HC Deb 21 May 1973 vol 857 cc2-3
1. Mr. Rost

asked the Minister of Posts and Telecommunications whether the proposed increases in charges for postal services, as notified to his Department, will comply with the Government's counter-inflation policy, phase 2; and why the recent increased telephone charges as a result of the introduction of VAT have not allowed for the abolition of selective employment tax.

The Minister of Posts and Telecommunications (Sir John Eden)

Under the Price and Pay Code the Post Office may apply to the Price Commission for increases in postal tariffs in line with the increase in its allowable costs, but no such application has been made. As to the second part of the Question, the telephone service did not pay selective employment tax.

Mr. Rost

Will my right hon. Friend confirm that with each of the past two price increases for postal services there has been a resulting drop in volume and use of the facilities, which has not been recovered subsequently? Does it make commercial sense to increase postal charges again by a proposed 20 per cent., which will only price more postal services out of the market?

Sir J. Eden

I am sure that the Post Office will have considered the point raised by my hon. Friend. I cannot comment on the figure of 20 per cent. or any other figure of that kind.

Mr. Gregor Mackenzie

Does the Minister recall that we raised this matter during the Committee stage of the Post Office Bill and that I asked him then, as I ask him again today, whether he has thought in terms of giving any compensation to the Post Office because of the effects of the phase 1 and phase 2 policies? Will he tell the House whether he has been thinking about this, rather than just a straight increase in postal charges?

Sir J. Eden

As the hon. Member knows, that matter has been and still is under consideration by my right hon. Friend the Chancellor of the Exchequer in relation to the position of all nationalised industries.