Post Office Finance

Press, Volume LXXXIX, Issue 27149, 19 September 1953, Page 6

Post Office Finance

The forecast by the PostmasterGeneral (Mr Broadfoot) that, if the wage and salary scale is increased “by any margin at all”, the Post and Telegraph Department will again lose money is a dismal sequel to the substantial increase in the department’s charges last year. The increases were of such weight and scope that it seemed probable then that they would produce more revenue than the department would need. They certainly seemed large enough to give some stability for a time, even if there was another wage increase. It is at least a possibility that the wage and salary scale will soon be raised, because the department’s officers would almost automatically get the benefit of any decision made by the Court of Arbitration on the application of the Federation of Labour for a general wage increase. The department was formerly a profitable State monopoly, and its postwar troubles are regrettable. At the same time its special difficulties at a time of rising costs should be realised. Because of the department’s wide service to the public, there are good reasons why its charges should not be altered too frequently, or be put up too far in advance of the need. On the other hand, it is not in the position of a private business, which has reserves established in favourable years to meet the circumstances of difficult

years, because the department’s profits have gone into the Consolidated Fund. These are inherent difficulties of a State trading department. The best the Government can do to overcome them is to be clear in its

distinction between ordinary maintenance expenditure and expenditure that should be charged to capital or against the depreciation reserves of the department. The public are entitled to expect this to be done. It would be wrong to raise money for capital purposes by increased charges at such a time as the present. Mr Broadfoofs pessimism may not be altogether justified. It is true that the financial summary in the annual report of the department does not show the benefit that might have been expected from last year’s revision of charges, and the financial year ended with an estimated loss of £550,000. The increases were only effective for one quarter, however, and the DirectorGeneral (Mr P. N-. Cryer) in his report stated that when they were i effective for a full year the department’s finances “will once again be “on an even keel”. The financial

summary does not give much evidence to support either the optimism of Mr Cryer or the pessimism of the Minister. It does suggest, however, that the higher

charges did not h«?ve an effect proportionate to their period of operation last year. For instance, telephone rental revenue at £3,850,000 was only £270,000 greater than in the previous year, although for one quarter rentals were 25 per cent, higher and although the number of telephones increased by 12J per cent. An increase in revenue of more like £400,000 to £500,000 might have been expected. On the whole it does seem likely that the department •should make a modest profit this year to set off against the possibility of a loss next year, which should obviate for some time the need for another all-round increase in charges.