we have been discussing a Bill which will allow the Post Office to have £2,200 million, only in the last moment or two has the Postmaster-General himself joined us. This is a vitally important Bill, and we would have been justified in having the senior Minister present throughout our discussions.
I congratulate my geographical, if not my political, colleague from Merseyside, the hon. Member for Liverpool, Walton (Mr. Heffer) on the points which he put forward, and I hope that I shall not embarrass him by showering too many bouquets on him. He raised two very important points in connection with telephone charges and local radio, and I interrupted him because the local radio issue has become extremely important on Merseyside during the last few weeks.
In this Bill we are asked to authorise an increase in the borrowing powers of the Post Office. In return, we should be told to what extent this money will be devoted to the installation of local radio stations, because there may be some proceeds from those stations for the Post Office. We might be satisfied about authorising the borrowing of this money if we are told that it is to be invested in building local radio stations. Some gain would accrue to the Post Office from such a move, not to mention the benefits which would be provided for the public in my area.
Merseyside is the most densely populated area in the country. It has 10 miles of pierhead, and Liverpool is a real community of people. It has two cathedrals, two famous football teams, and a great university. It has all that, and the Beatles, too. Here there is a real community which needs a local radio station, but it is to be deprived of the one station which it enjoys, Radio Caroline, and I want to know whether the money which we are to allow the Post Office to raise will be devoted to providing a local radio station on Merseyside. I hope that we shall have a satisfactory answer about that.
I congratulate, too, my hon. Friend the Member for Weston-super-Mare (Mr. Webster) on the extremely concise way in which he put his finger on so many defects in the Post Office service. It is right that we should discuss these defects when we are being asked to allow the Post Office to borrow £2,200 million, and it is right that we should do this now, because this is for a period of four years. As has already been mentioned during the debate, we may never have another chance to discuss this. We are discussing whether the Post Office should have mil- lions of £s extra to tide us over the next four years, and it is right that we should consider this in great detail.
Under the present Government, it seems that the administration and the management of the Post Office have lost the concept of public service. I do not believe that the employees have lost their concept of it. Many of us in this House come into contact with Post Office employees in our constituencies at Christmas time when we visit post offices to see what is happenning in the sorting offices, and so on. Many of us have become well acquainted with Post Office employees through our children taking Christmas jobs in the Post Office. My son and daughter did so frequently when they were the right age for that, and I came to know some of the Post Office employees through them. They are a very good crowd, and very loyal to the service, and the public are not getting the benefit of that loyalty because of the management of the Post Office as it exists at the moment.
Anything which seems to be convenient or to give pleasure to the public in the Post Office service is being whittled away. Instead of concentrating on increasing the number of telephones, all that we are getting is a concentration on increasing the numbers that one has to dial. I used to be able to remember the letters of the exchanges. I cannot see what saving there is under the new system, and I now have to try to remember a whole set of numbers. In addition, I am told that those who might have helped me to remember these numbers—the directory enquiry service—have been ordered not to be helpful any more, to cut down on the time that they take to answer inquiries.
We now have the threatened increase in rentals, to which the hon. Member for Walton drew our attention by his reference to the Sunday Express, and there is also the increase in the charge for each call. I deliberately call it an increase. We have discussed the question of 3d. and 6d. during the debate this morning. If a person goes into a call box and has to put in 6d. when he wants to make only a 3d. time call, that is obviously an increase in the charge.
One also has to put up with delays in getting repairs carried out. Some little time ago my telephone went out of order, and it took 10 days to repair it. The repairers then came and put a strange wire all round my house in the course of repairing the telephone. I had never had that wire there before, and, following the re-connection of the telephone, during the last few days each time I have had a call on my telephone there has been the sound of a lifted receiver somewhere else, and deep breathing. Am I being tapped? I want to know about this. I want to know why the repairs took so long——