I move:
That a supplementary sum not exceeding £330,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1964, for the Salaries and Expenses of the Office of the Minister for Posts and Telegraphs and of certain other Services administered by that Office, and for payment of Grants-in-Aid.
This Supplementary Estimate is mainly required to meet (a) unforeseen additional payments for the conveyance of mails; (b) increased telephone development; and (c) an increase in the Grant to the Broadcasting Authority consequent on increases made in radio and television licence fees since the original Estimate was framed.
Taking the subheads affected in order and giving the main reasons for the excesses, the sum of £66,000 required under Subhead A is the result of additional overtime in the mails and telephone services and of higher social welfare contributions. Mail traffic, particularly at Christmas, has been heavier than expected and there will of course be a corresponding improvement in revenue. The overtime on telephones has been partly on the engineering side, and partly on the accounting side where further mechanisation has been introduced to enable the rapidly growing volume of accounts to be more efficiently and economically handled. On Subhead B, £16,300 is needed to meet the cost of additional travelling and subsistence incurred mainly through the replanning of engineering work to speedup the provision of new trunk circuits throughout the country. On Subhead D, £96,400 is required because of extra mail traffic by rail and air, changes in the incidence of airmail accounts falling due for payment in the year, and the adoption of a monthly instead of a quarterly payment basis for a large CIE contract, causing two additional monthly payments to become due this year instead of next.
A further £34,200 is being sought under Subhead E to meet the cost of extra postal vans required for rural services, and also the cost of additional purchases of stores on behalf of other Government Departments. On Subhead F £109,000 more is required to cover increased purchases of engineering stores to provide for the expanded programme of telephone trunk line construction. When introducing the Telephone Capital Bill in November last, I told the House that this year's programme was being revised to give priority to the provision of additional trunk circuits needed for current and future expansion.
The additional £235,000 being sought under Subhead K. 1 is to enable my Department to pay over to the Broadcasting Authority the extra amount which will be collected in the current financial year as a result of the increase in the broadcasting licence fees as from 1st November, 1963. Figures of actual receipts from licence fees and expenses of collection for the current year will not be available until after the 31st March. Accordingly the payment to the Authority under Subhead K. 1 will be an estimated figure, and an adjustment will have to be made later when precise figures of net licence receipts are available.
The new fees of £1 5s. 0d. (sound) and £5 (combined sound and television) were fixed following careful consideration of representations made by the Authority regarding the inadequacy of its revenue. In 1962/63 the Authority received a subsidy of £150,000 to bridge the gap between sound broadcasting income and expenditure. Only £71,600 of the aggregate subsidies of £500,000 authorised by the Act remained unissued on 31st March, 1963, and this amount was clearly inadequate as costs have been increasing. The increase of 5s. in the sound licence and in the sound portion of the combined licence will bring in an extra £130,000 in a full year. This will fall somewhat short of the amount required to cover the present deficit on sound broadcasting. The Authority also wishes to effect some improvements in sound broadcasting and the recently announced decision on a VHF service will increase expenditure by about £50,000 a year. Under the Act the Authority is required to become self-supporting as soon as possible and the difference between expenditure and receipts attributable to sound broadcasting will therefore have to be made good from the Authority's general revenue.
The Authority's accounts for the year ending 31st March, 1963, showed a deficit on television of £17,000. This was very small in relation to a total expenditure on that service of £1,130,000. The Authority expected, however, that expenditure would increase faster than income from advertisements and licence fees. Part of the increase in expenditure is inescapable. For example, expenditure in 1963-64 will be substantially higher than the 1962-63 figure because of the extension of television to the provinces, and the Authority will have to meet higher charges by way of interest and depreciation as its capital construction programme nears completion. The Authority also desired to improve the present level of programmes. It was anxious to reduce its dependency on films of American origin and to enlarge the scope of its film purchases; to give greater prominence to drama; to undertake more feature programmes with deeper coverage of the country as a whole; to increase the content of home-produced programmes and to give greater scope to native talent. Finally, it wished to produce more programmes of an educational and instructive nature.
The increase in the television portion of the combined licence fee has made it possible for the Authority to carry out some, at least, of its plans for improving the programmes. The higher fee will augment television revenue by about £157,000 in a full year but this figure will increase according as the number of combined licences grows.
The gross excess of £556,900 on these subheads is expected to be reduced to £330,000 by savings of £26,400 elsewhere and by additional receipts of £200,500 from Appropriations-in-Aid under Subhead T. These consist of £115,000 from Telephone Capital funds as a consequence of the expanded development programme; £25,500 from the Social Insurance Fund mainly in respect of higher staff costs; £40,000 from increased issues of stores to other Government Departments on a repayment basis; and £20,000 from miscellaneous repayable services which have yielded more than expected.
Excluding the £235,000 in respect of the Broadcasting grant-in-aid, the balance of £95,000 represents less than one per cent of the original net Estimate of £12.4 million approximately.