POST OFFICE SERVICES (INCREASED CHARGES) (Hansard, 4 April 1951)
HC Deb 04 April 1951 vol 486 cc207-16
The Postmaster-General (Mr. Ness Edwards)

With permission, Mr. Speakers I wish to acquaint the House with certain increases which I propose to make in charges for Post Office services.

I have had under examination the developing position of the finances of all Post Office services, and as a result I have reached the conclusion—very reluctantly—that the time has come when the Post Office finances, faced with a steep rise in costs in practically all directions, must be fortified by an increase in several of our tariffs. The House may be surprised at this, in view of the considerable attention frequently given to the surplus exhibited by our commercial accounts, but there is, I fear, no escape from the conclusion that without this support the surplus for 1951–52 would fall to a very small figure.

The increases I now propose to make in Post Office tariffs are as follow:

INLAND PRINTED PAPERS.—I propose to increase the initial rate for an inland printed paper packet from 1d. for the first 2 oz. to 1½d. for the first 4 oz. These changes will be made as from the 1st June, 1951, and the necessary Treasury Warrant will be laid before the House shortly.

OVERSEAS PARCELS.—I propose, as soon as possible after the 1st June, 1951, to increase the postage rates for parcels to overseas destinations to make the service broadly self supporting. The rates for parcels to different countries vary widely but the average increase will be about 50 per cent.

INLAND MONEY ORDERS AND CASH-ON-DELIVERY SERVICES.—I propose to introduce the following changes in these services on the 1st July, 1951. The poundage on inland money orders and inland telegraph money orders will be increased by 2d. at each step, with a minimum charge of 8d. for amounts

OVERSEAS PARCELS
The postage rates vary widely for different countries of destination. The following are some examples of present and proposed rates:
Present
2 lb. 3 lb. 7 lb. 11 lb. 22 lb.
s. d. s. d. s. d. s. d. s. d.
France 2 0 3 0 4 0 6 6
U.S.A. 2 0 3 9 5 9 9 9
Brazil 3 3 5 3 6 3 9 9
India 2 0 3 9 5 3 8 3

up to £10. The present inland cash-on-delivery fees will be increased by 4d. at each step, with a minimum fee of 10d. for trade charges up to £1. These changes will be made by statutory regulations under existing Acts.

TELEPHONE SERVICE.—The present charge of 2d. for a local call from a public kiosk or other coin-box telephone will be increased to 3d. The increase will be made by statutory regulations under the Telegraph Acts and will come into operation as soon as the necessary adaptations of the coinboxes can be made, probably about the 1st October, 1951.

TELEGRAPH SERVICE.—I propose to introduce the following changes in this service on 1st July, 1951. The minimum charge for an ordinary inland telegram will be increased from 1s. for nine words (with 1d. for each additional word) to 1s. 6d. for 12 words (with 1½d. for each additional word). For greetings telegrams the minimum of 2s. for 12 words will remain unchanged, but each additional word will be charged 1½d. These new charges exceed the limits laid down in the Telegraph Act, 1943, and legislation will be required.

Each of the services in which I am proposing to increase the charges are at present running at a loss.

The effect of the changes which I have enumerated will be to produce additional cash revenue in 1951–52 of £5,320,000 for posts and remittance services; £700,000 for telephones; £300,000 for telegraphs; total, £6,320,000. The corresponding figures for a full year are £6,190,000, £1,550,000 and £450,000; total, £8,190,000.

For the convenience of the House I will circulate in the OFFICIAL REPORT some further details showing the effect of the various changes.

Following are the further details:

Proposed (not earlier than 1st June, 1951)
s. d. s. d. s. d. s. d. s. d.
France 3 6 4 6 6 3 9 6
U.S.A 3 3 6 0 9 9 17 0
Brazil 6 0 8 3 12 0 18 3
India 3 9 6 6 9 9 15 0
INLAND MONEYORDERS*
Poundage
Amount or order Present Proposed
s. d. s. d.
Up to £3 0 4 0 8
Over £3 and up to £10 0 6
Each additional £10 up to £50 0 2 0 2
INLAND TELEGRAPH MONEYORDERS*
Poundage as above plus:— s. d. s. d.
Official telegram of advice 1 4 1 10
Supplementary fee 0 2 0 3
INLAND CASH-ON-DELIVERYSERVICE*
Tradecharge C.O.D. fee
s. d. s. d.
Up to 10s. 0 4 0 10
Over10s. up to £1 0 6
Over £1 up to £2 0 8 1 10
Over £2 up to £5 0 10 1 12
Each additional £5 up to £40 0 2 0 2
* Date of change 1st July, 1951.
Mr. Eden

The right hon. Gentleman will realise that these are very widespread increases which will affect every section of the community. We shall obviously require time to study them; we shall want to examine and debate them. Can I ask him now whether I am right in thinking that the Post Office is now making a contribution to the Treasury? If so, can we be told what the amount of that is?

Mr. Ness Edwards

No, Sir. These proposals are considered in the light of Post Office finances. The right hon. Gentleman will not be unaware that there is such a thing as the Bridgeman doctrine which does have an influence on my mind; but these proposals are related solely to the Post Office.

Mr. Eden

May I ask the right hon. Gentleman to apply his mind to the question I have put? I remember that the Post Office contribution to the Treasury was stopped during the war, and I want to know whether there is now such a contribution being made. The right hon. Gentleman will realise how germane this is to any consideration of these proposals, and that if there is such a contribution, it should cease before the public are asked to pay these new charges.

Mr. Ness Edwards

The Post Office makes no contribution as such to the Treasury. What happens is that the cash account surpluses of the Post Office go to the Treasury. [Laughter.] I thought I had made it very clear. All the profits that the Post Office has made over very many years have been taken by the Treasury, and all one has to do is to look at the accounts to see how much has been taken by the Treasury; but the size of any contribution has never yet been determined by anyone.

Mr. Eden

Since we are all trying to be as simple as we can, can the right hon. Gentleman tell us what is the amount which the Post Office transferred last year to the Treasury?

Mr. Ness Edwards

The Post Office did not transfer any money at all. The confusion arises out of the profits on the commercial account and the cash transactions. The right hon. Gentleman's colleague has been in the Post Office and knows that there is a very clear distinction. The result is that the contribution to the Treasury over the last few years has been nil, and apparently it will be nil again this year.

Mr. Bellenger

Will the increased postal rates for overseas parcels be without prejudice to any of the concessions granted to troops serving overseas?

Mr. Ness Edwards

That is a special arrangement and it will still be borne, I take it, by the Defence Departments.

Sir Herbert Williams

Is it not a fact that over the last five years there has been a very substantial deficit on the cash transactions and that the Treasury has had to supply the right hon. Gentleman and his predecessors with nearly £40 million out of taxation?

Mr. Ness Edwards

The hon. Member has made the point—the difference between the commercial account and the cash account. The postal and telephone services have rendered services of £16 million a year to other Government Departments, from which the Post Office gets no cash payments although it takes credit for them in its commercial accounts. The cash transferred to the Treasury over the last four years has been nil, but there has been a substantial commercial profit.

Mr. Driberg

When my right hon. Friend says that without these increases the surplus would fall to a very small sum, can he say why the surplus should not fall to such a very small sum if the service to the public is thereby kept cheap?

Mr. Ness Edwards

I think that the reason is this. The Post Office must put itself in the position of meeting all the costs of the services it gives to the community. The Post Office in making these proposals, which hardly in any instance exceed more than 50 per cent., is very much behind the increases in the prices and costs imposed upon it.

Mr. Eden

Would I be right in saying that this extra charge on the public is in very large measure due to the additional demands which the Government Departments make on the services of the Post Office and the consequent effect on their revenues?

Mr. Ness Edwards

No, Sir, that would be completely contrary to the facts. The fact is that the costs of the materials of the Post Office have greatly increased—public conveyance has gone up by 166 per cent., and copper, and other basic materials, paper and wages, have all increased. All these have gone up to a far greater extent than these proposed increases.

Mr. Monslow

Are these suggested increases in any way due to the improved economic condition now enjoyed by the Post Office workers?

Mr. Ness Edwards

There has been a 180 per cent. increase as compared with pre-war in the wage charges for the services rendered by the Post Office.

Mr. Assheton

Is it not high time that the Government gave up the present practice adopted in the war of not charging the Government Departments for their bills, and therefore leading to great extravagance in telephoning and postage by the Government Departments?

Mr. Ness Edwards

While I have sympathy with the suggestion, I would point out that from a purely Post Office point of view it would require something like 2,000 people to supervise the collection and totalling up of these amounts, which means that in the long run the Post Office would be actually worse off.

Mr. Collick

Is my right hon. Friend aware of the very strong objections felt on this side to his proposals, and will he give the House the assurance that none of these proposals will be brought into effect until it has had an opportunity of discussing the whole matter?

Mr. Ness Edwards

My hon. Friend must face the alternative, which is that the ordinary letter writer, the old age pensioner, will have to subsidise services of this nature, which I am not prepared to agree to.

Mr. Boyd-Carpenter

In view of the fact that these proposals really amount to taxation, will the right hon. Gentleman not reconsider the plea that has been made to him and give an undertaking, apart from the telegraph charges, that these charges will not come into effect until the House has had an opportunity of expressing its view?

Mr. Ness Edwards

The necessary Statutory Instruments will be laid and can be discussed. I want to disabuse the hon. Member's mind of the idea that this has anything to do with taxation. This is something related to the Post Office finances and Post Office finances alone.

Mr. Eric Fletcher

Do I understand that the increase in local telephone calls from 2d. to 3d. applies only to kiosks and not to private subscribers, and if so, why?

Mr. Ness Edwards

It applies only to public call boxes. It does not apply to the other type of calls because, as Members on both sides know, in 1949 there was a Bill before the House which had certain disagreeable features and was withdrawn. My mind is not closed to the necessity of looking at that problem again, because it is not right that only persons in public call boxes should meet the whole of the charges that are to be made.

Professor Savory

The right hon. Gentleman has referred to increased costs and expenses. Are these not largely due to the devaluation of the pound, and is not that proved by the fact that those countries which have not debased their coinage have not had to increase their tariffs?

Mr. Ness Edwards

All I am concerned about is to meet the bills which private industry presents to me for the contracts which have been awarded, and unless I get these increases in revenue, I shall be unable to meet the demands of private industry which has contracts.

Mr. Harrison

Will my right hon. Friend say if all the services which he has mentioned were losing money, and if, therefore, we are to assume that the rest of the postal services were actually subsidising the services he has mentioned today?

Mr. Ness Edwards

The services on which I have proposed increases have been carried by other sections of the postal service. They have been working at a loss and the loss is now so substantial that it must be tackled.

Sir Peter Macdonald

Have attempts to improve or increase the services provided by the Post Office been commensurate with these increased charges, because in many cases services are still on a war-time basis, especially as regards the collection and delivery of letters?

Mr. Ness Edwards

This is one of the consequences of the improvements I have made. There have been increased charges which must be paid for.

Miss Burton

Has not my right hon. Friend inadvertently left the House under a misapprehension so far as private telephone calls are concerned? Were not the charges for these increased by 50 per cent. not long ago, and in addition to that there are surcharges, Would it be right for further additional charges to be put on the private subscriber?

Mr. Ness Edwards

My hon. Friend is right in some respects and wrong in others. The rental increase was 15 per cent. not 50 per cent. It would be wrong now, apart from the rental position, which I am reserving, to increase their local charges.

Mr. R. V. Grimston

Is it not a fact that if the Post Office were to receive payment from other Government Departments for services rendered there would still be, according to the right hon. Gentleman's statement, a small surplus, and that these extra charges would, for the time being at all events, be unnecessary?

Mr. Ness Edwards

I cannot with any assurance or confidence give the House the assurance that if these charges were not imposed there would be a commercial account surplus at the end of the year. There is grave doubt about it, and it would be quite wrong of me to mislead the House about it.

Mr. Harry Wallace

Does my right hon. Friend propose to undertake a full review of the charges made by the Post Office for all its services? Can he say now what Post Office services will be carried on at a loss after the proposed increases in charges? In other words, are there not still sections of the service which do not charge a price which covers the cost?

Mr. Ness Edwards

The telegraph service has, as the House knows, been carried on at a very substantial loss for many years. The loss last year was £4 million, and this year will probably be £5 million. I agree that it is a service that we have to keep in the interests of our community, especially the poorer and scattered parts of it. I am quite prepared to carry on the policy of maintaining that service and of fixing a tariff that will not kill it altogether.

Mr. R. V. Grimston

I gathered that the right hon. Gentleman cannot guarantee that there will be a surplus in the commercial account for 1951–52. But did he not say, in his original statement that there would be a surplus but that it would be a small one? Is the right hon. Gentleman now departing from what he said in his original statement?

Mr. Ness Edwards

No. What I said in my statement was that we anticipated that there will, towards the end of the year, be a very small surplus, but events are moving so swiftly against us—[HON. MEMBERS: "Hear, hear."]—the prices that private industry is charging are rising—that it is not with great confidence that I make that estimate that it will be a surplus at all. It may fall on either side of the line, and the House should be aware of that.

Mr. Albu

Is it not a fact that a few months ago the price of a telephone call in telephone kiosks in the United States, where the telephone service is run by private enterprise, went up to 8d.?

Mr. Ness Edwards

The fact is that the President of the United States has already asked Congress for increases far in advance of those for which I am asking.

Sir Ian Fraser

In order to protect the Post Office from being flooded out, and to help Members of Parliament, will the Postmaster-General raise the fee for a letter stamp, when constituents write to their Members, to 2s. 6d.?

Mr. Ness Edwards

That may be very good Tory doctrine, but it is not accepted on this side of the House.

Mr. Mulley

Will my right hon. Friend bear in mind, in regard to the last supplementary question, that we on this side of the House do not object to letters from our constituents? In regard to the need to increase the revenue of the telegraph service, will my right hon. Friend also consider raising the special rates which are given in respect of the Press telegram service, which is now run at a considerable loss?

Mr. Ness Edwards

I must have particular regard to that aspect. I do not want to do anything that will cause limitation in the dissemination of news and information. I am trying to be quite fair about this: I do not want any charge that we are crippling the Press in its legitimate activities to be levelled at this side of the House. The amount we should save by adopting such a proposal would be trifling, and I have decided that the balance of argument is against doing anything about it.

Mr. Summers

How are the commercial results of the right hon. Gentleman's Department expected to work out in the current year, after taking the benefit of the increases which he has announced, compared with the commercial results of last year?

Mr. Ness Edwards

As I have already said, we anticipate a slight surplus at the end of this year if further price changes do not alter the position. As I have indicated, there are 12 arbitration cases outstanding in respect of claims for increased wages. This forecast account does not include an increase in wages to the engineers amounting to £1,250,000 per year, which has already been granted. It is these imponderable and uncertain factors that make me very reluctant to be certain and dogmatic about our future accounts.

Several Hon. Members rose

Mr. Speaker

We have now devoted half an hour to this matter. We have other business to do, and I hope that we might get on.

Mr. Summers

As the right hon. Gentleman has completely failed to give me an answer, and as my question is one in which the public is vitally interested, may I again ask him how it is expected that the results of his Department will work out, after these changes, compared with last year?

Mr. Ness Edwards

If the hon. Gentleman will only read the published forecast account, which is available in the Vote Office, he will find all the information he requires.

Several Hon. Members rose

Mr. Speaker

I think we had better get on.

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