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Parcelforce

3.30 pm

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine) : I should like to make astatement about Parcelforce.

Parcelforce is the parcel delivery business of the Post Office. Formerly it was part of the Royal Mail, but it is now a free-standing unit with separate accounts. In a difficult, competitive market it has made a loss during the last two years. Through the determination of both management and staff, Parcelforce is making strenuous and encouraging efforts to turn itself round. I welcome this. Parcelforce operates in a fully competitive market that has grown rapidly. Many of its competitors operate worldwide and are household names in this country. Thousands of other private sector companies also provide a parcel service, albeit on a smaller scale. For the most lucrative sector of the parcel delivery business--the so-called "next day" market--Parcelforce now enjoys a market share of just 2 per cent. In the "later than next day" market, it has a 34 per cent. share. But the key point is that the vast majority of the work of Parcelforce is targeted at providing a service to business. Only 5 per cent. of the Parcelforce business deals with parcels sent from one person to another, while more than half the remainder consists of just a few large mail order contracts.

I can see no reason why Parcelforce should remain in public hands while operating in such a market. My intention is to privatise it. At this stage, this is a statement of my intent ; I have not yet asked the Post Office board to launch the sale process itself. I first wish to receive advice on the best way to transfer Parcelforce to the private sector. I shall, of course, want to involve the board of the Post Office fully in this.

In considering how privatisation might best be achieved, an essential requirement for the Government will be a continued universal parcel service at a uniform and affordable tariff. That is not negotiable.

What is constantly for consideration, however, is how those or any other services can best be delivered. The Parcelforce emloyees play a key role in this. I will therefore ask the Post Office to make available financial support to help the management and employees in putting together a bid for the business, should they wish to do so in competition with other potential bidders. The Government and the Post Office will of course wish to receive the best price possible for these public assets.

Parcelforce as a business will need to continue its recovery and maintain the confidence of its customers. I would expect any significant decisions on new investment to be left to the new owners.

My announcement today concerns only Parcelforce and not the Royal Mail or Counters. The Government are committeed to maintaining a nationwide letter service with delivery to every address in the United Kingdom, within a uniform structure of prices, and with a nationwide network of post offices. In the case of Parcelforce, our belief is that the essential requirements are best met in the private sector. I commend this view to the House.

Mr. Doug Henderson (Newcastle upon Tyne, North) : In making this announcement, is not the President of the


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Board of Trade threatening to undermine more than 100 years of universal parcel delivery service to every home and business in the country ? Is he not meddling in a market which he knows is already competitive and which has many operators providing a wide variety of services, at a time when all operators, including Parcelforce, face major difficulties largely caused by the difficult trading conditions of a recession which last week the President of the Board of Trade himself described as the worst recession since the 1930s ? On a point of detail, has £50 million of the planned £250 million investment to develop eight new sorting centres gone ahead? Will he confirm that the source of funding for that investment was the cash generated by the profits of Royal Mail and Post Office Counters? Is any more of the planned £250 million cash injection to be committed by the Post Office to Parcelforce before privatisation? Is not that cash injection and the merging of the profitable Datapost letter and document service into Parcelforce another blatant case of public sector profits fattening up a public sector asset before it is sold off to the private sector?

Will the right hon. Gentleman confirm that, as a prelude to privatisation, the Government prevented the Post Office from linking Parcelforce in joint ventures with other carriers? Will the right hon. Gentleman acknowledge that that prevented Parcelforce from developing its business to meet new trading circumstances, especially the international market? Will he also confirm that many private carriers that currently cream off profits from more lucrative inter-city routes use Parcelforce to deliver their parcels to remote districts?

Does the right hon. Gentleman accept that, while part of Parcelforce operates as a commercially viable service, part operates as a vital public service to many regions of the country that desperately require it? Will he give a guarantee here and now that he will reject privatisation if a universal service obligation cannot be met now and in future?

Is this not a case of privatisation for privatisation's sake? If the right hon. Gentleman is so proud of the plans that he has unveiled today, why did not the Conservative party have the courage to include them in its manifesto three months ago so that the British people could vote on them? Is not the President of the Board of Trade hellbent on out-privatising his predecessors with a knack that will do nothing to improve any postal service to any business or home in any part of the country?

Is not this postal privatisation the height of political opportunism? It was furtively announced at the butt end of the parliamentary Session. The country does not need postal privatisation to help the Tories' friends in the City ; it needs postal modernisation to secure quality services for the people.

Mr. Heseltine : I think that the hon. Member for Newcastle upon Tyne (Mr. Henderson) rather overstates his case. We brought forward the announcement, which otherwise might have come during the recess, as we thought it was good news in which hon. Members would like to share before they went on their summer holidays. I think that it probably enabled Opposition Members to psyche up each other's doctrinal obsessions, which were so decisively rejected at the last general election.

The hon. Gentleman asked me to reflect on the results of that election. To be fair, I should say that the overwhelming vote of confidence that the Government


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received then encouraged them to look again at the rate of progress that could be made on Parcelforce--the electorate's support was an important part of the Government's thinking in making the announcement today. It will do the hon. Gentleman no good to indulge in the customary scare tactics with which the Labour party tries to hide its doctrinal and obsessional opposition to privatisation. As I said several times in my statement, the universality of the service is not negotiable. The only issue is who provides the service. Anyone who has looked generally and widely at Post Office services is fully aware that the Post Office has a whole range of private sector activities to provide what the hon. Gentleman rightly describes as vital public services. Post Office Counters has 1,000 Crown offices and about 19,500 sub-post offices, many of them in the private sector, all providing a vital public service.

Mr. Richard Page (Hertfordshire, South-West) : I welcome my right hon. Friend's announcement. Does he agree that the object is to introduce the culture and ethos of private enterprise into this improving but still loss-making operation and into an area in which competitors are making a great deal of money? Who or what will be responsible for the fixing of the universal tariff so that operations are carried out on a level playing field?

Mr. Heseltine : I wholly agree with my hon. Friend's view about the need to inject the culture of the private sector, which will include--as I think the House and, certainly, my hon. Friends will broadly welcome--the opportunity for managers and people who work in the industry potentially to become part owners of it, a concept which has proved so successful elsewhere. The definition of affordability is bound to remain a public sector ministerial responsibility.

Mr. Malcolm Bruce (Gordon) : When Parcelforce is privatised, will there be a uniform parcel tariff so that a parcel from Truro to Aberdeenshire or Shetland can be sent at a flat rate, because there are surcharges now? Does the right hon. Gentleman accept that there has been a deterioration in the service in preparation for privatisation, with only one delivery attempted? If that delivery is unsuccessful, the recipient is required to go to a collection point, which may be 30 miles away. That is not an improving service but a deteriorating one.

I welcome the suggestion that the employees might be given an opportunity to buy the business. Will the right hon. Gentleman assure us that it will not be sold to a competitor, and will he reaffirm without equivocation that the Government intend to keep their sticky fingers off the Royal Mail?

Mr. Heseltine : Perhaps the hon. Gentleman missed what I said about the universality of the service. I made it as clear as possible that these matters are not negotiable--I think that those were the words I used--and were the subject of a clear manifesto commitment at the last election. I unhesitatingly reaffirm the Government's policy. The hon. Gentleman suggested that the service has deteriorated in anticipation of privatisation. That is unlikely because I discussed the form of privatisation with the chairman of the Post Office board only within the past few days, and it is unlikely that that has filtered through to cause a deteriorating service in the meantime.


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Of course I cannot give an undertaking about the ultimate purchaser of Parcelforce. We must market it and secure the best possible deal in the taxpayers' interests.

Mr. Alan Duncan (Rutland and Melton) : Does my right hon. Friend agree that the employees of Parcelforce should look upon his announcement as a great opportunity? Does he further agree that their prospects would be ill served by listening to the backward-looking advice of the Opposition?

Mr. Heseltine : My hon. Friend is right. He is drawing on the experience of privatisation because, despite all the endeavours of the Opposition, it has created one of the greatest share-owning democracies in the world. In support of my hon. Friend, I hope that the Opposition will continue to yammer away in this rather obsessional fashion because it will keep them on the Opposition Benches.

Mr. John McWilliam (Blaydon) : Does the President of the Board of Trade agree that the staff of Parcelforce have co-operated magnificently with the changes that have been introduced over the past few years? Does he also agree that his offer to them of a universal service into which they can buy and a universal price does not seem to make economic sense? There must be real worry, particularly among people in rural areas, because they rely on Parcelforce, on the old Royal Mail parcel services, for essential services. In general, such people are very badly paid and do not have the means to pay for an economic service.

Mr. Heseltine : The hon. Gentleman makes an important point. Let me clarify one aspect of what he had to say. I did not say that Parcelforce will have to provide a universal service. What I am saying is that the Government will ensure that there is a universal service. I draw the attention of the House to something that most people will already know, and that is that the Royal Mail already provides a support service for Parcelforce in many parts of the country. Therefore, it is perfectly possible to distinguish between the two.

The other point that the hon. Gentleman makes about rewarding the employees of Parcelforce is also of concern to me. There has been a considerable growing market in many of the services, but the growth of the market has not been one in which the Post Office has shared to the scale that it might. One of the opportunities of setting this part of the Post Office free is that it might be able to expand into directions at home and overseas which, characteristically, publicly owned industries have been precluded from doing.

Mr. John Marshall (Hendon, South) : Will my right hon. Friend confirm that Parcelforce has lost more than £150 million in the past two years? In view of that, and the fact that it has only 2 per cent. of the next-day parcel market, is not the choice facing Parcelforce clear-- either to wither in the public sector or to expand in the private sector? Does my right hon. Friend agree that every industry that has been privatised has increased investment, increased productivity and improved the service, and that that is what Parcelforce will do?

Mr. Heseltine : Sadly, my hon. Friend is right to draw attention to the scale of the losses. The figure for the past two years is £155 million, although it is fair to say that the loss last year was significantly less than that for the year


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before. It is because we wish to give the company the opportunity to trade in the private sector and to seize the opportunities of what has been an exciting market for many companies but not for Parcelforce that we seek to take the decisions that we are taking today.

Mr. Tony Benn (Chesterfield) : Is the Minister aware that what he is setting aside today is the culture of public service that was established by Rowland Hill and has been followed by every Postmaster-General, Conservative, Labour and Liberal, for more than 100 years, based on the clear understanding that it is much more expensive to deliver letters and parcels in remote areas than it is in urban areas? When the admission was drawn from the Minister that there would no longer be a requirement for Parcelforce to meet the needs of the rural areas, he was explaining the loss that it has suffered in recent years because it has had to meet that requirement. Is not the right hon. Gentleman aware that, as President of the Board of Trade, he is presiding over another piece of loot and plunder of the public services in the interests of his grubby little business friends who financed his election success?

Mr. Heseltine : The right hon. Gentleman has much experience, as I believe that he presided over part of the organisation during his long ministerial career. One reason why the losses of the past two years were discovered was that it was realised that there was an accounting error in the way in which the overheads were allocated in the system. It was nothing to do with the cultural change. But if we are talking about culture--I should be happy to do so in this context--let us face the fact that the most eloquent example of the quality of the culture is that Parcelforce has 2 per cent. of the next-day delivery and 34 per cent. of the later-than- next-day delivery. That shows that the customer has decided that the culture in the public sector is not good enough.

Mr. Phillip Oppenheim (Amber Valley) : At a time when Governments all over the world are privatising rather than nationalising, including even socialist Governments in Australia, Spain and France, why does my right hon. Friend think that our own dear old Labour party persists in burying its head in the sand and parroting the tired old dogma of the forties, fifties and sixties in wanting to keep in public ownership a loss- making operation, losses which under private ownership could be made up and put into essential areas of public spending, such as health and education, rather than poured down the drain of a loss-making, state-owned industry?

Mr. Heseltine : My hon. Friend may feel that, if the Labour party talks the language it does, the most eloquent thing it can do is to bury its head in the sand.

Mr. Peter Hain (Neath) : Surely the President of the Board of Trade blew the gaff on his commitment to maintain a universal service when he dumped it back on the public sector, in the form of the Royal Mail. What guarantee can he give Parcelforce employees that their pension rights will be protected, given that the Post Office pension fund will be dominated by the public sector Post Office? By surreptitiously stripping the Royal Mail prefix from the Parcelforce title, has not the right hon. Gentleman indulged in sharp practice? Not least, he has


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avoided direct conflict with an important person who has declared her opposition to postal privatisation--the Queen.

Mr. Heseltine : It is with some regret that I tell the hon. Gentleman that I did not even know until yesterday that the Royal Mail prefix had been dropped from Parcelforce. If that is seen as some great constitutional lacuna in my performance, let me explain to the House--

Mr. Hain : The right hon. Gentleman answered a question from me on that matter only three days ago.

Mr. Heseltine : What is two or three days? I will give the hon. Gentleman the explanation as I understand it--which is more bizarre than the truth. Some old vans were repainted and in the course of that work the words "Royal Mail" were not signwritten, only the word "Parcelforce". If the hon. Gentleman can see a sinister plot in that, I admire his ingenuity but I do not share it.

The hon. Member for Neath (Mr. Hain) raised a serious point to which I will give a serious answer. There is now wide experience of protecting the rights of public sector pensioners as they transfer into the private sector. I give the House my assurance that the same diligence will apply in this case.

Several Hon. Members rose --

Mr. Deputy Speaker (Mr. Michael Morris) : I would like to call all hon. Members who have risen in their places, but I make a plea for succinct questions.

Mr. Andrew Mitchell (Gedling) : Is my right hon. Friend aware that his announcement has been awaited by millions of customers of Parcelforce who want to see skill, innovation and entrepreneurial flair brought to this important market? Is it not richly ironic that, at a time when Labour is seeking to change its leader in a futile attempt to attract the electorate, it cannot change the economic policies that have shackled Opposition Members to the Benches opposite and ensured that they do not emerge into the modern economic world?

Mr. Heseltine : I thought that my hon. Friend was about to suggest that Parcelforce should conduct the retiring leader of the Labour party to some unknown destination. My hon. Friend is right when he says that our decision is a reflection of customer choice. We believe that there will be improving opportunities for those working in Parcelforce, and for customers to enjoy a more sophisticated service.

Mr. Alun Michael (Cardiff, South and Penarth) : Does the President of the Board of Trade accept that today's announcement justifies the worst fears of the staff and public in recent years? As privatisation has invariably led to increased prices--usually affecting the most vulnerable people--will the right hon. Gentleman give an assurance that his universal service will be available at a price that is affordable to all, including those living in remote parts of the country as well as those in the cities?

Mr. Heseltine : I thought that I had made that clear, but as the hon. Gentleman raises an important point I will repeat my remarks because I do not want him to be in any doubt. By universality, we mean that the service will apply from one end of the country to the other ; we mean that there will be a standard rate applying from one end of the


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country to the other ; and we mean that the rate--which will be at ministerial discretion and therefore accountable to the House--will be judged as affordable.

Mr. Bernard Jenkin (Colchester, North) : I welcome in particular my right hon. Friend's assurance that the Post Office will assist management and employees in their potential bid for a management buy-out, but will he ensure that management have free access to advice and to investors, and that management and investors can talk freely to the vendors? That would avoid the situation that arose in previous privatisations when management were starved of access to free advice and so did not get a fair crack of the whip.

Mr. Heseltine : My hon. Friend raises a most important point. It is one that I have discussed with the chairman of the Post Office, who is supportive of my announcement today. I shall ensure that my hon. Friend's views are conveyed to him, because they coincide very much with my own.

Mr. Tam Dalyell (Linlithgow) : As a distinguished gardener, the Secretary of State may obtain his gardening sweaters from Mr. Tulloch of Shetland and his bulbs from the Scilly isles. He said in his statement that a universal parcel service would continue to operate at a uniform and affordable tariff. By what mechanism will that be ensured for the islands and other remote areas ? How will it be done ?

Mr. Heseltine : It will be done in much the same way as it is done today. Ministers and the Post Office make decisions about what constitutes an affordable cost in the light of the evidence, the economics and the service that they must provide. That can be debated in the House, and, as the Minister responsible, I would take a personal interest in ensuring that a realistic price was part of the structure of any new system that we devised, having regard to what people could afford.

Mr. Graham Riddick (Colne Valley) : Does my right hon. Friend agree that Parcelforce is operating in a highly competitive market, and that it is wholly inappropriate for a state-owned firm to operate in such a market in which there is a danger of cross-subsidy from the letters monopoly ? Was not the "nationalisation at any price" mentality that we have observed in Opposition Members a significant contributory factor to Labour's defeat in the general election ?

Mr. Heseltine : My hon. Friend has made an important point. There are, of course, separate accounts for Parcelforce, which revealed the £155 million loss to which I referred. The funds to meet those losses, however, have come from other Post Office revenue, and to that extent Parcelforce is indeed the beneficiary of cross-fertilisation. My hon. Friend also made an important point by reminding us that Parcelforce is competing in a very competitive market. My experience leads me to believe that it will be able to compete more freely and responsively in the private sector.

Mr. Graham Allen (Nottingham, North) : Does the President of the Board of Trade admit that he has literally been caught playing pass the parcel, in that the loss-making parts of Parcelforce will be handed on to the Royal Mail? What will happen when the music stops? Will Royal Mail be next on the right hon. Gentleman's list?


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Will he also tell the House and those who work for Parcelforce how many redundancies will result from his proposals?

Mr. Heseltine : The hon. Gentleman is well aware that I cannot anticipate the market trends of this or any other industry. No Government have been able to shelter the employees of public or private-sector companies from redundancies caused by changing market trends ; it is naive to pretend that one has that ability, or would want it.

The hon. Gentleman seems to ignore the fact that Parcelforce is losing money. The privatisation will not deprive the Exchequer of a positive cash flow. Parcelforce is losing money, and it is being cross-subsidised. The only issue is whether the public will obtain better value for money, whether the employees will have a better opportunity and whether the marketplace will enjoy greater competition. What is not at stake is the responsibility to deliver a universal service at an affordable tariff.

Mr. Geoffrey Dickens (Littleborough and Saddleworth) : Does my right hon. Friend agree that a company in the private sector must be efficient, produce competitive prices and deliver on time if it is to survive and grow? If a textile mill in my constituency, on the outskirts of Oldham and Rochdale, required a component, it would need to be able to rely on the delivery time : that would be critical. Does my right hon. Friend agree that it is better and more efficient for commerce, trade and industry to allow Parcelforce to compete and fight to survive and grow, thus giving a better service to my constituents?

Mr. Heseltine : The people of Littleborough and Saddleworth are undoubtedly a vital part of the make-up of the marketplace to which our new privatised Parcelforce will wish to direct its attention. I shall ensure that my hon. Friend's views are transmitted to them.

Mr. Andrew Faulds (Warley, East) : If all this is in the general interest of taxpayers, how does it equate with an efficient and universal parcel delivery service?

Mr. Heseltine : The hon. Gentleman will understand that by means of the competitive process we can often obtain a cheaper price in the private sector for delivering a public service.

Mr. John Whittingdale (Colchester, South and Maldon) : Is my right hon. Friend aware that all those businesses that require, indeed insist upon, a reliable and affordable next-day parcel delivery service will welcome the increased opportunity for competition that his announcement provides? Does he not agree that Parcelforce will stand a much better chance of increasing its present puny share of the market once it is in the private sector?

Mr. Heseltine : My hon. Friend touches on a wider issue. It is important to recognise the extent to which in recent years the private sector has eroded a great deal of the new market in delivery services. One of the exciting opportunities to which employees of Parcelforce will respond is that now they will be able to compete effectively in that growth market without the constraints that previously held them back.

Mr. Bob Cryer (Bradford, South) : It appears from the Minister's comments that it is ministerial assurances that


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will ensure the maintenance of universal delivery at a standard charge. Does the right hon. Gentleman recall going on television many months ago and giving numerous assurances about not standing against the then Prime Minister, Margaret Thatcher? In view of the varying positions he has taken on many issues, would it not be better if we had legislation to guarantee the universal service at a standard charge? If not, will not people on low incomes, such as pensioners, face a massive increase in charges, while the only people to benefit will be the fat cats in the City who contributed to Tory finances at the last general election?

Mr. Heseltine : The hon. Gentleman has his own obsessions, which I understand full well. It is because they are obsessions peculiar to him that they have so little appeal outside this House.

Mr. Peter Thurnham (Bolton, North-East) : While I welcome my right hon. Friend's excellent statement, may I ask him to bear in mind the outstanding performance of Document Interlink Ltd. in my constituency, which has built up a successful organisation that specialises in next-day guaranteed delivery of letters?

Mr. Heseltine : My hon. Friend encourages me in what I do. I shall certainly bear in mind the excellent example that he has drawn to the attention of the House. Mr. David Winnick (Walsall, North) : Is it not of some interest that this statement has been made just before the House goes into the long summer recess, a decision based on sheer political dogma, and that we are not being told what is to be done about the growing and deepening economic crisis and the fear of higher interest rates? Would not that have been a far more relevant statement to make today than this nonsense which has just been announced by the Secretary of State?

Mr. Heseltine : I thought that the case of those who sit on the Opposition Front Bench was that I should have made the announcement earlier. Now, apparently, it should not have been made at all and my right hon. Friend the Chancellor of the Exchequer should have been here to tell the House that we are pursuing the only sensible policies upon which economic recovery depends.

Mr. Nigel Evans (Ribble Valley) : Does my right hon. Friend agree that some of the scare stories that we now hear from Opposition Members were excctly the same stories as we heard when British Telecom was privatised, particularly about public telephone boxes in rural areas? Is it not a fact that since privatisation there are more public telephone boxes in rural areas and that far more of them are working than ever before?

Mr. Heseltine : My hon. Friend draws the attention of the House to the tragedy of the Labour party. The longer the Opposition go on clinging to their outdated ideas and peddling their prejudices, the less credible they are with the electorate. If there is one distinction to be drawn between the privatisation of British Telecom and the privatisation of Parcelforce, it is simply that the Labour party's arguments today are even less credible than they were when British Telecom was in its sights.


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Mr. Nigel Spearing (Newham, South) : The President of the Board of Trade has referred to the opportunities for the employees of Parcelforce, of whom, as he may know, there are 1,000 in the West Ham area of Newham, in my constituency. Does not the competition that he is now introducing mean, however, that other people will have the opportunity to make my constituents redundant? As to universality, if it is not necessarily to be Parcelforce, who will be responsible for it? The removal of "Royal Mail" from the Parcelforce title is a means, is it not, of getting round the guarantee given by Lady Thatcher that Royal Mail would not be privatised?

Mr. Heseltine : The hon. Gentleman has not been listening closely to what I have been saying to the House. We are not discussing abandoning the pledge of universality. That remains a public commitment. It is a Government policy which was in our election manifesto and I have repeated several times that we do not intend to prejudice that position. We are not concerned about whether there will be universality, uniformity or a standard tariff, because we are determined to preserve all those things. The only issue being dealt with in this case--the same question can be asked in other cases--is how to implement the commitments. It is apparent to anyone studying the Post Office that in many cases the policy commitments which may be those of the Government, are being implemented in the private sector. I gave the clear example of sub-post offices. There are far more of those in the private sector than there are Crown post offices in the public sector.

Mr. John Bowis (Battersea) : Is my right hon. Friend aware how long the world has been awaiting his statement? When setting up his postal service, Rowland Hill indicated that in due course he expected it to be run by the private sector. "In due course" has been a long time in coming. Will my right hon. Friend ensure that letter postal services are not too far behind, if not in privatisation, at least in opening up the service to competition?

Mr. Heseltine : I understand that Rowland Hill made that commitment 150 years ago. I can only apologise to the House for having taken so long to make this announcement.

Mr. Harry Barnes (Derbyshire, North-East) : Will not the privatisation of Parcelforce take away another area of parliamentary questioning? There have been many privatisations in energy which have resulted in getting rid of a Department and many agencies have been established about which we cannot ask questions. Is it not a fact that the Government's ideological programme attacks partliamentary democracy?

Mr. Heseltine : I wonder whether the hon. Gentleman has ever questioned his obsession with parliamentary questioning about this service. What is the point of being able to question Ministers about 2 per cent. of the next-day service when one cannot question the 98 per cent. of the service in the private sector? What is the point of thinking that one exercises any effective control over quality of service if in the later- than-next-day service one can talk about 34 per cent. with Parcelforce but not about the 66 per cent. in the private sector?

Sir Michael Grylls (Surrey, North-West) : Will my right hon. Friend accept that his statement will be warmly


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welcomed, not least because of the extra competition it will bring that will be in everybody's interest? When carrying out the privatisation, will he use his influence to try to ensure that the employees in Parcelforce have an opportunity of owning the business? He could perhaps take as his role model the huge success of the National Freight Consortium, which has a great deal of employee ownership. Will he do everything he can to help Parcelforce to succeed in the same way as the NFC did?

Mr. Heseltine : I understand my hon. Friend's concern, which I share, for encouraging employees to become owners in the businesses for which they work. I have discussed the idea with the chairman of the Post Office and he has readily agreed that the Post Office will make funds available to help employees and managers to prepare a bid if they should so wish. However, it is not a responsibility of the Government to make up the minds of employees or managers about the nature of the commercial decision that they may choose to take. Our task is to ensure that they have an opportunity to take it, not to take it for them.

Mr. Chris Smith (Islington, South and Finsbury) : The President of the Board of Trade has said that he is not proposing today to privatise, in whole or in part, the Royal Mail letters service or counter service. However, he has conspicuously failed to rule out privatisation in principle. Will he now do so?

Mr. Heseltine : The hon. Gentleman was not listening to what I said. He asked about Post Office Counters and whether I will rule out privatisation. Of the 18,500 post offices in Britain, 17,500 are privatised and 1,000 of them are Crown Offices. A year ago, instead of the 1,000 Crown Offices, there were 1,150. Therefore many have been transferred into the private sector in the past 12 months. It is outside the experience of any hon. Member that I should say that this is all a public-sector-provided service. It is a public service in terms of universality, uniformity and affordability, but the delivery mechanism is spread widely in the private sector.


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Points of Order

4.10 pm

Mr. Max Madden (Bradford, West) : On a point of order Mr. Deputy Speaker. In addition to your duties in the House, you are a constituency Member. In that spirit, will you deprecate a decision of Customs and Excise, which is due to be announced on Friday, to close an office in my constituency with the loss of more than 100 jobs and to transfer it to Leeds? That announcement will be made without--

Mr. Deputy Speaker (Mr. Michael Morris) : Order. I do not think that I can anticipate anything that might happen in the future.

Mr. Tony Marlow (Northampton, North) : On a point of order, Mr. Deputy Speaker. You will be aware of the European Commission's outrageous suggestion that the United Kingdom's budget rebate should be reduced by 25 per cent. Not content with taking the powers of the House, it is taking our constituents' money and our privilege over supply. We are about to begin the recess, but this matter has grave implications.

May I, through your offices, Mr. Deputy Speaker, ask the Government to make an urgent statement on the issue? My understanding has always been that we must have unanimity for any change in the budget. If so, why is the Commission making this outrageous suggestion now? It must know that--

Mr. Deputy Speaker : Order. The hon. Gentleman said that it is a suggestion. The Leader of the House is on the Front Bench and will have heard his submission.

Mr. Andrew Miller (Ellesmere Port and Neston) : May I raise a matter of which I gave Madam Speaker and the Chancellor of the Exchequer's office notice? I received yesterday representations from staff of the National Economic Development Office about the implementation of the Chancellor's statement on 16 June. Although Labour Members disagreed with the intention behind the statement, there was consensus about the Chancellor's praise for the staff and director-general of the office. In his statement, the Chancellor gave commitments regarding employment opportunities in the Board of Trade.

The solemn undertaking that was given to the House has been acted on in part, but in a memo dated 7 July some of the staff were given only six days to apply and two days for interviews. Some have not been invited at all. I should be grateful, recognising that you, Mr. Deputy Speaker, are not responsible for Government statements, if you would use your good offices to bring this matter to the Chancellor's attention and ask him to ensure that it is clarified and that the spirit of the statement is met in full.

Mr. Deputy Speaker : Madam Speaker was grateful to the hon. Gentleman for giving her prior notice. Ministers on the Front Bench will have heard the hon. Member's submission. It is not a matter for the Chair.

Mr. John McAllion (Dundee, East) : We have just heard a statement from a senior Minister that he described as a statement of the Government's intent to privatise a nationalised industry. On 7 February 1985 we had a statement about the Government's intent to privatise the nationalised water industry in England and Wales. On both occasions, the Government have recognised their


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responsibility to keep the House informed before making any other public statement about their intentions. Yet, all this week, without making a statement to Members, Scottish Office Ministers have been trumpeting in the press their intention to privatise Scottish water services. As this is supposed to be a unitary Parliament, how can the House force Scottish Office Ministers to show it the same respect as Ministers in English and Welsh Departments have shown?

Mr. Dennis Canavan (Falkirk, West) : Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker : Is it on the same point?

Mr. Canavan : Yes. I wish to support the point that my hon. Friend the Member for Dundee, East (Mr. McAllion) legitimately made. It is part of our parliamentary tradition that, if a Government seek to change the ownership of a major industry or service, they seek a mandate from the people by including it in their manifesto. In neither the English nor Scottish manifesto was there mention of the privatisation of the Scottish water service, which is owned and administered by local authorities. I have raised the matter in written parliamentary questions, but I have received very little information compared with what is being almost deliberately leaked to the press. Initially, Ministers denied any possibility of privatising Scottish water but then started making encouraging, positive noises to welcome such a proposal. It seems that members of the press are better informed than Parliament about the issue.

The Government have no mandate--certainly not from the people of Scotland-- to privatise Scottish water. Indeed, even by British standards they have no mandate to do so. If they are intending to privatise Scottish water we should have a statement from the Minister before the House goes into recess.


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