§ Order for Second Reading read.
§ 11.6 a.m.
§ The Postmaster-General (Mr. Wilfred Paling)
I beg to move, "That the Bill be now read a Second time.
The reference in the Bill to "local telegraph authorities" is general, but, in fact, it applies only to the Corporation of Kingston-upon-Hull. Hon. Members will remember that the local telephone service in Hull is owned and run, not by the Post Office, but by the corporation. This is a long-standing arrangement, and the reasons for it are historical. But I mention it here because it is responsible for a state of affairs in which the corporation, as telephone authority, is now being placed in an unfair financial position.
In 1940, the Government had to impose a surcharge on telephone subscribers generally in order to raise money for the war. It would not have been right to leave subscribers on the Hull system out of the arrangement, as that would have exempted them from making their proper contribution to the war effort. For this reason the Post Office and Telegraph Act of 1940—by virtue of which the surcharge was imposed—applied not only to services provided by the Post Office, but also to those of local telephone authorities. In point of fact, as I have already mentioned, Hull was the only such authority.
Since then the character of the surcharge has changed. So far as the Post Office is concerned, all our costs—operating, maintenance, development and 892 equipment—have greatly increased since the time that the surcharge was imposed; and it is no longer a simple contribution to the national Exchequer over and above normal Post Office revenue. Rather, it has become necessary to use it as an integral part of this revenue, in order to meet these increased costs.
The Hull Corporation, on the other hand, has been obliged all the time to pay over the surcharge to the Exchequer. It has not been able to use these surcharges to meet its increasing costs, and, for this reason, it is now beginning to come up against considerable financial difficulties. I think hon. Members on all sides of the House will agree that it is unfair that Hull should be penalised in this way, and the effect of this Bill is simply to release them from their obligation under the 1940 Act. The corporation propose, I understand, if this Bill becomes law, to increase the basic rental rates by the amount of the existing surcharge. This will have the effect that the subscribers will be paying the same total rentals as at present: but the corporation will be able to use the additional revenue to meet the increased costs of the service.
Perhaps I should explain that under the terms of its contracts the corporation cannot apply these increases on the same date to all its subscribers. The earliest effective date will be one month, and the latest 13 months, from the date of public notice of the increase. This is the reason behind the provision in the Bill that no surcharges shall be payable to the Exchequer in respect of any new contract made after the Bill becomes law, and that the present surcharges shall cease to be payable as from the date when the change in basic charges becomes effective for each subscriber. There will be a small loss to the Exchequer—of the order of about £27,000 a year. I am confident that this small but just Measure will commend itself to both sides of the House.
§ 11.10 a.m.
§ Mr. Sydney Smith (Hull, South-West)
On behalf of the citizens of Hull, I should like to express gratitude for the way in which the Minister has dealt with this situation. The City of Hull is in a unique position in that it is the only local authority with its own private telephone service. Therefore, this Measure applies solely to Hull. The advantage which it 893 gives us, to the extent of £27,000 a year, is considerable and will help us in our development. On behalf of my constituents I wish to express our gratitude to the Minister.
§ Mr. Grimston (Westbury)
On behalf of my right hon. Friends and hon. Friends I merely wish to say that we appreciate the Postmaster-General's explanation of this Bill. It puts Hull in the same position as the Post Office with regard to increased charges. For that reason we do not oppose the Measure.
§ Question put, and agreed to.
§ Bill read a Second time, and committed to a Committee of the Whole House for Monday next.—[Mr. R. J. Taylor.]