HC Deb 06 May 1918 vol 105 cc1933-56

Order for Second Reading read.

The POSTMASTER-GENERAL (Mr. Illingworth)

I beg to move, "That the Bill be now read a second time."

This Bill in itself is really a very simple one. It deals with the new rates of postage—the increase of the ½d. postcard to a 1d., and the various increases on the Inland book packet. It is desirable, however, in view of the probable general discussion that will take place, that I should explain to the House the various increases it is proposed to make which will be carried out by Executive action and not through the legislation of the House. As to the increased rates which the Retrenchment Committee, which sat in 1915, of which the right hon. Gentleman the Member for North Monmouthshire (Mr. McKenna) was Chairman, advised should be made in the services rendered by the Post Office, some of them have been carried out, but the proposal to abolish the 1d. post was not persisted in. Certain changes were made which added some £2,000,000 to the profits of the Post Office at the time, and this at a time when the Post Office was making quite reasonable and normal profits. I will read just a few lines of the Report of the Retrenchment Committee, which says: We assume that in view of the cost of the War it will now be generally admitted that the Post Office administration should endeavour to to secure as large a net revenue as possible to the State, with due regard to the needs of the business community and to the principle of paying fair wages. If at that time, when we had had a little over one year of war—I think it was September 1915, that these changes were brought in—the matter was so urgent when we had what looked like a very large Budget, although it would seem a very small one now—it was then a Budget of £272,000,000—there is much greater urgency for it now when we have a Budget of £842,000,000 with which to help to defray the cost of the War. In 1915 there were many sources of taxation which were untapped. I think most of them have been touched now, and we have to go further a field and look for other sources where the money can be raised. The increased cost of the work of the Post Office, compared with what it was at the beginning of the War, is enormous. Materials of all kinds have increased very largely in price. I will give the House one or two examples which are the most striking. A purchase of hard-drawn copper and bronze wire cost before the War £242,000. The present day cost would be £436,000. The pre-war price of iron wire and a certain amount of iron stores amounted to £65,000. To-day's cost of that is probably £163,000. Twine in pre-war days cost £43,000; now it is exactly double—£86,000. The cost of equipping a postman before the War was £2 17s. 2d.; now it is £6 18s. 2d. Not only is there the increased cost of the services of all kinds and the prices of raw materials that are used, but the war bonus which has been awarded to the staff amounts, in round figures, to £6,000,000, and at present there is a further claim before the Arbitration Board which, if it is granted, will amount—I have not the exact figure—it is estimated, to something like £5,000,000 more.

Before the War the profits of the Post Office were something like an average of £5,000,000 per annum. This year, after putting accounts on a commercial basis, we estimate that the net profit will be only something between £2,000,000 and £2,500,000. The uncertainty of the market prices makes it rather difficult to fix an exact sum of what the profits will be. These figures may be, perhaps, a little bit confusing to hon. Members when they look at the figures which were given in the White Paper, but these are made up on a peace basis, and any deficiency is made good by issues from the Vote of Credit. The estimated expenditure in the White Paper for 1917–18 is £25,980,000, and the estimated receipts for 1917–18 are £35,300,000. But when the accounts were compiled on a commercial basis we find that the actual expenditure for 1917–18 came to £38,600,000, and the actual receipts to £43,000,000. The actual expenditure includes payments made by the Post Office for other Government Departments and the increased cost of working the Post Office. The increased receipts are accounted for by taking credit for services rendered to other Government Departments. The Estimates for expenditure in the White Paper for 19l8–19are £26,141,000, and the estimated receipts on the existing basis of taxation at £34,600,000. The estimated expenditure for 1918–19 on a commercial basis is £42,500,000 and the estimated receipts on a commercial basis for 1918–19, on the present rates of postage, are £45,000,000, and, on the new rates, £48,400,000. The House will see that really the profit is getting very near the vanishing point, and if the Post Office is to pay its way there must be some increase in the charges made for the services rendered to the public. It will be generally admitted that the user should pay for the services rendered to him and that it should not be a charge on the taxpayer.

As to the inland rate of letters, from 1897 to 1915 it was 1d. up to 4 ozs. with a ½d. extra charge for each 2 ozs. over the 4 ozs. In 1915 the Retrenchment Committee recommended a ½d. on all postal communications, and extra charges on heavier letters—up to 1 oz. l½d., 1 to 2 ozs. 2½d., and a ½d. for every 2 ozs. increase above 2 ozs. This proposal was not then carried out, but the scale adopted was 1 oz. and under 1d., 1 oz. to 2 ozs. 2d., and 2 to 4 ozs. 2½d. The scale at present proposed is to put all these three scales on to one flat rate of l½d.—that is to say, under 1 oz. l½d., 1 to 2 ozs. l½d., and 2 to 4 ozs. l½d., with a ½d. per 2 ozs. for every additional 2 ozs. above 4 ozs. Before the War, the letters of 1 oz. and under comprised 86 per cent. of the total. It is now proposed on that 86 per cent. to add one ½d. Of the remaining 14 per cent., one-third were over 1 oz. and under 2 ozs., and on these the reduction will be ½d.

Mr. HOGGE

Can the right hon. Gentleman tell us whether the 86 per cent. sent at a 1d. paid as a business transaction.

Mr. ILLINGWORTH

It paid as a business transaction under the normal conditions, but it will not do so in future. The sample post did not exist from 1897 to 1915. In 1897, when the charges were reduced, the sample post was merged into the letter rate. This was re-established in 1915, in order to meet certain objections which were raised to the scale at the time. The administration of the sample post has proved full of difficulties, and continually causes friction with the public owing to the difficulty of deciding what is and what is not a sample. A very considerable staff is kept employed at the Post Office engaged in trying to settle various disputes which arise from time to time with the public as to what should be a sample and what should not. It is proposed now to merge the sample post with the letter post. Book packets not exceeding 1 oz. will not be changed; exceeding 1 oz., but not exceeding 2 ozs., will have id. to pay, and above 2 ozs. will be merged in the letter rate. Ordinary notices, receipts, insurance cards, circulars, etc., largely sent by approved insurance societies, trade unions, and benefit societies, will in consequence suffer no increased postage rates on the large part of their business.

The next point I come to is for letters to troops abroad. This alone, with the parcel post, is really a very large traffic to handle, and causes the employment, varying with the various seasons of the year, of from three to five special trains per day. The proposal was that they should have the same increase as the inland post, which would bring in about £500,000 a year. We considered that this would not inflict any hardship on the relatives of soldiers at home as the free letters would still come from the troops home, and those who wanted 1d. communications would be able to do it on the postcards, on which it is arranged that the rate should remain at 1d. But since this proposal was first brought forward we have had good evidence that the troops abroad would consider that rather a hardship. The last thing in the world that the Chancellor of the Exchequer and I wish is that these men should be put to any hardship, or even imagined grievance, which would leave them rather sore when they are undergoing such dreadful trials and real hardships at the front. I am told they appreciate correspondence from home move even than parcels containing luxuries, which they can get at the canteens at the front, but they cannot get news so easily from their people unless they have the cheap post. After consultation with the Chancellor of the Exchequer, it has been decided to withdraw this proposal. Letters to the Colonies are to go at the rate of 1½d. an oz. instead of the present rate of 1d. It may be urged on sentimental grounds that for the small sum of money, £140,000, which it would bring in, it is really not worth while to make this change, but it would be a very illogical position to take up to send a letter from London to Australia for 1d. while at the same time charging 1½d. for sending a letter from one end of London to the other.

Mr. P. A. HARRIS

Are we to understand that the rate will not be raised for correspondence to soldiers overseas?

Mr. ILLINGWORTH

It will not be raised. Inland postcards will be raised from ½d. to 1d. This is absolutely necessary, because if the price is not increased there will be a very considerable leakage of letters from the 1½d. post to the ½d. postcard, and in order to enable the full benefit to be derived from increasing the letter post it is necessary to increase the postcard to 1d.; otherwise the estimated increase of revenue of £2,700,000 which is hoped to come in from the letter post, the book post and the sample post would be very much reduced. The parcel post was increased in 1915 by 1d. per lb., which brought in about £300,000 a year. The parcel post has always been a loss to the Post Office, for some years before the War running up to as much as £1,000,000 per annum. Now it is proposed, instead of having eleven scales of payment, starting at 4d. for 3 lbs. up to 1s. for 11 lbs., to introduce the triple scale, which is very largely used in foreign countries and in the Colonies, of 6d. up to 3 lbs., 9d. from 3 lbs. to 7 lbs., and 1s. from 7 lbs. to 11 lbs. I am told by my expert advisers this will reduce counter work very much, as at present nearly every parcel which is handed in has to be weighed, but in future only about one-third of them will have to be placed in the scales. The additional revenue from this source is estimated at £500,000, which with all the others, after making a slight allowance for any inaccuracies which may have crept into the estimates, will give about £4,000,000 in a full year, or about £3,400,000 this year. I am sure the right hon. Baronet (Sir C. Hobhouse) will not envy my position to-day of having to abolish the 1d. post, which has been of such inestimable value to everyone, not only in this country but in all the other countries where it was introduced. But there is one point, what one may call an extenuating circumstance, that the British Post Office is the last of all the great countries to abandon this historical, epoch-making rate, which was established in 1840. Canada, France, Germany—which, by the way, is doubling the letter rate, which will produce an extra, income of £6,250,000 per annum, and nearly doubling the parcel-post rate, which added together, taking the present profits they are making, will increase them to £16,500,000—Holland, Italy, New Zealand, Switzerland, the United States, and Austria have all abolished their cheap postage rates. We have gone carefully into all the figures, and the rates have been very considerably increased. As we have these examples before us from other countries, even those which are not at war, I trust the House will pass the Second Reading promptly.

Sir C. HOBHOUSE

I certainly do not rise for the purpose of delaying or opposing the passage of this most necessary proposal. I can fully sympathise with my right hon. Friend in finding himself in the position of having to abolish the 1d. post, but if he had to increase the revenue of the Post Office, and to make a considerable charge upon the public for the transmission of any postal matter whatever, it is quite certain that he would be obliged to have had recourse to the transmission of letters for the charge of 1d. in order to secure that increase. There are a great number of Departments in the Post Office which are quite unprofitable from the revenue-making point of view. The whole of the revenue of the Post Office is derived from the transmission of inland letters in the great industrial centres of the country. It is the profit on the transmission of letters in towns like Liverpool, Manchester, London, and elsewhere, from which the bulk of the Post Office revenue and profit is derived. Therefore it was only natural that, if an increased charge was to be made for postal rates which was to give a real profit to the Revenue, the penny post should be that part of the Post Office revenue which should provide that money. I am quite sure the House will have welcomed my right hon. Friend's decision not to press the increased charge which he proposed to make on letters written to soldiers in the field, and I am sure he himself is as relieved as anyone in announcing the decision at which he has arrived, in spite of the sacrifice of the £500,000 involved. He said truly that soldiers in the trenches welcomed their letters even more than their parcels. I cannot conceive, having witnessed at a distance some portion of this dreadful War, anything which would be a greater deprivation than, before receiving same attack or delivering some offensive, to be deprived of messages of consolation, hope, and cheerfulness which come from their relations here, and which are, perhaps, the last, as they are the greatest pleasure upon earth. Therefore to have done anything to impede the transmission of messages from this country to the men at the front would have been an action which could only be resorted to in the last extremity. No one supposes for a moment that the Revenue of this country is in so parlous a condition as to necessitate a charge such as that which was originally proposed. Perhaps the right hon. Gentleman will allow me to remind him that when this War started it was a question whether any charge should be made on the letters of relatives to soldiers written from this country and sent to he various fronts, and a charge was only imposed for this reason, that it did something—though probably that would be less and less as the years went on—to restrict the traffic on the railways. If there had been no restraint on this correspondence in the early period if the War, it would have been perfectly impossible to handle it when it got to the other side. I understand that the railway communications have been improved of late, but it was felt that unrestricted traffic would have imperilled the transport of the necessary munitions of war. It was for that reason only that a charge was imposed upon any letters to the troops.

The right hon. Gentleman tells us that he hopes to get a revenue of £4,000,000 as a result of these proposed charges.. He gets rid of the difficulties connected with the sample post. It has always been very troublesome to know what was and what was not a sample post. It was one of those puzzles which has always been presented to every department of the Post Office. It is exceedingly difficult to solve, and occasionally we have given some most extraordinarily inadequate solutions. Therefore any extra charge which gets rid of the difficulty of answering these puzzles is to be welcomed. I would go further: I have always thought that every Department of the Post Office in regard to every charge levied upon the public for the transmission of postal matters ought in itself to provide revenue sufficient for the postal service involved. A great number of Departments of the Post Office are not so self-supporting. Urged by Members of this House and by deputations from the public for one reason or another, the charges have been reduced until in many cases they are far below the cost of carrying the postal matter involved. If the particular increase of revenue which is proposed by this Bill tends to re-establish the balance between the cost and the revenue, I would welcome it, and certainly should offer no opposition of any sort or kind to the proposals now made. For the same reason, I think the increased charge upon parcel post is a fair one. I understand that whereas the present charge is 1s. for 11 lbs., hereafter it is to be 6d. for 3 lbs., 9d. for parcels from 4 lbs. to 7 lbs., and 1s. from 7 lbs. to 11 lbs.

Mr. ILLINGWORTH

The charge is to be 6d. up to 3 lbs., 9d. up to 7 lbs., and is. from 7 lbs. to 11 lbs.

Sir C. HOBHOUSE

That will, of course, although it means an increased charge, simplify the charge so far as the Post Office is concerned, and will get rid of any troublesome amount of weighing. I look upon this with a little more hesitation than I do upon some of my right hon. Friend's proposals. If he can establish the balance between the cost and the revenue I hope he will not go further until the War is over than by making the revenue derived from these charges balance the cost of expenditure in carrying out the distribution. The increased charge on postcards must follow the increased charge upon letters, otherwise that would materially decrease the profits on the increased charge upon letters. I do not suppose there will be any opposition to this Bill. The right hon. Gentleman pointed to Germany having increased her charges to the amount of, I think he said, £16,000,000.

Mr. ILLINGWORTH

I said their proposed increases would come to £6,250,000, and that added to the profits made before would amount to £16,500,000.

Sir C. HOBHOUSE

They are making £16,000,000 profits, and we are making about £5,000,000. It cannot be said that in this case we are indulging in profiteering on the part of the Post Office. It must be borne in mind that there are other taxes which we lay upon the people of this country which the Germans have not laid upon the people of their country, and, therefore, there is a reason why the amount of profit to be derived at the expense of the letter writers and the Post Office users generally should be limited to a greater extent than it is in Germany. Therefore, while I think the Postmaster-General is justified during the War in abolishing the 1d. post and in making the other increased charges, I hope he will not base himself too much upon the German precedent and attempt to get anything like a revenue of £16,000,000 out of the British Post Office, because if he does I can assure him, from my own experience, he will have a very rough time of it in this House.

Mr. HOGGE

We are all grateful for what the Postmaster-General said about the soldiers' letters overseas, but many of us would like to know how far the concession goes. I do not think the Postmaster-General can confine his attention entirely to soldiers serving overseas. Let me put to him a difficulty which will occur to most Members as being a real difficulty. Supposing a soldier is invalided home through wounds and is in one of the many hospitals in this country, does this concession mean that so long as a parent is writing to a soldier with a regimental number the postage will be 1d. in this country, as well as abroad?

Mr. ILLINGWORTH indicated dissent.

Mr. HOGGE

The right hon. Gentleman shakes his head. I take that to mean that the concession is confined entirely to soldiers who at the time they receive the letter are actually overseas. Let me put another query to him which arises in connection with the treatment of soldiers under the Review of Exceptions Act. Is a soldier who serves in Ireland serving overseas, and will the postage on a letter addressed to a soldier serving in Ireland be Id. or 1½d?

Mr. ILLINGWORTH

I am afraid my hon. Friend is rather stretching the expression overseas. It means on active service in France or Mesopotamia or other places overseas.

Mr. HOGGE

I was not stretching it. In certain circumstances a soldier engaged in the Irish rebellion was considered as having been engaged in service overseas, and he claimed exemption for that reason under an Act which was passed in this House. I am only putting two interesting points to the right hon. Gentleman. If parents are to be allowed to write to their boys overseas for 1d. as usual, why should parents be deprived of the opportunity of writing at the same postal rate to their boys who are in hospital here? They are still in the Army and are still in service. I do not know how far it is possible to make the concession and what money would be involved in it, but I would ask the right hon. Gentleman to consider whether it might not be much better as a means of solving the whole difficulty to arrange that the concession should be granted whenever a letter was written to a man with a regimental number. That would include every case and would not wipe out hospitals or any other service in which the soldier might be engaged. I am sorry that the Government find it necessary to increase the 1d. postage. I do not see why the one section of the Post Office which pays should be further taxed in order to carry those portions which do not make a profit. [An HON. MEMBER: "It always has been!"] Then there is less reason why it should be increased now. We have had discussions about Press telegrams, which arc carried at an enormous loss, as everybody knows. That has always been so. I have heard reasons given why it was so. I believe it was part of an old agreement. The fact remains that Press telegrams are carried at a loss. Why should the ordinary communication of 1d., which always has carried a profit be taxed now at a time when interchange of correspondence which is a material part of the social fabric of the country, especially in war-time, in order that other portions of the Post Office which do not pay should escape taxation?

I should like to know why these increases have been made. I understand there are two reasons, one is the Revenue reason, and the other is the question of handling the work in the Post Office. I understand that the question of labour in the Post Office is somewhat difficult, and by increasing the postage on certain articles and letters it is hoped to diminish the work. There are other ways of diminishing the work if it is a question of diminishing the work. If the right hon. Gentleman would get the heads of other Government Departments to send fewer bulky and useless documents through the Post Office, it would be relieved of a very great deal of work. For instance, the chairman of an insurance company in Edinburgh sent me to this House a number of picture postcards which had been sent to him from the Ministry of Information. They were postcards of dumps of shells in France, portraits of admirals and soldiers which had been distributed to him by the Ministry of Information in order that he might prosecute the War more industriously. Members of this House also know that we get through the post such things as a weekly paper from the Food Department, which is a very large and bulky document which none of us ever read. I never read it. I have difficulty enough in getting my food without reading about it. That kind of thing is going through the post. Take the question of War Loan circulars. Every Member of this House has received more War Loan circulars than he knows what to do with. He has exhausted all the money he can put into War Loan before he has exhausted the receipt of these circulars. There is a tremendous bulk of unnecessary material passing through the Post Office in that way. Could the right hon. Gentleman tell us whether he is making these charges for Revenue purposes alone or whether he is attempting at the same time to reduce the work in the Post Office and to save labour? If it is the intention to save labour, there are other ways in which it could be done.

I suppose it is useless to oppose this Bill on the ground of the 1d. postage, but I would like to see that charge kept as it is, I do not like to put in a plea for Members of this House of Commons, but I think they have a right to be considered in a matter of this kind. I suppose every Member knows that since the War broke out the correspondence that comes to us from our Constituents and from other people's interests in many questions has grown very largely. One has a duty in replying to the letters of one's Constituents, but we get hundreds of other letters from people up and down the country asking for information which many of us can give, and which many of us give freely, and this addition to the postage is a heavy tax upon the ordinary Member who gets nothing apart from the £400 a year at which everybody sneers. When one remembers that the same letters go to heads of Departments and replies are franked, I do not see why Members of the House of Commons should not be considered in that respect. If we are to be asked to pay the extra postage, which I do not object to do, I will suggest to the Postmaster-General that he should look round the Departments of his colleagues and see that his colleagues, who now, in replying to the same letters, pay nothing, should be charged the 1½d. which we are charged. I think that some other means could have been found for finding this money. The amount, which has been stated at £4,000,000, could be got by increasing the Income Tax by 1d. or 2d., or by a Stamp Duty on a good many things. If you put a 1d. stamp on all delivery orders in this country it would probably provide a large proportion of this money. At one time in this country delivery orders used to be stamped, and this would produce a very large revenue. At a time like the present, and in a House like this, one cannot put up a fight on a question of this sort, but I very much regret that the simple method of exchanging information for 1d., which was previously possible, has gone. I hope that the Postmaster-General will come to a definite decision on the question of soldiers and sailors so that no distinction will be made between men overseas and men who are in hospital at home.

Captain CARR-GOMM

In view of the statement of the Postmaster-General, it will be unnecessary to move the Motion of which I had given notice. I am grateful that this is so, because it will save a lot of time. I think if the Government had pressed it, even with their majority, they would have found that the proposal to impose a Stamp Duty on letters to the Army would have been very unpopular. I do not quite associate myself with what my hon. Friend has said with regard to the same charge being made on letters to soldiers and sailors who have come home to hospital and on letters to those who are abroad. The man abroad, especially the man in very distant places, is one whose letters should be increased rather than diminished. Reference has been made to the strain of war in France, and that is undoubted, but in the case of those distant areas there is always the possibility of the mail which was so long expected being sunk on the way, and no post arriving for the officers and men. So although the strain is not so acute, the monotony is greater and the chances of leave are very much less and letters are most welcome. I offer no opposition to this Bill, but I would point out a matter which should not be overlooked. This Bill is based on the Post Office Act of 1908, and the Postmaster-General is given power to impose fresh duties on postcards and postal packets. He has the power now by Royal Warrant to increase the rate on postal letters. It seems to me that the House ought not to allow the Postmaster-General to have the power to deal with postal letters without being a party to the settlement of it themselves. If there is anything wrong with the Act of 1908, it should be remedied. The Postmaster-General should come to this House if he wishes to increase the postal rate on letters. The Act of 1908 has been overlooked, and it should be remedied some time, when opportunity offers, when a purely drafting Bill could be introduced and passed.

Mr. EVELYN CECIL

I was a member of the Retrenchment Committee to which the Postmaster-General referred. None of us like these increases of ½d on letters and postcards. Like all taxation, it is disagreeable, and I share the regret that we are, abolishing for a time the 1d. postage. But this is a war tax, and I understand that it is being presented to us as a war tax, and it is one which I think is perfectly justified. I only regret that it was not put in force some time ago. No doubt the Postmaster-General has profited by some of the criticisms that were advanced when the proposals of the Retrenchment Committee were before this House two years ago and has somewhat altered the rates which were then proposed, but for all that I think it was a mistake that the extra ½d was not imposed some time ago, and I am very glad that the right hon. Gentleman has taken his courage in his hands and is imposing it now. Other countries have gained considerable revenue in consequence of such a change. I am not at liberty to mention one or two figures which were submitted to the Retrenchment Committee in consequence of inquiries from overseas, but it was partly due to them that I, at any rate, cordially at that time supported the increase of the 1d. post to 1½d. A few months ago I asked the present Postmaster-General whether he had made inquiries in some of the countries where the extra ½d. had been imposed. He told me that he would make inquiries. I do not know whether he has, but I feel fairly confident that, if we can judge from the original results of imposing this extra tax, it will be well worth doing from the point of view of revenue. The Retrenchment Committee was a very representative Committee, representing every shade of opinion in this House, from the most reactionary member to the most extreme member of the Labour party, and after careful consultation in private together we were unanimously of opinion then that the extra ½d. should be imposed. It is a fair tax all round. It taxes most those who are most busy and most prosperous, because their correspondence is large. It taxes to a less extent those who are not so busy and not so prosperous, because their correspondence is small. I am glad that an exception has been made as regards soldiers serving overseas. That will be welcomed throughout the country. in view of the great sacrifices which they are making for us and their conspicuous bravery, it is only right that this privilege should be extended to them. But I do not share the view of the hon. Member for East Edinburgh that soldiers who are in hospital here should have the same privilege. I think that that would lead to great confusion, and possibly also to a certain amount of fraud, because relations and friends might make use of these soldiers as addressees of letters and thus get reduced postage on letters which are not intended for the wounded soldier at all, but for his friends or relations. I am quite certain that the exception should be made for soldiers on active service abroad, but beyond that it would not be right or wise to go. I cordially support the Second Reading of the Bill.

7.0 P.M.

Colonel COLLINS

While the House appreciates the concession made by the right hon. Gentleman in the case of soldiers, he did not quite make clear what would be the position of letters sent to sailors. Are letters sent to sailors in the Grand Fleet to pay id. or 1½d?Are letters sent to sailors in ports to pay 1d. or 1½d? I hope that we shall have some statement from the right hon. Gentleman on that point. I support the suggestion of the hon. Member for East Edinburgh, that letters addressed to soldiers in this country should be sent for 1d. As is well known, the main source of cost in the Post Office is the cost of delivering the letters, and in the case of letters sent by the Post Office to men in the Army in this country the Post Office is freed entirely from the cost of delivery. If that be so, the main argument advanced by the Postmaster-General in favour of this increase falls to the ground, as the Post Office itself does not bear any share of the cost of delivering the letters to soldiers. Therefore, I hope that the Postmaster-General, having gone some way to meet the wishes of the House, may go further, and that letters sent to soldiers in this country may be sent for 1d., and, in addition, that letters sent to sailors who have served may also be sent for 1d. But I shall be sorry if the House passes this Bill. In the financial statement of the year we were told that the profits of the Post Office were £9,000,000 a year, and yet this afternoon we were told that the profits of the Post Office are only £2,000,000 a year. I would ask the Assistant Postmaster-General, What are the profits of the letter post? What are the profits of the parcels post? What is the profit and loss on the telegraph system, and on the telephones? Are we raising rates for certain Post Office services which are profitable, while we are leaving untouched unremunerative rates for other branches of the postal service. I sincerely hope that later in the year the Postmaster-General will present to this House an ordinary commercial profit and loss statement, showing to the House and to the country that certain services are being run at a loss to-day, while others are being run at a profit. If such a statement had been presented to the House to-day I am very certain that the House would not pass this Bill. I believe that a large profit is being made by the Post Office from the 1d. post, and the loss is not on the 1d. post, but on other branches of the service. My hon. Friend the Member for East Edinburgh referred to Press telegrams, on which I think there is a loss of about £500,000 a year; and there is a heavy loss on certain telephone services, certain private telephones, in different parts of the country that are being subsidised by the taxpayer to-day. In view of the statement of the right hon. Gentleman differing so materially from the financial statement presented by the Chancellor on his annual Budget that the profit was £9,000,000, and we are now told that it is £2,000,000, I should like that the House should receive some assurance that accounts in future will be presented in such a clear fashion that we shall know exactly what services are remunerative and what services are carried on at a loss.

Brigadier-General McCALMONT

I had intended to support the Amendment of my hon. Friend which stands upon the Paper, and with him, therefore, I welcome the decision of the Government on the subject of letters to soldiers. I am bound to say, however, that I think the decision has possibly been arrived at a little hastily, having regard to the sister Service, the Navy. The question of the Naval Service should be considered. As I understand, letters for the Navy are addressed to the care of the General Post Office. Whether the sailor is serving at home or on a China station, the envelope addressed to him to all intents and purposes is exactly the same. I certainly suggest that the sailor should get a letter for 1d., but the soldier serving at home would have to pay 1½d I do not agree with what the hon. Member for East Edinburgh suggested—that we should give every soldier at home his letter for 1d. I think that would be exceedingly likely to lead to fraud, for it would only be necessary to put on the letter a regimental number and it would go for 1d. I think the Postmaster-General might get himself into slight difficulty in that matter, and I hope we shall have some assurance on the point. I intended to make a suggestion to the Postmaster-General—assuming he had not given way, as he has done—and it is this, that in order to benefit the class of persons which I take it he is anxious to benefit, the dependant of the soldier or sailor, she be entitled, at the time she draws her allowance from the post office, to draw an envelope, ready stamped, say, one a week, which she can use for sending a letter to the soldier or sailor serving, adding the extra war stamp. I think, by that means, the poor mother or wife would be benefited; while, at the same time, the better class of people who can afford to pay would not—unless they were drawing a separation allowance—participate in the benefit.

I make that suggestion for what it is worth, in the hope that if there be any difficulty about the Navy and the Army the right hon. Gentleman will make use of it. I think it would be a thousand pities if a sailor and a soldier serving at the same station, as they do in many places, were put under different conditions with regard to the letters they receive from relations. I do not quite understand whether the parcel post rates apply to troops or whether as regards troops they remain the same, but I have one more suggestion to make with regard to reducing the bulk of mails, especially to the troops. I am quite certain that a great deal of the bulk of mails carried by the Post Office abroad is very often useless to the soldier, because frequently the letters consist of bills and circulars, that are forwarded, and that are not required at all. I do not know whether the Regulation could be laid down that "forward" letters should not be sent abroad to the troops, and that any letter should be addressed, in the first instance, to somebody in the Service. Letters addressed to someone in England or Ireland to be subsequently forwarded should not be accepted at 1d. for transmission abroad, and by that means you will reduce greatly the bulk of mails sent to the fighting forces. I hope we may have an assurance from the Postmaster-General, if he replies on the Debate, on the subject of the postal relations between the Navy and Army, and that he will consider the suggestion which I have put to the House.

Mr. C. PRICE

I listened with a certain amount of disagreement with those who approved of the increased postal rates. Personally, I disapprove of the increased rates, more particularly the increase of the penny post, which so materially affects the poorer people. The penny post is a department of the postal service which actually pays, and I think it is grossly unfair to call upon a great mass of poor people to make this contribution for carrying on the War, while the department of the penny post, as it stands, is a department which pays. I think we would be in a good deal better position if we had placed before us the information which was asked for by my hon. and gallant Friend (Colonel Collins), in order that we might see how all the departments are working. We know that there is a loss on Press telegrams, and we should have more information, so that we may learn where other losses actually occur. It is a legitimate business proposition that where losses are made by particular departments those should be the departments in connection with which charges should be made commensurate with the burden or loss. I think the increase which is proposed will work very unfairly on different classes of business. Many businesses are conducted almost entirely by correspondence, so that the burden will be heavy upon them, while other businesses are carried on with hardly any correspondence whatever, so far as their development is concerned. I have received correspondence on this subject, and the suggestion is made that in the case of those firms which necessarily are conducted by correspondence, there should be some concession made, so far as catalogues and other documents are concerned. These correspondents feel that they are being subjected to an additional grievance, and I therefore place it before my right hon. Friend with a view to his seeing whether anything can be done.

Sir C. KINLOCH-COOKE

I join in the appeal made to the right hon. Gentleman in regard to the Navy, but I wish also to refer to the mercantile marine, minesweepers, patrol boats, and a very large number of men leading a sea-faring life, who are really in His Majesty's Navy. I hope we shall have a statement from the right hon. Gentleman to the effect that the men in these services which I have indicated will be placed in the same position as others in regard to the concession made this afternoon. I am very sorry to see, as I dare say most people are, that the 1d. post is practically going back. I know something of the work of the Post Office, and I can assure the House that the increase will still continue after the War, but I suggest to the Postmaster-General that, if he means the extra payment to be for the duration of the War, then, in order to preserve the 1d. post, he should allow the 1d. stamp and the ½d. stamp to remain in use so that they can, without difficulty, be continued after the War, and, in the meantime, those who send letters, while using the ordinary 1d. or ½d. stamp, can add the ½d. war stamp for the duration of the War. That would preserve the 1d. post and the ½d. post without any difficulty, after the close of the War. I do not say that the suggestion is original, for it has already been adopted in Canada, and one or two other places. I should like to make a suggestion in reference to the weight of parcels, as between 7 lbs. and 11 lbs. No parcel can be sent to a soldier over 7 lbs. in weight by post. If he sends one over 7 lbs. he has to send it by railway, and he has to send it addressed to the Military Forwarding Officer, But no parcel can be sent in this way which does not weigh 11 lbs. No parcel can be sent to a soldier which weighs between 7 and 11 lbs., the result being that every parcel which is between these two weights has to be stuffed full of packing of various kinds, which, in these days when economy is so necessary, is a very serious mistake, for not only is it a waste of packing, but it takes up more room on board ship than is absolutely necessary. I appeal to the right hon. Gentleman to raise the weight of the parcel postage to men at the Front from 7 lbs. to 11 lbs., and, at any rate, to see that if some parcels are carried to the soldiers by the railway system, they may be under 11 lbs. in weight.

Mr. D. MASON

I should like to support the suggestion made by the hon. Gentleman who has just sat down, with reference to the war stamp on the 1d. postage. If this impost does go through, it will have to be made very clear that it is in the sense of a war tax only. I wish, however, to make an appeal to the right hon. Gentleman whether it is not still possible to maintain some form of 1d postage. As the right hon. Gentleman reminded us, 1d. postage was passed in 1840 by Sir Rowland Hill, and it has been of inestimable advantage to this country. The right hon. Gentleman referred to other countries having increased their postal rates, but I am sure he will agree with me that the internal and foreign trade of this country leads the world, and that it has been largely built up by this 1d. postage. When we remember that the figures still show a surplus of £2,500,000— and many of us hope and pray and believe that the War may possibly be brought to an end within the coming year—why, before you come to a deficit, should you interfere with this, which is so essential for building up your trade and commerce? As the parcel post is run at a loss, it might have been wise and advantageous to increase the charges there, and in some other departments of the postal service; but I think that if the 1d. rate could have been maintained, and an increase made in other directions, it would have had a less adverse effect upon trade and commerce. Now that typewriting and other methods enable people to condense their communications, it would be of immense importance to maintain in the trade and commerce of the country the ability to communicate for 1d., and I am by no means certain, as anticipated by the right hon. Gentleman, that the revenue, when 1d. postage is increased to 1½d, will show an increase. It does not by any means follow that you can estimate or budget for an increased revenue merely by putting up your charge. The probability is that many people who have communicated for 1d, in the past will not communicate now when you increase the charge to l½d., so that you may possibly make one Department of your postal service, which produces something like £4,000,000, unprofitable by increasing the rate to l½d., while at the same time you are going to interfere with the commercial community. We are most anxious—and I am sure the right hon. Gentleman will agree with me—to try to nurse the trade of this country when the War is over, and one of the essentials for that will be cheap and easy communication. I do not know if it is yet too late to make this appeal to the Postmaster-General. I understand that the reduction in the amount of weight sent for 1d. has had no adverse effect, and if the Postmaster-General could so have arranged his rates as still to have maintained 1d. postage, even for a limited amount of weight, and if he could have carried on the 1d. postage for another year, with the hope that the War might then have terminated, he would have continued to us what has been of inestimable advantage to the trade and commerce of the country.

Mr. CHANCELLOR

I think this Bill is extremely unfair, will interfere a great deal with business, and will be extremely irritating generally. It will bear very hardly on some businesses, and scarcely at all on others. I want to ask the Postmaster-General if there will be any enlargement in the size of postcards, so as to permit of the substitution of communication by postcard for communication by letter? At present many short letters go through the post because they cost 1d., and the normal postcards will not contain their communications. If however, the postcards were enlarged a little, tens of thousands of people would send communications, not of a very private nature, by that means. I do not think the revenue would suffer very much by this proposal, and it would be of great convenience both to business houses and private correspondents.

The ASSISTANT POSTMASTER-GENERAL (Mr. Pike Pease)

I think there has been a general feeling of relief in the House to-night that the Postmaster-General has been able to see his way to give up the idea of increasing the cost of letters to the troops in France or in other parts of the War area. Most of the criticisms we have listened to to-night really do not seem altogether to take into account the fact of the enormous amount of expenditure in this country at the present time. I can well remember nearly twenty years ago in this House when Lord St. Aldwyn—Sir Michael Hicks-Beach as he then was—spoke from this desk, and drew a very dark picture of the future of this country because the expenditure of the country for that year was about £150,000,000. If he had come into the door of the House to-night and listened to this Debate, and if he had heard the great speech of my right hon. Friend on the Budget this year, I think he would have wondered that this country has been able so easily to obtain so large an amount of money as was received by the Exchequer during the last financial year. So far as the Id. post is concerned, I am sure that I am only expressing the view of everyone in the country when I say that there is a very deep regret that there should be any possibility of an increase in the postage rate. But we must take into acount the fact that every other country which is at war has been forced to make this increase in the rates, and the fact also that some neutral countries have been placed in the same position. A certain amount of criticism has been made to-night in regard to the question of the revenue which is received from the Post Office in ratio to the amount which is received from the telephone and telegraph department. Of course, it is perfectly true that the revenue received by the Exchequer from the Department comes from postal packets, and letters and postcards, and not from telephone and telegraph charges. But, when it is suggested that we might increase the telephone and telegraph rates, it must be perfectly plain to anyone with an impartial mind in regard to these questions, and who has taken account of the past, that it would be impossible for us to increase these rates and to receive an amount of remuneration which would be of any service to the country, because the increase of the rates in the telegraph and telephone last year has not brought in any extra revenue to any extent, and an increase in either of the rates for the future would probably have the effect of lessening the amount of revenue received at present. Therefore, when it is necessary that the State should receive more revenue from the Post Office Department, there is only one way by which it can be done, and it is by putting on an extra charge on all the Post Office dues.

The hon. Member for Greenock criticised the financial position, and mentioned a speech which was made on the day of the Budget by the right hon. Gentleman the ex-Home Secretary (Mr. H. Samuel), who was Postmaster-General when I first had the honour of becoming a member of the Post Office staff. In the House of Commons on that day he said that he would call attention to the fact that the State already derived its profits from the Tax Revenue of the Post Office of £9,000,000. This figure was taken from the White Paper. I should like to give the hon. Gentleman who mentioned this a statement in regard to the matter, because, although the Postmaster-General dealt with it the other day, I think it is hardly realised by the House. The figures for expenditure are taken from the Post Office Estimates, and do not include the Vote of Credit issues on Post Office account. The Post Office Estimates, like those of all Civil Departments, are compiled on a peace basis, and any deficiency, due to war expenditure, which cannot be met by savings on the Vote, is made good by an issue from the Vote of Credit. The Estimates, therefore, make no provision for such items as war bonus, which amounts now to £6,000,000 per annum, and is at present an integral part of Post Office expenditure. In 1917–18, the Post Office drew from the Vote of Credit about £11,000,000, and it is anticipated that it will, draw about £14,000,000 in 1918–19. If, therefore, the Vote of Credit issues were included, the apparent surplus of £9,000,000 would be converted into an apparent deficit of about £2,000,0000 in 1917–18, and about £5,000,000 in 1918–19.

I should also like to say, with regard to the question raised by my hon. and gallant Friend opposite, that there is very great difficulty in regard to the letters sent to the Navy. From an administrative point of view it is extremely difficult for us to make the concession which he asks, but I may say, from conversation which I have just had with my right hon. Friend beside me, that he will consider this question and give some further reply in reference to it when the Committee stage of the Bill takes place. My hon. Friend who spoke last mentioned the question of the size of the postcard. That question, also, will be considered, but I am not in a position to-day to say anything in regard to it. My right hon. Friend mentioned the question of Germany, and said he thought we ought to consider the relations of the Post Office so far as the tax is concerned. But I am inclined to think, taking all the taxation of the country as it is to-day, that the extra charges that he suggested are not unreasonable. I have had the privilege of going to France, and of seeing the work done by the Post Office there. No one is more fully cognisant of the fact that a very large number of people in this country would like to see a reduction in the cost of parcels; but, considering the amount of transport that there is now, and the enormous increase during the last three years, it must be perfectly plain to anyone who considers the question that it would not be wise, from a national point of view, to decrease the charges placed on parcels to the troops in France, because the transport is greater even than this House imagines, and it might have its effect on the War from that point of view.

With regard to the question of parcels, which was raised by the hon. Member for Devonport, of course, as is well known to the House, no one is allowed to send a parcel of over 7 lbs. to the troops in France. This is due to the fact that orders have been given by the War Office in regard to the matter, and really it is not a Post Office question. But I think that, as far as that is concerned, I can hardly give a reply. I very much regret the inconvenience which is caused by this.

The only other point that I think I have not dealt with is the question of this taxation being a war tax. My only reply is one which, I am sure, will appeal to the House, and it is that no one can possibly realise what the future of this country is going to be. If it is possible at any time in the early future to reduce the tax by taking off the ½d which is put on the ordinary letter, I am sure everyone in this House will be glad; but with a Budget such as we have seen this year, and with the future as it appears to us at the moment, it is quite impossible for anybody to give a promise as to the date on which this Stamp Duty can be reduced. If there is any other question any hon. Member would like to raise with which I have not dealt, I hope he will mention it. I think I may take this opportunity of thanking the House for the way they have received this Bill, which, I hope, will soon be passed into law.

Colonel COLLINS

Will the right hon. Gentleman give us an assurance that in future the accounts will be presented in such a form that the House will be able to understand them?

Mr. PEASE

I will see that the matter is considered by the Treasury.

Bill accordingly read a second time, and committed to a Committee of the Whole House for To-morrow.—[Mr. Pratt.]