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There are two differences in the form of the accounts. First, at present the £5 million annual contribution to the Exchequer is charged as an expense before arriving at the profit or loss. Secondly, the eventual surplus or deficit is carried forward for the benefit of the Post Office. Previously all surpluses were in fact surrendered to the Exchequer. These averaged £15 million a year under the Labour Government and compare with £5 million paid now. If the old system had applied to present estimates, the cumulative surplus at 31st March, 1959, would have been £20 million instead of £5 million. But of course all this surplus of £20 million would have been paid to the Exchequer and the Post Office would have been £5 million worse off.
Is it not then the fact that by changing the form of the accounts a profit of £20 million has been made to look like a profit of £5 million? Has not that been the basis of the right hon. Gentleman's increased charges?
No, I could not accept that assumption. What has really happened is that since 1955—I repeat myself again—for the first time depreciation of Post Office assets is on current costs, so that when a telephone exchange breaks down in Caerphilly we have sufficient money to renew it. If we do not make such provision it cannot be provided when the exchange has broken down.
Is the right hon. Gentleman aware that this is a bookkeeping account that we are talking about—a commercial account, and not a cash account—and that irrespective of whether the cash is or is not in the commercial account, the money is there to repair the telephone exchange in Caerphilly? I put it to the right hon. Gentleman, is not it the case that what he is doing is something that the Inland Revenue never allows either he or his friends to do, that is, to regard supplementary depreciation as a charge on the current account?
What I should like to know from the right hon. Gentleman—[HON. MEMBERS: "Oh."]—a whole series of Questions put down on the Order Paper by a previous Postmaster-General have been against the principle of providing for depreciation at current cost. Does the right hon. Gentleman object then to the principle—[HON. MEMBERS: "Oh."]
Order. I am aware that some of these questions may be of the rhetorical variety, but the right hon. Gentleman should not reverse the rôles of questioner and answerer.
Can the right hon. Gentleman tell the House of any firm of chartered accountants which insists on commercial firms charging depreciation at current cost? Can the right hon. Gentleman cite any example where the Inland Revenue will allow that as a charge against Income Tax for any commercial firm in this country?