BAGILLT WELCOME HOME FUND (Hansard, 5 December 1947)

HC Deb 05 December 1947 vol 445 cc738-47 738

§ Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Wilkins.]

§ 1.39 P.m.

§ Mr. Nigel Birch (Flint)
The question which I seek to raise today concerns the misappropriation by an official of the Post 739 Office of certain moneys belonging to the Bagillt Welcome Home Fund. Though this matter is primarily of interest to the people of Bagillt, to the 524 ex-Service men there, and to those who have collected the fund, it also raises a question which is of some general importance.
The facts are these. The Bagillt Welcome Home Fund was duly registered with the War Charities Commissioners. In May, 1944, at a public meeting, the local sub-postmaster, a man called Mr. Beattie, was appointed treasurer of the Welcome Home Fund in succession to a previous treasurer who had left the district. The people of Bagillt very naturally assumed that this man, being a sub-postmaster, was a man of credit. They knew him quite well and had no reason to suppose that he was not a man of credit. Further, it was particularly convenient to appoint him treasurer because in the village of Bagillt there are no regular banking facilities except those supplied by the Post Office.
The committee of the Welcome Home Fund instructed their treasurer to invest such moneys as he received in cash in 3 per cent. Defence Bonds, and he was to invest that money in the names of the trustees for the time being of the Bagillt Welcome Home Fund. At the time Mr. Beattie was appointed there was already £300 invested in 3 per cent. bonds, and a bond book had been issued by the Post Office Savings Bank Department and duly stamped by that Department in London. From the day this man was appointed treasurer, he misappropriated all the money, and nothing whatever was properly credited to the fund. For that fraudulent conversion he is now serving a sentence of four years' imprisonment. The total deficiency was £1,197.
What I want to make quite clear is that no claim has been made on the Post Office for the whole of that amount but only for one amount of £300. The reason why we believe very strongly that there is a claim upon the Post Office for the £300 is as follows. Mr. Beattie was instructed to invest the money in 3 per cent. Defence Bonds, and on two occasions he produced the bond book, which I now hold in my hand, at meetings of the committee, and in the bond book were entered two sums amounting to £300 in all and both times the entries were not only correctly made 740 but also stamped with the official stamp of the Post Office. When the police were closing in upon this man, he crossed out the entries in the book, but we have the evidence not only of the committee who saw those entries before they were crossed out but also of the forensic laboratory at Preston that those entries amounted to £300 and are correctly stamped with the Post Office stamp. My contention is that when doing this the sub-postmaster at Bagillt was acting in his capacity as a servant of the Post Office and not in his capacity as treasurer of the Welcome Home Fund. I have already been in communication with the Postmaster-General and I would like to read a short extract from his letter in answer to mine. The Postmaster-General said: It seems to me to be quite clear from the full inquiry which has been made that the sub-postmaster received the sum of £300 to which you refer in your letter in his capacity as treasurer of the Welcome Home Fund, and in disposing of it irregularly he failed in his duty as treasurer to the fund and not in his capacity as sub-postmaster. I am afraid the fact that he chose to conceal £300 of the £1,197 with which he absconded by letting it be understood that he had used it to purchase Defence Bonds cannot be accepted as justification for the Post Office to assume liability for the loss. This is the important point: Indeed, it would be open to anybody, whether or not officially connected with the Post Office, to have practised the same kind of fraud. It is rather alarming if it is true that it is open to anybody not connected with the Post Office not only to make a false entry in a bond book but to stamp it with the official stamp of the Post Office. I do not think it could really be done, nor do I believe that this is the real view of the Postmaster-General. I do not believe it for this reason. This man Beattie not only defrauded the Welcome Home Fund but also practised extensive frauds upon the depositors in the Post Office Savings Bank. He entered in their books the amounts they deposited and stamped them with the official stamp and then did not enter those amounts upon the return which has to be made to the Post Office Savings Bank every other day. He simply kept the money. In the case of these private people I understand that the Postmaster-General has made restitution in full to the extent of £1,600. Therefore, the private depositors have got their money back but the charity—if we 741 may call a Welcome Home Fund a charity—has not been so treated and has lost the whole of the £300 deposit as well as the rest of the money not entered in the bond book.
I cannot see any real reason why this differentiation should have been made. It seems to me that when the sub-postmaster was making entries in Post Office Savings Books or in the bond book and stamping them, he was in both cases acting in his capacity as a servant of the Post Office and not as a servant of the Welcome Home Fund or any other organisation. If there had been a similar case of a servant of one of the Big Five banks doing that, I have no doubt that an action would have lain against the bank and that they would unquestionably have paid up. I understand that the Post Office cannot be sued, and possibly for that reason—I do not know—the Post Office is not at the moment prepared to pay up——

§ Mr. Eric Fletcher (Islington, East)
Will the hon. Member for Flint (Mr. Birch) make it clear whether or not he is suggesting that the charity has a legal claim against the Post Office?

§ Mr. Birch
I think it would have a legal claim, but I am not a good enough lawyer. I understand that the Post Office cannot be sued in the same way as one can sue a bank.

§ Mr. Ungoed-Thomas (Llandaff and Barry)
Legal proceedings could be taken.

§ Mr. Birch
If we do not receive a suitable answer, maybe we will do so. It seems to be a most dangerous doctrine to put about, that because we have as a treasurer or connected with a committee someone who is an official of the Post Office, that automatically takes away from us the protection which private people have if that man commits a fraud. Very rightly, it is a very common thing for Post Office officials to be appointed treasurers or secretaries of committees and charities of all kinds. They are used to dealing with accounts and are generally of the highest probity and, therefore, they very naturally get those jobs. If as a result of this case, it gets about that if a Post Office official is connected with a fund and a fraud is committed in the Post Office, one loses the ordinary protect- 742 tion which any other depositor would have, that is rather dangerous. It would mean a very great loss to the country if Post Office officials were in any way discouraged from doing the very good work they now do. There is strong local feeling on this matter and the people of Bagillt cannot understand why private depositors get their money back but the Welcome Home Fund cannot get its money back. I commend this case to the Assistant Postmaster-General and hope he may be able to give a sympathetic answer.

§ Mr. Ungoed-Thomas
As I made a remark to the hon. Gentleman I should not like it to be thought that I was in any way suggesting that he should take legal proceedings rather than bring the matter here to the House. I think he has been very wise to bring the matter here and not to have it dealt with by legal proceedings. It seems to me in conformity with what the hon. Gentleman said that the Post Office should consider this as a matter of what is morally right or wrong rather than as a matter of pure law. I hope it will be possible for them to consider this application sympathetically.

§ 1.50 p.m.

§ The Assistant Postmaster-General (Mr. Hobson)
I think the hon. Member for Flint (Mr. Birch) has stated his case with the moderation and persuasion which we usually associate with his remarks in the House. I think we both approach this problem not as lawyers but as laymen. It is perfectly true that we have both had legal advice. That is apparent from the remarks made by the hon. Member himself. The facts in the case are not in dispute at all, but our contention is this; that the sub-postmaster of Bagillt—this small township of 5,000 people—was acting purely in his capacity as treasurer of the Welcome Home Fund and not as sub-postmaster. In point of fact, he was engaged in quite a legal form of extramural activity in the same way as other members of the community would be so engaged. In other words, apart from being sub-postmaster, as a citizen he was taking part in other organisations. It must be remembered that the original entry in the book was not made by the sub-postmaster.
As a result of the expansion of their activities the committee was strengthened, and the scope of the Fund enlarged. Mr. 743 Beattie was appointed treasurer, and the bond book came into his possession, as treasurer, and he received the money. There is no doubt about that. It is perfectly true that he presented to the committee the savings bond book which contained forged entries. There is no doubt about that, but it is very interesting to note that while the committee were evidently satisfied with the entries which had been made in the book, they never asked for any particulars with regard to the other money, amounting to £800, which is also missing. Further—and this seems most unusual—they did not even ask what had become of the interest. After all, there had been interest paid on the original £300 and that had been paid into the local branch of the National Provincial Bank, I am informed.
To come to the fact that the person who committed this fraud was the sub-postmaster; is the hon. Member trying to argue the general principle that where defalcations of this character are committed by individuals who are not acting as servants, either to the Post Office or to a bank, the employers should carry their liability? There are, unfortunately, many cases among club officials—the secretary of a sick club, the secretaries of various other charitable funds—where there have been defalcations, but these clubs do not ask that the employers should meet these defalcations. It seems to me a sate analogy to say that if an official of a corporation or a transport undertaking were secretary of a sick club, and there was a deficit, no one would expect the corporation or the transport undertaking to meet the cost. Yet because it happens to be the Post Office, we are being asked to meet the claim.
It is very ingenuous to argue that the sub-postmaster had access to the stamp. I think the hon. Member's case more or less rests on that point. There are more ways than one of forging a book and it does not mean that no other individual, if he were evilly disposed, could not have forged the book. Quite frankly, I do not think there is anything in that point at all, because the book could have been forged, even if the treasurer had not been the sub-postmaster. Therefore, I do not think there is much in the hon. Member's claims.
I do not wish to score a debating point in this matter, but I must say this: the 744 Welcome Home Fund consulted solicitors. We have here a copy of their letter. The legal advice which was given to the Welcome Home Fund committee was that there was no case in law against the Post Office—and that advice was right. In 1924, there was a somewhat parallel case, and the Registrar of Friendly Societies ruled that the Post Office was not responsible. Therefore, while I appreciate the attitude of the hon. Member in wishing to look after his constituents, by making representations to the Post Office to get them to meet this payment, our case is that on moral grounds there are no reasons why payment should be made. When this sub-postmaster was appointed, we took all the usual precautions of inquiry into the gentleman's character. First, we found that he was a lieutenant in the Royal Ulster Rifles during the last war—an officer and, one would suppose, a gentleman. The character given to him by the Army authorities was "exemplary." The second reference we asked for was from his last employers—Messrs. Courtaulds, "the" Courtaulds—and again his character was given as excellent. There was no dereliction of duty on the part of the Post Office with regard to the appointment of this individual. The fact is, we have been let down en this matter.
Another point is that there has been a tremendous amount of lack of supervision. But the accounts of that post office were examined at the appropriate period of time. Another point which has been argued is that hardship has been caused. Quite frankly, I am afraid I cannot accept that. The fact that there have been defalcations must have caused a tremendous amount of disappointment; the annoyance must have been considerable and, no doubt, people have vented their feelings very freely, perhaps to the hon. Gentleman as representative of the Division. There has been a certain amount of inconvenience caused, but there has been no real hardship. The main point is, of course, that these people have received less than they would have done. My right hon. Friend has given every consideration to this case; we view it sympathetically, but we find there is no reason in law why payment should be made. An unbiased examination of the facts would lead to this situation being accepted—that it was not in his capacity 745 as sub-postmaster, but in his capacity as treasurer of the Welcome Home Fund that these offences were committed.

§ Mr. Birch
I think the hon. Gentleman is answering points which I did not make. I did not plead hardship or negligence on the part of the Post Office. The real point is this: what is the difference between the postmaster making an entry in this bond book and stamping it, and making a fraudulent entry in a post office savings book? Why should the Post Office honour one and not the other? That is the point I should like cleared up.

§ Mr. Hobson
If the defalcations had been made by someone who was not a treasurer of the fund, in all probability the Post Office would have honoured them, as, indeed, they did in the case of defalcations from the Savings Bank accounts. But the fact is that Mr. Beattie received the money as treasurer of the fund and not as sub-postmaster.

§ Mr. Ungoed-Thomas
My hon. Friend has given a full and fair explanation which, I am sure, will be very much appreciated but, sitting here independently, in an almost judicial capacity, as it were, I feel there is a difficulty about the point about cancellation. If the cancellation was made properly, or could have been made properly by Mr. Beattie, in his capacity of sub-postmaster, I find some difficulty in following the argument that there is no responsibility on the Post Office because it could have been made by someone else. I do not follow how the cancellation could have been made by someone else.

§ Mr. Hobson
If anyone desires to commit a forgery, he can do so. It could be committed on the actual Defence Bond book.

§ Mr. Ungoed-Thomas
May I put my point this way? Did not Mr. Beattie, in his capacity of sub-postmaster, stamp and cancel that document in a way in which he would have done, quite properly, if he had paid the money out to someone else who was entitled to the bond?

§ Mr. Hobson
I do not wish to recapitulate what I have already said, but let us take the normal Post Office practice in issuing Defence Bonds. When the money is paid it has to go to headquarters, and a book is issued. It is only when the book 746 is full that it goes to the head office of the Post Office. Mr. Beattie received this money as treasurer of the Welcome Home fund. The fact that he happened to be sub-postmaster was coincidental. He made an entry in the book, and stamped it. Other people, even if they had not held the job of sub-postmaster, could have done the same thing, had they been evilly disposed. It is our case that this offence was committed by Mr. Beattie as treasurer of the Welcome Home fund, and not as a Post Office official.

§ 2.4 p.m.

§ Mr. Solley (Thurrock)
It is unfortunate that I was not present when this Debate started but, nevertheless, I believe that what I am about to say may prove to be material to the question under discussion. I have had a little experience of the way in which the Post Office system operates, and I can say that, having regard to the extraordinarily large dimensions of that system, there is, correspondingly, a very small amount of crime in the Post Office. It is to the great credit of the nationalised industry which we call the Post Office that there should be so high a standard of honesty among its many thousands of employees. If, as a result of this Debate, it should go out to the country that the Post Office puts unnecessary temptation in the way of their employees I think it right and proper that that impression should, here and now, be corrected.
Anyone who has had experience at the criminal Bar will know from the cases which go to the Central Criminal Court—that is, cases which come within the jurisdiction of that court—that cases of Post Office employees are few and far between in comparison with the general calendar of crime which is dealt with at that court. The defendants concerned in Post Office crimes are, as a rule, quite untypical, in their outlook, of the general run of Post Office employees. Nevertheless, I think it only right to point out that crime in the Post Office, like crime elsewhere, has largely—not wholly, of course—an economic basis. It would be futile to deny that if employees were given a wage which was such as to enable them to have the minimum amount of luxuries for themselves and their families, the present small incidence of crime in the Post Office, and out of it, would become smaller.
747 This would not be the proper occasion to embark on the large question of the wage structure within the Post Office system, but I have had representations made to me from time to time about this matter. Not being a trade union leader, I have perforce had to say to those who brought this matter to my attention that, while I was sympathetic, they ought to seek their remedy through the official and trade union channels. I believe it would be wrong not to take this opportunity to ask my hon. Friend the Assistant Postmaster-General whether he is satisfied that Post Office employees are getting a sufficient wage, having regard to their onerous duties and to the fact that many are put into a position where, should they succumb to temptation, they can do a great deal of harm to the community? It is to their credit that crime comes within so small a compass but, nevertheless, I think it is the duty of my hon. Friend to see that even that small incidence of crime becomes smaller by bettering the lot of Post Office employees, not merely in respect of wages but general working conditions. If that were done, I am sure that criminal conduct on the part of Post Office employees should become an absolute rarity.