HL Deb 14 June 1921 vol 45 cc526-34

LORD SOUTHWARK rose to ask His Majesty's Government whether, in view of the highly unsatisfactory, unsound, and universally condemned proposals of the Postmaster-General in regard to the altera- tions of Postal charges, and with a view of advancing trade on sound and paying lines, they will consider reverting to 1d. postage and 6d. telegrams.

The noble Lord said: My Lords, before asking this Question, I should like to express the greatest possible sympathy with the new Postmaster-General in that he was called upon to devise financial arrangements for making both ends meet at the Post:Office before he had had time to consider and formulate any new proposals. The only possible way in which he could make both ends meet waF Hie hasty alteration of the postal rates which he has put into force, and which, I think all noble Lords know well. are very unpopular in the country. In view of the fact that he delivered a long speech in the House of Commons last week, I do not propose to go over postal subjects generally, but to deal with the subject matter of my Question.

I should I however, to congratulate the Postmaster - General upon having appointed a Post Office Council of business men, so that, as Postmaster-General, he will have the advantage of "a business point of view on every large question which arises in connection with the Post Office." The commercial world will, I am sure, be delighted that he has secured the assistance of such a very strong body of great and practical business men. Having secured their assistance, all will depend upon the powers they are called upon to exercise: As regards the duties and powers of the new Council, I hope they will be more than advisory. I will not ask to-day what the duties are to be, because the Postmaster-General has stated that he does not wish to define them until be has interviewed the new body. I understand that that interview will take place to-morrow. What I do ask for is a promise that the public should be made fully aware of the defined duties when they are settled. That is not an unfair request to make, because we know what advisory councils have been in the past.

If the Committee is purely advisory on points submitted to it by officials it will not improve matters. The officials will be enabled to make use of it as a buffer against outside criticism. In my view, the Committee should have power to initiate proposals of its own and to bring forward grievances, and at the same time should have assurance that steps will be taken to deal with those grievances. The business men who compose this new body are men of great experience and ability. They are men in whom, I am sure, the commercial world has the greatest possible confidence. That confidence will be maintained if the Committee has real power, but if the Committee is there to act simply as a sort of Advisory Committee to the permanent officials, it will not be any good to the commercial world. We want an assurance that the advice they give will be accepted and acted upon.

The Question that I have placed upon the Paper is couched in rather strong terms. With regard to the statement in it that the proposals are universally condemned, perhaps I may read a Resolution that was passed as recently as Thursday last by the Council of the Associated Chambers of Commerce, which includes London, Glasgow, Birmingham, Manchester, Liverpool, Belfast, Newcastle, and all the great cities and towns of the country. That Resolution was as follows:— The Council of the Association of British Chambers of Commerce desires strongly to impress on His Majesty's Government that the industry and commerce of the country is already overburdened by taxation and charges, and it protests vigorously against the proposed increases of postal rates to make good deficits on the telegraph and telephone services as the postal rates are of themselves at present producing a handsome profit. The time has come to improve the efficiency and reduce the war-swollen cost of the Post Office. and thereby obviate the increase in charges which will strike a further blow at the recovery of trade and prolong unemployment. The Council is firmly of the opinion that the increased charges will curtail the business of the Post. Office, and not accomplish the desired object. Those are views which I think are held by every one connected with commerce. We hope this new Committee will advise the Postmaster-General, and induce him and His Majesty's Government to alter the decision to which they have come.

I would urge the Postmaster-General, in the interests of trade and revenue, and for the prevention of unemployment, to make it one of his first duties to ask the new Council to decide whether it is possible to revert at once to our pre-war postal rates. If that were done it would, in my opinion, enormously increase circulation and income. I think the same thing applies to postal charges as has been found to apply in regard to taxation. We have seen the result of the taxation of wines and cigars. It has proved that you can tax up to a certain point., but that when you go beyond it von lose revenue instead of increasing it. I would ask the. Postmaster-General what profit he expects to make upon the increased postal charges. Have the Government considered the serious losses the business community are likely to sustain? Have they considered that, instead of developing business and accumulating large profits resulting in greater revenue from Income Tax, they will be retarding progress, destroying trade, reducing the country's Revenue, and bringing about unemployment? His Majesty's Government. must be in possession of information, received during the past fortnight, showing that these proposals will inflict a very great injury upon trade, create a great deal of unemployment, and bring about no improvement in the Revenue.

Some noble Lords may not, be acquainted with the effect of the increase of postal charges in the City of London; indeed, in a great measure. I believe, all over London, and, I have no doubt, in other parts of the country also. The increase of letter postage to 2d. has induced large firms and companies to save money by themselves starting postal departments with organised staffs of boys and girls to deliver letters and messages by hand all over London. These formerly used to be sent through the Post Office. As a result. there has been a great loss of revenue for the Post Office. That is one of the results brought about by high postal charges. The Postmaster-General said the other day that in putting up the charges he had considered the losses that the Post Office was likely to sustain by reduced circulation of communications. But we do not want reduced correspondence in this country. To improve the trade and commerce of the country you must make it easy and cheap for people to get into communication with one another, and that you can do by cheap postage and telegrams.

As to telegrams I would like to make a suggestion. I had the great pleasure, when I was in the House of Commons many years ago, to tell in the Division for sixpenny telegrams. We succeeded, and the sixpenny telegrams were a very great success.

VISCOUNT PEEL

What year was that?

LORD SOUTHWARK

Twenty years or more ago. My noble friend, the Earl of Crawford, suggests forty years ago, and it is possible that it may have been as long ago as that. We are told that sixpenny telegrams are very costly to the State, but I would point out that the great expenditure incurred is in the delivery of telegrams at places a long distance from telegraph offices. I would therefore make the suggestion that a telegram handed in at any telegraph office shall be delivered in all cities and towns throughout Great Britain and Ireland at. a charge of sixpence, and that delivery to places outside the cities and towns should be subject to a mileage charge for delivery, as in days gone by. It is more profitable to deal with a large number of telegrams at a low price in one city than to deal with a few at a high price, and, therefore, I. contend that it. would be profitable to encourage the use of telegrams in cities and towns by allowing them to be sent at the charge of sixpence. I am not asking that my opinion should he taken in this matter, but am merely suggesting that as soon as this new Committee meets the Postmaster-General should ask its advice and assistance as to whether it is possible to revert to the cheaper postage and telegraph charges.

I do not wish to say anything as to telephones. A House of Commons Committee is now sitting in regard to them, and I have no doubt that that Committee will make a recommendation. We all know that the increased telephone charges have resulted in less use of the telephone. Noble Lords present this afternoon know that they do not use the telephone system to the extent that they did formerly. The telephone is now so costly that I am informed the Government are losing revenue owing to the imposition of the high charges. In this matter also private organisation will be brought about to do the work more cheaply than it is done by the Government, just as has happened in the case of letters. I am told, in fact, that. many people in a large way of business are actually saving money by using messengers to deliver by hand communications which formerly would have been spoken over the telephone. That is not good business for the country.

I know I am expressing the views of the commercial community when I contend that this new Committee, which contains men of great. ability and knowledge, should have power not only to listen to the suggestions of the Government but to make proposals which they consider might be carried out. In order to prevent any complaint on the part of commercial men that their views had not been put before the Government and received consideration, we should also be informed, when proposals are rejected, that they have been made and rejected.

THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT PEEL)

My Lords, I accept gratefully, on behalf of the Postmaster-General, the good wishes, congratulations and compliments which have been dealt out to him by my noble friend Lord Southwark. I suppose the noble Lord spoke those words in expiation of other words which he used about him. In his Question he accused the Postmaster-General of putting before the country "highly unsatisfactory, unsound, and universally condemned proposals." It would not be possible to use words more condemnatory of a Minister than those. The phrase "highly unsatisfactory and unsound" is in the nature of an adjective which he is entitled to use, and which, no doubt, expresses his own opinion. But I must take exception to the words "universally condemned," because that is a question of fact. These proposals, which he says are universally condemned, received the approval of a very large majority in another place after the explanation of the Postmaster-General, and, therefore, my noble friend is making an unwarrantable attack on another place in saving that proposals which were approved by that Chamber are universally condemned.

He also asks whether, when the Postmaster-General defines what exactly are the powers and duties to be assigned to the Advisory Committee, he will make that statement to the House and to the public. I have no doubt. the Postmaster-General will do so; I think he stated so in another place. I will convey to him the suggestion that the Committee should have power to make representations on certain points. It is to be hoped that the gentlemen who will sit on this Committee will have sufficient time to give to the complicated business of the Post Office. I can assure Lord Southwark that it is an extremely technical business, and unless they can devote a good deal of time to the consideration of these questions their proposals will be of limited value.

My noble friend must recognise, of course, that there is a loss on the Post Office Estimates for this year, and that the loss must. be met. I was a little anxious and nervous, thinking he might suggest that this loss should be met by means of a subsidy. Having regard to the present condition of taxation I am glad he does not ask me to put any such proposal before the Postmaster-General. He, however, suggested that we should go back to the penny postage and the sixpenny telegram. I would call his attention to the fact that neither the penny nor the sixpence to-day represents the purchasing value it possessed before the war. Even had the value of money remained the same as in pre-war clays it might still be difficult to go back to those original charges. Considering the depreciation in the value of money, the difficulty of returning to the rates that existed before the war would be enormous, even if other questions did not require to be taken into account. The increase in the Post Office Estimates caused by the war bonus alone amounts to over £28,000.000, which is more than the whole of the cost. of the administration of the Post Office in the year before the war. Therefore. my noble friend will see, if he is addressing himself to the difficulties of the Post Office, that it really is the question of this large bonus which stands in the way of any reduction of charges.

With regard to the specific. point he has placed before the House this afternoon—the question of reverting to the penny postage and the sixpenny telegram—on the postal business as a whole the number of packets passing through the Post Office has fallen by 3½ per cent. since pre-war days. If the penny postage and halfpenny postcard—the noble Lord did not refer to the halfpenny postcard—were restored, and the number of packets increased to the pre-war level, we should obtain something less than £1,000,000 per year on the recovered traffic at the old rates. That is assuming we picked up the 32 per cent. which we have lost; while the loss from the application of the lower rates to the present volume of traffic would be about £20,000,000. That is a terrific and substantial deficit which I would ask my noble friend to digest at his leisure.

Were the sixpenny telegram restored and the number of telegrams increased to the pre-war level, we should obtain about £400,000 on the recovered traffic at the old rate, but lose about £1,900,000 from a reduction of the rate on the present volume of traffic. Again, that is a very substantial loss. Possibly these figures, which have been carefully worked out in the Post Office, may save a certain amount of trouble to the gentlemen on the Advisory Committee and prevent them putting forward similar proposals.

The noble Lord who has a large experience of business has assumed that if you largely extend the amount of your business you can sell your articles at a cheaper rate, because you can spread your overhead charges over a larger number of articles and thus reduce the cost of production. He is beset by the fallacy that all businesses are the. same and that you can apply to all businesses the principles which you can apply to a certain limited class. A peculiar point about the Post Office business is tins: the overhead charges are very small as compared with the working charges; they are very much less than in most businesses. In the rural areas an increase in the number of letters makes, of course, little difference in the number of postmen required to deliver them.; but in the larger towns, where the bulk of the postal business is centred, the labour required is more closely adjusted to the volume of traffic, and an increase in the volume of traffic produces something approximating to a proportionate increase in the number of the. staff. In this particular class of business, therefore, in contradistinction from many kinds of manufacturing businesses, the cost of administration increases almost proportionately with the amount of business that is done.

One last point with reference to the business. Certain charges have been made as to the increase of staff in the Post Office. As a matter of fact, the staff of the Post Office is smaller than it was before the war, and though, as I said, business has in certain respects fallen off, in certain other respects it has very largely increased, and new duties have been thrown upon the Post Office. The result is that I do not think it can be said—t any rate as compared with the year before the war, when there was no attack, I think, upon the staff of the Post Office—that that, staff is unduly swollen for the duties that it has to perform. I think I have covered all the points to which my noble friend has referred.

House adjourned at twenty minutes before six o'clock.