CAB129-35 — Page 63

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of the penning to contract, save that as Page 64of366ges, items hitherto subject to surcharge would become subject to an increase of 33% over the basic charges in the terminated agreement. Under this method the subscriber would receive no details of the lines and apparatus, nor would he be given the actual figures of his new rental, etc. A notice on these lines could, I an advised, be devised which would be legally effective, but the arrangement can only be worked at the expense of continuing the conditions of existing contracts, including the rather unsatisfactory provisions for making changes in charges, which I have always had in mind to alter if we were faced with the renewal of contracts without legislation. (I am, in any case, going to pursue this point for future new contracts.) It is estimated that it would reduce the average staff time required to 15 minutes for each agreement, making a total of, say, 18,000 man weeks, although the question whether resulting correspondence would be increased or reduced under this method is problematical.

4.

For the purpose of this shorter method sane 3,000,000 notice forms would be required, differing in printed detail for the 56 telephone areas of the country and also for various categories of subscribers. These could not be devised, printed, addressed and distributed before 30th June. Consequently the higher rates of charge could not be brought into force on 1st October. Nor would, any attempt to deal first with the 3 months notice subscribers get over the difficulty. Since it is imperative to adhere to a quarter day for the rate change, the earliest operative date would be 1st January, 1950.

5.

In view of the objections raised at the Cabinet meeting to the proposal to send out a general notification of increased charges until legislation had received the Royal Assent, it is, of course, impossible to adhere even under the legislation method to the date (1st October) proposed in the Bill for the increase in rentals to operate generally. The Bill would have to be altered to make the date 1st January, 1950, the same date as under the short procedure set out above.

6.

The substitution of 1st January, 1950, for 1st 1st October, 1949, would mean that the Budget receipts from the increase in rentals in 1949-50 would come down from $1 million to about 2400,000.

7.

I should, I think, make clear the dates on which subscribers would in fact be first called on to pay the increases.

Accounts are for a half year's service - rental charge being three months in arrear and three months in advance - but accounts are sent out each quarter to roughly half the subscribers. The effect is as follows:

(a)

accounts sent out early in January, 1950, to, say, 1,500,000 subscribers

(b) accounts sent out early in

April, 1950, to remaining 1,500,000 subscribers

(c) accounts sent out early in JuPage 6409f 366subscribers at (a)

3 months advance rental at new rates

3 months arrear rental at old rates

6 months rental at now rates

6 months rental at new ratesPage 64 of 366

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