§ 110. Mr. Sparksasked the Postmaster-General why he expects the profit realised by the Post Office to fall from £10,500,000 in 1947–48 to £3 million estimated for 1949–50.
§ Mr. HobsonThe expected decline in the surplus on the telephone service from £10,500,000 in 1947–48 to about £3 million in 1949–50 is mainly due to an increase184W in plant charges consequent on the high cost of new plant and to the effect of increases made from 1946–47 onwards in wage rates of staff employed on maintenance and operation of the system. Plant now being installed costs about double pre-war prices and, because of the interruption of the war, large sums have to be spent in modernising existing plant as well as in installing new plant to provide for the growth of the system. It is estimated that income in 1949–50 will be about £5 million greater than in 1947–48 but that expenditure will have increased by about £12½ million. Of this sum some £4¾ million is accounted for by an increase in plant charges (i.e., depreciation and interest), £2½ million by increased maintenance charges and £4 million by an increase in operating costs.