Why, then, the present Post Office crisis? It stems initially from the fact that for a long time under the last Government Post Office prices were not allowed to rise at the same rate as other prices; and while the Post Office has had to pay more in wages and for equipment, in line with general inflation, it has not been allowed to recover this extra expenditure from its customers. Consequently and naturally, deficits have piled up. This policy, which was pursued so ruthlessly by the last Tory Government, was absolutely disastrous. If prices do not increase again this year the telecommunications side will have to borrow to cover its deficit. This is a burden which it should not have to bear—and neither should taxpayers, many of whom, such as widows, are too badly off to be able to afford telephones, have to subsidise telephone customers.
My view is that that is economic nonsense and a social injustice. There should be special provision for those who need the telephone as a lifeline, particularly the house-bound and disabled. But we should not leave this to local authorities because the provision is so different from one authority to another; and neither should it be a responsibility of the Post Office Corporation. The responsibility should be taken over fairly and squarely by the Government and particularly by the Department of Health and Social Security.
Although the initial and basic cause of the financial crisis was the policy of Tory Ministers, it has to be acknowledged that there has been an error of judgment this year. My guess is that the error—or rather errors, for there were two—were made against a general optimism supported by the Treasury, that there would be a slackening of inflation. The level of inflation was underestimated and the level of business activity, and, therefore, of demand for Post Office services, was overestimated.
The Government have done well to recognise this and to state bluntly that the last increases should have been greater than they were. We are now correcting the decision, which erred on the side of optimism. It must be said that the financial crisis facing the Post Office has been heightened by the reluctance of the Treasury to meet the pre-1969 pension fund deficit of £55 million for telecommunications and £35 million for posts, although it came ill from the hon. Member for Bridgwater (Mr. King) to criticise, because I believe he is the only hon. Member to speak in this debate tonight who was a party to the decision at that time, in that he took part in the debates on the 1969 Act and had subsequently—