§ LORD SOUTHWARKMy Lords, I beg to ask His Majesty's Government if they can now say to what extent the postal revenue has increased since the recent reductions of postal charges; and whether the Postmaster-General can definitely state that the further reductions so urgently asked for by the united voice of business men in the interest of trade revival and increased revenue will be brought into operation before the close of the year.
By business men this Question is considered very important. I placed a Question on the Paper of the House before the end of last session in order that there might be plenty of time for consideration of the subject before Parliament reassembled. Since then we have had a General Election and a new Government. I hope the present Postmaster-General has had time, with the assistance of his permanent officials, to furnish himself with the necessary particulars, and that the Government will be able to give a satisfactory reply to-day.
In these days of unemployment, and having regard to the desire of the Government to provide work during the coming winter, I submit that there is no Department in the State more likely, or more fitted, to render invaluable service in this respect than the Post Office. It has a large and efficient staff, and its machinery is in working order. When I speak of machinery I do not refer to telegraphs or telephones. A further immediate reduction in postal charges would at once tend greatly to improve trade in all directions and bring about increased employment. I have often described the Post Office as our greatest commercial traveller. No other Department brings the manufacturer, producer and consumer so closely together. Therefore, the greater the facilities it offers the greater the volume of trade and employment.
Let me say how much the commercial community and chambers of commerce appreciate the great services rendered 291 by the late Postmaster-General in securing the reductions in the postal charges which they now enjoy. I do not see the noble Earl, Lord Crawford, in the House at the moment, but I should like to express my thanks to him for the practical assistance he rendered in connection with those reductions last autumn. Business men have been delighted with the recent speech of the new Postmaster-General, in which he expressed his belief in penny postage and his desire to bring it into operation again at the earliest opportunity. I am glad that he has endorsed the wise policy of his predecessor by reappointing that very able and strong Advisory Committee of practical business men.
I hope that he will have the courage of a Rowland Hill, to whom the country will ever be grateful for his splendid foresight and courageous action. The whole civilised world, indeed, is indebted to Rowland Hill for the introduction of penny postage. I urge the Government not to waste another six months but to improve trade, employ labour, and increase revenue, by at once further reducing the postal charges. I am not going into details this afternoon; I am anxious to hear the answer that will be given to my Question by the Government.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF HEALTH (THE EARL OF ONSLOW)My Lords, the particular reductions in postal rates to which the noble Lord has referred were those brought into force on May 29 last. They are as follows:—The postage of inland letters, weighing not more than an ounce, was reduced from 2d. to 1½d.; that of printed papers of the same category from 1d. to ½d.; and that of postcards from 1½d. to 1d. When those reductions were made, it was estimated that they would cost the revenue £6,190,000 in a complete year, after allowing for the additional revenue to be obtained from an increase in the volume of traffic which the lower charges were expected to produce. The reduced charges have been in operation for just over six months and, except in the case of printed papers, the increase in traffic has not come up to expectations. The noble Lord rather suggests that there has been an increase in the postal revenue, but that is not the case. The sacrifice in revenue which the reductions will entail will certainly be £6,000,000, probably rather more for the complete year.
292 In his speech the noble Lord suggests a further reduction in the postal rate in order to bring it down to the pre-war rate of one penny. If that were done, there would, no doubt, be a further increase in postal traffic, but it is equally certain that a further sacrifice of revenue would have to be faced. It is, of course, too early to estimate—we have not the annual figures yet—what the cost would be, but a rough estimate is that it would entail a cost to the revenue of about another £5,000,000. The Government have not yet had time to consider the financial issues involved in the proposal, and, of course, they cannot be dissociated from the prospect of next year's Budget. Therefore, I hope the noble Lord will forgive me if I am unable to make any further statement on the subject to-day.
§ LORD ILLINGWORTHMy Lords, as I was Postmaster-General from the autumn of 1916 to the end of the financial year 1921, perhaps I may be allowed to make a few remarks on this subject. I was responsible for the increase in postal charges. During that part of the year 1916 for which I was responsible, and in 1917 and 1918, the profits of the Post Office were larger than they had ever been before, aggregating a sum for the three years of about £21,000,000. Early in 1919 it was apparent that that happy state of affairs was coming to an end; that we should have to face a loss. However, I deferred increasing the rates then in the hope that the increase of cost was merely temporary and would be soon reduced. Not only that, I had to consider that a heavy increase in the cost of postage would probably cause disturbance in some industries, more especially in regard to picture postcards and mail orders, which were then recovering.
I was much disappointed when the increase, instead of being temporary, continued. The cost of living went up by leaps and bounds. Wages were the largest factor in the expenses of the Post Office—it came to about 75 per cent. of the whole charges—and it was necessary that the wages of the Post Office employees, some 200,000, should be increased. As your Lordships are aware, Mr. Asquith's Government, before leaving office in 1916, set up an Arbitration Board to deal with the whole subject of salaries and wages of civil servants. That Board, in spite of any protest I could make, increased the wages of the Post Office people considerably more 293 than was done in most other industries. Moreover, every other administrative cost of the Post Office was more than doubled. The result was—if I may take simply the penny post and leave out an enormous mass of other details—that I first increased the penny post to three halfpence and then to twopence. Business people naturally came to see me and to protest, but when they heard my case they more or less accepted the position with a better grace than I had expected.
There was another point. Newspapers had been subsidised —it really amounted to a subsidy—by giving them services at a price lower than cost. This subsidy amounted to from £1,000,000 to £1,250,000 a year, and I may add that some of the larger papers in London were getting their telephones at something like ¼d. or less per call. The Cabinet had ordered various Postmasters-General for years to do away with this arrangement. Nevertheless, they did not do it, though I do not know why they should not, because after I proposed to do it the whole of the newspapers of the country took a great interest in my career, and in a very short time I found that I was as famous and as well known in the country as though I had committed some horrible murder. I persisted in it, however, and took away a subsidy of about £1,000,000.
After these few explanatory remarks, let me point out that there were only two courses open to me, as there are only two courses open to the present Postmaster-General. It was necessary either to increase the charges or to give a subsidy to the Post Office. From the figures which the noble Earl has given it seems that the present Postmaster-General is more or less in the same position; that is to say, if he wishes to reduce the charges he will have to put on a subsidy. That is really the reply to the noble Lord, Lord Southwark, who asked this Question, though I did not understand the noble Earl to state that the course which the noble Lord suggests would mean a subsidy for the Post Office. I to not propose to address your Lordships on the well-known evil of subsidies, but it would make extraordinarily good propaganda for the Communists. And let me remind your Lordships that there are more than one hundred Communist members of Parliament at present whose declared policy is war on private enterprise and the socialisation of the means of production, 294 distribution and banking. If in one Government Department we are to keep wages at a high figure without giving the slightest consideration to the price received for the services rendered, it would be a great point to help these Communists in their propaganda and their agitation for the socialisation of industry. They would say: "Why stop at the Post Office? Why not take coal?"
I think all your Lordships will admit that as a basis of industry coal is of far greater importance than the post. It is the basis of the cost of everything that is produced or carried in the country. They could have approached the Prime Minister, and it would have been very difficult for him to reply to their demand to nationalise the collieries and pay the colliers a higher wage without any consideration of the price received for the coal. That would be the beginning of a terrible thing, and one does not know where it would stop. We all look forward —I as much as any of your Lordships to the restoration of the old charges of the Post Office, but I trust that His Majesty's Government and the Postmaster-General will see that if any further reduction is made it is made on sound economical lines, and not by simply reducing postal charges and making up the deficit by way of taxation in various other directions.
EARL RUSSELLMy Lords, I do not propose to follow the noble Lord who has just sat down into the by-paths of political speculation in which he indulged on this matter, though I might, I think, observe in passing that I do not quite know why he describes as Communists a Party which I understand has refused to issue its Whip to the only avowed Communist in the House of Commons.
The noble Earl who replied on behalf of the Post Office indicated that the Government could not really deal with the subject at the moment, and that it would have to be raised again. No doubt, the noble Lord, Lord Southwark, will raise it again. When that time comes, I should be glad if the noble Earl could somewhat develop the figures which he gave to the House, and perhaps in another direction. He said that time estimated loss of revenue was £6,000,000 odd, as the result of the change that was made in May, and that, so far as the Government could see at present, that loss would probably be 295 exceeded. But I think we want to know a little more than that. I think we want to know in general terms whether the Post Office is being run at a profit or at a loss, because while it may well be undesirable to subsidise the Post Office unless there were some very special reason for doing so, it is, I venture to think, equally undesirable to use the Post Office as a revenue-producing industry, as something which will produce a surplus for the purpose of general taxation. In considering this question the House ought to be told whether the Post Office as a whole is being run at a loss or not, because if it is not, it seems to me that the reduction would be well justified. I think that on the whole it would be undesirable that the Post Office should be used to add to the general revenue by way of taxation, because this is indirect taxation of a particular class and, I think, an undesirable principle. Perhaps when the noble Earl next deals with the matter, he will be prepared with figures showing the actual profit and loss made in the various postal departments that are being dealt with.
I may add before I sit down that possibly some accession of revenue might be obtained if the Post Office were run a little better than it has been run lately. I have had innumerable examples of delay, quite unprecedented delay, both to letters and telegrams. I have had a telegram sent from a place fifty miles from London which arrived three hours after the time at which it was despatched; and only last week I had a postcard postmarked 2.15 p.m. on a Friday in one district of London, which was not delivered in a neighbouring district, rather less than a mile away, until Wednesday morning. That kind of thing does not encourage an extended use of the post, particularly among business people. Although I think the post may perhaps be well run in big commercial towns like Manchester, Glasgow and Liverpool, there is considerable slackness nowadays, at any rate, in the way in which Post Office affairs are managed in smaller towns. I think that might well be looked into if it is desired to increase revenue.