POSTAL AND TELEGRAPH RATES (STATUTORY LIMITS) BILL.

HC Deb 14 October 1915 vol 74 cc1516-56

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a second time."

The POSTMASTER-GENERAL (Mr. Herbert Samuel)

The House will observe that the Bill does not include several of the proposals in reference to the postal and telegraphic charges that were made by the Chancellor of the Exchequer in his Budget speech. Some of these proposals do not appear in the Bill because legislative sanction is not necessary for them: they can be carried into effect by executive action. Of these the chief is the alteration proposed to be made in the rates of letter postage—alterations which, I think, have been received, under present circumstances, with general approval, and which will bring in a revenue of nearly £1,500,000. I have seen it suggested in some quarters that the Post Office ought to have gone further in one direction, and ought to have refused any longer to carry redirected letters from one address to another free of cost. A redirection charge used to be levied by the Post Office. It was abolished twenty years ago, as the revenue it brought in was exceedingly small, but mainly because that revenue was entirely absorbed by the cost of collecting these redirection charges. It involved the postmen at the time of delivery interrupting their delivery for the purpose of collecting small sums, usually amounting to a penny—a most costly method of collecting a comparatively insignificant revenue. In view of that fact, and of the great convenience to the publics which the free redirection of letters undoubtedly gives; it has been decided not to revive the practice of making a charge of the character I have described.

As the House has already been informed, it is not proposed to proceed with the increase of the halfpenny postal charges to a penny. By foregoing this alteration the Chancellor of the Exchequer is giving up nearly two millions of expected revenue. In this connection I should like to point out to the House a fact which is not generally known, that so far as the halfpenny packet post is concerned, the proportion of packets that contain circulars is only a very small percentage of the whole. We in this House who look each day at our daily budget of postal correspondence, finding that perhaps most of the halfpenny envelopes contain circulars, generalise from our own experience, and reach the conclusion that this is so generally. It is not so generally. I caused a Return to be taken recently on the examination of about 800,000 halfpenny packets, and it was found that only 14 per cent, of them contained circulars, whilst 86 per cent, contained business communications, invoices, bills, receipts, municipal, charitable, or social notices of one kind or another, maps, and other publications. Although perhaps in peace time the proportion of circulars might be somewhat larger than now, the fact remains that circulars are only a comparatively small portion of the whole of the halfpenny packet post. One proposal we intend to maintain, if the House agrees, is the raising of the postage rate for newspapers weighing more than 6 ozs. from one halfpenny to a penny, with a further halfpenny upon every additional 6 ozs.

The halfpenny rate for newspapers was introduced at a time when no one could foresee that the newspaper was likely to weigh more than an ounce or two; but the monstrous growth of papers, weighing 16 ozs. and 18 ozs., and sometimes up to 2 lbs., was never foreseen. An instance which might perhaps interest the House came to my notice a few days ago. An enterprising firm of London drapers inserted a great many pages of advertisements in a certain ladies' weekly paper, bringing up the total weight of that paper to almost 2 lbs. The firm then purchased over 40,000 copies of the paper, and sent it through the post to possible, or known, customers at a charge for postage of only one halfpenny per copy. There were eighty-four pages of advertisements in that paper, and sixty-eight pages of letterpress. The Post Office was required to carry in that case a total weight of 35½ tons, for which it had to pay over £500 for conveyance by motor vans and railway alone. It received in postal charges the sum of only £85. Under the new regulations as to weight, either the newspaper and the advertiser must largely reduce the weight they call upon the Post Office to carry, or, if they desire to maintain that weight, they will be called upon to pay instead of £85, £510, thus placing the service on a remunerative basis. The total revenue, however, that is involved by this charge is quite a small matter. Probably a reduction of the traffic will follow, and not more than £20,000 is estimated to be realised, because the vast majority of papers carried through the post are newspapers which are within the 6 oz. limit.

I do not think it necessary to go into any of the minor proposals of this Bill. I should like, however, to say a few words on the very considerable change which it is intended to effect in the charges for telegrams. The country generally has accepted without protest, in the existing circumstances, the increase in the telegraphic charge for ordinary twelve-word telegrams from 6d. to 9d.; but I do not think it would be proper for the Postmaster-General, when he proposes to Parliament a considerable change of this sort, to pass it by without some explanation as to the causes which have brought the finances of our national telegraph system to their present condition. The telegraph service, under State control, began badly from a financial point of view in 1870, when the plant of the companies was taken over by the State at a most excessive cost. Owing to the Parliamentary arrangements at that time not only was the value of the plant paid for, but heavy compensation was also paid to the companies on account of the transfer, and very large sums were paid to employés of these companies in pensions and allowances. The State expended altogether a sum of no less than £10,000,000 in respect of the plant, the actual value of which was about £3,500,000. Ever since the telegraphic enterprise has been charged interest on that £10,000,000, amounting to about £270,000 a year, only one-third of which is in respect of actual asset value. In 1883 a private Member's Motion in this House was carried, against the advice of the Minister of the day—as sometimes happened in those days—in favour of 6d. telegrams A small majority of this House—it was sixty-eight against fifty—insisted on the reduction of the minimum charge of 1s, to 6d., and in 1883, in obedience to that Resolution, the Government of the day altered the charge from 1s. for twenty words, excluding the address, to 6d. for twelve words, including the address. The accounts then laid before Parliament showed ostensibly a profit being earned on the telegraphic business, but that profit was, in fact, barely enough to pay the interest on the debt which had been incurred through the purchase of the system from the companies, and the accounts were then framed upon a much less strict basis than is now adopted by the Post Office. For example, no charge was made for depreciation beyond the actual cost year by year for renewals. No regard was had for the certain future increase in pension charge, but the pension charge was simply stated at the cost of that time, and there were several other minor points which depart from the present practice.

If the telegraph accounts at that time had been framed on the same basis as now, the enterprise would then have shown a not inconsiderable loss. The Postmaster-General of that day estimated that a revenue per telegram would be realised of 10d. for twenty words. It was then estimated that the ½d. a word telegram probably would consist of twenty words, and bring in a revenue of 10d. As a matter of fact, the average telegram consists of fifteen words, bringing in 7½d.; in other words, the revenue per telegram was 25 per cent, less than was estimated when it was introduced. If the original estimate had been realised we should have been receiving now in respect of telegrams an additional revenue of £750,000, against which would have to be set the comparatively small cost of transmitting the additional words for the longer telegrams that were estimated. The future expenditure that was estimated in 1885 was 8¾d. per telegram, leaving a profit on that basis of 1¼d. As a matter of fact, the expenditure per telegram is 11d., instead of 8¾d., and the revenue is 7½d., instead of the 10d. estimated, and there is consequently a loss on each telegram of 3½d. Since that time the wages of the operating staff have been very largely increased by successive steps, largely—perhaps mainly—in consequence of pressure from this House from time to time. The actual average pay, apart from overtime pay, Sunday pay, and pensions, of a London male telegraphist was 28s. 10d. in 1885. In 1913 it was 51s. 3d. I do not think that anyone can possibly defend a wage of 28s. 10d., and I am not suggesting that the present scale of wages is unduly high; but the fact has to be taken into account that these increases have been made, and, if an allowance is made for the numbers of the staff of the various classes, it is found that the average increased expenditure in respect of the wages of the operating staff has been in that period 40 per cent.—that is, comparing the year 1885 with the year 1913, and apart from all questions of war bonuses. The engineering staff also has had its wages considerably increased, and the total increased cost which may be attributed to increased labour expenditure amounts to another sum of £750,000 a year.

Further, the introduction and rapid spread of the telephone has had, naturally and inevitably, a great effect upon the telegraph service and its finances. Of recent years the number of telegrams transmitted has remained much the same from year to year, but their character has been continually changing. Short-distance telegrams, which were remunerative telegrams, perhaps from one part of a town to another, involving only a single transmission, have been continually decreasing. The long-distance telegrams, which involve several transmissions and the use of a much greater length of wire, and much more telegraph plant, have been increasing in number, and consequently the cost of transmitting the telegram per word each year becomes much greater. It will be obvious to the House that as short-distance remunerative telegrams have been replaced by telephone messages to a large extent, and long-distance telegrams have increased in number, the cost on the average of maintaining and managing the telegraph service must necessarily have increased. Further, for the sake of the convenience of the agricultural industry, and of residents in rural districts generally, great numbers of telegraph offices of an unremunerative character have been opened in the rural districts. It has been deliberately done as a matter of policy, and the loss which has occurred has been undertaken avowedly, and of set purpose, by the House. In addition the three-mile delivery limit is now allowed, and it is obvious that to send a telegraph messenger a distance of three miles out and three miles back to deliver a telegram on which, perhaps, only 6d. has been received for all services, must be an exceedingly unremunerative operation.

Again, the Post Office of recent years, not with any financial purpose in view, but solely in order to improve the efficiency of the service, has entered upon a costly programme of underground lines. Fourteen hundred miles of underground cable have been laid in various parts of the country with a view of improving the transmission of telegrams, and especially freeing them from interruption owing to the breakdown of the wires. These underground lines cost no less than £1,200 a mile, and expenditure has been incurred under that head of £1,675,000, which, from a financial point of view, is little remunerative, but which has undoubtedly very much improved the efficiency of the service whole. Against all those factors has to be set only this one—that the average telegram is, as I have stated, fifteen words instead of twenty, and consequently the Post Office is relieved from the necessity of transmitting the additional five words for which estimate was made in 1885. We have, again, effected economy of administration somewhat through the use of machine telegraphs, which, however, are very costly instruments to maintain, and we have undoubtedly in recent years very much improved the internal management of the Post Office telegraph system and increased the output.

The consequence—I think the Post Office is entitled to take some credit for it—is that in spite of the fact that wages have been so much increased, in spite of the fact that each telegram has to be transmitted a longer distance on the average, and in spite of the fact that we maintain unremunerative rural post offices, and have extended the free limit of delivery to 3 miles, the actual cost of operating is no higher than in 1885 on the average. The cost on the average then was 8d. to transmit each telegram. It costs on the average now just under 8d. to transmit each telegram, but the real cause of loss is due to the fact that the estimates framed in 1885 have not been realised, either in respect to revenue or in respect to expenditure. If one views the telegraphic accounts as a whole, and not the average of each telegram, it is found that we receive from the public in respect of telegrams, in round figures, £3,000,000 a year. This just covers the cost of salaries and wages, and leaves nothing over for maintenance, depreciation, interest, accommodation, and pensions. These items altogether amount to a total expenditure of about £1,200,000 a year, and that has been the loss hitherto on the telegraph service.

In those figures I have included, of course, the revenue from and expenditure upon Press telegrams. If 6d. for every twelve words was unremunerative it must be obvious that 1s. for every hundred words must be far more unremunerative, and particularly since the 1s. is only paid in respect of the first telegram of a batch, and that the Press has the privilege of sending at the rate of 2d. per hundred words by night and seventy-five words by day any number of additional copies of the same telegram to any number of additional addresses in different towns in any part of the country. A Press telegram is handed in at night, containing one hundred words, addressed to Newcastle, and a second copy of that telegram must be accepted by the Post Office, and addressed, perhaps, to Southampton for 2d. Nine tenths of the Press telegrams are sent, as a matter of fact, at the copy rate, and the average receipts for Press telegrams, taking that fact into consideration, is not much over 4d. per one hundred words by day and 3d. per one hundred words by night. The night rate is one hundred words for 1s., and the day rate seventy-five words for 1s., with 2d. copying rate in each case. As a matter of fact, the great bulk of Press telegrams is not sent by night, as is generally supposed to be the case. About sixty per cent, of the telegrams are sent at the day rate, between the hours of 9 a.m. and 6 p.m., and only the minority of telegrams are sent by night, when the wires are comparatively idle. A very considerable proportion of those telegrams sent on behalf of the Press are never published. It is, of course, very difficult for any Press organisation to be able to distribute precisely the amount of Press matter required by the newspapers. Unexpected news may come in, displacing telegrams that would otherwise have been used. They have to cater for the different tastes of different newspapers. A return was taken in some of our largest provincial offices in 1911, and that return showed that only 64 per cent, of the words transmitted over the wires were published and 36 per cent, not published at all. The transmission of that 36 per cent, involves, of course, a heavy loss to the Post Office, as the revenue received for the transmission is far less than the cost.

Sir WILLIAM BYLES

They were all paid for.

Mr. SAMUEL

Yes, but I would much rather not have them.

Sir W. BYLES

I thought the House might think that only 64 per cent. were paid for.

Mr. SAMUEL

No, all transmitted over the wires, and consequently paid for, and the effect is that, the Press pay roughly for 150 words for every 100 words published. I hope one method by which the Press may recoup itself for the extra burden caused by the increased charges may be by economising in that direction, and securing that the number of telegrams transmitted shall approach more closely—I quite agree it cannot approach accurately—to the number used. Although the Post Office thereby loses some revenue, the service is an unremunerative one, and the loss of revenue leaves me quite cold. The Press, however, have been accustomed to these excessively cheap rates for a period of forty years, and great businesses have been built up on the strength of them. On a review of the whole circumstances the Government thought that it was not possible at the present time to attempt to make the Press telegraphic service remunerative. The charges which were proposed by the Retrenchment Committee, and which were mentioned by the Chancellor of the Exchequer in his Budget speech, are considered on review to impose on the Press a burden which, especially in the present time, it would be difficult for them to meet, and, consequently, I have been in close communication with accredited representatives of the Press and journalists' organisations. I have found that they recognise that some increase in the Press rates is reasonable in the present condition of national finance, and, by agreement with them, I propose the scale of charges which hon. Members will find included in this Bill. They will add about 40 per cent, to the present revenue from the Press, after allowing for some diminution of traffic—realising an additional sum of about £60,000. The Press have represented very strongly that their position during the War is one of great difficulty, for, although the circulation of papers has increased, the advertisements, which to them are very important, have very largely declined, and, therefore, in order not to press them too hardly, it is proposed by this Bill that the new charges shall not come into operation until the end of the next period for which they make their normal contracts—after the 31st December next year, thus giving them rather more than a year's notice in order to adapt themselves to the new arrangement.

The consequence will be that from the new telegraph charges we shall derive the following additional sums:—From ordinary telegrams an increased revenue of £410,000 after allowing for some diminution of traffic, and from Press telegrams an increased revenue of £60,000. We hope to be able to effect owing to the diminution of traffic a saving of expenditure in a full year of about £70,000 in the near future, and we hope also that we may be able to make a much larger saving, perhaps, amounting to as much as £200,000, when the effects of these changes are fully felt and when we have been able to adjust the staff to the new conditions of traffic. That will be a total from revenue and saving on expenditure of £740,000.

Further, I have been giving in recent years very close attention to the increased use of machine telegraphy, and to the economies that may be effected in that direction. When I had the honour of being Postmaster-General before, I appointed a Departmental Committee under the chairmanship of the then Assistant Postmaster-General to make a more detailed inquiry, with expert advice, into the kind of machine which is most suited for the various classes of Post Office work. There are a number of rival machines on the market. That Committee is now about to-report. Since then my right hon. Friend, who succeeded me as Postmaster-General, appointed a second Committee under the chairmanship of my hon. Friend the Member for Elgin and Nairn, which is going more closely into the question of the finances of the telegraphs, particularly with regard to machine telegraphy. That Committee will be able to act on the new Report which will be in their hands, and I hope they will be able to carry the process of Post Office economy by means of using machines, which of recent years have been very greatly improved, to a much further point than has hitherto been possible.

I beg to present to the House this Bill for Second Reading. The Post Office has always prided itself on being able to give to the public a progressive reduction of rates with increased facilities, and during the four years of my previous tenure of office as Postmaster-General I had the privilege of being able to extend in many directions the facilities to the public—all of them of a character which were at the same time not unremunerative to the Post Office. It is an unhappy moment for any Postmaster-General at any time to have to come to Parliament and ask for sanction for an increase of Post Office charges. In fact, I believe it is the case that since the penny post was introduced, over seventy years ago, there has been only one instance in which any Post Office charge has been increased, and that was the abolition of the sample post in 1871—a policy which was reversed a few years later in 1887. Otherwise the record of the Post Office has been an unbroken history of reductions of charges and increases of facilities. But in the present national circumstances the Chancellor of the Exchequer has been compelled, much against his will, to look to the Post Office for assistance in increasing the national revenue, and I trust that, in view of the difficulties of the time, the House will give its sanction to this Bill.

Mr. PETO

On a point of Order. I understood that the other day you said these postal charges were not in the nature of a tax, and, therefore, required a separate Bill. May I ask whether, in that case, private Members will be in order in putting down Amendments which will increase those charges?

Mr. SPEAKER

The hon. Member had better put that question to the Chairman of Ways and Means when the Bill reaches Committee. I have no power to deal with any Amendment, and the only Amendment I can take now is one that the Bill be read a second time this day six months.

Sir F. BANBURY

I want to say a very few words on the Motion for the Second Beading of this Bill. I quite appreciate the last statement of the Postmaster-General, that ever since the inception of the Post Office charges have always been decreased. But at the present moment we are in very exceptional circumstances, and I think it is absolutely necessary that some increase should be made in the charges. I am rather sorry, in fact, that the right hon. Gentleman has abandoned his proposal for the abolition of the halfpenny postcard. There has been very great agitation against it, but it does not follow that because there has been such an agitation the proposal is wrong. The increase of the charge from a halfpenny to a penny was going to bring in a very large revenue, and I think it would have been better if the right hon. Gentleman had adhered to his first feeling and had made the increase. I am not quite certain whether it was the right hon. Gentleman or the Chancellor of the Exchequer who said what, the increased revenue from this change would be. I believe it was a very large sum that was mentioned.

Mr. SAMUEL

About £1,000,000.

Mr. T. P. O'CONNOR

They would never have got it.

Sir F. BANBURY

At any rate it is a very considerable sum; and as to the interruption of the hon. Member for the Scotland Yard Division of Liverpool, may I point out that people have been in the habit of sending a variety of things through the post for a halfpenny. If the thing was worth sending through the post, if there was anything to be gained by way of advertisement from it, surely the senders could afford to pay a penny instead of a halfpenny. The fact is that the people who are sending these things through the post for a halfpenny wish the State to continue to give them a subsidy to carry on their business. If a thing is worth sending it is worth paying a penny for. If it is not worth a penny it had better not be sent at all. We are all overwhelmed every day with an enormous number of things that are of no earthly use, and which are in fact a considerable nuisance. I often do not gather for the moment the importance of a particular letter because I have been spending my time in opening all sorts of letters which come by the halfpenny post and which have nothing in them except an advertisement as to some article I did not want. I understand that the change was only to be for the War, and I think it would have been worth while, despite the interruption of the hon. Gentleman below the Gangway, to have made it. I am sorry the right hon. Gentleman did not adhere to his original intention. I do not know whether the proposal was his or whether it came from the Chancellor of the Exchequer. With regard to the rest of the Bill, I can only say I shall be very happy to support it.

Mr. JAMES MASON

The right hon. Gentleman indicated in his speech that the Retrenchment Committee, on which I had the honour of serving, had at an early date to undertake the examination of Post Office rates. I wish to point out that that Committee, in approaching this question, worked upon two principles. The first was to see how far the Post Office service could be made self-supporting, the question being whether those who got the advantage of a service should pay for it, or whether the general body of taxpayers should pay for services used by only a limited number of people. We came to the conclusion that, in a general way, it would be well that the people who did use a, partcular service should in most cases pay for it. In the present national emergency it was undoubtedly desirable, as far as possible, that the taxpayer should be relieved of paying for a service only used by limited classes. The second point was whether some increase of postal charges was not a fair way of raising revenue which was necessitated by the War, and which, after all, must be raised in one method or another.

We came to the conclusion that, as regards increasing rates with a view to making the chief branches of service self-supporting, an increase such as that proposed in the halfpenny post, and that in the case of telegrams—and in the latter case the increase is not sufficient to make it self-supporting—was justifiable. Of course one had to take into consideration the fact that the increased charge and reduced amount of work sent through the telegraph plant might make a certain portion of that plant unremunerative. It was considered that, although the 9d. rate would not make, telegrams self-supporting, it was as far as any increase in prices could be carried. I regret that the increase of the halfpenny postage has been abandoned, and, accepting the principle I have just mentioned, it would seem that that increase was a proper and reasonable way of relieving the taxpayer from unnecessary expenditure and of providing something towards the general revenue of the country.

But I cannot help thinking that as regards the raising of revenue for the general expenditure of the country, the best proposal would have been one which was not accepted by the right hon. Gentleman—I have no doubt for very good reasons—and that was an additional halfpenny war stamp on all packets, whether charged at the present time a halfpenny, or a penny, or more. I believe this additional war stamp would have produced nearly £4,000,000 a year. It was a good way of raising revenue in a manner very little felt by the public. It would not be felt as heavily as many other ways in which money may be raised, and I hope the right hon. Gentleman, having abandoned the proposal to increase the halfpenny post, will examine into the proposal of a general extra halfpenny war stamp, should he have to reconsider this matter at some future date.

The right hon. Gentleman mentioned that one of the difficulties about the telegram was that in recent years the short-distance telegram, which cost the least to send, had decreased in number, whereas the long-distance telegram had proportionately increased. This, of course, is attributable to the introduction on a general scale of the telephone. If that is so, and it is undoubtedly the fact that a great deal of the short-distance work formerly done by telegram is now done by telephone, it would seem to be a reason for increasing the revenue derivable from the telephone. I do not know how that could be done, but there are a few directions in which an effort might be made to increase the revenue, such as the fixed rate of interest chargeable for machines. I merely throw out for some future occasion the suggestion of the possibility of deriving some further revenue from the telephone if it is the fact that the telephone absorbs a good deal of work which used to be done by the telegram. The right hon. Gentleman pointed out that the Press telegram rates were not to be put into force until December next year. That, of course, means that for the next fifteen months we are not to derive any increased revenue from that source, and, although I am sure there are excellent reasons for doing that, it is to be somewhat regretted that we have to wait so long for the result of this alteration. I would merely like, as I have no doubt the whole question is being decided by the right hon. Gentleman, to impress upon him the desirability before this matter has to be revised—and I have no doubt if the present conditions of things continues long he may find it advisable to revise the postal rates again—of considering the possibility of some special charge on all packages, which I think perhaps would be a better way of increaseing the revenue.

Sir THOMAS WHITTAKER

The hon. Member who has just spoken was a member of the Retrenchment Committee. This Bill represents an enormous change in the recommendations of the Retrenchment Committee, and one of the lessons to be learned from it is that if you appoint Retrenchment Committee to deal with matters of this kind you should appoint business men. They would never have made the recommendations they made if they had approached the matter in a businesslike fashion. Something like four-fifths of the members of that Committee had had no business experience whatever, and the recommendations were such as we might expect from a Committee of that kind. One of the first things a man with no business experience thinks of when he wants to improve a business is to increase charges, but it is one of the worst ways you can go about it. The thing to do is to encourage sales. I understand that the halfpenny postcards are remunerative, and it is a great fallacy to think that by increasing the charge from a halfpenny to a penny you are going to sell anything like as many at a penny as you sell at a halfpenny. The reduction would be enormous. You would never have made a million increase or anything of the kind. The difference between a halfpenny and a penny as an expenditure is best illustrated by the experience of the halfpenny and penny newspapers of this country. Anybody who knows anything about newspapers is aware that when you reduce the price of a newspaper from a penny to a halfpenny you immediately practically sell ten times as many. The sale of the halfpenny paper is ten times that of the majority of the penny papers. The difference between a halfpenny and a penny makes that difference in the sales. It would have been so in the case of the halfpenny postage, and the increase to a penny would not in my judgment have made an increase in the receipts. The Postmaster-General has very wisely indeed met the representations which have been made to him by those who understood the matter. The Retrenchment Committee came to their decision without hearing anybody but the officials. They made no inquiry whatever amongst those who would be affected, and who knew something about it. They simply swallowed what the officials told them and took no evidence whatever.

Mr. SAMUEL indicated dissent.

Sir T. WHITTAKER

They had nothing more than that which the officials told them, and their Report bears out very much indeed the story which the officials have told for a very long time. I dispute altogether the idea that these are subsidised services. I do not think it is an accurate description. The Postmaster- General, having met the numerous persons, parties, and interests that would be affected, has very wisely very substantially modified the proposed charges, and as he has come to an agreement with them. I have no intention of criticising the present arrangement, but I do think the lesson is an extremely clear one. The additional charges which are to be made for Press telegrams are an increase of 80 per cent., which is a very substantial increase. I suggest that the Postmaster-General and his predecessor in making these inquiries into the use of labour-saving and more efficient machines are moving in the right direction. The right direction is to increase efficiency, to increase speed, and to get better services. I believe that the officials of the Post Office Department are very able men, and I do not think they ever showed their ability more than when they were approached by the Retrenchment Committee and when they switched the Committee off retrenchment and on to increased charges on the public. It was very ingenious and showed a very considerable amount of ability. I notice also that the Retrenchment Committee did not suggest because the agricultural post offices and agricultural telegrams do not pay that there should be an alteration there. They are obviously and clearly unremunerative. I contend that they ought to be continued. I do not think you can look at these services in detailed items. It is a national service, and you must take it as a whole. The postal service in our large towns could be done by private enterprise at a great deal less cost, but in my judgment you must look at the service as a whole, and as a whole it is extremely well done, cheaply done, and well managed. I have indicated the directions in which, in my judgment, increased revenue might be obtained. You should get increased revenue through increased efficiency, and not through increased charges where they can be avoided. The present time is special, and it is quite reasonable that there should be some increase in the charges, but those now proposed, I venture to submit, are quite ample.

Mr. EVELYN CECIL

The right hon. Gentleman the Member for the Spen Valley (Sir T. Whittaker) has made a severe and I would say an almost bitter attack on the Retrenchment Committee. He is perfectly welcome, as far as I am concerned, to depreciate as much as he pleases any business capacity which he may think I have, but I think I am justified in pointing out that his criticism that the Committee did not consist of business men is not only a futile one, but is wholly untrue. My hon. Friend the Member for Windsor (Mr. J. Mason) has just spoken. Does he suggest that he is not a business man?

Sir T. WHITTAKER

I said the majority of them.

5.0 P.M.

Mr. CECIL

It is almost invidious to go through them one by one, but I need scarcely say that Sir Gilbert Claughton, chairman of the North-Western Railway, is an extremely wise and capable business man. Mr. Gaspard Farrer has spent his whole life in business. I do not know whether the right hon. Gentleman would consider Mr. Harold Cox a business man. Apparently he does not. There are many business men on the Committee, and I think I may say that every man on it is level-headed. The right hon. Gentleman suggested that the Post Office officials were extremely ingenious in switching the Members of the Committee on to increased charges. If he will look at the Debate in the House of Lords, initiated by Lord Midleton, he will see that Lord Midleton expressly asked whether increased charges were to be considered by it or not, and the reply of the Government was that they were to be considered. That statement therefore is quite inaccurate, and if the right hon. Gentleman bases his attack upon the Retrenchment Committee on such inaccuracies I am afraid all I can say is that his criticisms are not worth much. While I welcome entirely what the Postmaster-General has done in advancing these proposals, so far as they go, I should like to express mild surprise at his extreme modesty, especially when I bear in mind my right hon. Friend's past history. I do not think that he has been naturally averse to putting on heavy taxation on the various occasions when he has been in this House, and I do not think he can be quite unconscious of a rather widespread criticism at the present time that more money is really required to foe raised than is actually being raised by the present Budget. If I might make one other somewhat preliminary remark, I would like to say that where there is too much fear of interested agitators there is usually too little regard for national finance. The whole principle of the Retrenchment Committee has been to make each Civil Government Department or section of a Department pay for itself, like any other business concern. Surely that is a sound principle to work upon, and I hope it is one which the right hon. Gentleman the Member for the Spen Valley will take to heart. If by some drastic measures a material additional profit can be justifiably secured to the Exchequer, no member of the Retrenchment Committee at any rate, and I should be inclined to think very few Members of this House, would oppose such a course. No doubt in making these high charges there are exceptions to be made. If you put on an extra halfpenny it may be right to give friendly societies and insurance societies, who are in a very exceptional position, some special consideration. The recommendations of the Committee, as contained in the Interim Report, to a great extent hang together. I regret that the Government only accepted some of them. If you impose an extra halfpenny on postcards you almost must put it on ordinary letters. It may be that there has been no increase in the penny postage since it was started in 1840, and that is a very proud position to maintain, That was during a normal time, but these are wholly abnormal times, and so long as they last I think there is something to be said for reconsidering our course of action. Doubt has been expressed by the right hon. Gentleman the Member for Spen Valley (Sir T. Whittaker) whether an extra halfpenny all round would pay, in view of decreased correspondence. I can only say in reply that the figures have been carefully gone into by the Post Office, and they estimate that making all allowances, even for importation of circulars from abroad under postal union rates, there will be a large increase. It is estimated that you will get £1,000,000 from postcards, and £4,000,000 by an extra halfpenny on ordinary letters. I do not think a sum of £5,000,000 a year is one to be sneezed at nowadays. If the right hon. Gentleman doubts this statement, I would very politely suggest to him that the business men on the Committee have endeavoured to go into the matter by making inquiries as to what actually occurred in Canada, where a halfpenny has been put on all round for some months. We have inquired what the result has been. I am not certain that I am justified in stating the figures, but they are very remarkable. I do not know that I ought to state the figures without the leave of the Canadian Post Office, but I can assure the Postmaster-General that the experience of Canada during the first two and a half or three months has been extremely instructive, according to the latest figures we could get as regards the effect of this change in Canada. We felt convinced in making this recommendation from a business point of view that we were very appreciably adding to the revenue of the Exchequer, and that we were on perfectly sound ground. The whole of our proposals really hang together, and that recommendation would do as much in this country as in Canada. There was no grumbling in Canada, and there was no interested agitation against it. It would touch a number of people; some of those who even yet do not seem to realise that a gigantic war is going on. I think those people ought to have taxation brought more nearly to them, for they are people who do not acknowledge the duty of contributing to the National Exchequer, and do not have any pride in the obligation to do so. If this broad recommendation of a halfpenny war tax, which is in operation in Canada, cannot be adopted in a broad sense now, I should like to commend it to the Postmaster-General for serious consideration in a future Budget, when more money has to be raised.

Let me take the Bill as it stands. May I make two suggestions? Why could you not limit the halfpenny packet post to one halfpenny per ounce, instead of 2 ozs., so that the penny letter scale would begin at 1 oz. for everything? I think that would meet the case of friendly societies, and societies in similar positions, whose packets are not heavy, and at the same time it would stop a great many heavy circulars, which are quite unnecessary in time of war, and more labour would be set free to enlist. My second suggestion is in regard to postcards. I believe that under the French system of postcards, so my information goes, you may write for a halfpenny five words on a postcard, and if you write more than five words the charge becomes one penny. That would save picture postcards, which, as a rule, are merely greetings, if this is desired. You can send five words by paying only one halfpenny, and it would prevent correspondence, which is virtually a letter, being sent for a halfpenny. That is a suggestion which I hope the right hon. Gentleman will note as one worthy of future consideration. I quite agree that newspapers of more than 6 ozs. should be charged more than one halfpenny, and I am glad that the rate of Press telegrams has been raised. Nobody wants to be unfair to journalists or Press agencies, whose public services I, for one, gladly and warmly acknowledge, but in a time when there is a crying need for economy I doubt whether the nation should continue giving what is really an enormous subsidy, and something which is subversive of the principle that each Department should be run on a remunerative basis. I understand that that is the principle upon which my right hon. Friend wishes to act, and that is certainly the principle which has actuated all the recommendations of the Retrenchment Committee. The right hon. Gentleman said that these new rates for Press telegrams applied more particularly during the War, and they were not to begin until 31st December, 1916. I shall be thankful if we are able to conclude the War before that date, but whether that be so or not, I do not quite follow what the right hon. Gentleman really proposes. Supposing the War ended before that date, would the right hon. Gentleman bring in a Bill to restore the old rates, or is it proposed eventually, when peace conditions return, to see that Press telegrams are placed on a remunerative basis, and that the rates will be again revised after 31st December, 1916, to ensure that the principle to which I have referred is carried out. I commend these suggestions to my right hon. Friend.

Colonel HARRY LAWSON

In whatever light you look upon it, I think the House will be with me in saying that this is a melancholy little Bill. I doubt if it does much for retrenchment, and I am certain that it does a good deal that sins against efficiency. To those of us who have dabbled in past years, however ineffectually, in postal reforms, this is a very depressing and disheartening performance. When we have pressed for cheaper means of communication it is because we have thought that they have been essential to national welfare, the expansion of trade, and the growth of industry. I do not think that we have forgotten those maxims now; but, of course, we live in hard times, and I agree that the Postmaster-General is justified in doing all that he can to effect economies, providing that the loss of efficiency be not overmuch. It is not for me this afternoon to enter into general questions so much as to deal with those parts of the Bill in which the organisations with which I have something to do are particularly interested. I think the House should be quite sure of its ground in making changes in regard to the cost of Press telegrams. The history in this connection is rather a curious one. The present arrangement was made forty-six years ago, and it was done more for the benefit of Members of this House than for the public generally.

The new charge is one which falls almost exclusively on the provincial Press. When the proposal was first made, I think hon. Members were a little mistaken and thought the Press generally would share the charge among them; but that is not so. It is really an addition to the working cost of provincial newspapers, and the reason the old arrangement was made was largely to enable speeches made in this House and by public men outside to be reported in the provinces. The effect, of course, will be that many of my hon. Friends will find they are no longer reported in the newspapers which circulate in their constituencies; and I am sure that will be a loss to the constituencies, and some of my hon. Friends may think it a loss to them also. That is the way in which the economy will be effected, and I am certain that the revenue will not gain much. I am equally certain that the Postmaster-General's anticipations will be falsified. The economy will be made in diminishing what has been looked upon as a public service, and it is for the House to judge whether that is a desirable thing or not. Some people think the effect will be to curtail the volume of speeches made here to the national advantage. I do not know whether hon. Members know that there is a special section occupied in reporting their speeches in the Press Gallery here in a special manner for special newspapers. That is to say, speeches made here are supposed not to be of equal interest in all parts of the country, and therefore special reporters report them at greater length—I do not say at undue length—for consumption in the constituencies represented by hon. Members. I venture to think that that section of the Press Gallery will largely disappear under the new system, or at any rate their arrangements will have to be modified. I have no interest whatever in this matter, but it is really a curtailment of publicity of debate and of speech making, and the House must look upon it in that light. There is no doubt that it is in that direction that the Press agencies will effect a saving, and newspapers can only expect in that way to maintain their present rate of expenditure upon this part of their working organisation.

It is wrong to think that this was a favour shown to newspapers, because it was really a piece, of extravagance—vicarious extravagance perhaps—imposed upon the country by hon. Members of this House who wished to be reported in their constituencies. That is the true and inward history of the arrangement made for Press telegrams. The House now professes to wish to bring it to a close. I notice the date on which the arrangement will come into operation is far removed from this, and perhaps before that time hon. Members may reconsider the question in the light of their own experience. Anyhow they will not experience the new charge until they have ascertained what the new conditions will be. As it stands, it cannot come into operation for virtually fifteen months. If a saving is made, having the experience of past years behind us for our guidance, does anybody imagine that the country will reap the benefit? Probably those who will reap the benefit will be the postal servants. From some lack of concentration and the inevitable slackness of management which characterises Government Departments, the Post Office has never been able to resist any organised movement for the increase of wages and remuneration, and I am certain the postal servants, who are admirably organised under very capable leadership, if they find that there is a saving made, will be the first to say that the benefit ought to go to them and to nobody else, and will point out very good reasons why that should be so. In fact, I believe myself that this difference in expenditure is a new appropriation-in-aid of postal wages. Whether that turns out to be a prophecy which, like many others, may be falsified by the event, that is how the matter strikes me. I thought the House ought to know exactly how this new newspaper tax will act. It will not affect the Press generally. It is meant to be a burden on the provincial papers, but probably the provincial papers and the Press agencies who supply them will safeguard their interests by curtailing the reports of public speeches.

I am informed that in the drafting of the Bill there is a mistake in Clause 1, which makes it very doubtful whether there will not be an extra charge on all packets far in excess of what is intended. That is a matter of drafting which I am quite certain the right hon. Gentleman will see is set right when the Bill comes into Committee, because it is clearly not his intention to disturb existing arrangements to that extent. The right hon. Gentleman is wrong also in thinking that daily newspapers generally will be covered by the 6 ozs. rate. That is not so either. That is a matter of detail which on inquiry he will be able to set right, if he thinks it ought to be done in fairness and on the principle of equality as between different publications. For my part, I should have much preferred that this new tax, instead of being put as a perpetual clog and load upon our national industries, had been specifically stated to be for the term of the War. In that respect I agree with the hon. Member for Aston Manor (Mr. E. Cecil) that a war tax and a war stamp would have been preferable to a permanent impost. It cannot be the wish of this House to fetter the means of communication so as to act in a way that will be detrimental to our national trade in the future. After all, competition will not only be keener, but, to use an American phrase, it will be more cut-throat than ever after the War. It will be a desperate affair to keep things going, and it cannot be sound to cripple national industry in such an essential as the means of correspondence if it can be avoided. In national economy that cannot be a right principle and it cannot be an expedient principle. I believe that is done to some extent by this Bill, and if we could be assured that to meet the necessities of the War these taxes were imposed for the period of the War and until the present trouble be overpassed, personally I should prefer it, and I think it would be not only more workable but more likely to be successful in its results. These are the points to which I wish to draw the right hon. Gentleman's attention. As to the charges in regard to the weight of newspapers, I hope he will be able to give them some consideration before the House goes into Committee, because I am certain he has been unwilling to bring this Bill before the House, but as he has had to bring it I am equally certain he is anxious it should not act unfairly to the particular interests affected by its provisions.

Mr. PETO

I must confess that I see with some regret the way in which the proposals for retrenchment have been whittled down to something which is almost negligible in this Bill. I particularly refer to the main suggestion of the increase in the ordinary postal rates—the halfpenny rate and the penny rate. It was with that view that I asked you, Sir, a question just now on a point of Order as to how private Members stand. I have taken your advice and consulted the Chairman of Ways and Means, and, without stating definitely a decision at first asking, he is not unfavourable to the view to which from your ruling I was inclined myself, that an Amendment proposing an increase in the charge proposed by a private Member would be in order. With that in mind, I wish to make to the right hon. Gentleman a suggestion which seems to have been brought a little nearer realisation by the speech to which we have just listened from the hon. and gallant Member for Mile End (Colonel Harry Lawson). He says he wishes that these increased postal charges should not have the appearance even of being something which would be permanent and which might restrict the revival of trade which we shall have to do so much to encourage when the War is over. The opposition to the doubling of the halfpenny rate was very strong, and arose from various quarters. But I do not think, if the right hon. Gentleman, finding that opposition, had proposed a War surcharge upon every postage stamp, which would obviously on the face of it be a contribution to our War expenditure and of a temporary character, as would be indicated by its being a surcharge on the stamp of ordinary denomination, that he would have met with the same opposition.

Mr. CECIL

That was the proposal of the Retrenchment Committee.

Mr. PETO

A stamp of different denomination would have had to be printed. My point is that that might go on indefinitely so far as the public or anybody in this House can tell now, whereas the other form of increase would naturally be of a temporary character. In that way a small surcharge could easily have been made. I am informed that this is being done not only in Canada, which has been mentioned by other Members at different points of the Debate, not only to-day, but previously, but it is also being done in Russia. If we took such a step as that we should be acting in good company. I hope the right hon. Gentleman will very seriously consider getting out of the difficulty of either such a special increase as a complete doubling of the halfpenny rate or, on the other hand, doing nothing to make that great branch of postal service remunerative, in the way I have suggested to him. The last speaker referred to the question of Press telegrams. Personally, perhaps, I have a special interest in the provincial Press, and, as representing a provincial constituency, I may say I am very pleased that the right hon. Gentleman was able to say that he had so far modified the earlier proposals, when a great increase was suggested in the Press telegram rates, that he had got the approval and agreement of the parties who are mainly interested.

Colonel H. LAWSON

Only the agreement.

Mr. PETO

The hon. Member said that it might result in Members' speeches in this House being reported at less length. I would call his attention to the fact that the charge it is actually proposed to make is 1s. for eighty words, and I really think that if a speech in this House is not worth 1s. for every eighty words it had much better not be reported in the provinces or anywhere else. With regard to what the right hon. Gentleman said in reference to the remuneration of postal telegraph clerks, I was very much interested to know that not only was there such a great increase since 1885, but that the average of the postal telegraph clerks have now arrived at the dignity of being Income Tax payers or potential Income Tax payers.

Mr. SAMUEL

In London.

Mr. PETO

I think it is very satisfactory to think that this great service is remunerated on such fairly generous lines, and that half of these gentlemen will be making Income Tax returns—at least I hope they will. I am sorry to see that there is a lost opportunity in this Bill, because I am looking for ways and means by which the charges for the postal services should more nearly make a balance wherever they are at the present time making a loss. I see that the charge of 1d. for 4 ozs. is maintained.

Mr. SAMUEL

Perhaps the hon. Gentleman will allow me to explain that the proposed alteration can be made by administrative action without legislation.

Mr. PETO

Is that proposed?

Mr. SAMUEL

Yes.

Mr. PETO

Is it proposed to reduce the weight of the ordinary 1d. letter to 1 oz.?

Mr. SAMUEL

Yes, Sir, as proposed by the Chancellor of the Exchequer in his Budget speech.

Mr. PETO

Like many other Members, I had taken a different view. So many things are set forth in this Bill in detail, and that one was not mentioned, that we thought that proposal, like many others, had been dropped. I am very glad to hear that that is not so. I have spoken already of the provincial Press with regard to Press telegram rates, and, on the other hand, I am very glad that the proposal to charge a penny postage on all newspapers has been dropped. Just as the hon. and gallant Member (Colonel Harry Lawson) was perfectly right in saying that any increase of the postal telegraph rates hits the provincial Press and not the London Press, so, if that proposal had been maintained, it would undoubtedly have been a great hardship to people in the country, who would have had to pay very highly for a newspaper delivered by post, which in many cases is probably the only way in which they can get it.

Colonel H. LAWSON

They will now in certain cases where the newspaper is over 6 ozs.

Mr. PETO

I was thinking more of the ordinary small daily paper, and not of one of the size to which my hon. and gallant Friend was referring. Although the right hon. Gentleman is wise in having dropped that part of the proposal, it would be recognised as a perfectly reasonable thing if some small surcharge for the period of the War were made. The right hon. Gentleman told us that the average telegram sent turns out to be a telegram of fifteen words, which, on the present scale, brought in a payment of 7½d. As he has shown us that he is practically making arrangements under this Bill to make the postal telegraph service self-supporting and to make both ends meet, I would suggest, as it is always a matter of great ingenuity to work a telegram with the address into twelve words, and as he has found from experience that fifteen is the average number of words, that he might, at Very small cost and at great convenience to the public, make this charge of 9d. a flat rate to cover a telegram with three more words than is usual now. Addresses, particularly country addresses, very often involve several words, and this suggestion, if carried out, would have the effect of giving the public ten words in which to convey what they want, leaving over five words for the address. That is a small suggestion I make in the opposite direction to the increase of the charge, but rather in the increase of the service rendered. If the right hon. Gentleman is going to tell us anything more about the Post Office to-day, I would like to ask him, as it is of particular interest in the present circumstances, how far he has gone with the large extension of underground work in connection with telephone services which he had said had cost more than £1,250,000. I should also like to know, in regard to the restriction of public works, what is the position of the postal telegraph railway in the Metropolis, in reference to which we had a Bill upstairs, and which was to cost, I think, £10,000,000?

Mr. SPEAKER

We are not now discussing general Post Office Estimates.

Mr. PETO

I did not intend that as any criticism at all, but simply wanted to know what facilities were already completed, if the right hon. Gentleman could have told us. I hope most seriously he will consider the proposal I have made to him, and if he does not put down an Amendment to the Bill himself, which would be the most obvious solution of the difficulty, if I put down an Amendment in that sense, I hope he will give it his most careful consideration. It might be a way of saving a very large part of the revenue we give to the Post Office, which is abandoned in this Bill, and, according to the experience in Canada which was quoted by the hon. Member (Mr. Evelyn Cecil), particularly if it was to be a war surcharge only for the period of the War, would not result in any material diminuation of the use the public would make of the postal service.

Sir W. BYLES

I rise to express my thanks to the Postmaster-General for the manner in which he has addressed himself to the public agitation which arose after the postal changes were first announced. When the Resolutions were in Committee I predicted that there would be an outcry. There has been an outcry, and I have no doubt the Postmaster-General has had a heap of letters and complaints of warning, so to speak, on the subject. I have, at any rate, had a great many, and it is on behalf of these people who have protested especially against the withdrawal of the halfpenny stamp, as well as on my own behalf, that I thank him for the courtesy which he has rendered us. He has listened to the remonstrances which have been made to him, he has applied his own strong common sense to the matter, and he has found that there was good reason for the complaints which have been made. I cannot agree in the least with some of the earlier speakers, notably the hon. Baronet (Sir F. Banbury), in regretting the withdrawal of the halfpenny stamp. I was prepared vigorously to resist its abolition. I believe the concession which has been made in that matter is abundantly justified by evidence which has been brought to me, and no doubt to my right hon. Friend, proving that it is an enormous convenience, and an essential of many businesses which have actually been built up upon the halfpenny stamp. They would be dislocated, and even destroyed, and so far from bringing in revenue to the Post Office it would in all probability have brought them a serious loss. I believe it was a blunder ever to have proposed it, and the wonder to me is what has been its genesis. It does not speak much for the wisdom of the Retrenchment Committee. I thought it was probably some simple-minded but unimaginative official of the Post Office, who said, "Here are so many millions of halfpenny communications being carried. They bring in so much. If you double the postage and make it a penny instead of a halfpenny it will bring in twice as much." If he thought that he was mistaken. The abolition of the halfpenny would have abolished the revenue which arises from the halfpenny stamp. People would not pay a penny for what they now get for a halfpenny. However, the Postmaster-General has examined the thing for himself, with the result that the halfpenny is restored to the great satisfaction of the public.

To the other changes which are proposed I will not refer further than to express my acquiescence in the observations of my hon. Friend near me in regard to Press telegrams. The changes which have been made in the charges to newspapers for Press telegrams, as compared with the rates which were proposed in the first Resolution are, at any rate, tolerable if not thoroughly acceptable to the newspaper Press, but it should be remembered that it is hot in the interests of newspapers only that these charges are adjusted to the capacity of the newspapers, but it is also in the interests of the public. It is the general public that profits by having- its news diffused, not only in London but all over the provinces, by having columns of war news sent on the wires every night, and columns of general news, not to speak of Parliamentary news. It is of immense interest that all that is happening around us should be concentrated into the service of news, as it is by the great Press agencies and carried at such a rate as will enable the newspapers to present it to the public. I am extremely anxious that this matter should not be regarded as a class, or private, or trade interest at all, but in the interests of the public itself, the reading public—and all the public to-day is a reading public—and I am glad that the Press telegram rates are put at a figure at which it will be possible at any rate to give a good service of news. In all the complaints I have heard from people who were afraid of the additional tax which would be imposed upon them there is no one who is not perfectly willing to bear his share of this costly War that we have been drawn into. There is an entirely loyal sentiment expressed by all these men who desire the continuance of the halfpenny stamp, and they are perfectly willing to bear their share, only they do not want to be ruined, and they do not want the revenue to suffer.

Mr. BOOTH

I rise at the request of the approved insurance societies to point out that this measure will add a considerable increase to their burden, and they are in a peculiarly unfortunate position. Their management expenses have been decided for them by the Commissioners under the guidance of the Treasury, and they have been asked to work on so much per head per annum. There will be a large increase of postal charges even now, and they will be in the position either of asking for an increased Grant from the Treasury to meet those expenses or giving fewer benefits. They cannot recoup themselves from customers or anything of that kind. They are in a rather helpless position. Part of the original bargain was that the insurance societies were to be helped by the Post Office. The fabric of the Act is built upon that. The societies post the insurance books, as well as the cards, and on the average two communications go every year. But it is quite clear that some societies which are now working at a slight loss, and are just getting into debt, will be rather staggered at the extra postage bill. I feel sure that the Government will have to meet it, so that, I hope, in calculating the increased revenue, the Retrenchment Committee will count this increased burden upon approved insurance societies, which are working strictly under the Act of Parliament and under Treasury administration. I thank the right hon. Gentleman for deleting the rather extraordinary proposal of the Chancellor of the Exchequer to abolish these halfpenny stamps. It would almost have fomented a strike on the part of the approved insurance societies. I do not see what else they could have done. It would have made their administration almost hopeless. However, I express the gratitude of these societies that this proposal has been discarded when it came to the business department, but even now the extra cost will be very grievous, and I have had appeal after appeal, both from large and small societies, to bring this matter up. I would point out to the Assistant Postmaster-General that I have had communications from his own area. In the North Riding of Yorkshire, for example, rural clubs have joined together and become approved societies, and upon going into the facts I find, and I dare say other Members from agricultural districts will bear it out, that the increased cost of these postal charges hurts the small village societies more than the powerful centralised institutions in London because they depend almost entirely upon the postal service for communicating with their members, so that when the burden comes upon them it comes in an unfair degree upon the poorer societies, and I hope that will be borne in mind, perhaps not by my hon. Friend but by the Treasury or the Insurance Commissioners when they have to put these matters right.

I must protest against the speech of the hon. Member (Mr. Evelyn Cecil) in suggesting that this is retrenchment. It really is a preposterous idea to say that a Government Department is over-staffed, or it might rearrange its methods and save money, and ask the Retrenchment Committee to go into it, and their reply is simply to charge an increased price to their customers. A more preposterous idea of retrenchment was never conceived. We hear warnings that they are next coming on to the administration of the Insurance Act, but if they come in the spirit they have come on to the postal arrangements they will say at once, "We will make every working man pay 1d. a week more out of his wages." Surely that cannot be called retrenchment any more than, if we thought there was extravagance at Billingsgate Market or the Metropolitan Meat Market, you told the butchers to charge 1d. a lb. more for meat, or the fishmongers 1d. a lb. more for their fish, and called that retrenchment. I dare say there would be more money to divide and some people who are now losing might make a profit, but I never understood from the business point of view that that could be called retrenchment. I should have thought that if the Retrenchment Committee was turned upon the Post Office they would endeavour to show how, by economy of administration, greater facilities could be given to traders. That is what they should have devoted themselves to, and not to finding means of carrying on the War. That is the business of the Chancellor of the Exchequer. I hope these things will be borne in mind, because the approved insurance societies have a claim upon the Treasury to put them right. I want the largely increased burden of these institutions on the private side to be remembered. When you increase the postal rate to the friendly societies which communicate with their members they have no chance to recoup themselves. I cannot see how there can be any refusal to help them when the thing is working under State control, but on the private side there is a heavy burden. You cannot pick and choose, and it may be that they will have to bear it; but I fail to see, if you charge the great friendly orders more for their postal communication and hand it over to the State, how you can call that economy. How can you call it economy when you know it must mean a reduction of benefits? I do not understand the meaning of it. It may be justified on the ground that you must exact all the money you can to carry on the War, from the bad and the good alike. That I can understand, but I do maintain that to tax friendly societies in this way and call it economy is simply a misuse of terms.

Mr. BRADY

I rise for the purpose of asking the Postmaster-General, or his colleague, a question which has been suggested to me. It has been publicly stated that this Bill contemplates, in addition to the increased charges which are set out, a diminution in the number of private wires. I do not find any warrant for that in the Bill itself, but it is just possible that such an arrangement can be carried cut in a departmental manner without any statutory enactment. I cannot help embracing this opportunity to cordially endorse everything that has been said so eloquently and forcibly on behalf of the provincial Press by the hon. and gallant Member for Mile End (Colonel Lawson). If the proposals embodied in this Bill adversely affect the provincial Press of this country, they will still more adversely affect the Press in Ireland. In common with all the Members of this House, we who sit on these benches recognise that in the present national emergency, increased taxation, and increased cost to the public is necessarily involved, but at the same time, I cannot help thinking that in this matter as affecting the provincial Press the hardship would be more severely felt in Ireland than in other parts of the United Kingdom.

There is another matter which calls for attention. The Postmaster-General pointed out very properly the disproportionate cost of the long-distance telegrams. I recognise that many of these long-distance telegrams go to Ireland. The right hon. Gentleman will remember that some time ago he and I were engaged in a friendly controversy about the very frequent breaking down in the wires used for the purpose of conveying these telegrams to Dublin and other parts of Ireland. I hope that if he is going to get, as I know he is going to get, this increased cost for telegrams, that greater efficiency will be secured in the future for these long-distance telegrams to Ireland than has been secured in the past. The right hon. Gentleman will remember the very bitter complaint that was made by the Stock Exchange in Dublin, extending over two or three years, as to the constant delay in the transmission of Stock Exchange telegrams to Dublin. He took the matter in hand, and I think considerable improvement has been effected; but I cannot help thinking that in the transmission of long-distance telegrams to Ireland there is considerable room for further improvement, and I hope the right hon. Gentleman will take that into account. I should be very glad to hear from him, or from his colleague, that there is no intention of diminishing the number of private wires, so far as Ireland is concerned, in the future, in view of the serious effect it would have not only on the provincial Press, but on the whole of the Press of Ireland.

Mr. POLLOCK

I want to make a suggestion to the Postmaster-General. I welcome the alteration of the scheme that the right hon. Gentleman has now introduced. For my own part I felt that it would be impossible to withdraw the halfpenny postage, because it served as an important function in public life, and is an important basis in the commercial system of the country. It occurred to my mind that the estimate on which it was said that the halfpenny postage did not pay was somewhat misleading. I understand that the penny postage does pay. It must be remembered, however, that the halfpenny postcard is used largely as a basis of, or as a first approach to, a commercial transaction which ends, probably, in one or two penny letters being sent. Therefore, when you come to consider whether the halfpenny postage pays or not, you must consider that it draws a considerable benefit to the penny postage, because it ensures that a certain number of penny letters must follow for the purpose of conveying cheques, money orders, and so forth. Under these circumstances you must not consider the halfpenny postage entirely alone, but must recognise the effect which it has upon the penny postage. I thank the Postmaster-General for the alteration and also for his action in leaving the halfpenny postage in regard to newspapers. On this point I would like to make a suggestion. It is recognised by the altered scheme now before the House that it is of importance that the newspaper should be sent, but the right hon. Gentleman gave a very glaring instance of a case where the halfpenny postage undoubtedly is misused or has been misused. The figures that he gave indicated clearly that the advantage which is offered by the halfpenny post is sometimes used in a manner wholly uncontemplated, and it causes a very large loss to the Post Office. In considering the question of the 6-oz. limit, has the right hon. Gentleman considered or taken advice as to the trade papers? I am told that a certain number of trade papers, which necessarily have a number of designs and pictures printed upon them, and which necessarily have to be printed upon heavy paper, would exceed the 6-oz. limit. If that be so, will he consider a suggestion in Committee that the 6-oz. limit should be altered to 8 ozs., which, I believe, would have the effect of safeguarding the halfpenny postage to what I may call the trade newspapers. The alternative suggestion that the trade newspapers should print on lighter paper is really not a practicable one, because the paper has to be so good and so very expensive to bear the imprint that it would be impossible for them to adopt that course. It may be that the Postmaster-General can see his way to modify the 6-oz. limit so as to meet that need of the trade of the country.

I desire to make another suggestion. If the halfpenny post does not pay, is the picture postcard business of sufficient magnitude to be worth dealing with by itself? The trade of the country, I quite recognise, ought to be safeguarded and to have the opportunity of cheap means of communication, but when I come to the opposition that is raised to the withdrawal of the halfpenny postage by the picture postcard trade I really can have no sympathy with it at all. This is a trade which has risen in the course of the last few years, and if it is of such magnitude that the loss upon it can be estimated or can be appreciated by the Postmaster-General, I suggest that he might differentiate as to that and not allow postcards to be sent by halfpenny postage which are in the nature of picture postcards. We have been told by a notice, which I think was issued by some authority, though I do not stop to inquire by what authority, that picture postcards of public buildings ought not to be sent by post at all. That is a considerable stab to the picture postcard trade. I hold in my hand a picture postcard on which it is stated that it was printed in Germany. Is the picture postcard business still carried on by cards which are printed in Germany and which come into this country by means of neutral countries? If so, there is reason for putting an end to that trade, not only on the ground that it is a loss to the Post Office, but that it is remitting money out of this country to neutrals or to Germany to pay for these picture postcards which we receive from Germany, and which are printed in that country. I hold in my hand a picture postcard which was handed to me by the hon. Baronet the Member for the City of London (Sir F. Banbury). He was too modest to refer to it himself. It contains upon the reverse side a picture of a house in which we must all take an affectionate interest, because it is the house in which the hon. Baronet recuperates at the week-end after his strenuous efforts in this House. Much to the alarm and the regret and the anger of the hon. Baronet, he finds that the picture postcards of his own little home are printed in Germany. I will leave that matter, which is one of domestic detail, and come to the broad question, in regard to which I do ask whether this picture postcard trade is one in which the basis of the cards are printed in Germany, and whether it is a trade which ought to be put an end to, because so many public buildings are represented on picture postcards that it is unwise that they should be the subject of postal matters? Further, if this trade is of such magnitude that the Post Office can recognise the loss upon it, it seems to me that by a simple Amendment which can stop the transmission of, such cards by halfpenny post, it will save the loss to the Post Office and at the same time put an end to a trade which, so far as one can see, and having regard to the criticism which I have suggested this afternoon, seems to have no particular merit to support it. If there is any real desire to send picture postcards I believe those who are really anxious to send them will be prepared to pay a penny for them. It may be that one is talking about something that is so small that it may be unworthy of the notice of the Postmaster-General and unworthy of the trouble of his Department. If so, we shall be told so. Meanwhile I would like to have some information upon it.

Sir G. TOULMIN

Perhaps I may be allowed to say a few words on this Bill, although I am rather personally interested, as I happened to be a representative of the Press in the interviews which took place with the right hon. Gentleman. The Press generally were very glad when this question was removed from the Taxes Bill, because there is a very strong feeling that one ought not to seem, and certainly ought not, to shirk any burden which may be placed upon us by the War. The Postmaster-General has administered this Government monopoly with very great consideration, and the Press have always found that he had an open mind to their necessities in any communications which we had to make to him. They were therefore very glad to meet him and to discuss this matter on a business basis and on the grounds of public policy. Personally I am extremely glad that we were able to come to a settlement and avoid the necessity, which I think the Press would have found themselves obliged to have recourse to, of pressing for an inquiry into the accounts and administration of the Post Office, the nature of which was indicated by the statement which the right hon. Gentleman has made. There are many points there which I expect might have been disputed; they are certainly very disputable. Nothing would have been more hateful during the War than discussing such details as these. I hope the House will recognise that there is a very large increase of cost imposed by the new charges upon the Press. When the deputation was genially dismissed by the Postmaster-General they felt that they had been pretty closely shorn, but I have received sufficient information from different parts of the country to show that we at present accept in good faith this settlement of a very long standing controversy between the Press and the Post Office, and that we are extremely glad that that settlement has been come to.

6.0 P.M.

The House may not appreciate the terribly critical position in which the original proposals would have put a very large portion of the provincial Press. From information and figures with which I have been supplied from various quarters, I cannot help thinking that those proposals would have been fatal in certain parts of the provinces to some of the newspapers which are struggling against the competition of London and of the larger cities. So great a change as that which was proposed at first we felt was not merely a matter of account, but was a question of a change of public policy, affecting almost every provincial constituency in the three Kingdoms. It would have reduced very seriously the facilities of the local Press for commercial, markets, law, and foreign telegrams, and for Parliamentary news as well as for general political intelligence, a change which, I think, would have lowered the status of the whole community served by these local papers. I do not wish to do more than express my pleasure at the agreement having been arrived at. Hon. Members on the other side have indulged in some criticism in reference to the year's notice. I do not think that, when two firms are dealing together in such a large matter as the upsetting of an arrangement which has been carried on for forty or fifty years, such notice was too long. A year's notice, I think, was reasonable in such a case. Existing contracts would have to go on. They could not well be altered, and the time which has been given gives to the Press an opportunity of arranging the details of business. This matter affected a comparatively small number of firms, perhaps a hundred and fifty, certainly not more than a few hundred, in amounts varying from £500 to perhaps £5,000 a year, and it was a very great change to impose at such very short notice. That is decreased by the agreement to which we have come, and so far as this portion of the Bill is concerned, I hope that the House will see its way to endorse the proposals of the Postmaster-General.

Colonel YATE

I would like to join the last speaker in expressing my thanks to the right hon. Gentleman, the Postmaster-General, for the concessions which he has given to the provincial Press. We have all of us received a memorandum from him on the subject, and we all rejoice at the concession which has been given to the small provincial Press. I also congratulate the right hon. Gentleman on having put a stop once for all to the 4-oz. postage for 1d. I have always thought that the allowance of 4 ozs. for 1d., in the case of letter postage, was far more than was necessary, and I think that we are all agreed that the Post Office should be a paying concern and not run at a loss, especially in present circumstances. I am delighted that the halfpenny postcard system has been allowed to remain, and I join with the previous speaker in expressing my hope that the Postmaster-General will take some steps to stop the use of postcards which are printed in Germany, so that we may use only English postcards which are manufactured in England. Whatever arrangement may be necessary, I trust that these German postcards will no longer come into England in the way in which they are coming now.

Mr. PRICE

Though I am not a member of the Press I have received a large number of communications from provincial papers asking me to oppose the original proposals. Therefore I am very glad indeed to hear that the Postmaster-General has come to an arrangement with the representatives of the Press. May I ask him whether he will now take into consideration the statements which are placed before us as to economies in the Post Office itself? The communications which I have received point out that some of the departments of the Post Office were working under old and obsolete methods, and therefore while terms are being adjusted it might be advisable for the Postmaster-General to get into communication with the persons who have made these statements and receive and consider their suggestions, because it is still open to the Post Office to reduce expenditure and to make a profit on the whole matter. I was greatly impressed by statements which were sent to me, and by a personal interview which I had with some newspaper proprietors regarding the matter. In reference to picture postcards, I certainly think the suggestion made on the other side as to their abolition should not be carried out. The chances are that the postcard printed in Germany and giving a picture of the house of the hon. Baronet the Member for the City of London was printed long before the War took place. These cards are not coming in at all now. There has been a large development in this country of colour printing, and in Edinburgh in particular the proposals as originally suggested would have had a disastrous effect on the printing trade. Anybody who knows the printing trade knows that there is no trade which has suffered so much. I have had several resolutions from various quarters in Edinburgh, and therefore I trust that so far as picture postcards, or anything else affecting the printing trade, is concerned, the Postmaster-General will not do anything more which will affect that trade. In the printing trade over 50 per cent, are on short time. I congratulate the right hon. Gentleman on settling a long-standing quarrel regarding the Press. It has been up here every year ever since I have been here. I hope now that it has been finally settled, and that it will not be up again in my time.

Mr. DENNISS

I desire to ask a question in the interests of economy which would mean an addition to the revenue. I understand that there is a large loss on the Press telegrams, but I have always been opposed to any increase in the charges for Press telegrams for reasons which have been given at great length in this House, and which I need not repeat. I understand that the original proposal was that the rates should be raised by 200 per cent. Now we have come down to 50 per cent. That being the case, there must still be a large loss upon these Press telegrams. There is a certain company of engineering and Government contractors who have been in communication with the right hon. Gentleman and who have expressed their willingness to undertake to handle the whole of the news traffic of the whole country at existing rates, and then to do the work, they say, even more expeditiously than the Post Office. I would ask the right hon. Gentleman whether he will consider that proposal, and is he prepared to say whether such a scheme as that might not introduce real economy, and be a great saving of the loss upon Press telegrams which is now incurred. If the experiment succeeds it must revolutionise the methods of the Post Office and lead to a great national saving in that Department. If it fails, then the right hon. Gentleman will of course take a guarantee before entering into any contract with these gentlemen. But if these people do it, I will not say more expeditiously, though that is what they claim themselves, but if they do it at existing prices, the Post Office will not only save all loss but may be able to reorganise the whole of the existing telegraphic system.

The ASSISTANT POSTMASTER-GENERAL (Mr. Pike Pease)

As this is the first time that I have had the honour of speaking for the Government from this Bench I trust that my remarks will receive the kind consideration and sympathy of the House. My hon. Friend the hon. Member for the City of London referred to the halfpenny postcard, and deplored the fact that my right hon. Friend had brought in a Bill which did not deal with this. I think that the whole House really is in agreement as regards the halfpenny postcard, because it is well known that it is very popular in the country, and the abolition of the halfpenny postcard and the halfpenny post generally will destroy a great deal of trade. The case seems to be very clear. My right hon. Friend has received deputations and also has received a great deal of evidence to show that in future it will be wiser to keep the halfpenny postage. The hon. Member for Aston Manor (Mr. Evelyn Cecil) referred to the French postcards. In France the postcard is 10 centimes, in Russia 3 kopecks, or ¾d., in Belgium 5 centimes, which is a ½d., in Italy 10 centimes, in Spain 10 centimes, in Portugal 10 reis, in Holland 2½ cents, in Denmark 5 orë, in Norway 5 orë, in Sweden 5 orë, in Switzerland 5 centimes, in Germany 5 pfennigs, in Austria 5 heller, and in the United States 1 cent. In almost every case it is a ½d. The hon. Member for Leamington (Mr. Pollock) gave the House to understand that there was no proper remuneration from the halfpenny postcard, and that it was not a remunerative trade, so far as the Post Office was concerned. This is not the case. As far as I can learn.—it is always very difficult to make any real estimate in regard to matters of this kind—it is a remunerative service. And perhaps I might say that it is impossible for anyone in this country to estimate what the position of the State or the Post Office would be if the abolition of the halfpenny postage had taken place.

My hon. Friend the Member for Windsor, who is a member of the Retrenchment Committee, said he thought that the principle had been arrived at that in regard to matters of this character we should pay for services rendered. But many hon. Members, including my hon. Friend the Member for Devizes in his speech to-day, really ask a great deal more than that. As far as the question of a war stamp is concerned, and the question of a halfpenny postage, there is no doubt that it would be very difficult with any rearrangement of charges to adopt the principle of paying only for services rendered. For instance, if there were a surcharge of a halfpenny on every letter, it would mean really that owing to arrangements which we have made with our Colonies a man would be able to post a letter here for 1½d. and it would be delivered, say, in Victoria Street, for that amount, and the same man would be able to post a letter at Westminster which would be delivered in Canada for a penny. I think that that is a very clear exposition of what is involved in the suggestion to which I have referred. My hon. Friend also referred to the question of telephone charges. My right hon. Friend the Postmaster-General is extremely sorry that he has to make any increase in these charges, because it is admitted on all hands that it is desirable to decrease, as far as possible, telephone charges in this country. We are under-telephoned at the present moment, and whenever the opportunity occurs I am perfectly certain that my right hon. Friend will do all that he can to make an extension of that system. The question has also arisen in the minds of many Members, and they have mentioned it in their speeches to-day, as to the charge of a halfpenny on newspapers, and its possible increase as adumbrated by the Chancellor of the Exchequer. My right hon. Friend received a deputation representative of the chief Press organisations of this country, and they made perfectly clear to him that in existing circumstances it would not be reasonable to make the extra charge which was suggested.

Everyone in this House knows that a great many trades have suffered during the War, and anyone who considers the subject will agree that no interest has suffered more than has the newspaper interest, owing to the fact of the decreased amount of advertisements received and other causes. In the circumstances, I feel perfectly certain that the Postmaster-General could not come to any other conclusion than that as to the rates previously suggested it was necessary, so far as the Press were concerned, to reduce those rates. I am very glad that the Member for Bury (Sir G. Toulmin), who was the spokesman for the deputation, is satisfied with the arrangement which has been come to. Although he says that the Press of the country has been fearfully shorn, I am quite sure that they have received ultragenerous treatment, and that they ought to be very well satisfied with the position in which they are placed, when we consider that the services rendered are great and the payment is little. In regard to the question raised by the hon. Member for Spen Valley (Sir T. Whittaker) as to the Retrenchment Committee, views may be held which are not exactly in accord with those of the Post Office, but I am perfectly certain that the Department will be only too delighted to consider any inquiry so far as the Post Office arrangements are concerned.

With regard to the remarks made by the hon. and gallant Member (Colonel H. Lawson), I think we all appreciate the particular views which he expressed in regard to the telegraph rates. He is the owner of a well-known newspaper in this country. The point which he has raised has been to a very great extent in the mind of my right hon. Friend, and it was realised by him that an increase of the telegraph rates would affect adversely, to a very large extent, the provincial interests in this country, and, so far as the future is concerned, the reason why these charges are not made up to the end of next year is that many contracts, which have been already made, must necessarily be taken into account. With regard to the future there is no probability that this charge will be reduced, because these services are rendered at a considerable price, and the charge, it is suggested to-day, is an equitable one, and can be completely justified. I do not know whether Members have considered the possibilities of the future, and what they may be, but so far as taxation is concerned, I see no likelihood of a decrease of it in this country within the next few years. My hon. Friend the Member for Devizes (Mr. Peto) made the suggestion that the number of words in a telegram might be fifteen instead of twelve. I am sorry to say to him that I am afraid that is quite impossible, because it would not be remunerative to the State, and under existing circumstances it is absolutely necessary for us to consider only that, though we naturally wish to consult the convenience of the public, as far as possible. With regard to the question of charges in this Bill, I would like to point out that in regard to inland packets, not exceeding 2 ozs., they come under the old letter rate. Under the old rate packets exceeding 2 ozs. in weight came under the letter rate of one halfpenny for each 2 ozs. Under the proposed rate packets exceeding 2 ozs. will still be liable to be charged at letter rate. That rate will be 1½d. per packet more, and thus between 2 ozs. and 3 ozs. the charge will be 2½d., instead of 1d.

Mr. PETO

Does that mean ordinary letters?

Mr. PIKE PEASE

It means all packets of any kind except newspapers. With regard to the point raised by the hon. Member for Pontefract (Mr. Booth), I understand that there will be an additional charge, so far as the approved insurance societies are concerned, and it will be the duty of those societies to reduce the weight to within 2 ozs., so that there shall not be any additional charge. In reference to my hon. Friend the Member for Salford (Sir W. Byles), I am very glad that the Postmaster-General has received his congratulations. I know that he took a very prominent part in this controversy, and I understand that the changes are acceptable to him, though not very palatable. The fact is that old taxes are bad and new taxes are always worse, but many of those who find these taxes hard must realise their necessity. In reference to the question of my hon. Friend opposite as to private wires, they will not be affected. There is only one other point to mention, and it is the one referred to by my hon. Friend the Member for Edinburgh (Mr. Price) in reference to the new machine telegraphs. The Postmaster-General gave an explanation to the House on that question, and in regard to machine telegraphs, so far as the Treasury will allow, we shall extend that system throughout the country. I appeal to the House to now give the Bill a Second reading.

Question put, and agreed to.

Bill read a second time, and referred to a Committee of the Whole House for Tuesday next.—[Mr. Walter Rea.]