§ 6.54 p.m.
§ Lord BEAUMONT of WHITLEY rose to ask Her Majesty's Government what steps they propose to take to ensure that the rising cost of postal charges for the transmission of books and periodicals does not adversely affect the contribution that the printed word has to offer in a humane society. The noble Lord said: My Lords, in view of the length of the list of speakers tonight, I think that the House is entitled to one or two remarks from me ; not, I hasten to add, that I am responsible in any way for its length. But I took the view that this Question was 820 a genuine one for information as to what the Government intended to do, that it was too narrow for a Wednesday debate and too urgent to await the outcome of the ballot. I think that the length of the list of speakers somewhat bears out the point about its being too urgent for the ballot. As to whether it is or was too narrow for a Wednesday debate, probably the debate itself will illustrate that fact. If I am right, then perhaps we shall not sit as late as it looked, because a number of noble Lords who intended to make points which will have already been covered by other speakers, will, therefore, be able to shorten their speeches. I say that in the smug knowledge that I am the first speaker and therefore have no obligation of this kind, although I assure noble Lords that I shall keep my speech as short as possible. That is not to say that I do not welcome the large number of noble Lords who have put down their names to speak in this debate and who between them add almost a terrifying amount of expertise and knowledge.
§ We are particularly pleased that we shall hear the maiden speech of the noble Lord, Lord Allan of Kilmahew, who has such especially great knowledge in this field. I must make a small declaration of interest. It is merely that my main profession is that of a free-lance journalist. I have no publishing interests — thank goodness!—at the moment, but owing to my past publishing interests I can claim to be something of an expert on the unviability of magazines, which is one subject to be discussed this evening. In what I have to say I shall concentrate mainly on the internal situation. I know that a number of noble Lords, including the noble Lord, Lord Ballantrae— under whom I have the honour to sit on the executive of the British Council—will deal more fully with the overseas export situation of the underdeveloped countries. It is because I know that this will happen — not because I am indifferent—that I shall concentrate on the internal or home situation.
§ We are told constantly that we have one of the cheapest postal services. This is wholly untrue if it merely applies to the tariffs applicable to books and periodicals. Postage is now the largest single expense for many periodicals. It now costs more to post a 7 oz. magazine from Mayfair to Westminster than it does to write, edit, 821 illustrate, print, bind and wrap it. Virtually alone in the developed world, the policy of self-sufficiency in all branches of the postal service is subjecting periodicals to what would elsewhere be regarded as penal tariffs. Even allowing for substantial discount of the public tariff, the price of posting a 7 oz. magazine in Britain is twice what it is in Sweden, 15 times what it is in France, 17 times what it is in Italy and 100 times what it is in Spain. Looking at books, the comparison is almost as bleak. An ordinary publisher posting a 2 lb. book here would have to pay almost twice what he would in Ger-many, Belgium and Denmark; almost four times what he would in Sweden; more than 10 times what he would in Spain and more than 25 times what he would in Italy.
§ It is a small wonder that publishers, authors, booksellers, learned societies, printers and journalists view the new tariffs as a most serious threat. Not only do the new rates represent a second in-crease in nine months, but the Post Office has already served notice that it will be asking for more. Only last night I heard on good authority that, when metrication of weights is introduced in the Post Office in July or August of this year, its intention is to round down rather than round up the weights. This will immediately put a 4 oz. magazine up into a higher category and will with such a magazine have the effect of doubling the postage in six months from the beginning of March. I need hardly say that these frequent rises in postage are particularly hard on those magazines which sell subscriptions in advance and thereby have to fulfil contracts which they entered into at considerably lower rates of expense.
It is never difficult to obtain agreement to the proposition that the unhindered dissemination of information is an essential bulwark of the kind of freedom we prize above all our other blessings, precisely because it underpins and supports the other freedoms which wither away if information is not there. As de Tocqueville said
The free flow of information is a constitutive element of liberty.
§ That liberty is now being eroded by what I believe to be the mistaken philosophy of a commercial self-sufficiency being pre-scribed for something which is both a 822 public service and a monopoly, which has caused postal costs to rise to unprecedented levels, by 270 per cent, since 1970 and an average of 83 per cent, since just before then. This poses a grave threat, not only to those who earn their living by selling and distributing the printed word through the mails, but even more seriously to the spread of know-ledge itself.
§ Do not let us underestimate the seriousness of the situation. The last few years have seen a 12 per cent, decline in the number of British periodicals published. Last year some 4,500 remained and of those, only 650 titles were handled by the country's largest distributor. Roughly speaking, therefore, the difference between the 650 and the 4,500 must overwhelmingly rely on postal distribution, and often on postal advertising, to reach its audience. It is the cost of this postal distribution which has been so grossly and arbitrarily inflated as to put at risk the very existence of serious weeklies and monthlies, learned journals, trade and technical Press. The more specialised the audience, the more minority the interest, the greater the dependence on postal distribution.
§ My Lords, I do not pretend that every magazine and every book that is produced in this country is of this great seriousness. Obviously there is much which your Lordships would consider trash, but it is not in fact for us to decide what is or what is not trash. We are not censors, and indeed a certain amount of what might be regarded as lower grade reading has its strong uses. I imagine that there are very few of your Lordships who did not have part of their interest in reading stimulated by Dandy, Beano and Film Fun. A cousin of mine who is a Member of your Lordships' House taught himself Spanish by reading thrillers in Spanish. I have heard of people who have taught themselves foreign languages by what they regarded as the interest of reading pornography, though the result of that is often to give them a very peculiar vocabulary at the end of the day. It is, perhaps, to a certain extent, the trash which may well survive because it is the minority interest papers and magazines, the more serious ones, which the problem is really about.
§ In an interesting article in the New Stateman recently, Mr. Anthony Howard drew attention to the danger 823 faced by the magazine which he edits, and by others, a large number of whose copies go out by mail. He rightly asked how the certainty that some of these journals of opinion would go to the wall could be squared with the Labour Party's professed desire for a free and varied Press as called for in The People and the Media. I mention that point because the present Government are a Labour Government, though all Parties have an equal dedication to freedom of expression, and we would put this challenge to any Government.
§ Publishers who rely on the Post Office for selling as well as for distribution are even harder hit. Typically, I am informed by the Association of Mail Order Publishers, postage costs account for approximately 22 per cent, of their total revenue. As the new postal charges represent an increase of about 50 per cent, on these costs, it will be seen that any company making less than an 11 per cent, net profit on its revenue will find itself immediately in the red. The typical net profit percentage in the publishing industry was well below 10 before 17th March. Is it really intended that this form of industrial genocide should take place?
§ I come briefly to the question of books. Fewer and fewer bookshops now grace and enlighten our cities. Many of those which survive do so only by stocking copper-bottomed best sellers and by taking as few risks as possible with the 30,000-odd titles published in this country every year. They will order a book if the customer knows that it exists, knows the title of the publisher, is prepared to wait while the order goes to the publisher and the book comes back through the post and is willing to pay another visit to the shop to collect it. This has a very great effect on the whole economics of book selling. In fact, the more it happens the more it is a vicious circle whereby one gets fewer and fewer book-shops selling fewer and fewer books, or rather more and more copies of fewer and fewer books, again raising the unit cost to the publisher who can produce only smaller numbers of the valuable books he wants to provide for minority and professional interests, and this then 824 becomes a vicious circle because again there is less and less demand.
§ The main point of the question which I am asking is not about the workings of the Post Office itself. I am not pre-pared to argue the toss as to whether the Post Office is or is not as efficient as it should be; the Government would merely say in those circumstances that, even should my strictures be justified, it is a matter for the day-to-day business and administration of the Post Office. It may be that other noble Lords more knowledgeable than myself will have points to make in this connection, to which it is hoped the Post Office will pay due attention. My case is that postage for the printed word should be subsidised by the Government, just as the Arts are subsidised by the Government— and for precisely the same reason: that such subsidy is necessary for the cultural and social health of this country. That is what needs to be done.
§ There is a real danger today that part of our publishing industry, already beset by many difficulties, will finally succumb because of the increased costs of distribution which can no longer be passed on to the reader. What we shall be left with —and this is a most important point— is, on the one hand, the mass media which enjoy newsagent distribution and, on the other, a few very elitist magazines where the price does not matter. In the middle will be left a black hole into which the bulk of the minority and smaller magazines and books will vanish, and with them our hopes to retain the cultural lead that we are able to give in this world and which is very important to it. The consequences, both inside and outside the country, will be immeasurable and, although slow, will, unless something is done by the Government, be quite inevitable. It may well be that in ten years from now we shall have to fund a cultural revival from the public purse at a cost far greater than any subsidy would cost if it were applied at this time. I hope that I have made a case. I know that other noble Lords have additional points to make, most of them in support of this case. I hope that in replying tonight the Minister will at the very least give us his assurance that the Government will give this problem their most serious consideration as a matter of extreme urgency.825
§ 7.11 p.m.
§ Viscount ECCLES
My Lords, your Lordships will be grateful to the noble Lord for raising a Question that is causing a great deal of anxiety in a very large number of firms and among private individuals. I, too, have an interest to declare. I am Chairman of the British Library and what these new postal charges mean to us will, I believe, illustrate—and illustrate shortly—what they will mean to a great many other people. In the financial year 1975-76, we had estimated our expenditure on postal charges at £430,000. We shall now have to revise that estimate to £590,000. That is an increase of £160,000, and we shall be paying the Post Office £3,000 a week more.
Your Lordships will wish to know how this large increase will affect our own operations, how it will reduce the demands of our customers—or may do so—and how it may damage the publishers and book-sellers with whom the British Library has very special relations. The lending of books, journals and extracts is done from Boston Spa and, by its nature, it is done by post. Boston Spa is receiving requests for loans at the rate of 2,300,000 a year and this rate is advancing rapidly. The increase in the charges will put up the cost of a loan by about 5p, or 22½ per cent.
My Lords, we are an institution which is supported by public funds. We should be criticised if we did not recoup the costs of operating these lending services. There-fore, we shall have to pass on this 5p to our customers. That is what all the nationalised industries—coal, gas, electricity, the railways and the Post Office— are told to do. The public must pay when the costs go up and usually they do so, because the services in question are largely monopolies. In the case of the British Library, our customers are other libraries —public libraries, university libraries, technical college libraries and so on—and all are now squeezed for money. Their funds are not being increased to meet the rise in their costs due to inflation. Your Lordships will observe that if our funds were increased they would have had to come from the taxpayer and the ratepayer. There is therefore no saving to the Government in what they are doing now, if we consider the Post Office to be one of the taxing authorities.
826 My Lords, the libraries to which I have referred have been finding in their present straitened circumstances that it is cheaper, faster and more convenient to borrow books and journals that are not in common use rather than to buy them. They will now have to pay 22½ per cent. more. The result must be either an increase in their budget, which I think very unlikely, or they will buy or borrow fewer books. It is most certain that they will buy less and, if they can afford it, borrow more. It might be thought that this process would be agreeable to the British Library, but in fact there is a definite limit to which borrowing instead of buying should be carried in the interests of the regular users of public and educational libraries. As the volume of library purchases declines— and I hear that many libraries consider that these postal charges will be the proverbial last straw—it will cause big changes in their acquisition policies. As their purchasing declines, either fewer books will be published or the price of books will go on rising to compensate for smaller sales. In whatever proportion these results follow, the intellectual life of the country will suffer.
I now turn to the overseas business of the British Library. Boston Spa provides the world's most efficient and heavily used loan service to libraries outside the country in which the service is provided. In many parts of the Commonwealth, libraries prefer to borrow from us rather than try to find a book in their own country. It is cheaper and much quicker. A library in British Columbia will certainly borrow from Boston Spa rather than try to get a book in Ottawa, for instance. The same is true for many of the Australian libraries. We have to charge for the operational cost of this service— that is, the handling and the postage—but we do not charge for the acquisition of the book or journal concerned. To that extent, our service is subsidised. The new overseas postal rates will mean an increase of 48 per cent, in our charges to overseas borrowers We have been very proud of the acknowledged supremacy of our overseas lending service. It is an operation which is a great ambassador for the English language and for British books and journals. The rises in postal charges must diminish the attraction of what we have to offer, and they raise the question of whether 827 we shall be able to maintain our lead in this field.
As the noble Lord, Lord Beaumont of Whitley, has already told your Lordships, postal charges overseas are very much less than ours. We maintain our lead because our handling is more efficient and because we have a better supply, not because our postal charges are less than theirs. The competitor on whom we must keep an eye is the United States. American postal charges were well below ours before this increase came into force, and now in many cases they will be about half for large packages of books. We share the English language with the United States and, clearly, they compete with us in the publication of books for export abroad. Provided this competition is fair, I am all for it. I think it is very good for the general distribution of our intellectual talent. But we do not expect our Government to load the dice against our publishers and our lending services in a market where quite small differences in price can often be decisive. If we go on inflating as we are now, severe unemployment in the British publishing business is inevitable as the costs of production and of mailing books increase. The demand for British publications will decline. Publishing is part of the private sector of the economy where the increase in costs cannot be passed on as an increase in price to the customer. Of course in the public sector it is different. Unemployment can and will be avoided, and the burden of their rising costs will be loaded on to the private side of industry and personal consumption.
The firms concerned in the publishing trade cannot, like the Post Office, insist on higher prices to meet the rising costs of inflation and therefore both home and overseas sales will drop. Unemployment is therefore inevitable. I must ask the Government whether the Post Office took the slightest trouble to inquire from the Department of Education and Science what would be the consequence of these swingeing increases in postal charges. Did they ever ask the British Council? We are going to have the benefit of hearing the noble Lord, Lord Ballantrae, and no doubt he will tell us. Did they consult the University Grants Committee? Did they have a single word with Sir Fred Dainton? I believe not one. We are 828 governed by Ministers who are continually asserting their belief in economic planning. What sort of planning is this when charges are increased which must reduce the access to knowledge in all its printed forms, and which is bound to deal a blow to a most valuable export? The export of books has a double advantage. It not only earns us foreign exchange; it also makes it possible for us to spread to the rest of the world our ideas, our scholarship and our way of life.
I would not expect these cultural considerations to weigh with the "Little Englanders" who want to keep us out of Europe, but I would expect Ministers such as Mr. Roy Jenkins, Mr. Anthony Crosland and the noble Lord, Lord Strabolgi, who care about books to have seen to it that these postal charges were not so savagely increased where books were concerned. Books are zero-rated for VAT. There was great discussion about this at the time. Why were they zero-rated for VAT? It was because I believe all Parties in the House of Commons, and no doubt in your Lordships' House as well, agreed that knowledge was something which should not be subjected to this tax. Therefore there was a discrimination in favour of books. What is the Post Office now being allowed to do?—to reverse that discrimination and to hit books extremely hard. My Lords, there is only one result. It is that fewer books and journals are going to be published, bought, borrowed, consulted and read. I only hope that your Lordships' protest tonight will have some effect upon Her Majesty's Ministers.
§ 7.23 p.m.
§ Baroness WHITE
My Lords, we are all much indebted to the noble Lord, Lord Beaumont of Whitley, for putting this Question to Her Majesty's Government, and the list of speakers for a debate which it was known would be a little late in your Lordships' House indicates the very widespread interest which Members of this House take in this matter. We are particularly fortunate that the noble Lord, Lord Allan of Kilmahew, is going to make his maiden speech on this subject, because he holds a distinguished position in the world of publishing, being chair-man of both Longman's and Penguin, and I am sure he will be able to speak from a very wide experience.
829 As the noble Lord, Lord Beaumont of Whitley, indicated, this debate clearly falls into two parts, although the noble Viscount, Lord Eccles, has covered both the internal and the overseas aspects. I would wish to confine my own observations to the really drastic increases in postal charges as they affect the overseas postage rates. These rates, if fully carried into effect, will bring about an increase of no less than 167 per cent, in a period of 18 months. The first increase was on 24th June last year; the second was two days ago, on 17th March and—I was going to say, hopefully, " the final increase ", but I fear it may not be the case—the next proposed increase will take place on 5th January of next year. Had the Post Office had its way the increase this month and the proposed increase next January would have been one increase only, taking place his very week.
The main blow so far as the overseas transactions are concerned is the abolition of the former special rates for surface mail on printed papers—a term which covers newspapers, periodicals and books. Under the new arrangements there will no longer be these reduced rates or the special rates for direct agents' bags which, of course, save a great deal of postal expense because they are packed in bulk and collected by the agent to whom they are consigned. The publishing world have been trying since last July to gain attention from the Government for the likely consequences of these overwhelmingly increased charges. They first went to the Department of Trade, but were promptly referred to the Department of Industry, the reason being that the latter Department is concerned with the Post Office, although the Post Office, as we know, has now become an independent corporation. The Department of Industry pointed out this fact and told the publishers that they should have recourse to my noble friend Lord Peddie, who is chairman of the Post Office Users' National Council. My noble friend Lord Peddie and his colleagues went to work very quickly when they were sent the proposed new rates by the Post Office, and they did at least secure a partial stay of execution in that, as I have explained, the total increase has now been spread, instead of being concentrated in 830 a period of only nine months. But neither the Post Office nor their Users' Council, nor the Department of Industry have any particular concern with what is the truly significant substance of this situation. Even the Department of Trade may view books and newspapers as only one export among many, although certainly an export which has consequential effects of which they must surely be aware.
The noble Viscount, Lord Eccles, has said that to the best of his knowledge— and I can confirm this—the Department of Education and Science was not brought into the picture. The Departments which in my opinion should have been on the alert were the Foreign and Common-wealth Office on the one hand, and the Ministry of Overseas Development on the other. It is these Departments which are responsible for sustaining Britain's standing in the world, for upholding British influence abroad and for maintaining lines of communication with our partners, friends and allies. What is the use of having commercial attaches or cultural attaches in all our posts abroad and in the Commonwealth if no representations are made at home on changes which may drastically affect British interests in these spheres? I can find no evidence that any active interest has been taken by the Foreign and Commonwealth Office—a Department which I once had the honour to serve. I am extremely glad that the noble Lord, Lord Ballantrae, as chairman of the British Council, is here to reinforce this case. I have myself been in communication with my right honourable friend Mrs. Judith Hart, Minister of Overseas Development, who tells me that her Department is putting in for a consider-able increase in the financial provision for 1975-76 for the English language low price books scheme. This is certainly helpful so far as it goes, but it is only a small part of the story.
Surely the nub of the matter is that books, newspapers and periodicals are different, as we have always recognised — as the noble Viscount, Lord Eccles, emphasised— in our domestic taxation policy. Their importance to our trade is far greater than their own intrinsic value. Through the information conveyed directly in the text— or as far as 831 periodicals and newspapers are concerned, in the advertisements as well— persons overseas are influenced in the way they buy or do not buy, as the case may be, from Britain. We all know that professional men trained in the United Kingdom, or in firms or institutions with British traditions, are disposed in later life to order British equipment; engineers are possibly the most important in this respect, but other professions are significant too.
I have here a letter from the noble Lord, Lord Porritt, who greatly wished to be here tonight, but was unable to join us. He has written to me, with permission to refer to his letter. He says, with emphasis:The devastating effect such charges can have on the distribution of British medical journals and books, through which despite pre-sent difficulties this country still maintains its acknowledged world leadership in medical knowledge and education, is infinitely distressing.This opinion would apply to a whole range of other activities.
I am happy that my noble friend Lord Ardwick is present to deal with news-papers, which have not hitherto been mentioned in the debate. There is no satisfactory way to send newspapers to most parts of the world, except on a regular subscription basis. With national newspapers, I am informed that under the new arrangements postal charges for foreign subscriptions will be increased from just over £1 million per annum to nearly £2 million per annum; the actual estimate is £1,950,000. If there proves to be serious subscriber resistance some very well-known newspapers will have to consider whether or not to maintain a subscription department at all. I am told that these increases come at a time when British Airways has indicated that it intends drastic reductions in its freighter services, and therefore possible arrangements for joint freight or the like may be no way out, even in areas where this would be practicable.
All this means that advertising, news and views may be denied to our friends overseas, obviously to our national detriment. On the periodical side, trade and professional journals, as well as journals of opinion, are extremely important and will be similarly affected, as will be such printed items as prospectuses and regular 832 lists for academic and other libraries, which are now sent by publishers. I am told that many publishers will have to cut down on these quite drastically. Again, British outlets abroad will be diminished.
I return to books and wish briefly to make three main points. Books are the only major export which normally are sent by post; most others are sent by freight. Books therefore are far more significantly affected by these extra postal charges than any of our other major trade exports. The Universal Postal Union Regulations allow what they are pleased to term "serious printed matter" to be sent at 50 per cent, of the full rate. But as I have explained, our Post Office, by abolishing the distinction between printed matter and other items, is saddling British publishers with uncompetitive rates by comparison with other countries, it is admitted quite freely by the Post Office that the United States, West Germany, Sweden and Holland— among those countries which print books and periodicals in English—have lower rates. But the official answer by the Post Office to the Publishers' Association was: "They can afford it; they are richer countries ". On this basis, my Lords, they are likely to become richer still!
It now costs a British publisher 15p to send a book weighing 11b overseas. Until last Monday the cost was l0p. When the full rates—if they are permitted to do so— become effective next January, it will cost the British publisher 20p to send a book weighing 1 lb, while his competitor in the United States pays 8½p. For a larger parcel of books—a 7 lb. parcel—the rate was 52p. From this week it is now 80p., and next January it will be 105p. The American rate in this case is 49p. For the largest parcel, 11 lb., the rate was 80p until this week, and today it is 120p. Next January it will be 165p. The American rate is 74p.
My Lords, how can we face competition from other world publishers of English language books if our publishers have to meet rates as high as this? There is a very special condition so far as American competition is concerned. Since 1943 there has been an informal arrangement of spheres of influence in book exports between the American publishers and our own. But a recent anti-trust case in the United States has now, I think, 833 destroyed that arrangement, and we shall have to face far fiercer competition in the next few years than we have in the past, weighed down with these completely uncompetitive postal rates. That is the comparison with the other countries in the postal rates and it shows that we have a very severe handicap.
We are also handicapped under a complex agreement reached in Paris in 1971—ratified by the United Kingdom— to the effect that if books which are imported into a country become too expensive, the importing country (and this applies particularly to Third World countries) becomes entitled to abrogate the copyright conventions and can license the free copying of the relevant books in its own territory; again to the extreme detriment of British publishers. Under the proposal postal charges up to 30 per cent, of the retail cost of a book is likely to be postage—at any rate in the lower price ranges—and this will bring a whole new range of books into the scope of the Paris Convention on copyright.
Finally, my Lords, books, papers and periodicals are the only major exports which suffer from another recent inter-national agreement whereby Britain has to pay very heavy imbalance charges, amounting to between £4 million and £5 million per annum, to countries to which we post more items than we receive from them. This is something about which I knew nothing until I became interested in this crisis which is facing our publishing industry. The very success of British publishers has put this millstone round their necks. The fact that they export so successfully means that our imbalance payments are all the heavier. This is not a minor matter. British books earn directly around £1 million per annum. The British Council's latest report puts the figure higher still, but I would assume that that includes other publications besides books—
§ Baroness WHITE
I am sorry. I made a slip of the tongue. The figure is £ 100 million. The British Council, as I under-stand it, makes a total computation for British publications of between £175 mil-lion and £200 million per annum. In any case, it is a very substantial amount in direct earnings of foreign exchange.
834 But indirectly, as the noble Viscount, Lord Eccles, said— and I most strongly support him on this— British publications can earn very much more. As the late Sir Stanley Unwin said: "Trade follows the book". I am deeply concerned that so far the Government seem to have been entirely blind to the wider considerations. I am very sorry for my noble friend, Lord Strabolgi, because he has to take on his shoulders the responsibility of answering for at least five Government Departments who are involved in these matters. These are five Government Departments between whom consultation seems to have been minimal, if not non-existent. I hope very much that he wil indicate that there will be much closer consultation, and really constructive consultation, between now and January of next year. We have a little time. I am not blaming the Post Office. It is not the business of the Post Office to take these wider considerations into account; it is the business of other Departments of Her Majesty's Government to take on board these wider matters. It is they who should consult and see how one can meet a position in which, unless something really significant is done, British influence undoubtedly is to be diminished.
§ 7.41 p.m.
§ Lord ALLAN of KILMAHEW
My Lords, despite the kind and warm words of welcome spoken by the noble Lord, Lord Beaumont of Whitley, and the noble Baroness, Lady White, I wish in many ways that the subject on which I have the honour of first addressing your Lordships was one in which I am not quite so deeply involved as I am in this. However, since it is the tradition in your Lordships' House to speak from experience, I hope that you will accept that I approach this subject not with any idea of self-interest, but from the broad view expressed in the Question put before the House by the noble Lord who, if I may say so, was far too modest about his own contribution to the publishing industry.
The noble Baroness has stressed the importance of the export of British books and also the severe threat to that trade from these new postal charges. This is a line which I had intended to develop; but I shall resist this, particularly because the noble Lord, Lord Ballantrae, will undoubtedly be speaking and enlarging on the contribution made by British books 835 to the growing understanding of Britain, its culture, its scientific and technological expertise and know-how. I would say only that, the export trade, which accounts for over 40 per cent, of the out-put of British publishers, gives an essential strength to the domestic publishers. If they did not have this, they would suffer severely and so, too, would the British reading public. There is one other point raised by the noble Baroness which I think worth emphasising. It is that English is coming to be the most important of world languages. Much flows from this. Education and entertainment— through British books and journals— brings with them an interest in. and the use of, other British exports which are not in any way directly connected.
My Lords, it is this vital sector of the British publishing industry which is already threatened from two external sources, both briefly touched upon by the noble Baroness. The first is the anti-trust suit filed by the United States Department of Justice seeking to make illegal the arrangements whereby the English-speaking market was divided between British and American publishers. If this action were successful— and it looks as though it is likely to be so— British publishers will face the severest competition in their traditional markets, competition from a country which is already the greatest publishing rival to British publishers and whose exports can be spring-boarded from a home market which is eight or nine times the size of ours. It is also a country in which today the manufacturing cost of books is certainly no higher than in the United Kingdom. This being so, the price of British books now becomes every bit as import-ant as their quality.
The second external threat comes from the erosion of copyright mentioned briefly by the noble Baroness. The latest moves, as the noble Baroness said, give developing countries the right in certain circumstances to license the publishing of books originating in other countries. This is particularly relevant to the Indian market.
I am a director of one of the Indian publishing houses; and I should, perhaps, also have declared a wider interest at the beginning and said that I had spent most of my working life in the publishing 836 business and am now either chairman or director of a number of book and newspaper publishing concerns. I know that, if the price of United Kingdom books gets too high, these Indian publishing houses will force the Indian Government to invoke the 1971 Paris agreements. This will have a devastating effect on the sale of British books and periodicals in the whole of the sub-Continent and beyond it. These are two situations which demand the lowest possible price of British books— and this is at a time when British publishers are having to contend with enormous increases in material and production costs. Forgetting the external threat, from within we are adding substantially to these spiralling costs by the new postal charges. These postal charges are bound to be passed on to the customers. Because of the inflated costs of replacing stocks today —as anybody in the publishing business knows—all publishing houses are faced with acute cash-flow problems.
Postal charges can be absorbed only by very few, and those are the largest; others will have to pass them on to the customers. This is because the cost of the distribution of a book is a basic cost; it must be reflected in the price. It is not like the administrative costs of additional postage on letters which, in all conscience, will increase our overheads; this is a basic cost which must be reflected in the price. My Lords, you have heard a number of figures from all speakers indicating the various ways in which these charges are to affect British publications of one kind or another. In general terms, may I say simply that what it amounts to is that our overseas competitors will have a minimum advantage of 15 per cent, over us in relation to postal charges, and, as the noble Baroness said, in America the advantage will be 50 per cent.
I should like, if I may, to give your Lordships a few examples from my own experience. By 1976, the two main book publishing companies with which I am associated, which sell huge numbers of books abroad, will be faced with additional postal charges of something over £500,000 a year. This puts at risk mil-lions of pounds worth of exports. It will force us, incidentally, to examine whether still more of our books can be printed overseas, with obvious repercussions on 837 ones, so the figures involved are also large. But smaller publishing houses are even more severely affected, because the smaller houses cannot take advantage of the cheaper rates for bulk postage. So although in their case the figures may appear smaller, in practice they are even more crippling than they are to the larger houses. As the noble Lord said, it is in these circumstances that the small man is under pressure and it is the minority that is most likely to suffer and go to the wall. That is something which I am sure we would all view with the utmost distaste.
The noble Lord also mentioned learned journals. We have a journals division publishing learned journals which help to enhance British prestige all over the world. From next year this division will be forced to pay an additional sum of £120,000 simply on overseas postage, and it is inevitable that overseas subscribers will be lost. The Economist, perhaps one of the most influential of all British journals, had hoped to export by post next year about £1¾ million-worth of journal and other subscriptions. With postal charges now due to rise, in its case by something like £230,000 in a year, this invaluable export is also in jeopardy. I shall not continue with this list, but will end by saying that there will be an additional cost of £200,000 next year on the overseas sales of the Financial Times and its subsidiary publications. There is one additional point which the noble Lord, Lord Ardwick, will probably take up, which is that if, as a result of these increases, the overseas sales of a news-paper fall off, then a very considerable amount of overseas advertising will be lost.
What I have said is in no sense special pleading. It is rather an attempt to show the practical effect of these increased charges, and to emphasise to your Lord-ships what is at risk. So much is at risk that I very much hope the Government will follow the advice given by the noble Baroness and seek to bring together in consultation all the interested parties, to find means of alleviating this quite unnecessary burden which is being placed on British publishers. Such ways do exist, and they exist within international regu- 838 lations and, in my view, will not destroy the Chancellor's new policy for the public sector. What is needed in the first instance is very little: simply a readiness on the part of the Government to take part in talks with interested parties, and work out the solutions which are there. I suggest that if this discussion this evening achieves that end, we shall all be immensely grateful to the noble Lord, Lord Beaumont of Whitley, for having initiated it.
§ 7.55 p.m.
§ Lord ARDWICK
My Lords, I am delighted to follow the noble Lord and to be the first to congratulate him on a most notable maiden speech. It was not-able not only because of its content, arising out of his rich experience, but because of the ease and fluency of the speaker. As one of those who are still scriptbound, even after some years in this Chamber, I regard him not only with admiration but also with a certain amount of envy.
I shall not speak out of experience tonight. I am sorry to disappoint the noble Lord and also my noble friend Lady White, but I shall not speak about news-papers, simply because it is 20 years since I was associated with the Guardian —a newspaper which then had a consider-able postal circulation. In more recent years I have been associated with the Daily Mirror, and I cannot pretend that the sales of the Daily Mirror will plum-met because it will cost more to post it to India or Ceylon. But I must plead an interest in this debate, since in working, as I do, for the Mirror Group of papers, I work for one of the biggest publishing houses in the world.
The case one has to make tonight is not only in defence of the threatened interests of publishing companies or of the printing and journalistic staffs who work for them: it is also in defence of public and national interests. When I say "public" I mean the vested interest that we all have in the exchange of thoughts and information through the printed word. That is why in this country we have always avoided—at least since the early days of the last century—taxes on knowledge. Indeed, there was a tremendous fight put up, in one of the darkest moments of war, against special taxation being put on books. We are not concerned tonight with a tax or anything like it, but with 839 something that yet amounts almost to the same thing—a change in postal arrangements which, taken with the natural inflationary increase, could make the price of certain publications prohibitively dear.
Postage, in fact, is one of the most important cost elements of those periodicals which depend heavily on the post as a means of distribution—industrial journals, trade and technical journals and journals of opinion. Indeed, it may amount to between 10 per cent. and 25 per cent.—perhaps even 50 per cent. in the case of minority journals with a con-trolled circulation—of their total costs. There is great difficulty for the layman in debating postal increases seriously: it is not a simple matter like the price of sugar. But I take it the mail order publishers, who were quoted by the noble Lord, Lord Beaumont of Whitley, and who are equally affected by these changes, are right when they calculate that the cost of second-class mail has risen nearly 3½ times in the past seven years, whereas retail prices are less than double what they were, and wage rates are up only by one and a third. Of course, the Periodical Publishers' Association admit that, though publishers will have to pay more than in the past under their contracts for inland post, they are, to some extent, being cushioned. Even so, the initial increase of about 20 per cent. will be dangerous to those journals who are only just breaking even, many of which are serving a specialist interest.
It is all very well for the Chancellor to lay down general rules about nationalised industries paying their way, and imposing increased charges in order to do this, but who is the member of the Government able to take into account the social consequences of such policies and to find a way of mitigating them if they are adverse? My noble friend went round four or five Ministries which might be concerned, exploring the situation, but none bears responsibility. Who, in effect, is the "Chancellor of Social Values"? If we had a Minister of Culture, in this case, he or she would be the Minister to whom we might appeal; but we do not have one. So where do we go? We have a Minister for the Arts, but we do not have a Minister for more generalised culture.
840 Of course, it is not only journals but books, too, which are affected, as a number of other speakers have said tonight. It is not only the bookseller and his private customer who will experience difficulty but also the public libraries, the universities and the schools. Of course, for overseas publications the problem is even clearer. Their charges are up by over 50 per cent. and books and periodicals, as others have said, are an important export in themselves—over 1 per cent. of our total exports ; some people put it at 1½ per cent. But their effect upon the rest of the export trade must also be profound. Very often they are a catalogue not only for British ideas and British values but also for British goods—a kind of permanent peripatetic trade exhibition. I do not know how the Government should or could find an answer to the problem. Of course, postal costs must rise as every-thing else rises. The problem is the suddenness and the steepness of the increases. As a rule subscriptions to journals are paid annually in advance, and even when they can be raised to cope with vast increases in postal charges it is a very dangerous moment in the life of a marginal periodical. As many of us know as sub-scribers to journals we get from abroad, when there is a substantial increase it is often very easy to say, "I am going to cut that out."
What I am pleading for is that some-where in the Government there should be a kind of Ombudsman or Department which can swiftly examine and report on the social consequences of severe increases in administered prices, and propose appropriate remedies. Efficiency in the public sector is vital. Producers and consumers cannot be protected for ever, or even for very long, from increases in costs and prices. But they and their suppliers could sometimes be given more time to adjust to price increases. The one great advantage that Governments have over the smaller companies and over individuals is that they can play it long; and so they are always in a position, if they wish, to temper the wind to the shorn lamb until it has had time to grow some new fleece.
§ 8.3 p.m.
§ Lord BALLANTRAE
My Lords, it is a delight to be in a position to congratulate the noble Lord, Lord Allan of Kilmahew, on that notable maiden 841 speech. We all admired it. Most of us remember that castanetting knocking of our knees when we made our maiden speeches. We all admired the courage with which he delivered his speech, and its fluency, and we are grateful to him for the sample of what we hope to hear in this House many times hereafter. It is a real pleasure to congratulate him. He spoke with authority too—something I do not feel I always do.
One particular facet in the debate in your Lordships' House tonight I feel I can speak on with authority, although I ought perhaps to declare my interest as Chairman of the British Council. But it is not my interest; it is the interest of us all. I shall be brief anyway, but I should like to begin by saying that the British Council maintains overseas 117 libraries all over the world. In them we have an enormous number of books, millions of books. Last year alone, one of our biggest libraries, that in Bombay, lent out half a million books. This is quite apart from the people who come to the library to look at books and reference books, to consult books or just to browse.
The noble Baroness, Lady White, the noble Viscount, Lord Eccles, and I believe another noble Lord, mentioned the professional people who come to depend so much on what we send over-seas. I have now been chairman of the British Council for 2 years and 4 months. I have visited 27 countries, and wherever I go, I see doctors, medical students, engineering students and others using our libraries, without which, especially in developing countries, they would be lost for the technical education they so badly need. The British Council on its own behalf and on behalf of the Ministry of Overseas Development spends £2¾ million a year on books and periodicals. We have our troubles. It costs us too much to send periodicals by air. We have difficulties in stacking up back numbers. But we do our best to slake the thirst overseas for knowledge, and for English books and periodicals and technical books.
Apart from the fact which another noble Lord has mentioned, that British publishing earns over £100 million a year; apart from the fact that to overseas go many illustrated books for children to look at—there is nothing like "catching 842 them young" and inculcating a taste; the technical books for students of all ages and all disciplines, learned journals for specialists: it is not just a matter of foreign currency, although we earn a lot and stimulate a lot of taste for buying books. We are exporting ideas and good-will, and the phrase "trade follows the books," which Sir Stanley Unwin devised and the noble Baroness, Lady White, quoted, is a very true phrase, still pun-gent and correct this day.
As the noble Baroness mentioned, we are facing competition from the Americans and other people. If we lose out in this market we are very stupid. We have established the market; it is a good one; we are in it. Our stuff is in great demand and we are foolish if we go out of it. Higher postal charges make it more difficult, particularly for developing countries with balance of payments problems, to go on importing our books. In another place on 10th February this year the Under-Secretary of State for Trade said this:We face a daunting balance of payments challenge, a key feature of which is the need substantially to increase our exports.These are the stark facts of the present situation, and they mean that the support and assistance which we give to our exporters must be broadly comparable With that available to exporters in other countries. To do less than this would mean placing British exporters at a significant competitive disadvantage."— [Official Report, Commons; 10/2/75 ; col. 106.]If the right side of the mouth says that, why is the left side of the mouth saying to us something totally different? I repeat, in export it is not just the pounds, shillings and pence, or whatever currency we are using nowadays, that matters. It is the export of ideas.
My Lords, I am 100 per cent. Scotch. I have no Highland blood in me at all but I think I have some element of second sight. I suspect we are to be told this evening that postal charges, in whatever sector of the Post Office they may occur, must pay for the service. I have been told this in another context about STD, but never mind that. I suspect we are to be told that this is an economic rate to charge for sending things overseas by post. I think it is a specious argument. As a former Speaker has said, under the UPU rules we do not have to charge more than 50 per cent. As the noble 843 Baroness and another noble Lord said, the United States are already giving favourable terms to their exporters of books and printed matter. I was told this afternoon—on what authority I am not certain—that the postal rates in the United States for overseas are going up in July—but not for the printed word. It is no good trying to tell us that we are unable to produce favourable rates for the printed word going overseas.
There is an old song in Scotland which has the couplet:There's cauld kail in AberdeenAnd castocks in Strabolgi.I hope the noble Lord, Lord Strabolgi, will be able tonight to give us something more heartwarming than "cauld kail". When I was in the Army and was fighting against authority, as I often was, there were two replies that used to irritate me. One was, "That would constitute a precedent." The other was, "That is against the policy." If it is a good precedent, let us set it. If it is a bad policy, let us change it. But for goodness sake!, my Lords, do not let us cut off our nose to spite our face.
§ 8.10 p.m.
§ Lord TREFGARNE
My Lords, I regard it as a special honour to rise to my feet so soon after the most distinguished and interesting maiden speech of the noble Lord, Lord Allan of Kilmahew. It is not for me to be so pre-sumptuous as to commend him, because others who are more capable than I will do so. However, it was certainly an honour and a privilege to hear his maiden speech.
The noble Lord, Lord Beaumont of Whitley, is right to raise this most important matter this evening, and the House will be grateful to him for doing so. The noble Lord is asking this Unstarred Question in the shadow of the terrifying increases which came into force this week. In the light of these increases, we are entitled to ask—indeed, I believe that we have a duty to ask—some fundamental questions about the postal service. I doubt whether an Unstarred Question affords the right opportunity to make a long and detailed speech and I shall not do so; but I hope that I may be allowed to draw in some broad outlines of disquiet.
844 The Post Office seeks to justify the latest swingeing rises with two arguments; namely, inflation generally and the price restraint policies of various Governments in previous years. I submit that neither of these two reasons, nor even both together, justify the size of the latest increases. First, with regard to inflation, we ought to ask why, taken over, say, the last four years, the rises in Post Office charges exceed 200 per cent., while inflation during the same period accounts for only about 50 per cent. Other figures which I could take to illustrate the same theme show that since 1968, which is a little longer, Post Office charges have risen on average by no less than 340 per cent. while the retail price index has risen by only 88 per cent. during the same period and the wages index, if that is relevant, by 133 per cent.
While it is accepted that in the past the Post Office has been restrained from raising its charges by as much as it would have wished, the facts seem to indicate that such restraint was not the villain it has been made out to be. The large deficits which occurred during periods of restraint were largely caused by big, once-and-for-all payments to the pension fund, which should probably not have been charged to revenue account, anyway. This is an area in which one is somewhat handicapped, because the Post Office does not publish detailed figures and it is difficult to ascertain the precise facts.
If we regard the Post Office's explanations of its disappointing performance with some scepticism, what, then, are the real difficulties and what steps can we suggest to improve the position? First, while accepting that the postal service is labour-intensive, should we not ask whether the total labour costs are not excessive? I refer not to the rates of pay but to the numbers of persons employed and to the nature of their employment. We gather that the introduction of automated sorting equipment has been consistently obstructed by the unions, and I suggest that that alone has in no small measure contributed to the present problems.
Secondly, it is common knowledge that the work in sorting offices "peaks" twice during the day—once in the morning and once in the evening. Is it not possible to meet these "peaks" with some part-time labour rather than employ 845 a large body of full-time labour which is fully utilised for only two short periods each day? I do not suppose that the concept of part-time labour will com-mend itself to the Post Office union, but surely they are as anxious as anyone to secure a viable future for the postal service, which must surely now be threatened, and they themselves could greatly help in the solution of these problems.
Thirdly, it has been suggested that payments made to the Post Office by other Government Departments—for example, in respect of the distribution of pensions —do not now accurately reflect the costs involved. An underpayment figure of £14 million per annum has been mentioned. If that be so, the 1971–72 and 1973–74 deficits would largely disappear. Fourthly, and finally, there are two purely financial matters which I believe bear examination. I refer to the interest charges on Post Office debts incurred prior to the establishment of the Post Office Corporation and also the top-up payments made to the pension fund to which I have already referred. I wonder whether either of these two items can legitimately be charged to revenue account, particularly in these specially difficult times. I think there is a strong case for these items to be the subject of special treatment by the Government. Perhaps the noble Lord who is to reply can say something about that tonight.
On this side of the House, and, indeed, in other quarters of the House, we have taken the view that, save in certain exceptional circumstances, the nationalised industries should stand on their own feet and not be subsidised by the tax-payer; and the Post Office is certainly no exception in that respect. Speaking for myself, I believe that the postal ser-vice can be viable at rates which users will find acceptable. The latest increases may well prove to be counter-productive by pushing customers away to other means of communication. In particular, publishers of books and magazines about whom we have heard a great deal this evening and who rely on the post for their distribution arrangements, will either have to find other means of delivery or curtail their activities. If that happens, our cultural, scientific and educational pre-eminence, which has been so apparent 846 from tonight's debate, will surely suffer. The Post Office must be very careful to ensure that these important users of postal services, both at home and overseas, are properly provided for in the contractual arrangements which are available to them. I believe that the Post Office management is not now immune from some justified criticism. I think we shall need rather more convincing explanations when, and if, the Post Office asks for more increases later this year or early next. May I end by repeating my thanks to the noble Lord, Lord Beaumont of Whitley, and my congratulations to the noble Lord, Lord Allan of Kilmahew, and by saying that I look forward to the reply of the noble Lord, Lord Strabolgi.
§ 8.18 p.m.
§ Lord GORDON-WALKER
My Lords, may I congratulate the noble Lord, Lord Trefgarne, on the way in which he has made both valuable and new points at this stage of the debate when a great many things have already been said. Also may I congratulate the noble Lord, Lord Allan of Kilmahew, who in his maiden speech made such a notable contribution to the very formidable case which has been made tonight by noble Lords who know much more about these matters than I do.
Some years ago I was chairman of the Book Development Council and at that time I was largely concerned with the book export side of the publishing industry. Tonight I should like to speak on the effect of the new overseas postal rates on book exports. Book exports are vitally important; they make a major contribution to our balance of payments. As many noble Lords have said, we earn £100 million a year in foreign exchange from the sale of books. But it goes much further than that. Why trade follows the book is to a large extent because text-books form a very considerable proportion of our book exports. They help to maintain British standards in engineering and all kinds of things, which then bring in many more secondary exports.
Exports are also essential for the very survival of our book publishing trade. Relatively the United Kingdom has a very small market. The book market in the United States of America is eight times as large as ours, and it is only through book exports that we can obtain 847 a large enough market to enable us to produce books competitively. The present and proposed new postal charges will undoubtedly hit exports. In the cost of books postage is a bigger element than probably in the case of any other export, and as the noble Viscount, Lord Eccles, and my noble friend Lady White said, relatively it will give a very great advantage to the United States, which is our chief rival in book exports and which now, in all probability, is about to invade our traditional markets from which they have previously kept out. Our revised postal charges will make our overseas postal rate 72 per cent. higher than the rates paid by United States' publishers. This is an appalling handicap when one thinks of them as our main rivals in this field.
It may be argued by my noble friend speaking for the Government that if con-cessions—subsidies, in effect—are made to books both at home and for export, it will be hard to resist similar demands for preferential postal rates for many other interests; and also, as many noble Lords have said, the Post Office must make its various services pay. But this and previous Governments have recognised the very special status of books. They do not regard books simply as a commodity; books are, of course, a commodity, but Governments have realised that they arc also something very precious and valuable, and they have made a number of important and special con-cessions to books, which have not, in fact, spread back to other interests which could make similar demands. Books are free from VAT, and they have the unique right that the publishers can preserve the resale price maintenance arrangement. This is a unique concession to books and it shows how Governments have regarded books as a special kind of commodity.
There are, in fact, direct subsidies to books. As I understand it, the British Council gets something like £4,300,000 to help Her Majesty's Government's book aid programme, which is funded by the Minister of Overseas Development and is very valuable. Therefore, I submit that it would be in accord with past and present Government policy to discriminate in favour of book exports, and other aspects of books at home, and so on, and 848 to give them relief from the full effect of the new overseas postal rates.
In the last resort the Government are responsible for these things, and it seems to me that their policy is contradictory and inconsistent: while they give books these special concessions, while they give books aid through the British Council, at the same time they damage book exports and sales by exposing them to the full force of the new overseas postal rate. It seems to me to be very hard to defend both sides of that argument.
I hope the Government will be influenced by, and will pay attention to, the very powerful case that has been made by noble Lords tonight, and will think again and try to find some special way of helping book publishing in general, and exports in particular, with which I am concerned. I hope they will consider taking advantage of the rights they have under the Universal Postal Union which allows serious printed matter to be sent at 50 per cent. below the full postal rate. If the Government do this, they will be acting in accordance with an international agreement to which they are a party. In my view, only action of this kind will avoid the very great danger that now threatens British books.
§ 8.25 p.m.
§ Lord AUCKLAND
My Lords, I should first like to join in the tribute paid to my noble friend Lord Allan of Kilmahew on his excellent maiden speech. In another place the noble Lord was for some time closely allied to my noble friend and cousin Lord Avon, and his contribution to your Lordships' House today has been both knowledge-able and extremely valuable.
My Lords, I do not have any financial interest to declare in any aspect of the Question which the noble Lord, Lord Beaumont of Whitley, has so valuably tabled and prefaced with a notable speech, but anybody in the field of commerce or industry today who travels abroad will have noted with dismay the end product of these increased and in-creasing charges.
I should like particularly to pay tribute to my noble friend—if I may so call him—Lord Ballantrae, for the excel-lent work that he is doing as Chairman of the British Council. When I was in Finland, about seven years ago, I met our 849 representative of the British Council. I think I am right in saying that in Helsinki there is one of the largest libraries in Europe, and it has in it a very large number of British books. It is in countries such as Finland, which is such a close and valuable ally of this country, that these charges will send a nasty draught through those who are interested in reading and studying our books and periodicals.
Reference has been made to the medical profession. As some of your Lordships know, I have served on a number of hospital committees. We all know the value of the exchange of doctors and nurses, particularly between countries such as this country and New Zealand. When I was in New Zealand, just three years ago, I visited Auckland General Hospital and most of the top administrators were British, while over here we have a number of prominent New Zealand doctors. A number of medical periodicals go to New Zealand and Australia and countries far away from this country. What will be the situation with these heavy postal charges? It may well be that some of those periodicals are air freighted. I do not know—perhaps this is something which the noble Lord, Lord Strabolgi, will be able to inform us about. How many are, in fact, air freighted and what are the rules about air freighting magazines and books, which presumably may save postal charges? Doubtless these savings are counter-balanced by freight charges, so that one does not really know whether money is saved by this method.
Also, of course, books and periodicals go to other countries, particularly the developing countries which have been mentioned by a number of speakers, and for which we have a responsibility. There is a shortage of airports and landing strips in those countries, so that for obvious reasons there are not very regular air services and, therefore, books and periodicals have to be sent to these places by post at some of the charges which have already been mentioned. At a time when the English language is the second language in so many countries, and when it is held in such high respect, this seems to be a most inopportune moment to put these swingeing increases on reading material.
850 My Lords, the written word is a vital comunication with those whom we seek to interest in the ways of our democratic life, and in the ways in which this country works. I was in the Caribbean, in Santa Lucia and Barbados, at the end of last year on business. I noted the number of British newspapers and periodicals there, and how avidly they are read. If we are to have such an increase in charges, it will be very difficult indeed for reading material to be sent to places like the Caribbean. I join with the noble Baroness, Lady White, in her hope that our Embassies in these countries are in communication with the Foreign and Commonwealth Office. The noble Lord, Lord Strabolgi, is undoubtedly in a difficult situation here, as any Minister would be. Presumably, there are several Minis-tries involved in this problem, and communication between them and other Government bodies and representatives of the countries concerned is absolutely essential.
I have concentrated primarily on the overseas market because, working as I do primarily in the sphere of insurance, I recognise this as one of our major invisible exports. Clients overseas want to know what is going on through such magazines as Lloyds Log, the Insurance Gazette, and others. There are many other professions which publish magazines. If we are to be faced with these very high charges, what will be the chances of such magazines reaching with the required frequency some of the countries which they need to reach? Of course there are problems. We are living at a time of raging inflation, and the Treasury has only a certain amount of money to dole out. There must be priorities. As I said earlier, and as other noble Lords have said, the value of the written word overseas today has never been so vital as it is in these crucial times.
§ 8.35 p.m.
§ Baroness BURTON of COVENTRY
My Lords, first of all, I should like to thank the noble Lord, Lord Beaumont of Whitley, for putting this Unstarred Question on the Order Paper today. I think appreciation has been felt by every speaker. I should like to thank him also for what he said, particularly when he stressed the urgency of this matter. It seems that it is much better to put down an Unstarred Question and to have an informed debate, than to wait for another 851 opportunity. We ate most grateful, and we hope that the noble Lord will be rewarded by the noble Lord, Lord Strabolgi, when he comes to reply. I should also like to congratulate the noble Lord, Lord Allan of Kilmahew. We all feel very pleased that his knowledge made it inevitable that he should make his maiden speech today. We are grateful for what he said, and look forward to hearing him again in the future.
I am particularly glad, because I want to talk about the new inland rates. It has not been possible for Parliament as a whole to pay a great deal of attention to them, and it seems to be the case tonight, as is so often the way in this House, that your Lordships will show the way on these matters. I should say that I have an interest to declare. As the House knows, I am President of the Association of Mail Order Publishers and Chairman of its Authority. I share the deep concern for the future of minority interest books and magazines. Also, I believe that the levels of postal increases are now so swingeing each time that they can only motivate larger users to use alternative methods of delivery. I was very interested this evening—and I wrote down the names—to hear the noble Viscount, Lord Eccles, and the noble Lords, Lord Trefgarne and Lord Auckland, all use the term "swinge-ing". I think it is not a word that we use a great deal, but as we have all separately made use of it tonight it must convey to the noble Lord, Lord Strabolgi, what we feel on this matter.
My Lords, I think it would be appropriate for me tonight, in what I want to say, to kill the myth that large users receive their small discounts from the Post Office at the expense of individual users. The large users save the Post Office a good deal of money, and they save it for various reasons. First, they do not use stamps. By printing at their own expense "Postage Paid Impression" envelopes and cards they save the Post Office the cost of printing and retailing postage stamps. They also bypass the stamp-cancelling process by which the Post Office prevents the reuse of postage stamps. Secondly, they post from one point. Unlike general mail, which has to be collected at considerable expense from about 150,000 different post boxes, bulk 852 posters take all their mail direct to one, or at most two or three, sorting offices.
Thirdly, they post uniform, clearly addressed items. In fact, bulk letter mail, and most parcel mail, is despatched in quantities of a standard "Post Office Preferred" size and shape. Addresses are typewritten or printed, clearly legible, in the precise Post Office format, and, increasingly, with the correct post code added. Fourthly, they pre-sort the mail. According to the quantity posted, the items are sorted into countries and large towns, or into the full range of some 1,500 "post towns". Some posters, using the post code, pre-sort their mail right down to the individual postman's "walk". Pre-sorted mail is bundled, bagged and labelled by the poster. "Direct bags" do not require any examination by the Post Office from the moment they leave the poster until they reach the delivery office. Lastly, the Post Office know exactly when it is coming.
I was very pleased to see this recognised in paragraph 32 of last month's POUNC Report, and I quote:Without larger user business the finances of the postal service would be even less healthy, and the burden falling upon the small business user and the private user proportionately greater.I have stressed this aspect because it can-not be healthy for the Post Office that so many large users—publishers and others —are now costing other means of distribution. One very large member of the Association of Mail Order Publishers tells me that it will now pay them to deliver their magazine by hand in towns where they have a circulation of over 1,000— and that is some 60 per cent. of their total. This would leave the Post Office with the expensive deliveries to distant Scottish farms and other remote areas. And, of course, if this starts, other magazines could well make use of the same service. Or as the Daily Telegraph pointed out on 22nd February these other magazines could all use the distribution network set up by Great Universal Stores during the last postal strike, and still retained. Another very much smaller member of the Association of Mail Order Publishers, who publishes educational books, has now calculated that it can save 10 to 15 per cent. by signing a con-tract with British Rail. Yet a third example is the Bristol Law Society, which 853 is now going to deliver legal documents among its own members in the near future.
I am sure the Minister will agree that this potential loss of business is of much concern when we recall that the Post Office, even before the last round of increases, lost the Barclaycard magazine, with some 6 million copies a year, which is now distributed over the counter, and the American Express magazine. Even the Government themselves have suffered problems with the old postal charges, and give the postal rates as the main reason for the HMSO loss last year, a loss of £348,971. Lord Beaumont's mention of the decrease in the number of periodicals, which are so very dependent on the post, was vividly illustrated in an article I read the other day. And now that W. H. Smith & Son has wound up its subscripiton service, it is only too easy to understand why the magazine publishers are alarmed.
My Lords, we are all keeping our speeches short tonight, and time precludes me from commenting further on Lord Peddie's most thorough report, but I should like to add my voice to those organisations who have called for a full inquiry into the costing of the postal services. Of course, the user wants to know what he is paying for every time he is told that the price of his stamp is going up again.
In common with every speaker tonight, I would whole-heartedly support Lord Beaumont's call to the Government to investigate very carefully what they can do to preserve the dissemination of the printed word. From what has been said tonight, we all feel that the noble Lord, Lord Strabolgi, in his personal capacity anyway, will understand the problems we are talking about. He has a very difficult job in replying for five Ministries. I hope that he will give us comfort, and that behind the scenes he will convey to the Government the very real anxiety felt by every speaker tonight. All of them have spoken with knowledge and raised problems which I think should be attended to.
§ 8.45 p.m.
§ Lord HALE
My Lords, the special problems of a village solicitor, if he is in a litigious practice, arise from about five o'clock at night to about 7.30. Counsel 854 has notified us at the last minute that he cannot be there for the case due tomorrow. The Clerk of Assize has brought forward a case on an application for adjournment. There is a case in Birmingham that was expected to be reached on Thursday and is now about to be reached tomorrow. The necessity of urgent and frequent communications is absolute, while one must keep one's lines open for notice of further disasters. If the clients knew what was happening they would go "scatty" and sometimes the solicitor very nearly did.
We used to rely on the Post Office, and it was then, I believe, a nationalised industry. It paid very low wages. In order to get these messages through, there were three or four methods open to us. One could pay sixpence a mile to a Post Office messenger to take it all the way. Normally that was practicable only for short-distance communication. One could use the ordinary post, which was then three-halfpence, and when I talk about a penny, I mean the old penny. One could pay a small extra fee—I think it was 1d or 2d—for an express delivery, which, unfortunately, in London had the disadvantage of being so prompt that the letter arrived before my London agent's office was open: they had to stick a paper in the letter box asking them to call for it. Or there was the night telegraph letter, which we usually relied upon. The cost of that was 9d for 36 words, a halfpenny extra for every additional three words, so that for less than two "bob" you could write 100 words and have it delivered, I guarantee, next morning. For an extra penny or two, I think you could get an acknowledgment if you wanted it, and have a record. Having records of documents is rather important in a solicitor's office, where disputes are liable to arise in the course of negotiation about debts.
Of course, you could also use a rail service, in which you went to the local railway station and handed in a stamped envelope for an extra fee of 2d., which covered the transfer of the latter at the various junctions on its way until it arrived at its destination where it would be called for. The modern Post Office has slightly improved this service; you can now get your letter collected and delivered to the station and then have it delivered from the station at the other 855 end. The price of that has now gone up from 2d to £2 exactly. I regard that as a fairly substantial increase. I said, and I admit, that the wages were low and conditions were low.
I married, fortunately for me, the daughter of a village post-mistress, and I recall something of the conditions. I learned how to work a village postal telephone exchange during the night, when one padded down in bare feet on a cold floor, and had to listen, perforce, to the conversation, in order to switch the ex-change off. The conversation nearly always started with the question "Did you get home all right?" and the second was "Was she up?" and after that a contained dialogue.
Conditions had to improve, and they have improved. But I am not quite sure whether the service has. I have today an excellent postal service at Dulwich, and I make no complaint about it. Many of these privileges have gone. The 4 oz. were reduced to 2 oz. and the 2 oz. were reduced to 1 oz., with a dreadful increase of weighing and putting letters on balances and so on. It was a busy office and everything took a considerable amount of time. I do not know anything about economics, and I have never had the good fortune to meet anybody who does. I find it difficult to understand why, running over those 50 years—which have included periods of deflation, inflation, deflation, distress, unemployment, overemployment, peace and war—there is never an occasion when postal charges go down. So far as I know, they have never gone down since Rowland Hill. The present increases are absolutely prohibitive.
I have had some experience of technology. In Oldham we never mentioned politics at Election time, because we regarded it as controversial and distasteful and liable to arouse discussion. I certainly never read out the briefs submitted to me from Transport House. I remember when on one occasion I got up at a meeting of 2,000 or 3,000 workers at the Avro Works and I produced that classic phrase of the Election:We are going to harness together all the resources of modern technology and lay it at the service "—856 and at that moment the loudspeaker broke down and I was unable to continue that thoughtful and profound theme.
I did indeed have to use the service to transmit to Mr. Tom Harrison in Borneo some urgent documents for signature, and I had a message back to say that he was 14 days away by runner in the jungle, and asking whether we wanted them to run out, and we decided that we did not. Still more recently, as your Lordships know, the glad tidings that Mohammed Ali had retained his world heavyweight championship in Central Africa, which were transmitted by all the resources of modern technology to the civilised world, were sent almost as speedily, and much more appropriately, by drum throughout the forests of Africa.
But I rise today to make a case on behalf of one institution—the London Library. This is not at their request; it is my own desire. The London Library is a unique institution. I would have spoken at length on this matter if the noble Viscount, Lord Eccles, had not made the point quite clearly on behalf of the National Library. The London Library, which has been buffeted from Westminster once every three or four years, is a library so great that I often leave the British Museum Reading Room to go there and find the book which I could not find at the British Museum. You cannot give it much more distinction than that. It is a voluntary organisation in service of learning. How it will go on under these conditions, I do not know.
They had a withdrawal of their rate rebates some months ago, and a gentle-man whom I have never met, and who was full of zeal, raised the question of the benefits and referred to almost every learned institution in London—the Royal Colege of Music, the London Library and so on. I introduced a Bill to remedy that situation and was duly rebuked by the Speaker at a private interview for a wilful and calculated breach of the Rules of the House, after being warned of the consequences in words which to me are still memorable. He said:I never spotted what you were up to, until you said you were on the horns of a dilemma ".The noble Lord, Lord Beaumont of Whitley, who opened the debate, dealt 857 with the problems of magazine proprietors and so on in a very able memorandum which I received only today from the Publishers' Association. That case is overwhelming. Much of it was set out with the greatest possible ability by the noble Lord, Lord Allan of Kilmahew, in what it was surprising to learn was a maiden speech. It would be almost impertinent of me to congratulate him, because its quality was so obvious to everyone, but it was singularly accomplished. I will add a single sentence in corroboration of what the noble Lord, Lord Beaumont of Whitley, said. Only a few weeks ago, I paid a five years' subscription to the magazine Newsweek which, of course, has its headquarters in America, at a price which was not very much more than it would cost me to pay a year's subscription to a magazine of equal price in this country. These are serious and grave matters which will have reprecussions all over Britain in industry after industry. But the great burden is on books, publishers, readers and libraries. How will they survive? I do not know. It may well be true that many useful scientific magazines will perish under this unmerited and, so far as I can see, wholly unjustifiable burden.
§ 8.56 p.m.
§ Lord CULLEN of ASHBOURNE
My Lords, I am grateful to the noble Lord, Lord Beaumont of Whitley, for having initiated this very well-timed debate. I shall not attempt to reinforce the powerful arguments that have been made from all quarters of the House, but I sincerely hope that the Government will take heed of them. I intend to speak for a few moments about "talking books". Here I must declare a personal interest in that I recently became chairman of the National Listening Library which is a charitable organisation providing literature in the form of recorded material on "talking books" for the physically handicapped. The National Listening Library, though still in its infancy, provides a "talking book" service similar to that of the Royal National Institute for the Blind. By the terms of its charter the RNIB is unable to make its services available to people suffering from other forms of handicap, many of which either make the reading of books impossible or so diffi- 858 cult, or even painful, that no benefit or enjoyment can be obtained. That is why the National Listening Library was born.
Owing to the generosity of many individuals and many institutions, so far it has been made possible to limit the annual subscription to members to £12. Before this week's increase in postal charges the charges amounted on average to 50 per cent. of that sum. It would be most unfortunate if the subscription has to be raised, but without help that seems to be inevitable. Fortunately, there is a tailor-made precedent for help being given in almost exactly similar circumstances. Noble Lords will be aware that some 40 years ago Parliament approved the pro-vision of free postal delivery to the blind of braille material and "talking books". By international agreement this facility is now universally available.
I suggest that this enlightened precedent should be followed by a similar con-cession to those who are prevented from being able to read by physical handicap other than blindness. Surely that is only fair. It is something which I think the Government could and should do, either by conceding free postal delivery or by a grant to cover postal charges. After all, a book remains a closed book just as much if you cannot open it as if you cannot read it. It is estimated that at least 100,000 disabled people are eligible for this ser-vice, including children and those who are temporarily disabled. As yet, in these early days, there are only about 1,200 members growing at the rate of about 50 per month.
We want to make the service available as quickly as possible to all those who are eligible and we want all the help we can get. The cost of providing free postal delivery to the disabled would be at present the trifling sum of between £25,000 and £30,000. I do not know the cost of the concession to the blind, but it must be very much higher. To put the whole thing in perspective, it is interesting to look at the present cost of the library services, which are available absolutely free to the able-bodied. The annual cost in England and Wales of the public library service is about £90 million and that of the university libraries about £17 million.
It needs no words of mine to describe the mental stimulation and happiness that the library is already providing to 859 the few, nor the scope for giving confidence and education to disabled children, nor perhaps in years to come preliminary reading; for those who will require retraining owing to the need to change their jobs. At present we lag behind the United States and Canada, which have recognised the need to enable the disabled to continue to enjoy the written word as of right. In those countries a "talking book" service is pro-vided free to the disabled, so I am not asking for much for the disabled—just a concession of free postal delivery already granted internationally years ago to the blind. This is a special case and I trust that the noble Lord, Lord Strabolgi, will agree with me.
§ 9.2 p.m.
§ The Earl of LONGFORD
My Lords, the whole House was moved by what the noble Lord, Lord Cullen of Ashbourne, rightly called a special case. This House has shown itself repeatedly full of concern for the disabled, and of course some of our most respected and distinguished Members are themselves disabled. I agree entirely with what the noble Lord said—that whatever may be the outcome of the general discussion, the House will treat this particular case as indeed special. The noble Lord had every justification for speaking, even towards the end of this quite prolonged debate, though my justification is slightly less convincing. If I am asked whether my speech is really necessary, I think the answer can only be "No", but if I am asked whether it would not seem a little cowardly, possibly even sinister, if I simply scratched my name off the list of speakers, then I think the answer to that must be, "Yes".
I rise in the spirit of a notable character well known to your Lordships who, after Edmund Burke had spoken, rose and simply said, "I say ditto to Mr. Burke". All noble Lords will clearly remember his name, and if they do per-haps they will tell me later who it was because it has temporarily escaped my memory! However, I rise to say "ditto" to all the previous speakers, beginning, of course, with the noble Lord, Lord Beaumont of Whitley, who I was afraid I was going to have to congratulate in his absence but who has made one of his fleeting returns to the House.
860 I wish also, of course, to congratulate the maiden speaker, the noble Lord, Lord Allan of Kilmahew, who is a very much larger publishers than I am, though whether the rate of progress of my family is quicker than that of the vast organisation over which he presides I would not know. However, as one medium-sized publisher to a very large one, I salute him on his contribution. I think it would be a good idea to congratulate those sitting closest to me, which is always a prudent thing to do before one sits down, not-ably the noble Baroness, Lady White, and the noble Lord, Lord Gordon-Walker.
I hope the Minister will find it possible tonight to give us some encouragement. I realise the enormous difficulty of his position. Before he reached the scene, he clearly had been given some guidance by his colleagues and I do not want to embarrass him unduly. When I first came to this House, 30, or it may have been 100, years ago—whenever it was, it was in the Dark Ages—his father gave me tea on the first day I arrived and it would be poor recompense if I were to add to the noble Lord's afflictions tonight. But he must realise that I should doubt whether, in my over-long experience here, there has been such a unanimous volume of criticism of any step as we have listened to tonight. I hope the noble Lord will not say to himself, and possibly to us, that those who are speaking are speaking on behalf of some business interests of their own. Some are and some are not, but the truth is that in this debate we have speakers—in some cases they might be said to have a personal interest and in some cases they are detached—who are all thoroughly expert and truly concerned about the public good, and I am sure that that is the spirit in which the noble Lord approaches these problems.
I will not delay your Lordships for long. The noble Lord may tell us, or his colleagues may think, that this is now a matter that has to be left to the Post Office, that in their wisdom they must decide. Obviously the noble Lord and any Minister, however unenlightened or obdurate, must agree that some damage, and I should think a lot of damage, will occur if these extra charges go through. But the noble Lord may say or think— or his colleagues may say or think, "This industry is now outside our control." I 861 hope that that will not be said. I have been a Minister of a nationalised industry and, when I was Minister of Civil Aviation for three years, one part of our concern was with the aerodromes, which were nationalised in the sense of the Post Office, and another part comprised the corporations, which were nationalised on the present lines.
So whether the Post Office is nationalised in the old or the new sense, the truth is that the State, the Government, cannot divest themselves of all responsibility for what takes place. They would be completely betraying their trust if they said to themselves, "This is regrettably damaging to the national interest, but what can we do with these people? We have told them that they must make it pay and if this is the best way they can think of making it pay, so be it, we must leave it to them." I hope that we will not be told that tonight and, above all, that the Government will not think that, for the truth is that no Government responsible for a nationalised industry can ignore social considerations, can avoid the question which they must put to themselves: "When all is said and done, will this help or damage the country?" Obviously, so far as possible the Government wish to avoid interfering, but when they get this volume of criticism, the noble Lord and his colleagues must think again. I hope that tonight he will at least leave the door open and tell his colleagues that, so far as he can judge, there has never been an occasion when the House of Lords has been so unanimously against what is now being proposed.
§ 9.8 p.m.
§ Lord STRABOLGI
My Lords, the noble Lord, Lord Beaumont of Whitley, has been responsible for giving the House this opportunity for a most interesting debate. I agree fully with the noble Lord, Lord Trefgarne, that the subject is too important for an Unstarred Question, but I appreciate that the noble Lord, Lord Beaumont, had difficulty in getting time and so we had to have the debate rather late in the day. However, it has been none the worse for that, and certainly the subject has attracted a scintillating list of speakers, including a former Minister for the Arts. I do not know whether my 862 noble friend Lord Ardwick would call the noble Viscount, Lord Eccles, the Minister of Culture, but I certainly considered him to be so, just as I now regard my honourable friend Mr. Hugh Jenkins to be the Minister of Culture.
My Lords, I am, of course, the spokes-man for the Arts Department in your Lordships' House, and because the Question of the noble Lord, Lord Beaumont, ended with the words "a humane society" and referred to the place of the book in such a humane society—a matter which I shall deal with later—the task of replying has devolved on me instead of upon the spokesman for the Department of Industry, which is the Department responsible in a general way for the Post Office. However, as several noble Lords have surmised, I have had the task of co-ordinating what I hope to say with a great many Departments. I shall do my best to answer all the various points which have been made.
First of all, I must congratulate the noble Lord, Lord Allan of Kilmahew, on his maiden speech, to which we all listened with the greatest interest. I want to say more about paperbacks later, but here I must say how much I have always admired Penguins and how much pleasure I have derived from them. They compare very favourably with many of the paperbacks produced in other countries, particularly on the Continent, and —dare I say it?—with the Livres de Poche.
Despite what my noble friends Lord Gordon-Walker and Lord Longford have said, I must be plain at the outset on the subject of the higher charges. Although the Government are naturally consulted by the Post Office about its general pricing policy, postage rates for particular services are primarily a matter for the Post Office. These responsibilities are conferred by the Post Office Act 1969, which was passed by Parliament and which gave the Post Office, first, the power to provide, inter alia, postal ser-vices and, secondly, the general duty to exercise that power in certain ways having regard to efficiency and economy. The 1969 Act also gave the Post Office power to make schemes which prescribed the charges and conditions applicable to its services. I may say in this connection 863 that the second sight of the noble Lord, Lord Ballantrae, has been as accurate as I am sure it usually is.
However, having said that, I must say that the Post Office's freedom to set rates for its services has been somewhat curtailed by the counter-inflationary policies pursued both by this Government and by the previous Administration. As a result, compliance by the Post Office with the terms of successive Price Codes has meant that this year the Post Office—taking both postal and telecommunicttions businesses together— faces losses of some £300 million, which would have risen to an estimated £700 million in 1975–76. Continuing losses on this scale were clearly unacceptable and I must remind noble Lords of statements made at the end of last year by my right honourable friend the Chancellor of the Exchequer. He made it clear that it was the policy of this Government to phase out price restraint subsidies to the nationalised industries as soon as possible.
Of course, everyone recognises that implementing that policy is bound to be both painful and unpleasant, even if its impact were to be reduced by stages. Nevertheless, it remains the Government's view that economic pricing is as essential to the economic wellbeing of the public sector as to the private sector and is necessary if public expenditure is to be effectively controlled. Confronted with the massive deficits which had been fore-cast and mindful of the Government's policy in regard to nationalised industries, the Post Office had no choice but to propose massive increases in the prices of its services. Even so, I should point out to noble Lords that, at the request of my right honourable friend the Secretary of State for Industry, the Post Office sought increases of a lower order than the maxima permitted by the provisions of the current Price Code. As a result, it will still be left with an estimated loss of some £50 million in the coming financial year.
The proposals made by the Post Office were referred, as the 1969 Act requires, to the Post Office Users' National Council which has been referred to by several noble Lords. My noble friend Lord Peddie, who I know wanted to be here tonight but was unavoidably prevented, was kind enough so to inform me and to send his apologies. I think the Council 864 under the chairmanship of my noble friend Lord Peddie, to whom I should like to take this opportunity of paying a tribute, enjoys an enviable reputation for the vigilance with which it has discharged its functions in the interests of all classes of users of the post. After full consideration of representations made to it, the Council has of course made public its reluctant acceptance of the proposals of the Post Office, and increased postal rates were accordingly introduced on the 17th of this month. Before that date, there was also a statutory referral—except for the overseas rates—to the Price Com-mission, which accepted the proposed increases.
The overseas postal rates are very much factors in considering the Question which the noble Lord, Lord Beaumont of Whitley, has asked. Assuming no price changes, the Post Office forecast a deficit in the current financial year of £4½ million on those services, but this would be expected to increase to £24½ million in 1975–76. Although sea conveyance costs, reflecting the increased price of oil, have risen enormously, the largest single item in this increased forecast deficit, comparing 1974–75 with 1975–76, is caused by the decision last year of the Universal Postal Union Congress to increase and extend the compensation arrangements in respect of traffic imbalances referred to by my noble friend Lady White. This may not have been appreciated, but the Post Office is bound by that decision which was strongly resisted by the British delegation, but, my Lords, the views of the majority unfortunately prevailed. There are very few countries like the United Kingdom which send more letter post traffic than they receive. Accordingly, the Post Office has had to increase its rates for printed papers—these of course are principally books and periodicals.
After considering the representations of the Post Office Users' National Council and the industry, the Post Office agreed to introduce these particular increases in two stages. It was not really, as my noble friend Lady White said, that there were more increases on the way. They were increases which should have been made now, but which have been deferred in order to make the position rather easier, although I appreciate the difficulties which the book industry is facing, as 865 indeed are all industries and all of us in many fields. The first stage which increased the full rate printed paper tariff by 24 per cent., the reduced rate by 54 per cent., and the direct agents' bag rate by 50 per cent., came into effect on 17th March. The second stage, which advances the full rate to 66 per cent. of the tariff prevailing before 17th March, and the reduced rate and direct agents' bags to 100 per cent. of the pre-17th March tariffs, will, as I said, be introduced next January.
It is these services which very largely create the imbalance of traffic with other countries. They were operated at a very heavy loss before 17th March, and they will continue to be operated at a loss after next January, despite the large increases in tariffs which I have mentioned. In spite of the continuing losses on those services, I am able to reiterate an assurance given on the occasion of a similar debate in another place at the end of January, and I am sure that noble Lords will be gratified to learn that the Government know of no plans on the part of the Post Office to abolish the special rates, for all that they are not as low as certain noble Lords would wish and as I myself would wish for books and periodicals sent abroad by post. These are the facts of life that we have to live with.
So far as the inland service is concerned, there are no comparable services, and books and periodicals must go at either first- or second-class letter post rates or at parcel rates if they are sent by post. At this point, I would remind noble Lords that the Post Office has no mono-poly over the carriage of items other than letters, so that books and periodicals may be sent to a destination in the United Kingdom, or abroad, either by post or by other means. The choice as far as possible, though I realise this may sometimes be difficult for smaller publishers, is the senders. The serious financial position of the inland postal service clearly called for some action: without a tariff increase a deficit of £126 million was forecast for 1974–75 and £277 million in 1975–76. Following acceptance by the Users' Council and the Price Commission of the Post Office's proposals for increased rates at 49 per cent. overall for letters and 51 per 866 cent. for parcels, these revised rates were also introduced on 17th March. Their effect will be to reduce the forecast inland postal deficit for 1974–75 to £118 million and for the period ahead to £65 million. My Lords, I must stress that these figures for the forecast deficits are still very substantial ones.
In the light of the economic situation of the Post Office and the Government's expressed policy in relation to subsidies to the nationalised industries, it would be unrealistic to expect any form of subsidy to be made to offset the effect of increased postal rates, either inland or overseas, on a particular industry. I must therefore tell noble Lords that the Government can see no ultimate justification for such a subsidy, which would have to be paid for by other users of the post, or by the tax payer. Nevertheless, I will undertake to bring what has been said today to the attention of my right honourable friend and to the other Departments concerned. I include here the suggestion made by the noble Lord, Lord Beaumont of Whitley, that books and periodicals should be subsidised, although I do not know how one decides which are to be subsidised; but this is something of which we shall take account. When one is a spokesman for the Arts, one is always approached by many people to subsidise various things. Some people come to me wanting the Government to put aside a reserve fund to buy every masterpiece in the country. They say, "It will cost only £30 million." Other noble Lords want to subsidise the postage of books and periodicals. These are matters which have to be taken into account and which are considered very carefully, but one cannot do everything while at the same time keeping taxes at a certain level, when already they are rather too high.
My Lords, I am well aware—and can fully understand—the book trade's view that the large increases in postal charges are viewed with alarm, and I have seen the figures which the Book Development Council has produced showing the usage of overseas postal services in 1973. These figures were made available to the Post Office Users' National Council. But it is a fact, though a sad one, that we all have to live in inflationary times and acknowledge that the higher postal charges are but one element in the rising costs of 867 producing the printed word, alongside the higher costs of materials and labour, and, indeed, the higher costs of producing and distributing all manner of things.
Except of course for the paperbacks, the cost of books has gone up enormously. A novel now costs £3; it used to cost 15 shillings. Art books, as the noble Viscount, Lord Eccles, and others will know, used to cost a couple of pounds. I can remember Phaedons were 10 shillings before the war ; they are now £10, £15 or £20—anything almost; the sky is the limit! Postal charges really are one element in the whole question of book production and everything else. I will only repeat that in the matter of distribution the Post Office does not have a monopoly. Users can, and do, use alternative means. Given the increases in postal charges, users will be considering further use of alternatives and central distribution points. This is quite understandable. I am sure that, either way, publishers will be determined to maintain their trade and the best possible service to their customers at home and abroad.
§ Baroness WHITE
My Lords, would my noble friend explain how he proposes to send newspapers other than by post to arrive within a reasonable period?
§ Lord STRABOLGI
My Lords, I will come to that a little later, but having worked in the magazine industry, I know that a great many magazines, particularly the mass circulation magazines, with which I used to have a lot to do, go by road.
§ Lord STRABOLGI
I will deal with the overseas trade in a moment. With regard to periodicals, it seems probable that in many ways these will be harder hit by the loss of advertising revenue in the present economic situation than by the higher postal rates; because we know to what an extent practically all periodicals depend on advertising to subsidise their costs.
I should like to say a word on the effect of the international copyright mentioned by my noble friend Lady White. Mention has been made of the possible consequences of an increase in postal charges under "international copyright agreements" to the detriment of British 868 publishers. My understanding is that the point relates to the situation that this country's publishers may face in the developing countries where at the present time they have a market in, for example, India because they can sell there more cheaply than an indigenous publisher could sell a re-print.
The argument runs that if publishers have to increase their prices to cover higher postal charges, local publishers might be able to under-cut them legitimately by using the facilities offered by the 1971 Paris Revisions of the Copyright Conventions. These Revisions constitute an exception in favour of the developing countries to the general copyright principle that the author or his successor in title, who could be the publisher, shall have the exclusive right to authorise reproduction of his work. They allow a local publisher in a developing country to get a compulsory licence to reproduce a book if that book has not been offered in his country by the original publisher at a "reasonable" price and within a certain time.
My Lords, I feel sure that no attack on the Copyright Conventions is intended and I take the point as merely an example of how the publishers might become less competitive in certain over-seas markets. But the United Kingdom has ratified these Revisions, and it is most important to be clear that a royalty is of course payable to the original publisher in return for compulsory licence. There is also the question of the Low-Priced Book Scheme in the emerging countries which I think the noble Lord, Lord Ballantrae, in his capacity of chair-man of the British Council is concerned with, and who mentioned it in his speech.
My Lords, my right honourable friend the Minister of Overseas Development has naturally considered the probable effects of the increases in overseas postal rates upon the selling prices of books produced under the British Low-Priced Books Scheme for developing countries. She believes that the effects will be relatively small compared with the increases resulting from inflation in book production costs over the past three or four years and to which I have already drawn your Lordships' attention. These have been absorbed apparently without undue difficulty, except in certain sectors, and far from there being a reduction in sales of 869 these books they are still increasing. The financial provisions being sought by way of subsidy for this scheme in 1975/76 is substantially higher than for the current year. That I can certainly say, but without going into details, because the estimates have not yet been published.
Similarly, in relation to the Books Presentation Programme and Library Development Scheme, although the increases in postal charges will mean that fewer books can be purchased and dispatched overseas for the same outlay, the annual financial provisions planned for these schemes in future allow for rising costs and should be sufficient in my right honourable friend's view, to cover increases both in production costs and postal charges as well as for some degree of expansion. If, in the event, there are indications to the contrary, my right honourable friend, who is watching the situation, will consider carefully adjustments to the provisions to prevent a quantitative reduction in this form of aid to developing countries.
That is the general situation. Perhaps I may now try to answer a few specific points which have been raised. First of all, may I say that of course we shall pay great attention to what was said by the noble Lord, Lord Cullen of Ashbourne, about postal concessions for the blind and for other disabled people. I regret that at this stage I can give no further assurances, but I will certainly undertake to see that this particular point goes to the Post Office and is considered by them. I am sure we all have the greatest sympathy with what the noble Lord said.
The noble Viscount, Lord Eccles, asked whether the Post Office consulted the British Council. The answer is that it would be invidious to consult any particular user and of course it would be impossible to consult them all; but they do consult the Post Office Users' National Council, who represent all classes of users. In addition, any particular group may of course make representations to that Council. In respect of the latest increases, the Book Development Council, for example, spoke for a large section of the publishing industry.
The noble Lord, Lord Auckland, asked about air freight. Here there is no monopoly and I am sure British Airways 870 would welcome approaches from publishers about air-freighting their publications. Air freight, I believe, offers an excellent service and in many ways it is quicker and more reliable than surface services.
The noble Lord, Lord Ballantrae, asked about the increased rates for over-seas printed paper services—a point which was also referred to by my noble friend Lady White. Even after next January, the Post Office do not expect to run these services other than at a loss. They attempt to recover only directly attributable costs such as sea freight, land transit costs in other countries and imbalance payments, to which I have referred, and so on. But it is certainly their intention to carry on these services.
The noble Lord, Lord Trefgarne, raised a great number of points. He spoke about the impact of inflation on postal charges in recent years. Of course, as noble Lords will appreciate, it is possible to draw different conclusions from the statistics available. Postal charges, of course, have risen more rapidly than, perhaps, the general rate of inflation might have led one to expect. From 1968 those charges were insufficient to cover costs and, despite subsequent increases, the fact of the matter is that the discrepancy between costs and revenue has widened. The economic indicators which have been mentioned all have their limitations. While it is true that in an industry where 75 per cent. of costs are paid in wages, and basic wages have been increased by substantial percentages—in passing, I might point out that postmen's pay alone rose by over 40 per cent. in the current financial year—that factor must be considered in conjunction with others. There have been a reduced working week, improved holidays and unforeseen over-time brought about by staff shortages and similar factors, and they mean that the total wages bill is increased by a proportionate amount when compared with increases affecting the basic wages structure.
I think the noble Lord also asked about the Post Office Pension Fund. This is not a once-and-for-all payment; it is a continuing commitment, and the independent auditors to the Post Office took the view that it is properly chargeable to the 871 revenue account. The noble Lord asked about staffing. Noble Lords will know that for some time the Post Office has had a recruitment problem, and for some considerable time the number of postmen fell substantially below the number that was required. But following the special pay review authorised by the Government last year, the recruitment position has eased. I understand that, broadly speaking, half the vacancies have been filled. But I must admit that some quite important offices are still substantially below strength. The Post Office, I understand, is actively considering, in conjunction with the union concerned, the various questions relating to staffing, including of course the employment of women.
With regard to mechanisation, the Post Office expects mechanisation to show worthwhile financial savings in the longer term, although full advantages can be obtained only when automatic sorting machines are operating in a completely integrated network. Thus, there will be an adverse cash-flow in the earlier years.
§ Lord TREFGARNE
My Lords, I am sorry to interrupt the noble Lord. I am fully appreciative of all the answers he is giving to my points. But is it not the case that the introduction of automatic sorting equipment in the Post Office has been a very long-winded process? They have been talking about it for years. They have had some equipment on trial for at least five or six years, and we are still talking about the long-term benefits.
§ Lord STRABOLGI
My Lords, that may well be so, but of course these things take time. I also know of no evidence that there has been resistance from the union in the kind of Luddite way which the noble Lord referred to. The noble Lord also spoke about agency services, I think, and suggested by implication that part of the cost of the services carried out at Post Office counters on behalf of various Government Departments falls on other users of the postal services. This is not so. The agency services as they are known are carried out by the Post Office under the terms of an agreement which provides for the Post Office to be paid the costs it incurs in providing those ser-vices and, in addition, a service fee of 4 per cent. This agreement has operated since 1st April last year. Previously, a service fee of 2 per cent. was charged. I 872 am unaware of any loss attributable to such agency services in the years mentioned by the noble Lord.
Also, the sum of £14 million which has been bandied about. I do not know where he got that. For example, in 1971–72 the Post Office made a profit of £1 million for agency services; in 1972–73, the com-parable profit was £1.3 million; in 1973– 74 the profit was £1.6 million. So it is a rising profit rather than an astronomical loss as the noble Lord surmised. The noble Lord, Lord Trefgarne, also suggested that past losses incurred by the postal business are adding to the burden which today's customers are being asked to shoulder. That is not so. The net accumulated deficits in the years up to and including 1972 and 1973, which in total amounted to £177 million, were written off, as your Lordships will remember, under the provisions of the Post Office Borrowing Act 1972.
One or two noble Lords asked me about the recent anti-trust case which is taking place at present and which involves the British Publishers' Association and other publishers. The Department of Trade is well aware of the valuable contribution which the book trade makes to our export efforts, and is following very closely the developments in this anti-trust case in the United States. Also, the Department is keeping in close touch with the British Publishers' Association. The fact that any problems arise as a result of litigation in the United States imposes constraint on the action which we can take. Nevertheless, our Embassy in Washington has made the American Administration firmly aware of our concern at the potential international implications of the case. We shall continue to watch these developments and will not hesitate to take appropriate action in future. Beyond that I cannot say, because the precise nature of the injunction which the United States Justice Department is seeking in this case is not yet known. It is hoped that any decree would not prevent individual negotiated licensing agreements.
With regard to the other question which was raised about comparable rates in the United Kingdom and the USA, it may well be that the United States charge less for postal services than we do. Every country has its own rates for all kinds of things. Some are higher, some are 873 lower. I think that most things in the United States cost much more, but their postal charges are less than ours. On the other hand, the United States will have imbalance problems similar to those which have affected the British Post Office following the Lausanne Congress decision. I expect them to adopt measures similar to those taken by the British Post Office; so any existing disparity in rates must tend to contract significantly. Indeed, it may largely disappear within a comparatively short time.
My noble friend Lady Burton of Coventry asked about bulk postings of periodicals. Bulk postings of periodicals were referred to also by my noble friend Lord Ardwick and others. Bulk postings of periodicals in the inland post will be affected by the increased rates which, as I have said, have been accepted by the Post Office Users' National Council and by the Price Commission as being justified. However, may I point out that special arrangements exist whereby periodicals registered as newspapers at the Post Office travel in the inland first-class letter stream at rates equivalent to second class postage. So far as inland bulk rebate postings of items other than newspapers are concerned, I understand that existing arrangements will not be affected in terms of service. Nor will the amount of the rebate vary in percentage terms, although clearly both the amount of the postage and the amount of the rebate will be more in absolute terms as a result of the increased rates introduced on the 17th March.
§ Baroness BURTON of COVENTRY
My Lords, although I know it is getting late, will my noble friend allow me to intervene? The point that I had hoped to convey was that the Post Office was in danger of losing finance because the largest users would seek alternative measures on account of the high postal rates, and I wondered whether with some urgency he could bring this home to the Post Office?
§ Lord STRABOLGI
Yes, my Lords, I will certainly undertake to do that. Of course, pre-sorting and postage from one point is the kind of thing which the Post Office takes into account in allowing the rebate to which my noble friend has referred. The Post Office has certainly 874 no intention of penalising this class of user by reducing the percentage rebate as such. On the other hand, I must point out that the Post Office has no monopoly in this field and does not wish to have a monopoly, and there are other ways open to users of delivering in bulk—I have dealt with them myself and I know. Those are open to users if they wish to make use of them. I am afraid that may be cold comfort to my noble friend, but that is as far as I can go.
§ Viscount ECCLES
My Lords, if the noble Lord will allow me, surely he is undermining the Post Office. If he keeps on telling us that if we have a large volume of business we had better try an alternative way of handling it, what will happen? The more expensive business will be left with the Post Office. The Post Office is clearly not well managed now, and the problem of managing it better will get more and more difficult. Will the noble Lord convey to his right honourable friend the fact that this debate shows either that the British Post Office is not as well managed as Post Offices overseas, or that they subsidise their rates? We should like to know which it is.
§ Lord STRABOLGI
My Lords, I shall certainly bring that to the attention of the Post Office, but of course they do make a rebate on these bulk mailings. To what extent they depend on these bulk mailings for their profitability, I do not know. But I will certainly go into the matter and will get in touch with the noble Viscount. The overseas rates are of course controlled by international agreements, which include the question of the imbalance, and so on.
The last part of the Question deals with the contribution that the printed word has to offer in a humane society. The invention of printing and the spread of the printed word in all its forms has made—and will, I am sure, continue to make—an incalculably great contribution to civilisation and to society. The world output of books has long been growing fast and shows no sign of diminishing, to the extent that a new major library in a civilised country has yet to be built whose librarians feel that there will still be room and to spare in it to keep pace with this output before many years have passed.
875 The number of books lent out by public libraries has increased, I believe, from 400 million to 600 million over the last 20 years, and the number of books in stock has doubled. Also, during the last few years we have seen the phenomenal growth of the paperback, and I believe that 31 per cent. of all book sales and 29 per cent. of book exports are now in paper backs. Will more books be bought now than would have been bought had broadcasting not been in-vented? We cannot know. I believe it right to look upon the printed word and other modern means of communication as complementing each other in the spread of education and enlightenment in our society, and not as rivals. A striking example of this lies in the wide series of written publications and linked paperbacks to complement the educational broadcasts, and your Lordships will be familiar with the effect on book production and sales of such broadcasts. I think therefore we should pause before expressing serious views in regard to the future contribution of the printed word to a humane society, either on account of higher postal rates or for any other reason that can be reasonably predicted.