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The position of Latin American countries is very different from that which I have just described. Their incomes per head are typically five or six times as high as those in Africa. The bulk of their debt is owed to commercial banks. Given that they are starting from a higher base than African countries, it is even more true that prospects for growth depend on their economic policies. Economic reform can do more than debt reduction to improve the prospects for growth and for rising living standards. It can also do more than debt reduction schemes to help countries to overcome their debt difficulties. Sensible policies form the basis for a long-term recovery of creditworthiness. They are also important in meeting short-term financing needs. Confidence in a country's economic management will encourage investors to put their money into a country and will discourage residents from putting their savings elsewhere and adding to the problems of capital flight.

Mr. Stuart Holland (Vauxhall) : Surely the Minister recognises that one feature of the Brady plan is that it recognises that debt cannot be repaid. Is the Minister not aware that Brazil has halved its imports since 1981 and that that has had a major effect on United Kingdom exports? Studies, such as that carried out by Gabriel Palme of Cambridge university, have shown that up to a quarter of a million jobs in the United Kingdom have been lost because of forgone exports to indebted countries. Therefore, it is not simply a question of internal management, on which the Minister has made some substantive point, but a matter of looking at global trading as a whole.

Mr. Patten : May I, like my hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten), say that if this is the last opportunity that the hon. Gentleman will have for intervening in one of my speeches, that makes this an even less happy day than would otherwise be the case, given that it is another birthday for me. I have always enjoyed the intellectual jousts that I have had with the hon. Gentleman in the House and I hope that the fact that he is moving to the humbler surroundings of Florence will not mean that we shall not have the opportunity of such exchanges in the future.

However, I do not entirely accept the hon. Gentleman's description of the Brady plan, to which I look forward to returning. I am not convinced that the hon. Gentleman is right in what he says about our exports to Brazil. I think he will find that there has been hardly any change in the last few years.

Mr. Holland : What about Latin America?

Mr. Patten : The hon. Gentleman referred specifically to Brazil. With me on the Government Front Bench is the Minister for Trade, who knows much more about these matters than I do, but I do not think the position is precisely as described by the hon. Gentleman. Just as in Africa, debtors in Latin America require external finance to support their economic reforms. That is why we have supported the recent decisions of the IMF interim committee to encourage further voluntary debt reduction by the commercial banks. But that raises questions about the respective responsibilities of the public and private sectors. I do believe that the right sort of debt reduction can have an increasing role to play in meeting those financing needs.


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Many have called for what I consider the wrong sort of debt reduction--debt reduction brought about by taxpayers bailing out the banks. All along we have taken the view that management of their existing debts is a problem that banks must sort out with debtors. If the banks have lent unwisely, they must face the consequences. In their negotiations with debtors, banks have developed a range of innovative financing arrangements. Some of those involve an element of debt reduction. Chile, for example, has reduced its debt by about a quarter, largely by means of a vigorous debt-equity programme. But overall, the impact of debt reduction has so far been small in comparison with the total stock of debt.

In the years since 1982, Governments have done a great deal to help middle income debtors. We have provided financial assistance through rescheduling Paris Club debts and providing new lending through the IMF and the World Bank. We have also maintained a strong commitment to an open multilateral trading system and general stability and growth in the world economy.

The consequence so far has been that Governments have done more than their share. Commercial banks have rescheduled principal payments. The Paris Club has been prepared to reschedule interest, too. Together with substantial new lending by the IMF and World Bank, this contribution from the official sector has provided far more resources for debtor countries than the new money and debt reduction provided by the banks. Overall, while exposure of commercial banks to the 15 most heavily indebted countries has risen by 17 per cent., that of the public sector has risen by 107 per cent.--over six times as fast.

That injection of funds by Governments and the international institutions has given the banks some breathing space to restore their balance sheets. The danger of systemic collapse of the banking system has been averted. Banks are now in a position to increase the rate of debt reduction. But we believe that this remains a matter for commercial banks to negotiate with the countries concerned. To abandon now our policy that Governments should not finance reductions in bank debt will only increase the already disproportionate burden being borne by taxpayers.

The agreements reached at the IMF and World Bank spring meetings in discussion of Secretary Brady's proposals to which the hon. Member for Monklands, West referred in interesting terms, are designed to support this sort of voluntary negotiated debt reduction--what I referred to earlier as the right sort of debt reduction. Secretary Brady's initiative consisted of ideas for further work. It was not a blue print. The interim committee agreed, with United Kingdom support, that those ideas should be pursued further. It also reiterated the cardinal principals of the existing strategy--the need for fundamental and convincing economic reforms in debtor countries, the need for a case-by-case approach, and the principle that official creditors should not subsidise private lenders. It was agreed that the IMF and World Bank should set aside a part of their policy-based lending to facilitate debt reduction operations for countries undertaking sound economic reforms.

It was agreed that the two institutions should work out specific proposals to put to their respective boards, and we are now playing a full part in the further detailed work that is going on. No details have yet been decided. We are also participating fully in the international review of tax


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regulatory and accounting obstacles to debt reduction which Secretary Brady has proposed. In those further discussions, Britain will seek to ensure that, as agreed, official lending supported by the taxpayer will not substitute for private lending. We shall, therefore, be looking particularly carefully at proposals for additional interest support mechanisms. We want support for debt reduction to go where it can be effective--to countries undertaking strong economic reform programmes. We shall want to see--

It being half-past Two o'clock, the debate stood adjourned.


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Private Members' Bills

LICENSING AMENDMENT (SCOTLAND) BILL

Order for consideration read.

Hon. Members : Object.

Consideration deferred till Friday 26 May.

2.30 pm

Mr. Jimmy Hood (Clydesdale) : On a point of order, Mr. Deputy Speaker. I bring to the attention of the House the fact that the Bill has the full support of the Government and has been supported throughout the procedure. It is now clear that an English Tory Member has sabotaged a Scottish Bill and--

Mr. Deputy Speaker (Mr. Harold Walker) : Order. Nothing has occurred that is out of order.

Mr. Hood : I am sorry, Mr. Deputy Speaker. I have just made the point that an English Tory Member has stabbed the Scottish people in the back.

WEIGHTS AND MEASURES (AMENDMENT) BILL

Order read for consideration in Committee.

Hon. Members : Object.

Committee Friday 9 June.

CONTROL OF LITTER (FINES) BILL

Order for Second Reading read.

Hon. Members : Object.

Second Reading deferred till Friday 26 May.

Mr. Simon Burns (Chelmsford) : On a point of order, Mr. Deputy Speaker. I did not hear any of my hon. Friends object to the Bill. It has all-party support--

Mr. Deputy Speaker : Order. We have a lot of business to get through. Nothing has taken place that is out of order. I am sure that the hon. Gentleman knows that. Perhaps we can get on.

Mr. Burns : Further to that point of order, Mr. Deputy Speaker--

Mr. Deputy Speaker : I have made it clear to the hon. Gentleman that that was not a point of order. Perhaps he will let us get on with the business.

BRITISH NATIONALITY (HONORARY CITIZENSHIP) BILL Order for Second Reading read.

Hon. Members : Object.

Second Reading deferred till Friday 19 May.

TROPICAL HARDWOODS (CONTROL) BILL

Order for Second Reading read.

Hon. Members : Object.

Second Reading deferred till Friday 26 May.


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ABOLITION OF DOMESTIC RATES ETC. (SCOTLAND) ACT (AMENDMENT) BILL

Order for Second Reading read.

Hon. Members : Object.

Second Reading deferred till Friday 26 May.

COAL MINING SUBSIDENCE (DAMAGE, ARBITRATION, PREVENTION AND PUBLIC AWARENESS) BILL

Order for Second Reading read.

Hon. Members : Object.

Second Reading deferred till Friday 9 June.

GAMING MACHINES (PROBITION ON USE BY PERSONS UNDER EIGHTEEN) BILL

Order for Second Reading read.

Hon. Members : Object.

Second Reading deferred till Friday 19 May.

BRITISH RACING COMMISSION BILL

Order for Second Reading read.

Hon. Members : Object.

Second Reading deferred till Friday 9 June.

FOOTBALL SPECTATORS (No.2) BILL

Order for Second Reading read.

Hon. Members : Object.

Second Reading deferred till Friday 9 June.

HOUSING ASSOCIATIONS (ACCESS TO INFORMATION) BILL Order for Second Reading read.

Hon. Members : Object.

Second Reading deferred till Friday 26 May.

HOUSING ACT 1985 (AMENDMENT) BILL

Order for Second Reading read.

Hon. Members : Object.

Mr. Deputy Speaker : Second Reading what day? No day named.

ROAD TRAFFIC (BREATH TESTS) BILL

Order read for resuming adjourned debate on Second Reading [24 February].

Mr. Deputy Speaker : Not moved.

HARE COURSING BILL

Order for Second Reading read.

Mr. Deputy Speaker : Not moved.

REQUIREMENTS OF WRITING (SCOTLAND) BILL

Order for Second Reading read.

Hon. Members : Object.

Mr. Deputy Speaker : Second Reading what day? No day named.


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FIRE SAFETY INFORMATION BILL

Order for Second Reading read.

Hon. Members : Object.

Second Reading deferred till Friday 9 June.

RIDERS OF EQUINE ANIMALS (WEARING OF PROTECTIVE HEADGEAR) BILL Order for Second Reading read.

Hon. Members : Object.

Second Reading deferred till Friday 19 May.

Mr. Burns : On a point of order, Mr. Deputy Speaker. I am sorry if I caused any confusion with my earlier point of order. I was merely going to ask whether it would be possible for you to read the title of my Control of Litter (Fines) Bill again : I do not believe that the hon. Member for Stockton, North (Mr. Cook) could possibly have objected to it, as so many people--including Labour Members and Labour local authorities--support--

Mr. Deputy Speaker : Order. I thought that I had made it clear to the hon. Gentleman when he sought to pursue a similar point earlier that it was not a point of order. Nothing that has happened has been out of order.


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Post Office

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Sackville.]

2.35 pm

Mr. John Bowis (Battersea) : I am grateful to my hon. Friend the Minister for responding to this debate. Our two earlier debates were answered by two Ministers with the same name : at least this one provides some variety from the plethora of Pattens.

I am not sure how much experience my hon. Friend has of his post going astray, but he lives, I believe, in one of the

longest-inhabited castles in the land, so perhaps the Post Office has had time to get it right in his case. Sadly, that is not most people's experience. I believe that Woodrow Wilson once said that people would endure their tyrants for years but would tear their deliverers to pieces. I do not know whether he had postal deliveries in mind, but I know that some of my constituents have.

The Post Office is a topical subject this week. All sorts of things have been delivered that should not have been, with the Leader of the Opposition --if he is to be believed--receiving mail that the Post Office denies having delivered at all. Too often, however, the postal service can only be described as hopeless, and typical of a service that has no competition.

Competition is not, I suggest, a political panacea, but it has a good track record in achieving higher quality at lower cost. Let me quote from that gospel that I am sure my hon. Friend takes nightly to bed with him, the Conservative manifesto :

"The Conservative Government has created a framework in which once again enterprise can flourish--by cutting red tape, by denationalising state- owned companies, by removing unnecessary restrictions by keeping down prices through extending competition, and by ensuring access to open trade".

I can almost hear my hon. Friend singing that refrain into his shaving mirror every day. The manifesto goes on :

"Competition forces the economy to respond to the needs of the consumer. It promotes efficiency, holds down costs, drives companies to innovate and ensures that customers get the best possible value for money."

All that is true, unless we are talking about the postal service. The manifesto also says :

"We have fostered a new spirit of enterprise"--

except, as it should have confessed, in the Post Office. It says : "The British instinct is for choice and independence"

unless, apparently, we want to post a letter.

Why, I ask my hon. Friend, have we been so timid about bringing the consumer the benefits of competition in the postal service? Who is frightened of competition? Surely it is not my hon. Friend, and surely it is not the Government. Can it really be the chairman and board of the Post Office? Only a few years ago I remember talking to senior Post Office executives who were excited at the prospect of privatisation and gearing up to win in a competitive world. I wonder what has happened to those people. Are they now terrified by the idea of giving the British public a bit of choice? Have the men of enterprise become the mice of protectionism--or, as my hon. Friend might say, have the lions become donkeys? I fear that they have. My constituents think that they have, and they do not like it. I have already raised the non-deliveries over Christmas, the anti-consumer decision to close sub-post offices


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because bureaucratic tidiness is valued more highly than customer satisfaction, and the cost to business of lost letters. One mail order firm tells me that it loses £1.2 million worth of packages every year, and the Periodical Publishers Association, which spends £90 million a year on post, says that less than 50 per cent. of items posted first-class arrive the next day. I refer my hon. Friend to the response given last November in the House by my hon. Friend the Parliamentary Under-Secretary of State for Industry and Consumer Affairs who, when asked about disruptive postal services in London, confirmed that :

"during the period November 1987 to October 1988, there have been a total of 55 industrial disputes within the letters business, four within the parcels business and eight within the counters business which affected postal services in the numbered London postal districts".--[ Official Report, 8 November 1988, Vol. 140, c. 139.] I am tired of raising the issue of lost letters, late deliveries and diminishing service to the public. Surely, it does not have to be that way. Surely, there must be a better way. If the Post Office does not believe me, it should ask the Post Office. It is that very same Post Office which today resists public choice that, in 1981, faced up to the newly competitive world of express mail and produced a winner in Datapost. As a result, we have choice of courier, reliability of service and reasonable cost. Jobs have been created in the private sector and, by and large, consumers are satisfied. That should have been no great surprise, because parcels have always benefited from competition. The Post Office has never had a parcels monopoly. As a result, it has had to provide a service that competes in cost and quality with the best of the private sector alternatives. Will my hon. Friend announce today the timetable for launching the parcels service into the private sector? I presume that the appointment as its managing director of the former managing director of DHL, Mr. Nelson, was made with this in mind, but the timetable has been a long time coming. Likewise, the counter services should also be on their way to the private sector. We await the date for their lift off into free enterprise.

I should have thought that the success of the Government's 1981 policy on express mail and the lessons of competition in parcels, would be part of the catechism for DTI Ministers and officials. I am sorry to say that I am not sure that that is the case. The latest DTI report, produced by the wonderfully entitled Institute of Logistics and Distribution Management, does not seem to be aware of the success that has been achieved in this area. For example, it calls for the creation of a working party to monitor the industry and identify its needs when such a working party not only exists, but is chaired by the DTI. It proposes taxpayers' support for research initiatives, when the industry is quite happy to continue to finance its many research projects out of its own money.

My task today is to tempt my hon. Friend down the path of competitive righteousness and away from protectionist leftishness. As he knows, in 1981 the postal monopoly was suspended for letters and packages for which there was a charge of £1 or more. That is clearly too expensive to attract customers, and so it is uneconomic for firms to set up to provide an alternative service. That £1 requirement could be abolished without any threat to the Post Office. A 5p levy could be charged, as suggested in the report of the London School of Economics, so that the Post Office was compensated for its rural and so-called uneconomic services, and a viable choice would emerge for the public in many parts of the country.


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Mrs. Teresa Gorman (Billericay) : I am glad that my hon. Friend raised the spectre of uneconomic rural areas. Is he aware that research shows that it is cheaper to deliver mail in rural areas because there more labour is available and there is no problem of Postman Pat's van travelling through crowded streets. Therefore, that is a complete non-argument.

Mr Bowis : I am grateful to my hon. Friend for that valid point. At the moment, I am merely seeking to bend over backwards to show that there is no threat implied to the Post Office in terms of the cost to it of continuing these services. I hope that my hon. Friend's point will be logged at Post Office headquarters and the DTI.

I hope that the Minister will soon respond to the LSE report. For now, I shall put aside the more comprehensive proposal and ask for at least a step in the right direction. Let me ask for half a loaf now, and let us settle for a 50p requirement.

As I understand it--my hon. Friend the Minister may be able to confirm this --that has been agreed in principle. Therefore, what are we waiting for? Not even the chairman of the Post Office could conceivably object to that modest step towards customer satisfaction. It will hardly threaten the mighty Post Office. After all, good as it is, the private sector handles just 25 million items a year, while the Post Office handles 50 million a day. Projections are for mail to increase from 1.8 billion items a year to 2.5 billion, so there is plenty of scope for everyone.

If we move towards a world of postal alternatives we begin to free the public from being held to ransom by industrial disputes. In theory, the Secretary of State now has the power to lift the partial monopoly in the event of a postal strike, but he has not chosen to do so on any occasion to date--and what if he did? Who would come galloping to the rescue with an alternative service? I suspect that nothing would happen and that there would be a deafening silence, because no one has been allowed to set up even an embryonic competitive business. If we had a limited choice there would be some point in lifting the monopoly completely in the event of a strike ; and perhaps it would make a strike less likely in the first place. Internationally, we do not suffer from the same sort of monopoly as we do domestically, but threats are being realised and opportunities to liberalise the international post missed. We have two more years of the presidency of the Euro Centre for Post and Telecoms--the CEPT--and I hope that we will use them to promote a new liberal framework. I understand that there will be an opportunity to do that this autumn at the Universal Postal Union congress.

For example, the situation surrounding Remail needs clarifying. Remail seeks the best mix of post and courier services, here and abroad, for the consumer, and the simplest way to achieve that would be to remove article 23 of the UPU convention, which is a bar to Remail and must surely be contrary to the treaty of Rome, at least in spirit and possibly in law.

Substantial business is at risk. I know of one firm which earns £150 million a year from this service. While we are at it, perhaps we can give the private sector parity of treatment with the Post Office at airports and customs. Why do we require courier parcels to have triplicate forms travelling separately from the parcel, while Post Office


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