§ LORD SOUTHWARK rose to ask His Majesty's Government whether it is a fact that the surplus of revenue over recipts from the postal service during the year 1925–1926 was £7,416,266, and 165 from the telephone service £550,830, making a total of £7,967,096 profit after charging interest on capital; and whether in view of this large profit the Government propose to give the country the benefit of penny postage which is now enjoyed by the United States, New Zealand and other parts of the Empire.
§ The noble Lord said: My Lords, my reason for putting down this Question is that we are approaching a time when the Chancellor of the Exchequer, if my figures are correct, will have to make up his mind what he is going to do with this great surplus from the operations of the Post Office, and he will have to decide whether he intends to assent to the reintroduction of penny postage, which all business men and representatives of chambers of commerce throughout the country believe to be a great moneymaking idea, or to force us to go on paying a higher postage rate than is now paid in foreign countries and in our Dominions. I am well aware that there is at present a loss on the telegraph service, and the cause of that is well known to His Majesty's Government; business men consider that it ought to be avoided, and could be avoided. I want to make it clear that this loss is in no way connected with the postal service. There is no loss connected with the postal service at all. If my figures are correct, when all losses have been deducted the Department, as at present organised, will still be left with a net surplus of £6,667,882.
§ The present Postmaster-General, or one or his numerous recent predecessors, has definitely and officially stated that the re-introduction of penny postage would mean an increase of some 300,000,000 packets through the post. This largely increased circulation of letters will not, of course, mean that penny postage would be a loss. It would in reality be a great boon to the Chancellor of the Exchequer because the increase of trade to which it would lead would mean increased profits, and therefore increased Income Tax for the Chancellor of the Exchequer. Dear postage, at the present time, is therefore keeping out of circulation 300,000,000 postal packets, and penalising trade. I have raised this subject several times, so that your Lordships will be familiar with the arguments. But I may repeat that penny 166 postage is our greatest commercial traveller and our great domestic friend, and it binds together our kith and kin in all parts of the Empire. The introduction of penny postage has been systematically advocated by chambers of commerce year after year Ministers have frequently said that business men are not pushing their goods sufficiently. My hon. friend Mr. Arthur Samuel, the Parliamentary Secretary of the Overseas Trade Department, is an able business man, and he has reminded us that goods do not sell themselves. We quite agree with him; they do not sell themselves, but we want all obstacles to progress and prosperity cleared away, and this is one of them.
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On the last occasion when I raised this subject, on June 17, 1925, the spokesman for the Post Office assured the House that—
the question of the penny post is very much before the minds of the Government, at this time, and will remain so until the next Budget, and that if there is the slightest chance of a return to a penny postage upon anything like economical lines the Government will see to it that the return shall not be delayed in any way whatsoever.
Those who represent our great chambers of commerce consider that the time when that should be done has arrived, and we hope that His Majesty's Government will take the same view. My noble friend opposite who, I suppose, will speak for the Government, always answers my questions on this subject very sympathetically, but the position he holds is not of a sufficiently definite character for him to be able to make promises on his own account. I am sure that if he were able, on behalf of the Government, to say that they were going to adopt my view, it would give him pleasure to be in the position to make that announcement.
§ THE EARL OF LUCANMy Lords, this question, as my noble friend has said, is rather a hardy annual. We all know how much he has at heart, this matter, which he has raised several times within your Lordships' recollection. I do not think, by the way, that it was I who answered him in the words which he has just quoted.
§ LORD SOUTHWARKIt was Lord Somers.
§ THE EARL OF LUCANOn the present occasion I am afraid he will consider the answer I have to give him unsatisfactory. The figures which the noble Lord gives are quite correct, as far as they go. He has taken off the deficit on the telegraph service, and that gives, more or less, the balance which he has quoted. But, so far from its being true that the introduction of the penny postage would result in an increase of 300,000,000 postal packages, I am informed that the opinion held at the Post Office is that there would not be much more than about a million recovered, so that if his scheme of penny postage were put into force there would be a net loss to the revenue of something over £5,000,000.
§ LORD SOUTHWARKMy figure of 300,000,000 was not money but the number of packages. The figure, I may say, was given by the Postmaster-General himself. I did not want, when I spoke, to occupy the House with details, as this matter has been discussed over and over again. We have had answers from the Postmaster-General from time to time, and have been promised that penny postage would be re-introduced, and then we have another Postmaster-General the next week. We have had six occupants of the office, I think, in six years.
§ THE EARL OF LUCANI can only assure my noble friend that it is estimated that the reintroduction of penny postage would perhaps result in an increase of about a million in the volume, but that the net sacrifice of revenue which the Chancellor of the Exchequer would be called upon to make would be something over £5,000,000. Therefore, although I assure my noble friend that the Government equally share with him the desire to cheapen postage with a view to increasing trade, my noble friend will understand that this next year is not a year in which you can expect the Government to put up with the loss of revenue of over £5,000,000. I am afraid, therefore, the answer to my noble friend is that the Government do not see their way to carry out his suggestion at the present moment.
§ EARL BUXTONMy Lords, the speech of the noble Lord who represents the Post Office in this House is somewhat 168 disappointing. With the few general observations that fell from my noble friend who raised this Question I think your Lordships would be inclined to agree. He gave some figures which, as I understand, had been given officially by both the present and previous holders of the office of Postmaster-General showing that the probabilities are that if the postage rate were reduced to one penny there would be in a very short time such a considerable increase in the packets delivered that the reduction from 1½d. to 1d. in the postal rate would not result in a deficiency, or at any rate not in a deficiency that would be very large in amount. It is to me very difficult to understand how a reduction from 1½d. to 1d. would involve such a large loss as £5,000,000, especially as it is quite certain there would be a very considerable addition to the number of postal packages dealt with if a reduction in the rate were made. I quite realise that, at the present time it is rather difficult to urge strongly that £7,000,000 should be applied to postal improvements rather than in meeting the deficit which unfortunately exists in the national Revenue this year.
The question has previously been raised as to how far the Post Office ought to be a profit-making department for the benefit of the taxpayer, or how far any surplus which may remain after deducting all expenditure ought automatically to be given back to the users of the Post Office in the shape of cheaper and improved facilities, rather than go into the pockets of the taxpayer. Personally I have the advantage of having been a Postmaster-General who, during some years of office, had a surplus. That is a long time ago. Surpluses are not so common now as they used to be. I was in the position of being able each year to hand over a surplus, but I agree that at the present moment it is very difficult to urge strongly that any such surplus should be applied in the manner that my noble friend proposes. Undoubtedly there will be a deficit on this year's Budget. We hope it is only a temporary deficit due to exceptional circumstances and we look forward to a surplus next year. It will then become a question of whether it is better to give increased postal facilities for the benefit of trade and industry, or to allow any surplus to go in the reduction of taxation, which may be the alternative. Much as I agree with my noble 169 friend in the general principle that he has laid down, I am bound to say that if on the present occasion the Chancellor of the Exchequer comes to the conclusion that it is better, from the point of view of trade and industry generally, to apply this surplus to the reduction of the deficit rather than to give it to postal users in the shape of cheaper rates, I should not quarrel with his decision in present circumstances.
Those who use the Post Office are, however, entitled to have something further given to them than what has been already said. While the particular surplus of the Post Office might in these exceptional circumstances be used to meet the Budget deficit, I think a general proposition ought to be laid down on behalf of the Government by the Chancellor of the Exchequer, that when surpluses are available a considerable part of the revenue of the Post Office should in future be applied to postal reform. If we could get something of that nature stated by the Chancellor of the Exchequer, I think it would give general satisfaction to those interested in trade and industry, and would do very much to remove the feeling that the Post Office is being used as a sort of milch cow for the Chancellor of the Exchequer. I ask my noble friend who represents the Post Office if he will be good enough to put that point, through the Postmaster-General, to the Chancellor of the Exchequer. Those who desire postal reform are not unreasonable persons and doubtless would be prepared to allow this surplus to go under present conditions towards lessening the Budget deficit, but they are entitled to an undertaking that when surpluses again arise the Chancellor of the Exchequer will give a considerable part of any postal surplus to Post Office reform.
§ LORD BANBURY OF SOUTHAMMy Lords, I sincerely hope that my noble friend and the Government will not accede to the request of the noble Earl. I am extremely glad that there is a surplus and a profit on the Post Office. I am rather surprised that there should be a profit on anything that a Government Department undertakes, but there is apparently a profit on the Post Office. Let us give it to the taxpayer, who is at the present moment groaning under a burden which no English taxpayer has ever before endured. Therefore, instead 170 of returning it to the gentlemen who put a three-halfpenny stamp on their letters instead of a penny one, I desire that this particular surplus should be given to the taxpayers as a whole.
I am not quite certain, but I think I understood the noble Earl to say that if the postal rate was reduced to a penny there would be a large increase in letter writing and consequently that there would be no very great loss resulting from the reduction in the rate. That is a statement which is always made by somebody who wants to get a service more cheaply. It is a statement that was made to the railway companies about two years ago by traders and passengers. I, as a railway Chairman, put very little faith in that statement. I believed that people would travel whether they had to pay 1s. 6d. or 1s. 3d. and I believed that goods would go by rail, provided always, of course, that the rate was not a prohibitive one. It turned out that I was quite right. The railway companies reduced their rates, but they did not find any more people travelling or any more goods sent by rail, and they have now had to increase their rates. The consequences would be exactly the same if three-halfpenny postage was reduced to penny postage. To say that people in the City are going to stop writing letters because they have to put three-halfpenny stamps on them instead of penny stamps is too absurd for words. The only possible result of the suggestion made by the noble Earl would be that unfortunate people like the majority of the members of this House and the majority of the people outside, who have an income of more than £200 a year, would have to pay an increased rate of taxation. In those circumstances I hope that the noble Lord below me will adhere to the very excellent speech which he made and will not hold out any hopes that any further reduction will be made.
THE LORD BISHOP OF NORWICHMy Lords, I have only one word to add to the debate, and I only regret that the suggestion which is in my mind cannot be more ably made. It seems to me from the very varied correspondence which I have with all classes of the community that the greatest advantage to be conferred on those various classes would not be the reduction of the letter postage 171 from 1½d. to 1d. but the reduction of the postcard rate from 1d. to ½d. That is all I have to offer on the subject, but I think that particular suggestion may merit the consideration of your Lordships and the Government.
§ VISCOUNT HALDANEMy Lords, what is the use of talking about reduction in what after all is a form of taxation? At this moment the country is very short of revenue. It has an enormous Debt which it must pay off. It has to tax whether it wishes to or not, wherever it legitimately can. None of us like being taxed, but on the whole I think we should rather be taxed on the price of our postage than be taxed with an addition to our Income Tax. Postpone paying off Debt we cannot. Therefore this is really a proposal to cut down the process of economy. I should like to hear what the noble Earl, Lord Beauchamp, has to say about the matter from that point of view. To me it would seem a great waste of the chances of legitimate taxation to cut down this. At this moment I entirely sympathise with the attitude of the Government, who say they cannot part with any source of revenue. I therefore agree with the noble Lord opposite that having got a good thing we should stick to it. I would only point out for his further comfort that this is a nationalised service which is yielding a profit. Possibly there may be some others.
§ EARL BEAUCHAMPMy Lords, the noble and learned Viscount has been good enough to ask my opinion and I am quite ready to give it. As compared with other methods of taxation I should prefer an increase in the Income Tax because that is a more democratic measure. That is no doubt why the noble and learned Viscount would be opposed to it.