HL Deb 17 June 1925 vol 61 cc648-58

LORD SOUTHWARK rose to ask the representative of the Chancellor of the Exchequer whether his attention has been drawn to the recent remarks of the President of the Board of Trade in which he stated that there never was a time when advertising, real advertising, was more urgently needed by British industry and would pay it more certainly than to-day; and whether in view of this statement and of the representations made by Chambers of Commerce and other bodies throughout the country the Chancellor of the Exchequer will state what further evidence he desires to assure him that the restoration of penny postage will prove not only advantageous to commerce but remunerative to the Treasury and to the country; and whether, in view of the fact that high postage is such an impediment to commerce, he will take steps to remove this impediment and so enable the suggestions of the President of the Board of Trade to be carried out by the commercial community; and whether the Chancellor of the Exchequer has not now sufficient evidence to enable him to re-introduce penny postage, and, if so, on what date he proposes to re-introduce it?

The noble Lord said: My Lords, those of your Lordships who take an interest in the revival of the penny postage and in my efforts to bring it about in the interests of trade, commerce and employment, will notice that I have no longer directed my Question to the representative of the Post Office in your Lordships' House, because it is admitted on all hands that all recent Postmasters-General, with the exception, perhaps, of my noble friend Lord Illingworth, required no pressure, but unanimously declared in favour of the policy of an immediate restoration of the penny post. This question is no longer one for the Post Office or the Board of Trade, because both Departments are strong supporters of an immediate return to the penny postage. It seems to me now to be purely a question to be decided by the Treasury and the Chancellor of the Exchequer, and all future responsibility in the matter must be placed upon them. If I read my Question to your Lordships, you will see clearly that it is with the Chancellor of the Exchequer alone that the prospect of success rests.

In thanking the present Postmaster-General for receiving a deputation upon this subject from the Chamber of Commerce, it may interest your Lordships to know that I said:— We have a really good strong Chancellor of the Exchequer, and if he is as courageous in office as on the platform, you will not have much difficulty in persuading him not to wait six months, but to let us have a restoration of the penny postage at once. I said those few words to encourage the Postmaster-General, who was thoroughly sympathetic with and enthusiastic for the penny postage. So far, unfortunately, I have been disappointed; but I hope that the answer I shall receive from the noble Lord who is to reply to my Question this afternoon will show that I was justified in my original high confidence in the Chancellor of the Exchequer.

As I have already told your Lordships, my Question is directed to the representative of the Chancellor of the Exchequer and not of the Postmaster-General. With my colleagues who are members of the Chamber of Commerce I have had a good deal to do in almost educating several past Postmasters-General from the state of no particular knowledge of the penny postage to becoming real converts to it. My Question is in these terms: To ask the representative of the Chancellor of the Exchequer whether his attention has been drawn to the recent remarks of the President of the Board of Trade in which he stated that there never was a time when advertising, real advertising, was more urgently needed by British industry, and would pay it more certainly than to-day; and whether in view of this statement and of the representations made by Chambers of Commerce and other bodies throughout the country the Chancellor of the Exchequer will state what further evidence he desires to assure him that the restoration of penny postage will prove not only advantageous to commerce but remunerative to the Treasury and to the country; and whether, in view of the fact that high postage is such an impediment to commerce, he will take steps to remove this impediment and so enable the suggestions of the President of the Board of Trade to be carried out by the commercial community; and whether the Chancellor of the Exchequer has not now sufficient evidence to enable him to reintroduce penny postage, and, if so, on what date he proposes to re-introduce it.

I believe that the advisers of the Postmaster-General and the Advisory Committee which he or his predecessor set up are all in favour of this reform, and that the only obstacle to it is to be found at the Treasury. I would like to suggest that the Chancellor of the Exchequer should take a long view of this question. By restoring cheap postage he will find a means of bringing more income into the national Exchequer. Trade has declined in various directions, as nobody knows better than himself. One has only to look at the published returns of unemployment to find that during the week ending June 1 there were an additional 60,000 persons unemployed. It was stated in this morning's paper that the return during the week ending June 8 showed that a further 43,894 men, women or children, whatever they may be, were unemployed. It is my opinion that high postage rates do not mean relief to unemployment. On the contrary, I think that high postage rates bring about unemployment.

Whenever we ask for a return to a cheaper postage we are invariably told that it will cost £5,000,000 a year. On the other hand, competent business men, members of chambers of commerce all over the country, have come to the unanimous conclusion that they do not believe it. From time to time we have asked for an explanation of the statement about the £5,000,000—because that is the only objection, so far as I have been able to gather, that has ever been made to putting a penny postage into immediate operation—and we have received no information. This afternoon I am to have the pleasure of being answered by another noble Lord, and I dare say he also has been told something about this £5,000,000, and I most earnestly hope—I cannot say that I conscientiously believe that he will be able to do it—that he will give us information as to how this £5,000,000 is made up, because really competent men of business in the country disbelieve the statement altogether.

I intend to give your Lordships a few figures to show the effect of doubling the postage on the one hand and of reducing it on the other. They are rather interesting figures. I know, of course, that the advisers of the Chancellor of the Exchequer still believe that if a penny postage is introduced it will result in a loss; but I would like to draw your Lordships' attention to the fact that the New Zealand Government restored the penny postage at a time when a deficit was anticipated and that there was no deficit at all. On the contrary, there was a profit. Your Lordships will no doubt remember that the suggestions of Rowland Hill were regarded as madness and that very great success followed his efforts. In those days there was opposition from the Post Office authorities. I am not saying anything about them now because they are all in favour of an immediate return to a penny postage.

As I say, in New Zealand its restoration was a real gain to the Exchequer, and the business men of this country believe that the Treasury would gain in the same way, instead of there being a loss. They believe that it would enable 300,000,000 more packages to be sent through the post—this is the estimate of the Postmaster-General himself—and would assist in bringing about what we all desire—a restoration of good trade. It will be remembered that in 1921 when the postage was increased to 2d. the nation's correspondence fell by 389,000,000 packets in one year. That was a terrible blow to commerce, and those who really appreciate what a great commercial carries the Post Office is will see that such a reduction in the number of packets sent through the post must considerably reduce the business of the country which, as the President of the Board of Trade has said, "requires real advertising." In 1922 the postage was reduced to 1½d. The Post Office that year had a surplus of £4,500,000, and in 1924 there was a surplus of £5,000,000.

As regards this estimated loss of £5,000,000 the business men of the country would like to know how the Chancellor of the Exchequer arrives at that figure. They would like to know also whether, in arriving at his decision, he has taken into consideration that this figure is only an estimate. We have no definite information, and if the noble Lord is going to give me that information to-night I shall he very grateful for it. This estimate of £5,000,000 has been given to the country for three or four years, but when we ask how it is made up we can never get any answer, although it is admitted that it is quite possible the estimate may be wrong. In arriving at his decision, has the Chancellor of the Exchequer taken into account the increased revenue that would be derived from the better trade which would result from penny postage? Even if there were a loss in one direction would not that loss be more than compensated for by a gain in another direction? One Postmaster-General has admitted that there would be an increase of 300,000,000 packets sent by post. At the same time he said that was an estimate, and that it was possible the number might be 600,000,000 packets.

I know, of course, that there are a number of people who do not want penny postage. The noble Duke opposite says: "I do not want a penny post; I want it to be half-a-crown; I do not want any letters." I realise that there may be certain great industries which have no use for the penny post. On the other hand, there are millions and millions of people who do appreciate penny postage, and who would like to see it reintroduced. Those who want to see the Dominions and the Mother Country brought closer together advocate it, knowing what a great advantage it would be for that purpose, and knowing also what a potent influence it is in bringing together members of families residing in different parts of the Empire, and also in bringing together people of different nations. There is no doubt whatever that penny postage has been the greatest possible blessing and advantage to our country.

I do not propose to occupy the time of your Lordships much longer, but before I sit down I should like to quote a few of the opinions of men whose views on this subject are well worth having. I will not quote again the opinion of the President of the Board of Trade. He is a Minister who has taken a very active part in connection with our overseas Dominions for many years. He came in contact with the business men oversea and, as President of the Board of Trade, I should think he would cordially approve of the observations which I have made this afternoon. He realises how hard it is for him, as President of the Board of Trade, to increase the trade of the country without the assistance of penny postage. I do not know whether he has brought any influence to bear upon the Chancellor of the Exchequer. I once took the liberty of saying to a Chancellor of the Exchequer: "I hope you will kindly look into this matter of the £5,000,000 yourself, because to a business man it is a ridiculous suggestion."

Sir Edward Manville, who formerly represented Coventry in Parliament, and is an ex-President of the Associated Chambers of Commerce, Chairman of the British Imperial Council of Commerce, and one of the Postmaster-General's Advisory Committee, is reported to have said this two or three days ago:— That the commercial men of the Empire set a very high value on Imperial penny postage could not be gainsaid. Disappointment that the home Government had not seen their way to grant penny postage was general, but the feeling was unquestionably more acute amongst those whose business it was to trade with our Empire oversea, for it could hardly be doubted that the Dominions oversea would soon follow the lead of the Mother Country. For the time being, however, New Zealand, Jamaica and Bermuda stood alone in setting an example to the rest of the Empire. All those countries have adopted penny postage, and they cannot understand why we do not do so. Sir Edward Manville went on:— So far as Great Britain was concerned one observation observation might be allowed. There did not appear to be any logical reason why a national service like the Post Office should show a profit. It was cheering, no doubt, from the point of view of the Chancellor of the Exchequer, but by far the largest contribution to the postal revenue was made by the commercial community, upon whom the so-called profit was, therefore, in reality a tax. I am sorry Sir Edward is not now a member of the House of Commons, for he is a great commercial man, and I am sure it would be an advantage to the country if he could be returned to Parliament.

Then Sir Felix Schuster, at the Bankers' dinner, proposing the toast of His Majesty's Ministers a few days ago, referred to the Budget and said— The Government, without seriously reducing Revenue, might have returned to penny postage and a penny cheque stamp. I may state that a return to the penny cheque stamp is desired by the commercial community. It is considered in financial quarters that it would be of the greatest possible service in trade. At the annual meetting of the London Chamber of Commerce a few days ago, Mr. Barclay, one of our great bankers, said: A penny post would make the Post Office a better paying concern, if only the Post Office would reorganise itself on the lines of modern businesses. But that was almost a sine qua non. They were keeping the penny post away from them not because it was in itself a bad bargain to make, but because their system was so bad that they could not command the resources with which to manage penny post. This, however, could be remedied. I have given your Lordships the quotations from these business men because their opinions are really worth having upon the subject.

I hope that His Majesty's Government will consider this as a serious question. I do not make this kind of speech for any advertising purposes myself, but because, having been much associated with chambers of commerce, and having been president of the London Chamber and Vice-President of the National Chamber, I know how keenly business men feel on this subject, and how much they desire that the great work they are doing should be assisted by a return to penny postage. It would have been of much greater advantage to the country to have returned to penny postage than to have relieved the Entertainments Tax to the extent of £5,000,000. When £5,000,000 were at disposal it would have been of the greatest possible advantage to the country to have utilised that sum by reducing the rate of postage, thereby doing something to reduce unemployment.

The Government do not seem to realise what a great advantage cheap postage may be to the commercial community. When these millions and millions of postal packets are circulated they make business. There is no doubt that the President of the Board of Trade is quite right in telling the people of this country that business and trade will not increase and develop unless they put energy and activity into it, as well as advertising, and I suggest that the Postmaster-General should back up the President of the Board of Trade and come to the conclusion that in the best interests of this country, in the best interests of the trade and commerce of this country, penny postage should be restored.

LORD SOMERS

My Lords, I could make use with very great truth of a phrase with which I have become perfectly familiar in this House, and that is that I did not intend to intervene in this debate to-night. But for some reason which I do not know I have been, I may say, ordered to represent the Treasury and answer the Question which has been so ably argued by the noble Lord. I have not been a regular attendant at your Lordships' House for very long, but it appears to me that the noble Lord must have asked this Question before. I am convinced of yet another thing, and that is that the noble Lord is perfectly familiar with the answer he is going to get. In fact, the few remarks which I have to make in answer to his Question could almost be taken out of the speech to which I have just listened with such great interest.

The noble Lord starts his Question by a reference to the speech made at the Thirty Club Dinner by the President of the Board of Trade on May 19, in which the President referred to the great advantages of advertising. We are all agreed about the great advantages of advertising, but I do not suppose we are all quite so agreed as to the connection between advertising and a return to the penny post. Personally I do not see exactly what the connection is. It is certainly the case that the number of circulars has increased largely lately; the mere fact that we have not got penny postage seems to have had no check whatever on the number of circulars that are sent out daily. I do not know whether it is that form of advertising to which the noble Lord referred. Moreover, a great number of these trade circulars at present enjoy a very large part of the special halfpenny rate. I would rather like to see that halfpenny rate put up to 2d. It would save a great deal. On this point, however, I am speaking entirely for myself and not for the Chancellor of the Exchequer. I do not know what his opinion is on that particular point.

With regard to that part of the Question which refers to the chambers of commerce and the representations made by them and by other bodies throughout the country as to the desirability of a return to a penny postage, I think it is only natural that such bodies should be in favour of a penny postage because it would reduce their expenditure very largely. No one will disagree with them about the advisability of the return to a penny postage. The Question of the noble Lord is a little involved. At times I do not know whether I am to reply for the Chancellor of the Exchequer or for the Postmaster-General, but I think I must recollect that I am replying for the Chancellor of the Exchequer.

LORD SOUTHWARK

I separated the Postmaster-General from the Chancellor of the Exchequer.

LORD SOMERS

Of course, the point of view of the Chancellor of the Exchequer must be a little different from that of the Postmaster-General. The Treasury, I have no doubt, would think it would be very difficult to get revenue from a proposal which they are informed on good authority was going to cost a large sum of money. I am now going to refer to the figure with which the noble Lord is very familiar. It is a little larger figure than the one he mentioned. Instead of £5,000,000, the figure with which he is so familiar, it is £5,600,000. That is the figure I have been given, and although the noble Lord suggested that the restoration of the penny postage would not only be advantageous to the commerce of the country but remunerative to the Treasury, that must be a matter of opinion. The noble Lord has given us his opinion and also the opinion of certain other eminent authorities. The opinion of the Treasury is a little at variance with the opinion he gave, and I must point out that the figure of £5,600,000 is the loss that would be incurred in a full year by a return to the penny postage. That is the figure which has been given to the Treasury by the Post Office Department itself, and I take it the Treasury has to accept that figure as gospel. I am afraid I cannot give any details as to how the figure has been arrived at.

LORD GAINFORD

Can the noble Lord say whether that figure is a permanent figure or whether, in the opinion of the Post Office, it would be reduced at all in subsequent years?

LORD SOMERS

I am afraid I have no brief whatever from the Post Office. The figure is given to me as the estimated loss for a full year, and it is arrived at after allowing for a consequent increase in the use of letters and postcards. The noble Lord is quite right in bringing forward this question at this time. While it is true that it is impossible for any such proposal to be incorporated in the present Budget it is always well to get ahead a little, and the arguments we have heard this evening will be taken, I have no doubt, into consideration in the next Budget. Changes in postal rates of this magnitude and importance can really only be handled in connection with the Budget of the year, and when they involve millions of pounds it is essential that they should be considered in relation to the financial requirements of the country as a whole. The problem which is before the Chancellor of the Exchequer is whether a penny postage is more desirable than the reduction of some other taxes, and after giving the whole matter very careful consideration before the present Budget, he came to the conclusion that it was not possible to reduce the postage rate to a penny at the present juncture. This does not, of course, prevent the question being considered on its merits on a subsequent occasion and with regard to the whole financial position of the country and to the number, character and urgency of other claims upon the national resources.

Might I for one moment remind your Lordships of the financial effects of this proposal? On a conservative basis, the introduction of the scale most generally advocated, which is one penny per ounce of a letter and one halfpenny for post-card, is estimated, as I have already mentioned, to cost £5,600,000 in a full year, allowing for a substantial increase of users in consequence of the cheaper rates. This would be far in excess of the cash surplus expected to be available from the Post Office revenue account, after allowing for the expenditure from the Post Office Vote, and would mean that for Budget purposes, so far from having any surplus on the Post Office account, the Chancellor of the Exchequer would have to make good the deficit on that account from other sources. It is clearly, I think, a very grave matter that the taxpayer should be called upon to contribute money to this scheme, because, although it confers benefit on nearly everyone, it does benefit some interests more than others. I think that is quite clear from the character of the public bodies and others who very strongly advocate this return to the penny postage.

I do not know whether I have touched upon all the points in the noble Lord's speech. I might almost have said at the very beginning that for the moment the answer to the noble Lord's Question was in the negative, but I was told that this was not quite a proper proceeding in your Lordships' House and that, especially in a more or less maiden effort, I should have to make a few more remarks than that. However, I do not think that I can very well do further than conclude by saying that the gist of the whole of this answer, so far as I see it, is that the Chancellor of the Exchequer very carefully considered the question of the return to the penny post with all the evidence that he could possibly acquire—and I take it that nobody is in a better position to get accurate evidence than he—before the Budget of this year, and he came to the conclusion that the country could not afford it under present conditions. But I may assure the noble Lord and your Lordships that the question of the penny post is very much before the minds of the Government at this time and will remain so until the next Budget, and that if there is the slightest chance of a return to a penny postage upon anything like economical lines the Government will see to it that the return shall not be delayed in any way whatsoever. I think that this is all that I can say, and I hope that I have made fairly clear what the attitude of the Chancellor of the Exchequer is—for I hold no brief whatever for the Postmaster-General.

LORD SOUTHWARK

My Lords, may I be allowed to say, with regard to the noble Lord's reference to the Budget, that the consideration of postal charges, whether in relation to a reduction or an increase, is not a matter which must necessarily be deferred from one Budget to another? I am much obliged to the noble Lord, and perhaps I ought to add that I am sorry to have put a rather complicated Question to him at so early a stage of his connection with the Government. I am much obliged to him for his reply.

House adjourned at twenty-five minutes to seven o'clock.