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House of Commons

Wednesday 1 May 1991

The House met at half-past Two o'clock

PRAYERS

[ Mr. Speaker-- in the Chair ]

PRIVATE BUSINESS

Heathrow Express Railway Bill

[Lords]

Considered ; to be read the Third time .

Oral Answers to Questions

TRADE AND INDUSTRY

Shipbuilding

1. Dr. Godman : To ask the Secretary of State for Trade and Industry if he will detail the vessels which are being constructed in United Kingdom shipyards with financial assistance provided by way of the European Community's seventh directive on the shipbuilding intervention fund ; and if he will make a statement.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh) : On 31 March 1991, 42 vessels were being constructed in United Kingdom shipyards with support from the shipbuilders intervention fund in England and Scotland and from intervention grant aid in Northern Ireland. This represents a total tonnage of 586,971 tonnes and a total value of £654.7 million. Assistance contributes £116.4 million or 17.8 per cent.

Dr. Godman : May I thank the Minister for his generous efforts on behalf of Scott Lithgow in attempting to have that shipyard redesignated for intervention subsidy? I am angry and deeply disappointed about the miserly reaction of Sir Leon Brittan. That conceited Commissioner should be told that United Kingdom shipyards deserve the same sympathy as is shown to the shipyards of other nations. Will the Minister use his good offices, and those of his colleagues in the Department of Energy, to ensure that Scott Lithgow obtains some of the offshore work? That must be better than such work going outside the United Kingdom.

Mr. Leigh : I am grateful to the hon. Gentleman for his plaudits. He is right that we approached Sir Leon Brittan, who told me when he came to see me last month that he was unable to compromise on the matter and that shipbuiding intervention funds would not be available to Scott Lithgow under article 7 of the seventh directive until 1994. I shall certainly approach my right hon. and hon. Friends in the Department of Energy on behalf of the hon. Gentleman.

The hon. Gentleman may have been a bit harsh on Sir Leon Brittan, who faces demands from the rest of the


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Community for increases in shipbuilding subsidy. There is also a problem in the German shipyards as the German Government have decided to give no subsidy whatever to any shipyards in what was West Germany.

Miss Emma Nicholson : I congratulate the Minister and ask him to confirm that the restructuring of British shipbuilding means that it is imperative that other European nations continue to reduce their subsidies so that we have a level playing field. He knows my deep interest in Appledore shipyard. Will he confirm that his Department is doing everything that it can to help that small shipyard on which so much employment regeneration rests?

Mr. Leigh : I know that my hon. Friend, who has come to see me on the matter, speaks up strongly on behalf of Appledore yard in her constituency.

Mr. Morgan : What is the Minister going to do about it?

Mr. Leigh : I shall tell the House what I am going to do about it. Appledore is in receipt of shipbuilding intervention funds and if it were to apply for the home credit guarantees schemes, we would consider that. My hon. Friend is right. The figures that I read out show that we subsidise shipbuilding to the maximum extent allowed by the European Commission. Given the problems of the former warship yards, particularly Swan Hunter and Cammell Laird--I see the hon. Member for Birkenhead (Mr. Field) in his place--it is clearly in the interests of those yards that we end subsidies as quickly as possible.

Mr. Frank Field : On behalf of the stewards at Lairds, may I thank the Minister for his efforts in trying to secure intervention funding? The stewards have asked me to ask the Minister whether they are right in assuming that the British Government pay the intervention funding, not the European Commission. The stewards wish to know what would happen if the British Government decided to pay the intervention funding without the approval of the Commission.

Mr. Leigh : It is indeed the British Government who pay the intervention funding. The hon. Gentleman has asked me to do something difficult which we have not considered doing before--to go against the explicit direction of the European Commission. For such a communautaire Government as we are, that would be an inappropriate and wrong thing to do.

Kuwait (Contracts)

2. Mr. Dalyell : To ask the Secretary of State for Trade and Industry how many British firms have obtained contracts in Kuwait ; and what is the estimated value.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Lilley) : I am aware of more than 35 companies which have obtained contracts worth over £140 million in connection with Kuwait reconstruction.

Mr. Dalyell : In relation to reports about torture and human rights, is there a penn'orth of difference between those whom we went to expel from Kuwait and those whom we went to defend? Do not we have to face up to the fact that Kuwait is now paralysed and that there is no chance of those who are there tackling the problem of the


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fires? Ourselves, the Americans and the Saudis should go in, take charge and do something about what is a major engineering project which cannot be left to relatively few firefighters in commercial terms.

Mr. Lilley : It is clear that excesses have been committed since liberation and the British Government have made their views on that clear to the Government of Kuwait. If the hon. Gentleman sees no difference between the appalling outrages committed by the Iraqi Government and army and the excesses that have been committed since liberation, he has extraordinarily confused vision.

Mr. Rowe : In my constituency lives the managing director of Reynolds and Wilson, a company which has been placed on the American blacklist. The Americans have told him that they have no evidence of malpractice and that there is no particular reason for the company being on the list, but that they do not intend to remove it. The company, which has traded in that part of the world for 60 years, is having the greatest difficulty winning contracts simply because of the Americans' disgraceful behaviour. Has my right hon. Friend any comfort for that company and others like it?

Mr. Lilley : I assure my hon. Friend that my officials are discussing the matter with the United States authorities and are awaiting further information from them. I can reassure my hon. Friend that so far three firms have been taken off the blacklist and I expect others to be taken off in due course.

Mr. Gordon Brown : What possible help can it be to exporters to Kuwait or anywhere else to proceed with privatising parts of the Export Credits Guarantee Department? Now that there is no serious British bid, will he abandon the sale, which the British Exporters Association says is a shambles and which could put control in Rome or Amsterdam? This could become the second Government Bill to be rejected in another place within days. Frankly, it is privatisation for privatisation's sake.

Mr. Lilley : The hon. Gentleman should be aware that in the European Community export credit facilities are issued by private sector companies in Germany, the Netherlands, France, Italy, Belgium, Portugal and Spain and that Denmark and Ireland are also considering privatising their export agencies, because they believe, as we do, that export credit for short-term business should be in the private sector. We believe that that is more in tune with the single market and it is in accord with our view that the private sector should be responsible for such matters. The hon. Gentleman thinks that all European countries are obsessed by dogma, but it is the Labour party alone which believes that this should be in the state sector.

Sir Anthony Grant : Although I appreciate that my right hon. Friend wishes to help British firms in this context--he is doing a good job--will he bear in mind the interests of our allies who supported us during the Gulf conflict? For example, I have a constituent who works for an Australian company with special expertise in putting out appalling oilfield fires such as those to which the hon. Member for Linlithgow (Mr. Dalyell) referred. Will my right hon. Friend assure the House that there will be sensible co-operation with such companies?


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Mr. Lilley : Yes, I shall do so. I have passed on the information that the hon. Member for Linlithgow (Mr. Dalyell) asked me to refer to the group competing for contracts in the oilfields. There is every reason to believe that a group of British companies will be awarded the contract for damage assessment in one of the oilfields which is expected to lead to substantial contracts for extinguishing and capping burning wells and restoring oil production. Discussions on that continue with the Kuwait authorities.

Timeshare

3. Mr. Norman Hogg : To ask the Secretary of State for Trade and Industry what further steps he is taking to eliminate unscrupulous timeshare sales practices.

Mr. Leigh : I have asked the Commission of the European Communities to prepare a directive to regulate the selling of timeshare properties. In addition, we propose to amend the Trade Descriptions Act 1968 to tighten controls on statements about services and to bring timeshare award schemes within the Act's powers.

Mr. Hogg : Is not it a disgrace that it has taken so long to make such little progress with what amounts to a massive abuse by this so-called industry? Is the Minister aware that many thousands of people are receiving so-called prizes such as motor cars? This very day, my hon. Friend the Member for Newham, North-West (Mr. Banks) has won a "prize" of a motor car. He would tell the House about it himself, but he is a shy and retiring fellow. Will the Minister assure us that his proposals will come into force quickly and that timeshare cowboys will be booted out of British business life?

Mr. Leigh : To some extent, I share the hon. Gentleman's impatience. The problem is that about 80 per cent. of timeshare properties are located abroad, so it is pointless for us to act unilaterally. We must persuade the Commission to introduce a cooling-off period and demand that companies provide a written prospectus and protect deposit moneys. I demanded just that when I went to see Commissioner van Miert a couple of weeks ago. I agree that receiving junk mail through the post is one of the curses of modern life, but one can apply to the mailing preference service, which covers 80 per cent. of such mail, to have one's name removed. Indeed, one can apply to have junk mail from Walworth house stopped if one wishes. It promises a place in the socialist sun, with reduced taxes and increased services. The British people should demand not only a written prospectus but protection of deposit moneys.

Mr. Colvin : If my hon. Friend is saying that self-regulation is the best way of proceeding, does he think that the new Timeshare Council is likely to be any better than the Timeshare Development Association that it replaces? Given what he said about 80 per cent. of properties being purchased abroad, does not he think that European legislation would be the answer rather than national legislation?

Mr. Leigh : My hon. Friend is right. We welcome the formation of the Timeshare Council, which I helped to launch last week. Self-regulation has an important part to play, but we have a right to demand that the timeshare industry puts its house in order. There is nothing wrong


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with the product, but we receive many complaints indeed, more complaints than on any other subject about the selling techniques of timeshare operators. The Government are right to act.

Mr. Nigel Griffiths : The Minister has had a damning report on this industry from the Office of Fair Trading since July last year. Why has he done almost nothing? Why is he still permitting misleading mailshots to this country, from which businesses in this country profit? Why does not he act now to ensure that people who receive the mailshots do not have to go to misleading and high-pressure sales in timeshare offices? Why does not he close offices that do not meet the standards that the public demand?

Mr. Leigh : The Director-General of Fair Trading has power to act under the Control of Misleading Advertisement Regulations. As the hon. Gentleman well knows, award schemes are not covered by the Trade Descriptions Act. I have said that we intend to amend that Act. Unfortunately, Under-Secretaries cannot introduce legislation within a couple of months. We shall have to await our place in the legislative slot in the next Session or the Session after. The hon. Gentleman failed to say that 80 per cent. of timeshare properties are located abroad, so there is a limit to what we can achieve nationally. We must act with the help of a European directive, and the Commissioner has promised to take up my suggestion that he should introduce one.

Car Industry

4. Mr. Mans : To ask the Secretary of State for Trade and Industry if he will make a statement on the inward investment in the United Kingdom car industry.

The Minister for Trade (Mr. Tim Sainsbury) : The Government warmly welcome inward investment in the car industry.

Mr. Mans : Does my hon. Friend agree that the presence of three Japanese car manufacturers in this country clearly shows the success of the Government's policy in encouraging foreign investment in Britain?

Mr. Sainsbury : My hon. Friend is absolutely right. The Japanese are perhaps the most shrewd international investors and the fact that they concentrate so much of their European investment in Britain shows that the Government's tax regime, for companies and individuals, and the framework of industrial relations law that we have created provide an excellent climate for industry, especially for manufacturing industry.

Mr. Hoyle : Despite the inward investment, does the Minister realise that demand for motor cars in this country is low? Indeed, 340 dealers went to the wall last year. Ford has announced 1,000 redundancies and matters will be made worse by the 2.5 per cent. increase in value added tax. Does the Minister agree that despite the increase in exports, if there is not a strong home demand for cars more redundancies, more short-time working and cuts in investment, training and research and development will follow? That will not augur well for the future of the British motor industry.

Mr. Sainsbury : I should have hoped that the hon. Gentleman would applaud--as I do--the great success of the industry in increasing its exports. The Nissan factory


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expects to export about 80 per cent. of its production in the current year and that is having a healthy effect on not only employment but the balance of payments.

Sir Hal Miller : Does the Minister accept that for inward investment in this country to be brought to a successful conclusion, it is essential that the industry's products are freely traded throughout the Community? Can he assure us that that is accepted by the Commission and by the member states?

Mr. Sainsbury : I agree entirely that it is essential that cars produced in the United Kingdom are freely traded throughout the European Community. I assure my hon. Friend that cars produced, for instance, in the Nissan factory to which I referred are as much European cars as are cars produced by a company owned by General Motors or by Ford in any part of Europe.

Tootal Group

5. Mr. John Evans : To ask the Secretary of State for Trade and Industry if he will refer the proposed takeover of the Tootal Group by Coats Viyella to the Monopolies and Mergers Commission.

The Minister for Corporate Affairs (Mr. John Redwood) : On the advice of the Director General of Fair Trading, my right hon. Friend the Secretary of State has decided not to refer the merger. The House will recall that when a previous proposal was made for a merger between these two companies there was a full inquiry by the Monopolies and Mergers Commission.

Mr. Evans : Is the Minister aware that that reply will be received with considerable dismay by all Tootal employees, especially those at the Slimmashirt factory in St. Helens? What on earth is the point of his going up and down the country making speeches that cast doubt on the wisdom of hostile takeovers when, in practice, he is not prepared to do anything about them? Bearing in mind the recent Polly Peck fiasco, does he agree that the Monopolies and Mergers Commission could have investigated the amount and integrity of Coats' profits which emanate from South American sources about which shareholders clearly know very little?

Mr. Redwood : In its previous inquiry, the MMC considered all the relevant issues, many of which are the same as under the current proposal, which led to the director general's advice. The speeches that I have made about the virtues and wisdom, or otherwise, of contested takeover bids were aimed at shareholders. In this case, no matters of public interest need investigation. There are many matters for shareholders which can properly be dealt with by them. I am sure that the shareholders of both companies will read the record of these exchanges and other matters, including an early-day motion, and that they will be aware of the House's view when they make the important decision about the future of the two companies.

Mr. Nicholas Winterton : Those of us who take a great interest in the textile and clothing industry will have the greatest regard for Coats Viyella, for its role in the industry and for the reputation of Sir David Alliance in seeking to maintain a meaningful and proper place for the textile and clothing industry in the United Kingdom economy. But is not my hon. Friend concerned that a


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monopoly will be created? How many other thread manufacturers will remain in the United Kingdom should the merger go ahead? What impact will the merger have on employment, which is critically important to the north-west of England?

Mr. Redwood : I am grateful for my hon. Friend's comments in the first part of his question. The question of sewing thread was addressed fully in the previous report. The advice of the MMC was adopted and the correct action was taken to deal with that potential competition detriment.

The issue of employment was also tackled in the previous report. If I remember rightly, the report said that both companies then thought that there would be some job losses through natural wastage resulting from the rationalisation, but that subsequently there would be more opportunities for new jobs. In the new bid, the two sides take a different view on jobs. The director general does not believe that there is a major matter for investigation in the public interest, but of course the jobs issue should be debated by the shareholders. I presume that the shareholders will want a successful enterprise and that will include winning business, which creates jobs. The only guarantee of a job is to have business which people want to take up and customers to buy the goods.

Mr. Henderson : Before a decision is taken on the matter, will the Minister accept that the textile industry has been particularly badly hit by the recession? Is not he concerned about the fact that hundreds of jobs have been lost, on a weekly basis, in communities that depend heavily on the textile industry such as Colne Valley, Batley and Spen and Keighley in Yorkshire and Pendle and Bolton in Lancashire? Does the Minister believe that those job losses have been caused by high wage settlements or, on reflection, does he believe that interest rates may have had a bigger impact?

Mr. Redwood : The decision to which the question refers has already been taken. My right hon. Friend has announced his decision. Like the hon. Gentleman, I regret job losses wherever they occur. I should need to look at each individual case to decide what lay behind those particular job losses. However, a successful textile industry depends on the right goods servicing customers. I must point out the recent examples of inward investment in the textile industry ; as with the motor industry, people see that Britain is a good place in which to invest and a good place from which to export.

Mr. Brandon-Bravo : While not taking any side in the bid between Tootal and Coats Viyella, my hon. Friend will be aware that the financial strength of the bidder can be bolstered by the use of pension fund surpluses. Many of my colleagues and I are most concerned about that. Surely the primacy in pension fund surpluses must belong to pensioners past, present and future. Will my hon. Friend consider that practice?

Mr. Redwood : The question of gearing was considered by the director general when he reached his decision to advise against a reference. The specific question about pension fund liabilities is governed by other regulations and laws. Regulations prevent the inappropriate use of surpluses and there are rules to ensure that the interests of


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pensioners are looked after. After all, that is the whole point of a trust fund. It must ensure that moneys are available to meet future pension liabilities.

Royal Mail

6. Mr. Hain : To ask the Secretary of State for Trade and Industry when he will next meet the chairman of the Post Office to discuss reorganisation and possible privatisation of the Royal Mail.

Mr. Leigh : My right hon. Friend will be meeting the chairman of the Post Office on Tuesday 11 June.

Mr. Hain : Having created separate Post Office Parcels and Counters companies, and with the current reorganisation of the Royal Mail--[ Hon. Members :-- "Reading."]--into nine regional businesses--

Hon. Members : Reading.

Mr. Speaker : Order. The hon. Gentleman has only just arrived in this place. We should show consideration for our new colleagues.

Mr. Hain : --and with the current reorganisation of the Royal Mail into nine separate businesses on a regional basis, together with an additional number of separate business centres, despite the known opposition of a certain person whose name and head appears on stamps, will the Secretary of State agree to consult that certain person before he proceeds with his disastrous programme of privatisation of the Post Office or any sectors of the Royal Mail?

Mr. Leigh : I welcome the hon. Gentleman to our exchanges. [ Hon. Members :-- "Reading."] Yes, I was reading that bit.

What is important is not whether the Post Office is in private or public hands, but that the public obtain the quality, choice and value for money that they demand, within the context of a uniform, affordable structure. We have repeated those commitments many times. The matters to which the hon. Gentleman has referred are purely operational ; they are not a prelude to privatisation.

I am surprised at the hon. Gentleman. Given his career, I would have expected him to be more open-minded. If it is true that certain parts of the Post Office might profit from more competition, and that more value for money might be achieved, what is wrong with that?

Mr. Soames : Does my hon. Friend agree that the problem with the Post Office is not that it is not technologically advanced--it is--but that the trade unions have made poor progress in adjusting to modern conditions and equipment? Does he agree that they really must adjust to modern working practices much more quickly, for the benefit of all of us who use the postal system every day of our lives?

Mr. Leigh : That is exactly why the monopoly is a privilege and not a right. That is why it is always appropriate for the Post Offfice--which is responsible for operational matters--to examine every part of its activity to see whether more choice and value for money, and better quality, are possible. Opposition Members, of course, never accept that. They are the reactionaries, the Bourbons of this debate ; we are the Orle anistes, the


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pragmatists, ready to consider any kind of proposal from the Post Ofice that is aimed at improving the quality of service for the customer.

Several Hon. Members rose --

Mr. Speaker : Order. Normally, I try to reach question 9 by 3 pm ; we have only reached question 6. May we have briefer questions and briefer answers, please?

Steel Industry (Scotland)

7. Mr. Salmond : To ask the Secretary of State for Trade and Industry what plans he has to meet the chairman and chief executive of British Steel to discuss the future of steel making in Scotland ; and if he will make a statement.

Mr. Redwood : My right hon. Friend and my noble Friend the Minister for Industry meet the chairman of British Steel from time to time to discuss matters.

Mr. Salmond : Does the Minister accept that the information given to the Select Committee on Trade and Industry on 6 December by the chairman of British Steel--that the European Commission would oppose any sale of Ravenscraig--was incorrect? Is he aware that, on 25 March, the Secretary of State for Scotland was not only given that information by the European Commissioner, but told that Scholey himself knew that he had gone too far in his evidence to the Select Committee? Can the Minister explain why the Secretary of State for Scotland has not given that information to the House of Commons, the Select Committee or the general public?

Mr. Speaker : Briefly, please.

Mr. Salmond : Now that the key reason given by British Steel for not selling Ravenscraig has been discredited, will the Minister intervene to force such a sale before the assets are destroyed by the private-sector monopoly that he has created?

Mr. Redwood : My right hon. Friend is considering his reply to the Select Committee, and will give that reply by 14 May, which is the deadline for it. There are two matters that are specifically for his consideration, and he will deal with them when he produces his full and considered response.

I cannot answer for the chairman of British Steel in regard to the evidence that he gave the Select Committee ; that must be taken up with him. If the hon. Gentleman has any questions for the Secretary of State for Scotland, I suggest that Scottish Question Time would be a better opportunity for him than Trade and Industry Questions.

Mr. Bill Walker : When my right hon. Friend meets Bob Scholey, will he tell him that Conservative Members respect the way in which he has so dramatically changed the fortunes of British Steel? He has made it profitable and increased productivity, and the company is now a net exporter of steel. We have no intention of insulting him or the work force, as the Scottish National party has done.

Will my right hon. Friend also tell Bob Scholey that we expect British Steel to honour its commitment to sell the Scottish plants, on the ground that it has no use for them?

Mr. Redwood : I am grateful to my hon. Friend for his comments. He is right to point out that the Scottish National party has upset the trade unions in this case,


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which, I am sure, is a matter of concern to the House. He is also right to point out that British Steel's success under its management in the private sector has been phenomenal. It is a world beater--a very profitable and productive company, which has transformed the fortunes of our steel industry in the past few years. I should have thought that most sensible Members of the House would welcome that, and would support the management that had delivered the goods. Dr. Moonie rose--

Mr. Douglas : Make way for the well-known steel worker.

Dr. Moonie : Clearly, the hon. Gentleman's brain is as large as his body. [Laughter.]

Mr. Speaker : Order. A question please.

Dr. Moonie : We appreciate the fact that the Secretary of State for Trade and Industry is trying to match the Prime Minister in dithering. As he has now had the Select Committee's report in his hands for some time, can he tell us what action he proposes to take?

Mr. Redwood : I thought that the hon. Gentleman was good at anatomy, but his first remark implies that even that is not his strong subject. I can promise the hon. Gentleman that we shall make a considered reply to the Select Committee within the due time, but I cannot tell him what my right hon. Friend will say, because he has not yet finalised his response. If he had finalised it, it would now be available. I am sure that you, Mr. Speaker, and the House will want a considered and full reply, and that is what my right hon. Friend will produce.

Mr. Grylls : Will my hon. Friend remember and remind his right hon. Friend the Secretary of State that he is no longer the owner of British Steel and that British Steel's owners are now the many thousands of people who work in that company, as well as the many thousands of small and, no doubt, larger shareholders around the country? Does he agree that British Steel has been successful because politicans have not interfered in it during the past few years, and will he--as I am sure that he will--resist any temptation to do so in the future?

Mr. Redwood : I am grateful to my hon. Friend who is right that we need a productive and successful industry to provide the jobs that we all wish to see in the steel sector. It is remarkable how much more successful British Steel has been since politicians stopped issuing lunch-time directives and making direct interventions in its management, and that is how we intend to continue.

CBI (North West)

8. Mr. Bradley : To ask the Secretary of State for Trade and Industry when he will next meet representatives of the north-west regional CBI to discuss the recession in industry.

Mr. Lilley : I have no present plans to meet representatives of the north-west regional CBI, although my officials do so regularly, and on Monday I met the CBI's presidential committee.

Mr. Bradley : May I suggest that the Secretary of State arranges an urgent meeting with the CBI to discuss the


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disastrous fall in manufacturing employment in the north-west? After two Tory-inspired recessions, manufacturing employment has fallen by an appalling 301,000, which is a colossal 31 per cent. When he has that urgent meeting with the CBI, will the right hon. Gentleman tell the CBI that the Government have abandoned their prejudice against manufacturing industry, and will he join the Labour party in giving hope to thousands of unemployed people in the north-west by saying in future that manufacturing industry matters to the regions?

Mr. Lilley : I have recently made a number of visits to the north- west, where I visited businesses in Bolton, Bury, Clitheroe, Ellesmere Port, Liverpool, Manchester, Skelmersdale and Warrington. I was impressed by the progress that has been made in diversification and modernisation over the past decade. Most impressive of all was the Ellesmere Port Vauxhall works, which started exporting cars for the first time for 11 years last September and which now exports 40 per cent. of its output and takes on a new foreign market every fortnight.

Mr. Lee : The principal constituency employer of the hon. Member for Manchester, Withington (Mr. Bradley), is the health service, but no less than 55 per cent. of employment in Pendle is in manufacturing. Although trading conditions are not easy at present, may I advise my right hon. Friend that the vast majority of manufacturing employers are keeping their nerve and fully support the Government's policy of steadily bringing down interest rates and inflation?

Mr. Lilley : I am glad to hear that from my hon. Friend. When I was in the region, I was impressed by the fact that the number of firms trading in the area has increased over the past decade by nearly one fifth, and that the number of manufacturing firms has increased by one quarter. That is very good, and shows a strength and ability to resist the downturn and to diversify away from traditional industries.

Post Office Services (Rural Areas)

9. Mr. Wallace : To ask the Secretary of State for Trade and Industry if he will make a statement on the Government's policy regarding the provision of Post Office services in rural areas.

Mr. Leigh : The Government remain committed to Post Office services which meet the social, industrial and commercial needs of the United Kingdom, including both urban and rural areas.

Mr. Wallace : I wonder whether the Minister realises that, if he were so minded, he could send a 1 kg package to Iceland or a 0.5 kg package to Tibet by international datapost more cheaply than he could send the equivalent packages by datapost to Orkney or Shetland. Does he accept that the revenue received by the Post Office as a result of the 75 per cent. surcharge on datapost to the Scottish islands is small compared with the adverse effect that it has on businesses in the islands? Just as the Government have accepted that social and political considerations outweigh commercial considerations in sustaining some forms of rural post office network, will they consider the case for taking into account similar social and political considerations with regard to datapost charges?


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Mr. Leigh : The hon. Gentleman is right in one respect. We attach enormous importance to maintaining a uniform tariff structure for normal letter delivery to rural areas. However, the hon. Gentleman referred to datapost, which operates in a competitive and commercial market because it is above the 1 lb limit. First, it would not be right for me to comment on operational matters, which have always been the responsibility of the Post Office. Secondly, if through me the hon. Gentleman asked the Post Office to subsidise the service, he would ask it to do so at the expense of its competitors. I am not sure that that would be entirely right.


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