§ Mr. Faulds
asked the Chancellor of the Exchequer what rules are followed in arriving at the level of Government fees and charges.
§ Mr. Dell
Government fees and charges are generally set at a level which is designed to recover full costs and no more. The procedures followed, and the costs included, are described in " Government Accounting " published by HMSO in 1974, and available from Government bookshops. The aim is to recover full costs of this basis, from 1st April 1974. Any trading deficits which existed before that date were written off. It is considered right that me cost of a service should be paid in full by those using the 87W service, and that no part of this cost should be allowed to add to the general level of public expenditure and thus fall as a burden on the general taxpayer.
It is the aim that fees and charges should be reviewed and increased as necessary at relatively frequent intervals, thus limiting the size of the increases, rather than deferring them to a stage where they have to be undesirably high in order to recover accumulated deficits. If, however, fees and charges have fallen behind costs, as some of them have in recent years, substantial increases may be necessary in order to bring the charges up to the required level.
Within these procedures the Government impose on themselves rules analogous to those imposed on outers in relation to counter-inflation policy. In addition, consideration is given to the effect which increases in charges may have on the lower paid and the elderly.
The general rules do not apply where it is decided to fix charges to deter possible abuse of services or where it is decided as a deliberate act of policy to charge less than cost, as, for example, in the case of prescription charges.