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Post Office And Telegraph Bill

Volume 361: debated on Tuesday 4 June 1940

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Order for Second Reading read.

4.20 p.m.

I beg to move, "That the Bill be now read a Second time."

After the account of the great events which has immediately preceded, the subject which I now introduce to the House causes us to descend to a more humdrum plane. In times when great events and days are shaping themselves, in which each one of us is attending to his own particular duty, I have to ask the House to bear with me while, in a very few words, I explain the contents of this Bill and ask the House to give it a Second Reading. The Bill itself is made necessary by Budget proposals which are now before the House in the form of the Finance Bill. It will be remembered that my Noble Friend, when he made these proposals on 23rd April, announced certain increases in postal, telegraph and telephone charges, and these increases are made solely to raise additional revenue for the purposes of the war. Speaking generally, many of these proposals which have been announced by the Chancellor of the Exchequer have already been put into force because they did not require legislation for their enactment. All the postal increases, for example, with the exception of one, have been effected by Treasury warrant and are now operating, and the only reason for this Bill is that Parliament has in the past fixed certain statutory maximum charges for various forms of Post Office services, and there is no power to increase charges above these maxima without the consent of the House. That, in general, is the purpose of the Bill. As I have said, the bulk of the increased postal charges thus announced are not referred to in the Bill, because under the Post Office Acts it has been possible to effect them by warrant or regulation. The only postal charge for which it is necessary to legislate now is the inland registered newspaper rate.

Clause 1 of the Bill removes the statutory maximum charge and makes it possible for this postal charge to follow the line of other postal charges and be enacted by warrant, as are the other charges. The fact that there will be these increases in the postal charge for registered newspapers—a charge of 1½for four ounces instead of 1d. for six ounces as at present—renders necessary the following Clause. Clause2 deals with cases where people have made contracts with the publisher of a periodical for the supply of that periodical at an inclusive charge covering the postage. This would necessitate those who sell these periodicals to meet the postal charge, which was not in contemplation by the parties when the contract was made. The Clause gives power for the contracts to be terminated so that the parties may make such fresh arrangements as they may agree on the matter.

Clauses 3 and 4 deal with the telegraph service proper, and Clause 3 imposes a new maximum for the inland Press telegrams of 1s. 3d. for 60 words instead of 1s. Clause 4 raises the maximum charges for certain special classes of telegrams, that is to say, priority telegrams and greeting telegrams, where previously the maximum was 1s. for 12 words, and in future the charge for priority inland telegrams will be 1s. 3d. for nine words, and for greeting telegrams 1s. for nine words.

Clause 5 deals with matters particularly affecting the telephone service. Hon. Members will see that without Clause 5 mention is made only of telegraph services and telegraph contracts and so on, but the word "telegraph" in its legal connotation includes the telephone services, and though certain private telegraph services are affected by Clause 5, the main purpose of the Clause is to deal with the telephone services. At the outset I should distinguish between the telephone exchange service and the private telephone service, because I find, from representations that have been made to me, that a certain amount of confusion exists in regard to this matter. The normal telephone service is the exchange service; that is to say, the line from the subscriber's house terminates in a telephone exchange, where it is possible to link him up with any other subscriber. That is the normal telephone service, but in addition to that there exist private telephone lines where the end is not in an exchange but in another office. Many newspapers in London have such private telephone lines to their offices in the so-called provinces, and there the exchange does not intervene at all. It is that second class where there is no exchange facilities which is the private telephone service proper. I mention that because some hon. Members have assumed that the private telephone service applied to the ordinary private subscriber, but it does not. The Budget charges which were announced were an increase in the charge of 15 per cent. on the exchange service and 25 per cent. on the private telephone service. In the ordinary exchange service the charges fall under two heads. There is the charge for calls, so much per call according to the distance, and the fixed periodical payment, of which rental is the most common and important. The charges for calls do not require legislation. The changes have been effected by regulation under the Telegraph Acts and are in force.

Clause 5 deals with periodical payments like rentals, and the necessity for the Clause arises in this way. Telephone services are arranged between the Postmaster-General and the public by means of a contract made between them, and where new contracts come to be made they will be based on the new scale of charges, but in order to raise the necessary money which has been budgeted for, it is necessary that these increased charges should become exigible from 1st July. The purpose of the Clause is to deal with contracts which are now current and to make it plain that the charge will be exigible on 1st July. That means a unilateral intervention by this House in a contract entered into between two persons—the Postmaster-General and the citizen. Therefore we are enabling those affected by that variation, if they so desire, on proper notice to cancel their contract, so that they may, if they so desire, avoid a burden which they did not contemplate when they entered into the contract previously. Sub-section (8) of Clause 5 gives that power and Subsection (9) is consequential to the extent that if a person were given a month—

:May I ask the right hon. Gentleman why there is a different rate of interest in respect of exchange contract services and private contracts? The right hon. Gentleman said that some representation had reached him, and that may be why on this point, I understand, no objection has been taken to the 25 per cent.

The best answer that I can give is this: This is, of course, taxation, and in all questions of taxation it is for the Government and the Chancellor of the Exchequer to decide what any particular source of revenue will stand. The view was formed when the Budget was framed that what the private telephone service would stand is 25 per cent. As regards the ordinary exchange service, the appropriate increase for taxation purposes is 15 per cent. I was saying that as these charges are now being included it is proposed by Subsection (8) to give power to a party to determine a contract if he so desires. Sub-section (9) makes it plain that if he does decide to cancel his contract, then, for two months over which the contract can run after 1st July, no extra charge will be exigible. Hon. Members will observe in the Bill, notably in Clause 5, that there is a reference to "any local telegraph authority." These words refer in the main to the Corporation of Hull, who operate their own system within their own boundaries under licence from the Postmaster-General under which terms are arranged between them. By this Bill the private citizens of Hull will have a privilege equal to that of fellow citizens in other boroughs in paying more for telephones in order to aid the national finances and to provide the sinews of war. The Bill gives Hull, in regard to subscribers, the same right as the Postmaster-General has in regard to the public. Clause6 deals with the Title and construction of the Measure. That is an outline of the Bill, and it only remains for me to say that the Post Office, besides rendering great service to the public, vital in time of peace and still more vital in time of war, is also a great revenue Department. It is purely in its latter capacity that I now move that the Bill be now read a Second time.

4.36 p.m.

The House might feel that to a large extent discussion of this Bill is something of an anti-climax after what we have just witnessed in the House However, I will take the opportunity of welcoming the Postmaster-General on his first appearance in Debate since he took office. To some extent he calls for the commiseration of the House, because he has had the most extraordinary ill luck. He has been from Department to Department, and each time he arrived something went wrong with it. He has been put into the position of having to clear it up and has even had to carry responsibility and blame for something which happened previous to his arrival. He has now come into this office at a time when we are celebrating the centenary of the penny post which no longer obtains. It is a pity, of course, that the actual increase of postage is not in this Bill, because that would have been about the only thing on which we could have obtained a grip. It is a long way from the four ounces for a penny letter-post, which was granted in the Jubilee of 1891, to the proposals which have been introduced in the Finance Bill.

There are two main points in this Bill; one the increase in newspaper postage, and the other alterations with regard to the telegraph services. In 1870 the introduction of the halfpenny newspaper rate was brought in, and now, 70 years after, we are going back. It is curious to reflect that, so far as London is concerned, we are now very much worse off from the point of postal delivery, organisation and cost than we were in the seventeenth cen- tury. This has been done in order that the revenue may gain. It will probably gain from more than one angle, because the further impost on ordinary printed matter has the effect of indirectly increasing the revenue. It costs as much to handle halfpenny services as it does to handle the penny service. The only criticism one can make is that the tax on newspapers is, perhaps, a tax on information and commercial channels, but while we could have argued this a little while ago, it is now entirely another matter. Although we cannot oppose it, we may look at it with regret and reckon that one of the disadvantages that war brings to a nation is that it throws us back in respect of communications. However, we have not been bombarded by various interests, and there has been no outcry in the Press, which seems to suggest that the tax on commercial telegrams has been accepted with proper public spirit. It is curious to note that in 1868 the Press was allowed to send 100 words a shilling by night and 75 words by day, so that we have gone back, in that respect, two steps. In 1920 the rates were increased by 25 per cent.

Turning from that to the telegraph services, the Postmaster-General answered the question put to him, which was, I think, the only point which might have been made, namely, the peculiar anomaly which exists in the City of Hull, which is independent owing to the accident of time and the fact that it did not come within the ambit of the Post Office proper when the arrangements were made for taking over the telegraph and telephone services. I would like to ask a question in connection with the increased charges for the telegraph system. Does the Postmaster-General intend to wipe out by Regulation or this Bill the 50 calls allowed to private subscribers before any extra charge begins to count?

I am glad to obtain that answer, because it does give an indication that things are not quite so bad as they seem from a first look at the Bill. With regard to the difference in exchange services, is it not so that they do recover a bit of their tax by the difference made in the charges?

The 15 per cent. is the surcharge on the exchange services and the 25 per cent. is on private wires, both for rentals and calls.

So that the private wire to a certain extent suffers in two ways by the 25 per cent. and by having to pay the extra amount. Newspapers too have private wires.

Perhaps I had better not interrupt the hon. Gentleman too much, because my hon. and gallant Friend will deal with these points later. The actual position is, however, that Press telegrams are sent over the Post Office system. The Exchange Telegraph Company, for instance, and companies of that sort, have private telegraph and telephone wires which they hire from us. They pay only for the wire and not for its use. They can use them much or little, as they desire.

Many newspapers use private wires, so that from that point of view the tax is not so bad as it seems at first sight. Greetings telegrams, I see, are to be charged a little extra. One cannot oppose a Bill like this on such an occasion. From the brief examination which one is able to give it, the imposts do not seem quite so bad as when looked at for the first time. One can now understand why the Press have not been active in their protests against this proposed increase. So far as the larger newspapers are concerned, they, to some extent, will escape, but their correspondents will have to bear the increased cost of increased telegrams. Naturally, we shall not do anything to impede the passage of this Bill, and I take this opportunity of congratulating the right hon. Gentleman, who is having a smoother passage with this Measure than has been his lot on many occasions in the past.

4.43 p.m.

I want to ask the Postmaster-General a question, and it is with regard to the subscriber's right to cancel his contract with the Government when the Government propose to vary that contract unilaterally. I recognise that it is bare justice that subscribers should be allowed the option to cancel, but have the Government entirely counted the cost to the Revenue? There will be a number of subscribers, at the present time, especially those evacuated from their homes and those hard hit in business, who will welcome this opportunity as a convenient one to escape their obligations. Many would have to pay rentals for a substantial period of years, perhaps on a five or seven year contract. I think the right hon. Gentleman will agree that in view of evacuation particularly many people who have left their houses empty are still paying to the Government and would have been liable to pay several more years' rental. I think it may be a rather expensive thing for the Revenue if, in order to add generally 15 per cent. to rentals throughout the country a large number of people should be able to escape altogether from paying rentals which they would otherwise have had to pay to the Government for the next several years. I hope the right hon. Gentleman will consider this point.

4.45 p.m.

Five years ago a request was made to this House to provide a lot of further money for the development of the telegraph service. It was pointed out how unsatisfactory it was that the service should be carried on at a loss year after year. It was then stated that one of the principal contributory causes of that loss was the loss made on Press telegrams. I observe in the Bill that power is being taken to increase the charge for Press telegrams. For my part, I am pleased to see that. I wish the increase had been higher. After all, every industry in the country has to bear a great burden of taxation and thereby contributes to the Exchequer of the country and its general well-being. Here we have a sheltered industry which, so far from making a contribution to the revenue, is a burden year after year. It seems to me that attention should be drawn to this; anything that can be done to remedy it is most desirable.

With regard to Press telegrams in particular, the Press lords can very well afford to pay for the public service provided for them. I see no reason why they should be subsidised by being allowed to send telegrams at rates which constitute a loss to the telegraph service of the country. Moreover, I suggest that not only can they afford to pay for the service which is given to them, but that in point of fact they do not make so good a use of the service that we need worry very much about it? If we consider the information given in the popular Press, much of which has been telegraphed at the expense of the Exchequer, I think we may reflect that we could do without a good deal of it. As this subject has been raised by the Bill, I shall be glad if someone on behalf of the Government will give us a little information on this matter. It would be interesting to know whether any effort has been made by the Post Office to find out what the effect would be if such a charge was made for Press telegrams as would reasonably cover the cost of the service provided. No doubt that would result in some diminution in the amount of Press telegrams, but it would be interesting to know whether the subject has been investigated by the Post Office and what conclusions they have reached.

I know that this is a rather thorny subject for the Postmaster-General. I have always thought that one reason why it has never been tackled is because very often we have had a young Minister, an Under-Secretary with a bright future before him, made Postmaster-General, and it is rather too much to ask him to do something which would be unpopular to the Press, which is so very powerful in the country. We are fortunate now in having a more seasoned Minister in charge of the Post Office. Whatever failings we may have attributed to the right hon. Gentleman we are bound to admit that he is not lacking in courage, and I hope he will take the opportunity, if he cannot do it within the scope of the Bill, to investigate the questions, first, why this great service, which should easily be made to earn large sums in revenue for the benefit of the country, should be carried on at a loss; and, secondly, whether that part of the loss which is attributed to the subsidy which in effect is given to the newspaper proprietors to-day, could not easily be cut out without any reasonable person in this country losing anything of value.

May I ask whether the City of Hull have a right to refuse this payment, or whether there is any power in the Bill to compel them?

4.51 p.m.

Let me reply to the question of the hon. Member for North Camberwell (Mr. Ammon) at once. The City of Hull are bound to pay to the Postmaster-General the 15 per cent. The hon. Member for Tamworth (Sir J. Mellor), of course, appreciates that there are comparatively few of the cases of the kind he mentioned, but the Chancellor of the Exchequer had to take into consideration the possibility that some at any rate might throw in their hands and give up their contracts. The maximum loss at the worst is about £90,000, which is a small item compared with the total revenue. The hon. Member for Colchester (Mr. Lewis) raised the question of Press telegrams. He rather made a large mountain out of a very small molehill. The actual loss on Press telegrams is about £64,000, but I must even qualify that statement by saying that a proportion of overheads are included, and the actual out-of-pocket loss on Press telegrams is not really sufficient to warrant an inquiry at such times as these. The Postmaster-General, however, has authorised me to say that my hon. Friend's remarks will be noted.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the Whole House for To-morrow.—[ Sir J. Edmondson.]