HC Deb 26 November 1957 vol 578 cc1115-8

Motion made, and Question proposed, That provision be made, as from the first day of April, nineteen hundred and fifty-eight,—

  1. (a) for authorising the Treasury from time to time to issue out of the Consolidated fund, for application as appropriations in aid of moneys provided by Parliament for the service of the Post Office, such sums (not exceeding in the whole the sum of seventy-five million pounds) as the Treasury may determine to be appropriate on account of expenses properly chargeable to capital account;
  2. (b) for authorising the Treasury, for the purpose of providing money for sums to be issued out of the Consolidated Fund as aforesaid, or for repaying to that Fund all or any part of the sums so issued, to borrow—
    1. (i) by means of terminable annuities for a term not exceeding twenty years (such annuities to be paid out of moneys provided by Parliament for the service of the Post Office or charged on and paid out of the Consolidated Fund), or
    2. (ii) in any other manner in which they are authorised to raise money under the National Loans Act, 1939 (any securities created and issued for that purpose to be deemed for all purposes to be created and issued under the said Act of 1939), and for requiring sums so borrowed to be paid into the Exchequer;
  3. (c) for the repayment to the Exchequer, out of moneys provided by Parliament for the service of the Post Office of sums issued pursuant to paragraph (a) of this Resolution (so far as those sums exceed the amount borrowed in the manner mentioned in subparagraph (i) of paragraph (b) of this Resolution), together with interest thereon;
  4. (d) for the issue out of the Consolidated Fund of sums paid into the Exchequer under paragraph (c) of this Resolution and the application of sums so issued in redemption or repayment of debt or, so far as they represent interest, towards meeting such part of the annual charges for the National Debt as represents interest;
  5. (e) for restricting the operation of subsection (1) of section one of the Post Office and Telegraph (Money) Act, 1955, and repealing section two of that Act, and for the repayment into the Exchequer of certain sums issued under the said subsection (1).—[Mr. Powell.]

9.58 p.m.

Mr. C. R. Hobson (Keighley)

It is not my intention to make a speech on Command 318, but there are certain matters about which I want to ask, because this is a very important Command Paper, although very short and terse. I think that the Financial Secretary to the Treasury will agree that it indicates a complete change in the method of commercial accounting in the Post Office. Does this new method arise from the fact that private accountants have been introduced into the Post Office and have suggested new methods of accounting?

Reference is made to the £898 million borrowed over a period of years from the Consolidated Fund. We are interested in knowing from what date that borrowing began. The figure of £175 million for borrowing two years ago is given, but we do not know over what period of years the £898 million is spread. I would like, too, further information on paragraph 6 of the Command Paper. It is very important. It says: It will no longer be necessary in the Accounts and Estimates to distinguish between development and renewals. This will result in economies in accounting. The last sentence, of course, is self-evident.

What I think we are entitled to ask is this: when the accounts and estimates are presented in, presumably, their new form will we be given the exact amount of money spent in development as we have heretofore, and will it be divided, as has been the common practice in years gone by, in postal services, telegraphs, telephones, cable ships, and so on? I wondered whether, in view of the introduction of this paragraph, that was to be no longer necessary, or whether it will not be done. I agree that it may not be necessary, but it is very important, as far as the Committee is concerned and, indeed, when the matter is discussed in the full House, that this information should be made available.

My final point is this. When this Ways and Means Resolution is passed legislation will be introduced. Is it the intention of the Postmaster-General, in consultation with his hon. Friend the Financial Secretary, in the forthcoming Money Bill—which, I understand, will be introduced in a week or so—that that Bill will contain the legislation referred to in the last paragraph of the Command Paper? Those are the questions I ask on this very important Command Paper.

The Postmaster-General (Mr. Ernest Marples)

May I reply, first, to the last part of the question by the hon. Member for Keighley (Mr. Hobson). Paragraph 9 of the Post Office and Telegraph (Money) White Paper will be taken care of in the Money Bill which will be laid before the House. What we are doing in altering these accounts is to bring the cash account, which the Post Office has to keep for Parliamentary purposes, into line with the commercial accounts which it has to keep for commercial purposes as a trading concern. It was partially recommended by Peat Marwick Mitchell, the chartered accountants called in to advise the Post Office. In past years there has been great confusion between the reconciliation of the cash accounts which are presented to Parliament because we are a Government Department and the commercial accounts which are presented because we are a trading concern.

The hon. Gentleman's next question was: what did the £898 million include? When did it start? It was the total amount authorised to date under all the money Acts starting about 1870. The full details are contained in page 49 of the Post Office Commercial Accounts, 1955–56. It started with £1 million in 1870 and the next year it was £300,000. That figure of £898 million includes £175 million which was passed in the last Money Act in 1955, all of which will be spent by March next.

The next question the hon. Gentleman asked was: why did we distinguish between renewals and developments, and he mentioned paragraph 6 of the Cmd. Paper? This distinction between cash spent on the renewal of existing equipment as it became obsolete and cash spent on entirely new development was an artificial distinction imposed by the old system of accounting which will be abandoned in April. It was expensive from the point of view of keeping records and has little relevance in the modern accounts we shall introduce. The change we are making was one of the recommendations in the chartered accountants' report, a copy of which is in the Library. They said that by doing this we would avoid a mass of calculations and arbitrary assumptions which are required at present.

The hon. Gentleman also asked: would the Post Office show the division of the total capital expenditure not as between renewals and development, but as between different forms of expenditure, such as, the postal services and telephones? The answer is that that will be so in future, so that this House will be able to decide whether too much is being allocated to telephones or too little to postal services, and so on.

I think that I have answered all the hon. Gentleman's questions and I hope that the position is clear to him. I hope to clarify the issue further when the Money Bill comes before the House.

Question put and agreed to.

Resolution to be reported.

Report to be received Tomorrow; Committee to sit again Tomorrow.