HC Deb 24 May 1933 vol 278 cc1213-22

Considered in Committee under Standing Order No. 7lA.

[Captain BOURNE in the Chair.]

Motion made, and Question proposed: That, for the purpose of any Act of the present Session relating to finance, it is expedient—

  1. (a) to authorise the payment from time to time out of the Consolidated Fund, into a fund to be established under the said Act by the name of the Post Office Fund, of sums to be calculated in the manner provided by the said Act; and
  2. (b) to provide for the payment from time to time out of the fund so established into the Exchequer of sums to be calculated in manner provided by the said Act, and of sums which it is anticipated may become due from that fund to the Exchequer under the provisions of the said Act.—(King's Recommendation signified.) —[Mr. Hore-Belisha,.]

9.49 p.m.

Mr. HORE-BELISHA

This Resolution is to give effect to the recommendations of the Bridgeman Committee with regard to Post Office finance. The Com- mittee, of course, made other recommendations but we are concerned here only with finance; with the relations of the Post Office and the Exchequer. Hitherto credit has been taken in the Budget under the heading of Post Office Fund Receipts for the difference between the total cash revenue receipts of the Post Office and the cash expenditure of the Post Office. The Exchequer takes the whole of the surplus in any financial year and would be liable for any deficit. Any increase in Post Office expenditure or reduction in Post Office revenue reacts at once under the present system upon the Exchequer. There may be a conflict, I do not say that it is likely to arise, between the needs of the revenue and the desire of the present Postmaster-General to develop the service of which he has control. The recommendations of the Bridgeman Committee, under the heading with which we are dealing now, may be summarised in a sentence, which I will quote: So long as the existing financial arrangements continue so long will the tendency to regard the Post Office as a revenue producing instrument obscure and impede its primary function, which is the service of the public. Accordingly the Committee recommended: A system under which the Post Office after making a certain agreed annual contribution to the Exchequer would be allowed to use its surpluses after making the necessary reserves for the benefit of the public the improvement of the services and the development of its business. It is proposed for an experimental period of three years that the Exchequer share of the profits of the Post Office shall be restricted to £10,750,000, and any amount by which the profits exceed this figure in each year shall be paid to the Post Office out of the Consolidated Fund. The purpose of the Resolution is dual. In the first place, it provides for annual payments to be made out of the Consolidated Fund to the Post Office, and, on the other hand, it provides that the Post Office shall be in a position to guarantee that the Exchequer shall receive its fixed contribution of £10,750,000. What is the effect of this proposal upon the Exchequer? It will make a first payment next year to the Post Office Fund, which may be expected to be not far short of £1,000,000. That is the measure of the sacrifice which is being made by the Chan- cellor of the Exchequer at the beginning of this experimental period of three years. The present arrangements are tentative, for the period I have mentioned, but they do inaugurate for the Post Office a new era. In future the Postmaster-General will know exactly where he stands. He will know that above a certain figure he may use all his profits for the development of the Post Office. My right hon. Friend the Postmaster-General will be able to extend and develop in the manner that he desires. If anyone were calculated to take advantage of this new system my right hon. Friend is the man.

9.66 p.m.

Mr. ATTLEE

I am sure that the Postmaster-General is entitled to congratulation on seeing a Motion like this upon the Paper. We are not going to offer any opposition to the Motion, for we have certain Amendments to suggest on the Finance Bill, and I take it that there will be opportnity for a longer Debate then. As far as it goes we welcome this provision. The Postmaster-General has, at any rate, got the thin edge of the wedge into the Treasury, and I hope that he will be able to drive it a good deal further. I must say that this proposal does not go far enough. We have already had a quotation from the Bridgeman Committee. We are concerned this evening only with the financial recommendation of the Bridgeman Committee, and in my view that Committee's dealing with Post Office finance was the weak point of the report. Those who have read the report will recognise that there was not any very great examination of principle, and similarly in the suggestions which were brought forward as to fixing the amounts which shall go to the Post Office and those which shall go to the Treasury, there is no principle at all. There is merely a kind of ad hoc decision, based on what the Postmaster-General for the time being has managed to wring out of the Exchequer.

I congratulate the Postmaster-General very heartily. He is fortunate to be a Postmaster-General who has long worked in the same office as the Chancellor of the Exchequer, and no doubt he knew the right way to get round his right hon. Friend. But when one looks at what is being done here one finds that the Bridgeman Committee drew attention to a particular vice of the organisation of the Post Office, and that was its position as the mich cow of the Treasury. The Committee recommended a system of self-contained finance, but we do not get self-contained finance either in the Bridgeman Committee Report or in this Motion. The first thing is that the amount of the tribute to be paid to the Treasury is not fixed on any principle. It is fixed for only three years, and after three years a rapacious Chancellor of the Exchequer may raise the figure of that tribute. It is not based on any set of principles; it is merely based on a very rough averaging-out of the surpluses of the Post Office in the last three years, and, as the Bridgeman Committee state, these surpluses were mainly due to a drop in the cost of living.

Therefore the bird that the Postmaster-General thinks he has got in the hand may be in the bush, because we understand that the policy of the Government, to be carried into effect if possible at the World Conference, is to raise prices all round, and if they succeed in raising the prices of materials they raise the cost of living, so that bonuses go up and the Post Office surplus will disappear. Therefore, that million which was handed across by the Financial Secretary to the Treasury may not come to hand. I think the Postmaster-General would be wise to get a little on account. The trouble is that this absolute lack of principle in finance really vitiates and upsets the whole principle of having the Post Office run on certain definite business lines. There are three main points about Post Office finance. One is that it is the milch cow of the Exchequer. It has been cabin' d, cribn' d, confin' d by Treasury control in detailed administration. This system does not get rid of Treasury control. If you look at this Resolution and at the Finance Bill, you find that the Postmaster-General is still under the Treasury right the way through. Even with this Post Office fund, in which he is given a chance of expanding, he can expand only within the strait-waistcoat of the Treasury.

It is a very vital point which I cannot elaborate here. We all recognise that this is only one part of the Bridgeman Committee's report. The essential point of this financial control is that it affects the whole administration of the Post Office, and rigid Treasury control, even with some relaxation, is not the right way to run a great business. The second point is that the whole question of control by this House is not dealt with. The third point is that the question of internal administration of the Post Office is very largely affected by the financial arrangements and the extent of control, which to my mind leads to centralisation. I shall not speak at any length upon that point. While this may be accepted after a struggle of many years, as the first fruit, I do not think anyone can rest content with it. I want to see a real clean cut financially between the Post Office and the State. I want the State to be made into the debenture holder and not the ordinary shareholder and this House will be the trustee for the debenture holder.

10.5 p.m.

Viscount WOLMER

I welcome this Resolution and I also welcome the speech of the hon. Gentleman the Member for Limehouse (Mr. Attlee). I could not help thinking that that speech, though far more eloquent than any effort of mine, was the sort of speech which I used to make when I was on that side of the House and when the hon. Gentleman as Postmaster-General had to defend the position of Treasury control, and in doing so warded me off with his usual skill. Since he ceased to be Postmaster-General I admit that, speaking with greater liberty, he has taken a different position and has not deviated from that position. This Resolution is important because it recognises the principle for which the Bridgeman Committee contended, of Post Office autonomy in finance. It does not recognise it very far, but there is a recognition. It is, as the hon. Gentleman said, the thin end of the wedge, and I certainly shall be delighted to collaborate with him in driving in the wedge as far as possible. The net result in the Finance Bill of this year, as far as cash is concerned, is not, it is true, very great when we consider the vast sums involved in Post Office work.

The Bridgeman Committee admitted the principle that the Post Office should be run as a separate business and should be able to put its profits to reserve and develop its own resources. But then the Bridgeman Committee was faced with the practical difficulty that the present time was most inopportune for such a finan- cial departure. That is a fact which we must recognise. No Chancellor of the Exchequer at present, I do not care to what party he belongs, can afford to lose the huge revenue which his predecessors of recent years have been drawing from the Post Office. Therefore, while those of us who believe that the Post Office should be a self-contained unit, run as a business and not as a tax-collecting machine, welcome the endorsement of that principle by the Bridgeman Committee, we are forced to admit that it is not practical politics for the moment. I agree that we ought to be grateful to the Chancellor of the Exchequer for having, in these difficult times, followed out to the full as he has done this recommendation of the Bridgeman Committee by giving us this Post Office Fund. The Clause in the Finance Bill, which we shall discuss in detail later, as far as £ s. d. is concerned, carry out in full the recommendation of the Bridgeman Committee, and the net result is that the Postmaster-General will be left with something like £500,000 or £750,000 to play with at the end of the year.

That is a small sum compared with the vast sum which he hands over to the Exchequer. It is not a sum which will have any appreciable effect on telephone development or telegraph conversion or the mechanisation of the Post Office or the other heads under which great Capttal expenditure is necessary, but it will enable my right hon. Friend to confer a number of small benefits on the customers of the Post Office. A great deal can be done in that way with £100,000 or £50,000 and I believe that the result of these little benefits, which are familiar to anyone who has studied the Post Office question, will be to increase Post Office business, and will go towards swelling the profits of the fund in the future. While this is a very small portion of financial autonomy and while I agree with my hon. Friend opposite that the proposal takes away with one hand what it gives with the other, because Treasury control is maintained over the so-called Post Office Fund, yet there is asserted here for the first time the principle that the Post Office shall be able to retain everything it earns over and above a fixed charge to be paid to the Treasury. To that extent the Treasury is made a debenture holder. I think that is as much as we can expect in these difficult times. When times grow easier, I hope the Post Office Fund will be allowed to expand, and that the other principles to which the Bridgeman Committee gave lip service, will be carried out more fully than is at present possible.

10.10 p.m.

Lieut.-Colonel MOORE-BRABAZ0N

I congratulate the Financial Secretary on filing a petition of divorce to end what I have always regarded as the very unholy alliance between the Post Office and the Treasury. There is a lot to be said for private enterprise and there is something to be said sometimes for Socialism. We are apt to forget that our Army at one time was run by private enterprise, but even the most extreme Conservative would not defend such a system to-day and I think few of us would recommend a return to private enterprise in the case of the Post Office. But the present system has really nothing of great merit in it because, however well the Post Office is run, it is not allowed to take the profit which it makes for future development. That profit has to go to the Treasury. Some allusion has been made to the Postmaster-General expanding physically, and that, is indeed, distressing, but no one can accuse him of having been expansive. One of the most important things over which he has control is broadcasting but he only allowed us to say a few words on broadcasting on a Private Member's Motion. Having heard him so often in Opposition and so seldom Since he has been in office, I hope he will now tell us what he is going to do or what his dreams are with regard to the surplus which he is now to get. Are we to have better broadcasting, cheaper telegrams, better telephones or a penny postage? I hope he will hang upon this Resolution the opportunity of addressing us upon these questions which are so dear to the hearts of the whole community.

10.14 p.m.

Mr. DENMAN

If we were discussing the organisation of the Post Office I should follow previous speakers in welcoming the Resolution, but I would recall to the Committee the fact that we are discussing a Resolution which is the foundation of a Clause in the Finance Bill, and the important point to consider is the financial effect of the Resolution. I ask the Committee if they realise that this is a gift to the Post Office of £1,000,000 of our very hard-earned money as a prior charge. The Chancellor of the Exchequer has budgeted for a surplus of £1,200,000, and here is £1,000,000 of that surplus which he is giving away. It is true that it is not given away in the course of this financial year, but it is given away in the next financial year. That is to say, the right hon. Gentleman will come to us next year with a Budget in which his resources are diminished by £1,000,000, and that £1,000,000 is given to the Post Office before anybody else has anything given to them at all. I imagine that no one with a sense of the priority of social claims will feel that the Post Office has the first claim. I should have expected that the Opposition would feel that the children of the unemployed might have a prior claim, and I should have thought that Members in other parts of the House would think a reduction of taxation was a prior claim, but here the Chancellor of the Exchequer is giving £1,000,000 to the Post Office.

It is an extremely bad piece of finance, and the right hon. Gentleman may find it extremely awkward next year, because no one can say that our financial position is so clear that we can play about with £1,000,000 in this way. We may want it for far more vital purposes. Much as I agree that the scheme is sound, I think the time and method are ill-judged and that we ought to reserve our judgment until we are sure that we can afford this money. Then we could hand it over thankfully and cheerfully to the Post Office. Recollect that in this year we are not even providing for the Sinking Fund, and in these circumstances to hand away £1,000,000 of the surplus seems to be the one feature of unsound finance that this Budget has shown.

10.17 p.m.

Sir K. WOOD

I want to thank my hon. Friend the Member for Limehouse (Mr. Attlee), who preceded me in the position of Postmaster-General, and also the Noble Lord the Member for Aldershot (Viscount Wolmer), who was Assistant Postmaster-General, for the observations which they have made with regard to the conversations that I have had with my right hon. Friend the Chancellor of the Exchequer in this matter, and I would add that I have been greatly assisted by the efforts of the hon. Member for Lime- house and the Noble Lord in this matter for so long. I am very glad indeed to be able to express the opinion that the Chancellor of the Exchequer has treated the Post Office very fairly indeed, at any rate in making it possible that, as we hope, at the end of the next financial year some sum in the neighbourhood of £1,000,000 will be available purely for the improvement of the Post Office services. I think that is a great advance. I do not think I could have expected more, and I am very grateful indeed that I have had the opportunity in my term of office of bringing this about.

There is only one other observation that I want to make. I do not think my hon. Friend the Member for Limehouse need be alarmed that if the Government policy at the Economic Conference succeeds, it will have an adverse effect on the Post Office. In fact, if that policy succeeds, as we hope it will, nothing could be better from the Post Office point of view, because an improvement in the condition of the people of this country and of other countries would greatly advance the Post Office business. That is the short answer to the hon. Member. When we come to the Committee stage of these proposals, I shall be very happy to deal with the points that may be put forward.

I cannot accept what has been said to-night about Treasury control. Obviously, when you have ft Department such as the Post Office, there must be a measure of Treasury control, but I am glad to say to the Committee that when my Estimates come before the House, f they are asked for, I shall be glad to show that we, the Chancellor of the Exchequer and myself, have been able to take a considerable step forward and to make some new arrangement affecting the Post Office and the Treasury which I hope will be found satisfactory. To-night I content myself with thanking the Committee and trusting that the Post Office will be able to make good use of the money which we hope will soon be available.

Mr. DAVID MASON

What will the right hon. Gentleman do with this money?

10.20 p.m.

Major HILLS

I welcome what my right hon. Friend has said, but I do hope that he will go further. I hope that the Post Office is going to be run as a business under the Postmaster-General, and that the control of the Treasury will not be applied with strictness to it. Modern thought is moving on the line that a business of this sort ought to be run on quite different principles from other Departments of the State. I should like to congratulate the Noble Lord the right hon. Member for Aldershot (Viscount Wolmer), who, I believe, was part instigator of the Bridgeman Report, and who, at any rate, has fought very hard for the business management of the Post Office. I believe that under my right hon. Friend, after he has received the expansion which has been alluded to, the business will expand, and that in the end it will not only earn a large revenue for the Government, but will earn an even larger one, and that it will be a prosperous business and do its work for the public more efficiently and cheaply.

Resolution to be reported To-morrow.