HL Deb 26 May 1925 vol 61 cc533-44

THE EARL OF DENBIGH rose to call attention to the system known as "cash on delivery," and to ask His Majesty's Government if the General Post Office is willing to adopt the same as practised in some forty other countries in the interests of small producers, and with the object of checking profiteering as well as steadying the prices of food. The noble Earl said: My Lords, it is perhaps unnecessary for me to remark in this House upon the continued agitation that is going on in the country for the purpose of reducing the price of food, and also of reducing the great disparity which exists between the prices obtained by the producer and those which have to be paid by the consumer. Those of your Lordships who have looked at the Report of the recent Food Commission will have seen that the difficulty of solving this problem in a practical way was beyond the ingenuity of that very able Commission. I am inviting the attention of your Lordships' House to the system which is known as "cash on delivery," familiarly known as c.o.d., and to the great success which that system has reached in very many countries—I believe somewhere in the neighbourhood of forty—where it has been adopted. In this country it is practically unknown.

As regards the working of the system, parcels are delivered at the address of the consignee, the money is paid over, and the transaction finished. This system is practically a development of the parcels post. It entails very careful adherence to the regulations of the Post Office with respect to packing and directing. You have a label declaring the nature and value of the goods, and the name and address of the consignee as well as those of the sender. Then, on delivery, the postman collects the money, which is transmitted to the sender through the medium of the Post Office, and, in addition to the charge under the ordinary parcels post rates, a special fee is charged, which varies in the different countries where the system is in operation, and also varies according to the amount of money which is collected.

Experience has shown that service of this nature in the many countries where this system has been adopted is of enormous convenience, and is very highly appreciated. According to figures given two years ago in the Central Chamber of Agriculture, where the matter has come up for discussion on several occasions, it appeared that in 1913 no fewer than 74,000,000 parcels were dealt with in this way in Germany, and the value of those parcels was something like £78,000,000, taking the old rate of 20 marks to the £. If a practical, go-ahead nation like the Germans can give these facilities, and we refuse to march with the times, it will be one more instance of foreign commercial enterprise leaving us behind. Moreover, in Australia and India the system is in wide use, and is greatly appreciated. In the United States, too, it has been a success for years. There it is operated by a private express company. In 1921 26,000,000 parcels were carried, which was 30 per cent. increase over the number carried in the previous year.

The Canadians, seeing the success of this system in the United States, have adopted it in recent years in their own Post Office, again with most encouraging results. At first there was a considerable amount of opposition on the part of small retailers in the country. They thought that orders for goods would all go past them and find their way to what they call the big mail order houses in the large towns, and that they would suffer considerably in consequence. But experience has shown that their fears were much exaggerated. In fact, they were completely unfounded and the result is that the service in Canada is extremely popular. In 1923 the parcels steadily rose from 10,000 in February to 38,000 in May, practically double. As regards the way in which it affects the retailers, an analysis shows that repair firms deal with about 35 per cent. of the parcels, general retailers with another 35 per cent., while the mail order houses only accounted for about 15 per cent., the remainder being spread between the manufacturers and "jobbers"—I do not know quite what they mean by "jobbers." It is as well to remember that the repair firms are practically retailers. There is also the enormous convenience, when an unexpected breakdown occurs, of being able to obtain at short notice spare parts and items for repairs in cases where the exact cost is not known beforehand and the cost cannot be sent with the order, and when the person wanting the goods is not necessarily known to the firm in question and is therefore unable to obtain credit.

I would draw special attention to the great need in this country of a more economical system for distributing food crops. It would be the greatest possible boon to small holders. In a debate in another place a few nights ago, on a Bill brought in by the Labour Party, Mr. Duncan Graham quoted from a speech by Lord Bledisloe, in which he said:— There is probably no worse consequence of the lack of cohesion, organisation and leadership in British agriculture than the extent and power of the middleman's interest, unparalleled in the civilised world, whose parasitic tentacles have slowly yet surely fastened themselves upon the industry, and are sucking out its lifeblood to the detriment of producer and consumer alike. The creation of small holdings has been a great feature in this country. For their success small holdings depend, first, on the nature of the soil, and, secondly, upon the ability of the small holder to market his goods easily and satisfactorily. In too many cases the small holder is entirely at the mercy of shops in neighbouring towns, to which he has to send his goods, and we see complaints in the newspapers over and over again from small holders of the miserable prices they obtain, and then we also see letters from consumers complaining of the prices they have to pay.

Many small holders at the present moment do a certain amount of business in sending agricultural produce by post; and they labour under a great disadvantage. They have to wait some considerable time before they can get paid. They have no clerks or clerical staff to keep elaborate accounts, and any system such as this, whereby they could send goods to regular customers and get paid within a short time through the medium of the Post Office, would be a great boon to them. It would be highly appreciated by the agricultural community. I maintain that it is worth while doing a great deal in order to encourage the small holder. Items such as butter, small cheeses, cream cheeses, eggs and poultry, could all be sent in this way if the rates wore not excessive. The parcel post rates, which were increased largely during the War but which were certainly reduced about a year ago, are such that it is uneconomical to pay them on articles of comparatively small value. Therefore, I think some special rates should, if possible, be accorded for agricultural produce.

I have seen it stated by the Post Office authorities that they have grave doubts whether this particular branch of business would be remunerative to the Post Office. They say that already a small loss is incurred on the parcel post. I suggest that the Post Office is a great institution which exists for the convenience of the public, and that it is a great mistake to work it in what I would call water-tight compartments. They may lose on the one compartment, but they would gain on the general run. It is rather a case which illustrates the old saying that "what you lose on the swings you gain on the roundabouts." If the Post Office has a loss on one department it can get it back on another. I hope I shall receive a sympathetic reply from the representative of the Post Office in this House. I am quite aware that it would mean a very considerable revolution in the existing methods of collection and distribution, but I am not at all certain that that would be any disadvantage.

There is a widespread opinion that some of the methods of the Post Office in the matter of collection and distribution, more especially in the country districts, are absolutely archaic. If nothing else happened except that it was found necessary to abolish the antediluvian horse vans which now encumber the streets and impede traffic in London, I do not think anybody would be the worse for the substitution of quick moving and efficient motor vans for motor transport. I have no doubt that all this would cost money; and the Post Office may say that the system would be expensive. But I ask your Lordships to consider another aspect. Even if they do lose money, what are we doing at the present moment with regard to the expenditure on these small holdings and on that pernicious "dole" system? There is no doubt that the institution of this system would involve a considerable amount of extra labour. It would employ a considerable number of men.

There is no doubt that a very large amount of money has been absolutely lost in small holdings, many of which are unsuccessful simply and solely owing to the defects in the facilities for marketing produce. We want to give every possible encouragement for the building up of our rural population. We want to make small holdings a profitable means of earning a livelihood, and I am sure that if this reform of the Post Office could be brought about it would be found to be of enormous convenience to the general public, and would have the effect also of enabling persons to compete with profiteers in their particular locality by being able to obtain goods from other places. It would have a great effect in checking profiteering and abnormal prices being charged in any particular case. In venturing to draw your Lordships' attention to this matter, I desire to ask His Majesty's Government whether the Post Office can see its way to the adoption of this system at an early date.


My Lords, I am very glad that the noble Earl has brought forward this subject and I desire to support his plea with every argument I can adduce, although he has very effectually covered the ground. Unless my memory deceives me, in the classification adopted by the then Board of Agriculture before the War, no fewer than 80 per cent. of the farms of this country were classified as small farms. In addition, there are the small holdings which have been created in connection with ex-Service men and otherwise in such large numbers since the War, and there are the allotment holdings. Accordingly the number of persons engaged in the production of agricultural produce, who would be affected by the reforms for which my noble friend has pleaded, is very large, and I have no hesitation in saying that all that large class of hardworking and deserving agriculturists, the producers of our home produce, would be immensely benefited by this "cash on delivery" system if it were encouraged by the General Post Office. Then there are all the consumers of this country, who are generally more thought of by Governments in power than the agricultural producers. In this case the interests of the producers and of the consumers are identical, and I think that it is a very strange thing that in this country, where agriculture has so many special difficulties to contend with, no effort has yet been made to establish this "cash on delivery" system.

My noble friend has told your Lordships in how many countries this system exists and that no country which has once established it has given it up. The authorities of none of those countries, I think, deny that the system has been very beneficial to agricultural producers and to consumers alike. But I would speak more especially of South Africa. There the farms are not small farms, and accordingly I may conclude that, if the system has benefited the South African farmer, it might very possibly benefit the British big farmer as well as the small farmer and small holder. This system has been in operation in South Africa for some years and it has been a huge success. If His Majesty's, Government would refer to the Minister of Agriculture of the Union of South Africa, or to the Minister of Posts and Telegraphs, either of those high officials would speak of the system in the warmest possible terms and would say that it has been of the greatest benefit in South Africa, both to producers and to consumers, and that it was constantly extending its sphere of operation. I cannot but think that the postal traffic produced by this system would in a few years become so large that, under any reasonable scale of postage fees, it would become a paying system.

It is one of the great disadvantages of State trading that there is none of that enterprise which we find in private operations. I am not going to contend to-day with my noble friends opposite on the great subject of individual trading and Socialism, but there can be no doubt whatever that if our General Post Office had been in the hands of a great private firm, headed by a man like Mr. Gordon Selfridge or the founder of Harrod's Stores, we should have seen enterprises more far-reaching than any that the Post Office has hitherto undertaken. I am convinced that this system, reaching into every corner of the land, to every farm as well as to every village and to every cottage door, if necessary, is one that they would have tried long ago and established as a great success. I do sincerely hope that His Majesty's Government, who are looking about for an agricultural policy and who, through the mouth of the Prime Minister, if I remember rightly, have very strongly expressed their wish to help the consumer in these times of high prices and big profits to middlemen, will extend on behalf both of the consumer and of the agricultural producer, their friendly welcome to this suggestion of my noble friend.


My Lords, my noble friend spoke of forty different countries having adopted this system of "cash on delivery." I have been given the names of a good many of whom the Post Office are aware, but I will not weary your Lordships with them, because we grant that there is an enormous number of countries, not only European but overseas—to mention only New Zealand, India and many of our Crown Colonies—that have adopted the system. My noble friend mentioned the very striking example of Canada where, as he said, there was great opposition among the small retailers but where, nevertheless, the system was started in October, 1922. In the first year there were 357,000 parcels and in the second year 667,000, the opposition of the retailers has been overcome by experience, the system is supported in their trade journals and they are large users of it.

My noble friend probably knows that the British Post Office has a "cash on delivery" system with India, New Zealand and many Crown Colonies, as well as with foreign countries, including France, Holland and Belgium. In 1924, 217,000 parcels were despatched, to the value of £565,000 and 13,000, to the value of £24,000, were received, and the Post Office consider this service to be rapidly extending. My noble friend, I know, has served in India, as I have, and he will remember how the system obtained there many years ago. It was then called the "value payable post," and I remember that it was a great factor in facilitating business between tradesmen in Calcutta and Bombay and impecunious and creditless subalterns up country. I am sure that he will remember that.

I understand that wherever the system has been adopted it has been a great success. The countries that have started it have gone on with it. In regard to my noble friend's fears that it might not he economic, I understand that the Post Office consider that an inland service would be quite simple and practicable and could be worked quite as well as the foreign service is worked now. The principal reason why it has not been adopted so far in this country is the known opposition of small retailers in different parts of the country. Their great fear is that it would take custom away from local shops and that people would communicate with, and buy their produce from, the big stores. That is really the chief objection to the system being adopted in this country. It has been shown, however, from the experience of other countries that this has not proved to be the case in those countries where the scheme has been put in force.

The noble Earl, and also Lord Selborne, brought the question of agriculture to bear upon this proposal, and I may say that my noble friend the Parliamentary Secretary of the Ministry of Agriculture has sent me word that he is heartily in sympathy with the proposal so far as his Department is concerned, but that he would, of course, not put his views before those of the Post Office. The effect of my answer to the noble Earl is that the Government are fully alive to the notable success of this "cash on delivery" system abroad, and in the Colonies, and also as to the report which they have received as to its utility and popularity. They therefore have felt bound to make inquiries into the matter, and those inquiries are still proceeding. I am afraid hat I cannot give my noble friend any more definite answer than that, but I hope he will understand, from what I have said, that there is no active opposition on the part of the Post Office to the system which he proposes should be adopted in this country.


My Lords, I am sure that all agriculturists are very much obliged to the noble Earl for having raised this Question, because it is a matter not only affecting the small holder and the large holder, but also other classes of people. There is no doubt that since the War prices have not been reduced by the small retailers in the country, and the effect of having this system would be that these small retailers would have to come into line, owing to competition, and sell their goods to agricultural labourers, miners, and other workmen, at much reduced prices. I noticed that it was pointed out that already we have this system of c.o.d. at work in this country, because our foreign competitors are able to send their goods over to this country, and get them paid for by such a system. The English Post Office, while not giving these facilities to the English producer, is quite ready to do it for the benefit of the foreign producer who sends his goods to this country.

The noble Earl who speaks for the Post Office said that he believed that retailers in other countries had not suffered in this matter. I suppose that, having to reduce their prices, they have benefited by a larger turnover and sale, and so, in the long run, have not suffered. The noble Earl said, on the other hand, that retailers in this country had been the principal people who had prevented the Post Office from carrying out a system which, from the Post Office point of view, was quite workable and would not result in a loss. I quite realise, what no doubt is the case, that in another place members have had great pressure put upon them by the small retailers. I only hope that after this general expression of opinion from all quarters of this House, the noble Earl will be able to press the Post Office to take its courage in both hands and not have any regard to the protests of the small retailers in this matter. It is such a big question, and of such vital importance, that I think the Government ought to be ready to say that they will sweep aside these objections, coming from a comparatively small body of people, although I admit that they are influential, and that they will insist in the future, and I hope the near future, upon the same facilities being given to Englishmen as are accorded to people living abroad, who are able to send goods to this country under a system of "cash on delivery," and thus compete on very favourable terms with goods produced in this country.


My Lords, the noble Earl opposite who raised this Question pointed out the unenterprising character of a State institution in this country as compared with private enterprise, and in that he was perfectly correct. He went on to say that were the Post Office run by Selfridge's or Harrods' we should see a great deal more enterprise. He might have added, were it run by a Socialist Government—because Socialist Governments and Socialist theories are by no means in favour of want of enterprise. On the contrary, they regard the Post Office as an important servant of the State, rendering services to the whole community, which should be developed as much as possible. It is admitted by all previous speakers, that we are behind practically all other civilised countries, and in a retrograde position, in this matter. The position in America of what are called mail order houses is really quite remarkable. I do not know whether your Lordships recollect an American novel, which I read recently, in which at the beginning the hero is discovered at a western station in a state practically of isolation, living on his mail order catalogues!

It is true that conditions are not the same, or anything like the same, in this country, but none the less it is true that in a great part of the country people residing there—particularly poor people—are out of touch with anything in the nature of a general store or large shop, and can only go into the nearest towns on market days and choose what they require from a totally inadequate selection, at too great a price, from the small retailer, for whom the Post Office has been far too anxious. It is no part of our policy to encourage want of enterprise and efficiency on the part of small retailers. We believe that if they are induced by competition to get a larger stock it will be all for the good, and even for the good of the small retailers themselves. I was very glad indeed to hear, on behalf of the Post Office, that they are by no means blind to our being behind other countries in this matter, or to the fact that they are working the system successfully for foreign countries and not for us, and that they are considering the matter. I sincerely hope that the noble Earl who raised the Question will continue to press the Government until some system of this sort is introduced.

The noble Lord dealt chiefly with the question of agricultural prices. There are all sorts of things which a general store keeps which, if you have not a car, you cannot get in these country districts, unless you can write for them. What happens now is that you write for some twopenny-halfpenny thing, wait two days at least, and get a pro forma invoice for 3s. 7d. You have got to get that sum and send it back, and then wait a week or so until you get your article. How much simpler it would have been to get the thing by post in a couple of days. and pay the Post Office for it. Of course, it is going to involve certain machinery in the Post Office, and certain cost, and perhaps administrative changes, but a charge will be made for the service and I have very little doubt—and I rather hope from what the noble Earl said that the Post Office have very little doubt—that the service will soon pay for itself. It would undoubtedly confer great benefit upon people living in isolated districts, and greatly add to their comfort. We are anxious to see some check put upon rural depopulation, and this would tend to make the country a more agreeable place than the town. I am very glad of the sympathetic answer which has been given, and I hope that when the matter is raised again we may have a definite assertion that something is going to be done. I have great personal confidence in the present Postmaster-General, and I am sure he is alive to all the possibilities of this matter.