With your permission, Mr. Speaker, and that of the House, I should like to make a statement.

Since the last general increase in Post Office tariffs took place in 1957, wage and price increases have added £55 million to the Post Office bill; no less than £25 million will fall in the current year. This consists mainly of increases in wage rates. I expect to absorb about two-fifths of this £25 million.

Even so, I must raise a further £25 million in a full year in order to maintain the financial soundness of the Post Office and to prevent a sharp increase in its dependence upon the Exchequer for capital.

This means that I must increase charges. I have decided to raise £16½ million from the telecommunications services and £8½ million from the postal services.

The tariff increases I am proposing apply either to services running at a loss, or to services which produce an inadequate return on capital and where there is a high investment demand.

On a point of order, Mr. Speaker. May I ask for your guidance? On may occasions I have raised with you the fact that we are now getting the practice on the part of the Government of giving out what are obviously inspired leaks to the Press and then coming to the House and making a statement.

Today, in both the mid-day newspapers, there is almost a verbatim report. I quote from one, under the signature of Mr. Robert Carvel, that the Postmaster-General is to make a statement announcing an increase in Post Office charges.

You will recollect, Mr. Speaker, that this is not the first occasion when this has happened. It is now happening on almost every conceivable occasion when, as is the case, the Government so frequently increase charges. I am asking you, Mr. Speaker, whether it is not an abuse of your position and that of the House for the Government to ask for a statement to be made in Parliament when, obviously, in view of the fact that both mid-day newspapers had this, the Government had already made their announcement outside the House, and are thus abusing hon. Members of the House.

There most certainly is no insult to me in any way, or to my office in any way. I understand perfectly what the hon. Member has in mind, but I do not quite understand how it raises any matter for me.

The first question that one is tempted to ask, of course, is whether this is the rehearsal for tomorrow. Is this the "Purchase Tax" which the Government are proposing to apply to the Post Office? If this is any pointer to what is to happen tomorrow, then the people are in for a very grim time when the Chancellor's announcement is made.

I should like to ask the Postmaster-General one or two questions about his statement. First, how does he reconcile the statement with two statements which he made during the passage of the Post Office Bill? The first statement was that he was anticipating that a £20 million surplus would be made this year, the same as was made last year. The question I should like him to answer now is: what changes in circumstances have taken place to justify these increases in postal and telephone charges?

I should also like to ask him about the other statement that he made during the passage of the Post Office Bill. He said that it is a profound mistake to think that price increases, although sometimes necessary, are the only way, or, indeed, the best way, for the Post Office to maintain its financial position. He said that we can earn more simply by promoting profitable custom and doing more business. Why has he gone away from that very wise declaration to us, and why is he imposing further charges upon the public at a time when he ought to be encouraging the sales and the business of the Post Office to an extent which he has not done in the past?

Is this not, in fact—I should like the Postmaster-General to be specific on this—going back to the old position before the Post Office Bill, of making the Post Office an instrument of taxation for the Government? Is there, therefore, no basis at all for his contention during the passage of that Bill that the Post Office is now to be a free agency, with independence and freedom?

I should just like to put one or two minor points now. Does not the right hon. Gentleman feel that his decision to increase the telecommunications charges will dissuade people, paradoxically enough, from doing what he is asking of them in another direction—encouraging the S.T.D. scheme? Was he not boasting during the Committee stage of the Bill that this was his main objective? How, therefore, does he reconcile his statement with this paradoxical situation?

Coming now to the question of the charges on inland postage, does not the right hon. Gentleman think that he will kill the parcel post service by increasing the charges by 6d? Is it his intention to see that the whole of the traffic is diverted either to private enterprise or to some other form of public enterprise? Is he not ashamed that so soon after the Post Office Bill he comes to the House with this shocking announcement about Post Office charges?

The hon. Gentleman has asked a number of questions. I will try to answer them in order.

First, I think that he will wish to await the statement by my right hon. and learned Friend the Chancellor of the Exchequer tomorrow afternoon.

I want to make it absolutely clear, with regard to my statement to the House, that this is a Post Office operation conceived by me, and that it will be put through by me in the interests of the Post Office and of the public.

The hon. Gentleman went on to ask me whether it was not a fact that last year the Post Office earned a surplus of £21 million. That is perfectly true. It is equally true that we expected to earn a good surplus this year without very substantial increases in charges, but since that anticipation was expressed we have had very large increases in wage rates and, of course, the shorter working week for the Post Office, and these have added to our outgoings in the present financial year to the extent of £21 million, which represents 8 per cent. of our total wages bill. That is a fact which it is quite impossible to laugh off. But I have already made it clear that two-fifths of this increase in prices and wages will be absorbed by the Post Office through greater efficiency.

I can tell the hon. Gentleman and the House that the rate of installation of telephones next year will be as high as this year's, and that this year's figure is almost 50 per cent. higher than the figure for 1950.

Will my right hon. Friend be a little more specific about the effects of the charges on those who live in country districts outside three-mile territorial waters, as it were?

Yes, Sir. The position is that existing subscribers—people already on the telephone—will no longer pay an excess amount of £2 per furlong, but in future will pay the same rentals as anybody else. New subscribers will pay the new single connection charge of £5 for each furlong of new wiring in excess of three miles from the exchange. The effect of the change is that existing subscribers in country districts will benefit, and that new subscribers will also find that over a period of about three or four years the charges will be lower than at the present time.

Is the right hon. Gentleman aware that what he has said about the distinction to be drawn between his proposed measures and what the Government may have in mind tomorrow does not carry very much conviction? To us, it seems part and parcel of the same thing. Is he aware that this news that new subscribers in the countryside will be charged more will cause acute distress in the rural areas? Is he aware that already people in the overspill areas are complaining most bitterly about the failure of the Post Office to provide a decent service, or to provide connections?

No, Sir. I think that the hon. Gentleman has misunderstood the position. Existing subscribers in country districts will profit by these changes, and subscribers over a period of two and a half years will also be better off.

My right hon. Friend said that he anticipated that the number of telephone installations next year would be as high as this year. Can he tell us how many telephones he expects to install next year?

Yes, Sir; about 470,000. This is the same figure as this year, as I said before, and it is a record in the history of the Post Office.

Since the Postmaster-General has said that after two and a half years new subscrbers will benefit on connection to country telephone services, do I understand him aright when he says that before a telephone is connected in a country district the would-be owner of the telephone will now have to pay a charge of £40 per mile as an initial connection charge?

I think that I said in my statement that connection charges would be doubled for new subscribers. What I should like to make perfectly clear is that for existing subscribers, who pay £2 per furlong in excess of three miles from the exchange, that charge is abolished. New subscribers, those who would pay, ordinarily, £2 per furlong in excess of three miles, will, in future, pay a once-and-for-all charge of £5 per furlong.

Is not £5 per furlong £40 per mile? Is the right hon. Gentleman aware that a mile is a very easily covered distance in a country district? Does he really expect to install very many telephones when there is an initial charge of £40 per mile? Does he persist in his statement that this is a Post Office operation, and not one dictated by his right hon. and learned Friend the Chancellor of the Exchequer?

Most certainly. The fact is that for new subscribers, though they will have to pay £40 per mile, after a period of two and a half years, this will be advantageous to them.

Is my right hon. Friend aware that the abolition of the £2 per furlong charge every year for telephone connections will be widely welcomed, and that in any new proposal about a contribution towards the capital charge he will be following the procedure of all the electricity boards?

The Postmaster-General has given a figure of £25 million as being due to increased wages and prices. Can he give us these two items separately, and say how much was due to increased wages?

I can give the figure for the coming financial year, which is probably what the hon Gentleman has in mind. The figure of £21 million refers to increases in wage rates, and that of £21 million refers to increases in prices.

For the benefit of those who find it a little difficult to understand, can the right hon. Gentleman tell us exactly how this is to help to get export costs down?

There is nothing whatever in my statement which will be prejudicial to our export trade, but it is my responsibility, and I mean to discharge it, to see that the Post Office generally charges economic prices, and that, far from becoming a drain on the Exchequer for capital, we should undertake the lion's share of our capital development. I think that this is right, and I do not think that my hon. Friends on this side of the House would be prepared to see me adopt a weak and wishy-washy policy in the Post Office.

In view of these increases, can my right hon. Friend say whether he will continue to give such good value for money, and give a better service to the general public?

I have, in the course of the present financial year, been spending about £5 million more specifically on the improvement of services, and we shall have at least 90 per cent. of all Crown Post Offices on an all-service counter basis within the next three weeks. I am taking on very large numbers of telephonists to give better service in manual exchanges, and I am also taking on a large number of staff to improve weekend deliveries, but I wish to repeat that the public will never get the services to which it is entitled unless it is prepared to pay economic prices.

May I ask the Postmaster-General whether either he himself or anyone in his Department issued any statement to the Press prior to making his statement to the House? If so, may I ask him why, and if not, will he have an investigation made into how all this was in the mid-day Press prior to his coming to the House?

I can tell the House with complete candour that I have made no statement of any sort to the Press or anybody else, prior to rising at about 3.40 p.m. this afternoon.

Will the right hon. Gentleman have an investigation made?

Answer.

May I repeat the last part of my hon. Friend's question? Will the Minister cause an inquiry to be made into how the newspapers were able to carry such an extensive account of what was coming?

Secondly, may I ask him whether it is seriously his case that telephone subscribers will benefit by paying £40 cash down instead of paying over a period, and how he then expects to raise more money by these charges if consumers are to pay less?

Thirdly, is it not fast becoming a fact that it would be rather cheaper for everybody if he would employ his hon. Friend the Member for Lewisham, North (Mr. Chataway) to run the messages himself into the country districts?

Before the hon. Member for West Ham, North (Mr. A. Lewis) produced a copy of the newspaper this afternoon, I had no knowledge—

It was on the one o'clock news.

I did not hear the one o'clock news, because I was rather busy, but I did not divulge any part of this statement to the Press or anybody else. I am perfectly prepared, as I am sure the House would wish me to do, to make inquiries as to how this came about.

In reply to the right hon. Gentleman's second question, I think that the House is getting a little wearied of the economics of long line transmission.

rose—

Order. We cannot debate this matter further now. There is no Question before the House.