House of Commons Hansard Debates for 19 May 1994

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created public company. In addition, preferential share entitlements for the employees of the post office and sub-postmasters would ensure that a significant holding of shares would be in the hands of those people most immediately concerned with the future of the business.

The Green Paper will also set out an option for retaining the business in the public sector, but extending its commercial freedom as far as is consistent with continued public sector status. Let me emphasise that none of those options would in any way reduce the social obligations placed on the Royal Mail. To ensure this, any legislation would set up a regulatory system to ensure that those obligations were properly defined and policed. The Government's commitments to universal delivery, six days a week to every household, with a uniform and affordable tariff remain non-negotiable and would be written on the face of the legislation.

Tariffs would be controlled through regulation. Experience has shown that social commitments can be delivered through strong regulation ; for example, regulation requires BT to provide telephone boxes in rural areas. In the same way, it would be our intention to require the Royal Mail to maintain its letter services in rural areas.

I turn now to Parcelforce. I announced on 15 July 1992 the Government's intention to privatise Parcelforce, which already operates in a fully competitive market. Work has been going on since then on the best method and timing of the sale of Parcelforce. Of necessity, we have done so in the light of the Post Office review. It would be possible to continue with our original plans, but there are important synergies between Parcelforce and the Royal Mail. The Government have decided in include Parcelforce in their new proposals for the Royal Mail. We shall, of course, pay particular attention to the need to avoid any unfair cross-subsidy from the Royal Mail to Parcelforce.

Before concluding, may I reassure the House on three specific points ? First, it has been suggested that any change of status would lead to VAT on stamps. That is simply wrong. I can assure the House that, under any proposals that we finally adopt, stamps will continue to be exempt from value added tax.

Secondly, I can assure the House that all existing pension rights will be preserved in any case.

Thirdly, the House will be aware that the Post Office, and in particular the Royal Mail, has long had important connections with the monarch. I am pleased to announce to the House that, after consultation, Her Majesty has agreed that, if a public sale option were to be pursued, Royal Mail would be given permission to use a depiction of Her Majesty's head on postage stamps, to use the royal emblems, the Crown and the Cypher and to be registered as Royal Mail plc at Companies House.

I will soon bring forward a Green Paper setting out the options and the Government's preferred proposals. It will allow an opportunity for a full public debate on this complex area.

We are committed to increasing the opportunities for the Post Office and Post Office network, and to ensure that the national standard of service is maintained. We will wish to ensure in any change that the interests of the consumer continue to be protected by effective regulation.

There is common accord that major change is needed if the Royal Mail is to meet the growing competitive threat that it faces.

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The Government believe it important to allow the Royal Mail to build on the excellence of its reputation and to compete both at home and internationally where the quality of its achievements and the reputation it enjoys offer an exciting future. We hope to make rapid progress to enable this major British organisation to achieve its ambitions.

Mr. Robin Cook (Livingston) : The President will acknowledge that he has spent two years and £1 million on consultation over the future of the Post Office. He will also concede that his main announcement this afternoon is that he has reached the conclusion that he requires further consultation on the future of the Post Office.

Has the right hon. Gentleman not heard the chairman of the Post Office say that the delay is a millstone round the Post Office which needs to be removed if it is not to grind to a halt ? That chairman and the management of the Post Office were entitled to more decisive action from the President, who purports to lead British industry, than the announcement of a Green Paper.

Just so that the House is clear that the President's heart is in the Green Paper, can he assure the House that he went to the Cabinet this morning to argue for permission to publish a Green Paper that he cannot print today ?

I welcome the President's commitment to give commercial freedom within public ownership to Post Office Counters. I particularly welcome it, as it is the option that he told the Select Committee in January was not feasible. Now that he has decided that that option is feasible, why can he not agree to applying the same option to the Royal Mail ? Does he not recognise that if he agreed to the same solution for the Royal Mail, he would have unanimous support throughout the House?

Mr. Keith Mans (Wyre) : No, he would not.

Mr. Cook : He would have unanimous support from everybody except those whose votes he will need if he wants to become leader-- [Interruption.] I am happy to say that he is welcome to those votes.

If the President wants that solution, he does not need a Green Paper, as we could agree to it this afternoon. His only reason for wishing to present a Green Paper is to keep open the option of privatisation. Is not the real reason why he does not announce his decision today the fact that the Government are terrified of announcing the privatisation of the Post Office while the public still have a chance to vote on it at the forthcoming election ? I warn the President that he will never sell to the public the idea of privatising the Post Office. [Interruption.] I notice that Conservative Members did not try to sell it at the last general election, when they did not breathe a word of it in their manifesto. The President will not sell the idea to the public because the public know that privatisation would end the uniform tariff on postage. [Hon. Members :-- "No."] Can the President tell us how the assurance that he has given the House today on the uniform tariff for postage differs from the assurance on the uniform tariff on gas when the Government privatised British Gas ? Does he not know that, only last week, his Department gave the green light to British Gas to charge more to remote regions ? For how many years after privatisation would it remain possible to post a letter at the same price from any part of Britain to any address in Britain ?

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The President will not succeed in selling privatisation to the public because the public know that privatisation would threaten their local post office branches-- [Interruption.] Oh yes, oh yes. Does he really believe that a separate, privatised mail company will continue to collect and deliver mail at a loss from post office branches with a small turnover ? If he does, is he prepared to guarantee that each of the 20,000 post offices would be involved in that collection ?

The President rightly acknowledged that the Post Office is a public sector success story. It provides the best letter service in Europe at one of the cheapest prices. It does not need a penny subsidy from the Treasury, but for 20 years has subsidised the Treasury with profits. Why cannot the Government accept that the simple logic of that success is that the best place for the Post Office is in the public sector ? If they cannot accept that, I warn them that we shall lead the national campaign to demand that the Post Office stays where it belongs--owned by the public, in the public sector and providing a service to the public.

Mr. Heseltine : I came here this afternoon intent on discussing the Post Office and its future. Suddenly, the issue of leadership has been raised. I was waiting for the hon. Member for Livingston (Mr. Cook) to suggest a Green Paper on leadership. I understand the machinations of the political truce, which I thought the hon. Gentleman was only too keen to advocate in the House. The hon. Gentleman wants not a Green Paper but the reddest possible paper that he can lay his hands on. [Hon. Members :-- "Get on with it."] I came here to get on with it, but the hon. Member for Livingston apparently had his mind on a totally different constituency from the one in which we are interested. Having considered his ambitions and what he had to say, I must say with all my heart--and I speak for all my hon. and right hon. Friends--that I wish him the very best of luck. I would go even further : he may launch a campaign in the country ; I shall launch one in the country to help him achieve what he is so obviously trying to achieve.

It is incumbent upon us in the House to take-- [Interruption.] I am sorry that there is so much turmoil among Opposition Members. I thought that they were genuinely interested in the success of this great industry. The industry is entitled to the most serious consideration of the House.

May I answer the first question put to me by the hon. Member for Livingston which was relevant to the subject under consideration ? Yes, this morning I asked the Cabinet for support for a Green Paper and I am delighted that Cabinet members were prepared to go along with my proposals. It is important that the widest range of issues and opportunities involved be explored and that the public understand what is going on. We must listen to people's ideas and take account of the strengths and disadvantages of those ideas.

I pay tribute to the Select Committee on Trade and Industry, which conducted a most thorough investigation into the matter. The House must realise that there is no option called the status quo. If we try to preserve the status quo, the erosion of the Post Office's market share will be continued by the private sector, which is now providing an increasing number of ever-more sophisticated services. Thus, it is eating into the ability of the Post Office.

One of the options available to us is a move to the private sector, while another apparently gives more

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discretion within the public sector. But any public sector option would involve the borrowing of money on the back of Treasury guarantees and would, therefore, produce a particular dilemma for all those private sector companies that have to raise money in their own names and compete fairly in the marketplace. One of the most powerful arguments advanced by the management of the Post Office is based on its desire to become a world-class player in a world which will increasingly see a shrinking number of major companies competing. I should like to mention the matter in respect of which I part company most profoundly with the hon. Gentleman. He points, quite rightly, to the remarkable success achieved by the management of the Post Office within the domestic framework of Britain in providing a service that is much admired. But the management of the Post Office is looking for enhanced freedoms, including the ability to go out into the marketplace and win for Britain. Classically, the Labour party finds every conceivable reason for preventing just that. Several hon. Members rose

Madam Speaker : Order. The initial exchanges have taken more than 20 minutes. I am now looking for brisk questions and very brisk answers.

Sir Cranley Onslow (Woking) : I congratulate my right hon. Friend on dealing so effectively with the leadership nonsense that came from the Opposition.

How long does my right hon. Friend think the consultation process is likely to take, bearing in mind the fact that he, like the Select Committee, evidently recognises the urgency of enabling the Post Office to compete in the world market in which it must operate ?

Mr. Heseltine : I am extremely grateful to my right hon. Friend, who, as he played a significant role in the Select Committee's deliberations, is aware of the urgency of this matter. We shall produce the Green Paper as quickly as possible--within not many weeks--and shall urgently reach the conclusions that flow from it. We understand the need to make up our minds.

Mr. Alex Carlile (Montgomery) : With his usual eloquence, the right hon. Gentleman ensured that the first five pages of his statement were a eulogy of the Post Office's services. Before selling the depiction of Her Majesty's head to the highest bidder, will he explain how he proposes to guarantee the integrity of the delivery service in rural areas ? Does he propose that there should be a privatised monopoly ? Does he propose that there should be a regionalised monopoly ? Does he propose that there should be competition within localities ? If there is to be competition within localities, how on earth will the regulator be able to ensure a daily delivery by a postman or a postwoman for people living in remote rural areas ?

Can the right hon. Gentleman confirm that at present many sub-postmasters and sub-postmistresses work long hours for nothing for Post Office Counters ? Will he see that the regulator ensures proper contractual arm's-length negotiation ?

Mr. Heseltine : The hon. and learned Gentleman has raised a number of important issues. I assure him that we shall not be prepared to make the changes that we might, after consultation, be prepared to consider unless we are able, by contract and under statute, to ensure the universal

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delivery of services. There will be a tough regulatory process to ensure that, if the single-company option is adopted, the company will be statutorily charged with responsibility for delivering services.

Mr. Alex Carlile : Monopoly.

Mr. Heseltine : The hon. and learned Member says that that would be a monopoly. I wonder where he has been. The dilemma that we face is that an increasing range of services in every part of the country are competing with the Post Office. We see it every day--different services, international services, overseas companies. It is very important that, whatever we decide to do, the public should be assured, from the very beginning, of the absolute sine qua non : there will be a regular six-day-a -week delivery at a uniform tariff across the country.

Mrs. Ann Winterton (Congleton) : Is my right hon. Friend aware that my constituents will consider his proposals to be rather like the curate's egg--good in parts ? They will be much encouraged by the proposals for rural sub-post offices : the extension of their services will enable them to play a greater part in the local community. My constituents will also be encouraged by the fact that postmen and women employed by the Royal Mail will have an opportunity to buy a stake in their own business. They would be even more reassured, however, if the Government said that they would retain their shareholding, to ensure an excellent arrangement between the public and private sectors.

Mr. Heseltine : I am grateful to my hon. Friend for her constructive analysis, with which I agree. The Government have made it clear that one of the options that we shall present involves a very large minority shareholding ; furthermore, if we adopted that option, it would also give employees of the business a substantial opportunity to gain a shareholding. The combination of those opportunities would mean that, overall, the interests of those immediately concerned would have an important influence on the future of the organisation.

Mr. Richard Caborn (Sheffield, Central) : I thank the President of the Board of Trade for announcing the Green Paper, for two reasons. First, it will at least move the arguments on, and--we hope--bring about an early decision. Secondly, it suggests that the right hon. Gentleman has experienced a fairly substantial change of mind : when he spoke to the Select Committee, he was clearly in favour of privatisation and had ruled out commercialisation.

May I ask the right hon. Gentleman two questions ? First, will he consider keeping the whole of the Post Office together if that option emerges from consultation on the Green Paper ? There is a strong industrial logic for keeping the three component parts together. Secondly, in considering commercialisation, will the Government refer to models such as Nuclear Electric, British Nuclear Fuels Limited, the BBC and BP Burmah--models that can work effectively without going into the private sector ?

Mr. Heseltine : The hon. Gentleman will recognise that BT, which he mentioned, is now in the private sector and is very successful.

Mr. Caborn : I mentioned BP.

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Mr. Heseltine : BP is also in the private sector. BP and BT are both in the private sector, which means that a large number of British citizens own shares in those companies. The hon. Gentleman happened to choose two companies that--in the name of this country--are world class, trading internationally to the immense benefit of the country. Let me add-- as the hon. Gentleman raised the matter--that, since its privatisation, BT has provided a range of services at a lower price than people would have believed possible at the time of that privatisation.

Of course, when a Government publish a Green Paper they are inviting consultation ; but, in the course of the Green Paper debate, the Government are likely to present their own ideas about what they think the future should be. I understand the hon. Gentleman's view--he has studied the matter carefully--and I shall consider to what extent the Green Paper should reasonably reflect an option that, on the surface, is not immediately attractive.

Mr. Robert Hicks (Cornwall, South-East) : Does my right hon. Friend accept that many people living in peripheral regions of the United Kingdom are becoming increasingly apprehensive about the effects of privatisation-- or part-privatisation--following the introduction of regional differential pricing for electricity and gas ? Does he accept that relieving the existing Treasury constraints on the Post Office is the most satisfactory way of achieving the objectives that we all seek for the organisation ?

Mr. Heseltine : I am most grateful to my hon. Friend ; I know that he has taken a particular interest in the matter. I can give him a categorical assurance that there will be no regional differential in the charges relating to the universal delivery on which I have given the House an assurance.

Mr. John McWilliam (Blaydon) : Will the President of the Board of Trade reconsider those last words ? His predecessors in other Departments have given precisely the same reassurance, and it has proved unfounded in many instances. Will the right hon. Gentleman also think very carefully about what he is doing in announcing the Green Paper ? All that the Post Office really needed was access to a bit more commercial freedom, and access to funds without the external financing limit. A system of bonds that did not give any shareholders' rights--which was proposed before-- could have provided that, but it was ruled out in the case of BT simply because the Treasury did not like it, not because it was not efficient.

Mr. Heseltine : I do not think that the hon. Gentleman understands the nature of the implication that flows from borrowing that apparently has the Government's guarantee behind it. I do not believe that there would be an argument for assuming that we can just allow the Post Office to raise bonds, and therefore produce money, in some way that would carry a Government guarantee with which it would then be able to compete with the private sector, which has no such privilege.

Mr. Patrick Cormack (Staffordshire, South) : Is my right hon. Friend aware that many old-fashioned Tories, of whom I am proud to be one, view the prospect of Royal Mail plc about as favourably as they would his old regiment at Buckingham palace being replaced by Group 4 ?

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Mr. Heseltine : For once in his life, my hon. Friend has not understood the immensely close relationship between my old relationship and many of the employees of Group 4 Security.

Mr. Tony Benn (Chesterfield) : Is the Minister aware that, for 334 years since 1660, the Royal Mail has been a public service, not only through the counters until quite recently, but through the people who called at everybody's house every day, and were a form of contact ; that there is no justification for privatisation for commercial freedom, because, over the years, as he will know, the Post Office has developed, as with the giro, a completely new bank from within which was so successful that the Government sold it off ; that the consequences of privatisation will be higher salaries for the management, which is why they want it, and poorer services and redundancies ?

With great respect, after I heard the President give assurances about the pits 18 months ago, nothing that he says is believed, because he did not honour the assurances that he gave in 1992. Many people, and I am one of them, think that the sale of this asset to Tory businesses that funded the Conservatives' campaign will have a sniff of corruption about it from the very outset.

Mr. Heseltine : The great value of a Green Paper debate is that we shall have the opportunity of listening to the views of the right hon. Gentleman, which, in my view, have hardly changed through any of the 300 years to which he drew the House's attention.

Sir Michael Grylls (Surrey, North-West) : Does my right hon. Friend agree that it must be obvious to almost everybody in the country, perhaps with the exception of the socialists opposite, that if the Royal Mail is to remain competitive, and become even more so in the future, it must be given commercial freedom and freedom to invest ; that if the Government fail to do that, they will be failing in their duty as the current owner of that business ; and that the best way of achieving that is to privatise the Royal Mail and give it that freedom ?

May I ask a question on local post offices ? Would not it help them in their hour of need--as he has said, they are going through a difficult phase--if they were given priority access to the lottery terminals when the lottery comes into action, as that would help them a lot ?

Mr. Heseltine : My hon. Friend realises that the issue of the allocation of the lottery contract has already been determined by the House, although the results have not yet been finalised. My hon. Friend made the point about setting the Post Office into a world in which it can expand and create a more competitive system. That is precisely why we have been conducting the review. I will certainly listen carefully to what he has to say.

Mr. Clifford Forsythe (Antrim, South) : We on this Bench strongly favour the status quo for sub-post offices, and I welcome the assurances given by the President on them. We will study the Green Paper very carefully. When we have done so, we will make our views known. If we require any--may I use the word ?--"clarification", perhaps we could seek a meeting with the President.

Mr. Heseltine : The hon. Gentleman is most courteous and of course he can be assured that, although I will not indulge in clarification, any other form of consultation is readily available to him and his hon. Friends.

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Sir Giles Shaw (Pudsey) : May I congratulate my right hon. Friend not only on proceeding with this idea but on doing so through a Green Paper, a lesson from which many of his colleagues might learn in the complicated legislation that has recently been passed ? Will he give an assurance that Post Office Counters and small sub-post offices will not have to wait for the results of the Green Paper to be reassured about pension transmission and other activities, which they sorely need at the present time ?

Mr. Heseltine : My hon. Friend is most kind. We realise that there is considerable pressure on us to move the decision-making process forward and there was, of course, a temptation just to come up with a scheme, as sometimes happens in government, and move on from there. However, after wide consultation, we took the view that some issues were perhaps separate from the strict economic imperatives and called for a rather more timely and cautious way of proceeding.

Ms Kate Hoey (Vauxhall) : Will the Secretary of State assure me that there will be a clear option in the Green Paper, which will satisfy 90 per cent. of the public and everyone--including management--who works for the Post Office, for the Post Office to remain as one integral unit and have more commercial freedom ? Will that be a simple option in the Green Paper ?

Mr. Heseltine : The Green Paper will try to cover the horizon of options, as the hon. Lady requires. However, it is fair to say that if we were going to consider something along the lines of what she suggests, the opportunities for the Post Office would be so constrained as to make the exercise hardly worth while.

Sir Peter Emery (Honiton) : Does my right hon. Friend accept that his announcement about Counters will be a great relief to every sub- postmaster and sub-postmistress because it will resurrect the possibility of their staying in business, which is essential for country districts ?

Will my right hon. Friend make sure that the Green Paper points out the ways in which the interests of the tens of thousands of ordinary postmen who work in country areas will be protected, because they are also a great part of the country's structure and have a considerable role to play beyond that provided by the Post Office, as they deliver milk and do the various other little things that keep country districts operating smoothly ?

Mr. Heseltine : I am grateful to my right hon. Friend, especially for his remarks about Counters, which are merited by my statement today. I think that postmen and postwomen will take into account the fact that the service that they are delivering--a universal service at a universal tariff --will be enshrined by statute in the new arrangements. Those men and women will, therefore, be needed to carry out tomorrow the work that they are carrying out today ; but we shall put before them another option : instead of doing so just as paid employees of the Post Office, they might do so as paid employees of the Post Office but owning parts of the business for which they work.

Mr. Jeff Rooker (Birmingham, Perry Barr) : Is the President of the Board of Trade aware that most Opposition Members hope that the result of this Green

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Paper exercise is the same as that of the first that he carried out on the poll tax, which effectively rubbished it completely ? Bearing in mind the right hon. Gentleman's well-deserved reputation for bringing modern management to government in the past decade or more, does he accept that the big defect of his statement is that he has been unable to provide a date for publication of the Green Paper ? He said that it could be in a few weeks, but we should like to know whether it will before the House rises for the summer recess. More important, he has been unable to establish a reasonable period for the consultation process--five or six weeks would be wholly inadequate. Does he accept that regional meetings will be required so that the general public feel that they have been genuinely consulted ?

Mr. Heseltine : I understand that consultation periods are never long enough, but I have been through this process often enough to know that the views that we have heard expressed today will not change whether the consultation process takes a day, a week or a year. It is important to balance the interests of reaching a decision with a reasonable consultation period.

Mr. Rooker : How long ?

Mr. Heseltine : To be straight with the hon. Gentleman, in the normal course of events, I should have wished to come to the House with specific answers to the sort of questions that he is putting to me. However, faced with the fact

Mr. Campbell-Savours : And the whole of the Cabinet.

Mr. Heseltine : No, not the Cabinet at all in that context. The fact is that somebody, in the growing convention of the day, leaked the information to the newspapers. [Interruption.] The hon. Gentleman has few expectations about the system in which he works. I believe that it would be much better to do these things in an orderly way without leaks. Nevertheless, given that there had been a leak, it seemed to me to be courteous to make a statement to the House at the earliest opportunity--if for no other reason than to stop the mischief making of people such the hon. Member for Livingston (Mr. Cook).

Mr. John Butterfill (Bournemouth, West) : I am most grateful to my right hon. Friend for the attention that he has given to the views expressed by the Select Committee. What he has said today is very welcome, in particular his recognition that the world is moving forward very rapidly and that the development of new

technology--electronic mail, faxes and everything else--means that the Post Office will have to make considerable capital investments in order to compete in the future.

Does my right hon. Friend agree that that capital can be raised only through the private sector and that it would be quite unreasonable to expect commercial freedom to allow the Post Office to raise that capital through the Treasury ? It would be unreasonable for its competitors and a complete fudge. Will he resist the blandishments of the hon. Member for Livingston (Mr. Cook) which amount to nothing less than cooking the books ?

Mr. Heseltine : My hon. Friend makes some very important points. Every attempt that the Government have made to enhance the opportunities for British industry by

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turning nationalised industries into trading companies has been resisted by the Opposition parties. They have been wrong on every single occasion.

The fact is that we have to wrestle with the difficulties and discuss them on a wider basis than the forum today allows. The idea that businesses can simply operate in the public sector pretending that they are private sector businesses is not realistic.

Mr. Peter Hain (Neath) : Surely the President is aware that his favoured privatisation option will have a devastating impact on areas such as Wales because it will encourage the cherry picking of profitable traffic and the social dumping of remote areas. The separation of the Post Office Counters business as a rump service in the public sector could be very dangerous for remote, rural sub-post offices which have been effectively subsidised by the Post Office and are currently institutionally supported by it. [ Hon. Members-- : "They have not."] Yes, they have from time to time. Will the President of the Board of Trade give a specific guarantee that all existing second deliveries in urban areas will be maintained and that existing collection and delivery arrangements in rural areas will be maintained so that we do not go down the New Zealand route ? Is he maintaining the £1 limit on the letter monopoly ?

Mr. Heseltine : The hon. Gentleman has asked the sorts of questions which made it so necessary to make a statement to the House today. Although I have made it absolutely clear that his fears are utterly groundless, he still got up and asked his questions as though they involved new points that no one had heard about.

All over Wales today, post offices are subjected to increasing competition, whether in the form of fax machines, bike boys or international companies delivering the more expensive products. The fact is that the Post Office is now subject to that competition. The issue that we face is the extent to which we can free it to enable it to fight back, not only in this country but internationally where many competitors are based.

Sir Anthony Grant (Cambridgeshire, South-West) : Is my right hon. Friend aware that the proposals concerning sub-post offices are particularly welcome in view of the enormously important role that they play in the community ? It is absolutely absurd that they should have to haggle with the Treasury for months before they are allowed to sell even a fishing licence.

Is my right hon. Friend further aware that the all-party Select Committee on Trade and Industry--which included a Liberal-Democrat Member--noted, without objection or criticism, that one solution was privatisation and another was part-privatisation ? Committee members raised no objection to that suggestion. That statesmanlike and sensible attitude contrasts remarkably with the ideological nonsense that we have heard from both Opposition parties today.

Mr. Heseltine : My hon. Friend, who sat through the hearings of the Select Committee, makes a point that the House should take into account. When, in the Select Committee's long investigation, the arguments were

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paraded clearly, rationally and calmly, the Committee formed very clear and unanimous views across all parties that progress had to be made.

I very much welcome what my hon. Friend said. However, I make one small qualification. I am delighted that Counters are able to sell fishing licences, but it would be wrong to suggest that it was Counters which had to spend many months haggling with the Treasury.

Mr. Dennis Canavan (Falkirk, West) : Does the President of the Board of Trade agree that the Royal Mail is the oldest and most successful postal service not just in Europe, but throughout the world ? Does he agree that the 51 per cent. privatisation proposal will inevitably mean a reduction in service and an increase in unemployment ?

With regard to the question about the Queen's head on stamps, if El Presidente is not calling "off with her head" at this stage, will only 49 per cent. of her head be left and will the next stage of his crazy privatisation programme involve selling off 51 per cent. of the Crown jewels ?

Mr. Heseltine : What I find absolutely depressing about that sort of remark is that the hon. Gentleman stands up and says what an excellent organisation the Post Office is and then assumes that if it is given the freedom to expand it will get worse. I take exactly the opposite view. I think that if it is given the freedom to expand it will do an even better job than it is doing now.

Mr. Edward Leigh (Gainsborough and Horncastle) : It has been a long, careful road since we embarked on this process nearly two years ago. Will my right hon. Friend assure us that we will have a decision in time for the House to consider privatisation legislation in the next Session of Parliament ?

Clearly, the Government have, rightly, made up their minds that the status quo proposal is a non-starter, as is commercial freedom in the public sector, for the reasons given by my right hon. Friend. In short, I congratulate him and his right hon. Friends on having the courage at last to give the Post Office the freedom to invest in the private sector and on having the wisdom to reassure the public that a uniform tariff will be retained.

Mr. Heseltine : I am most grateful to my hon. Friend. I realise, as do all my colleagues, that we must balance proper consultation with the need for a decision. My hon. Friend may take some satisfaction from the fact that the statement has been made this afternoon.

Mr. Alex Salmond (Banff and Buchan) : At a time when the Scottish Office is being forced away from the privatisation of water and steered away from the privatisation of forestry, can the President of the Board of Trade explain why he wanted to swing ahead and sell off bits of the Royal Mail before his proposal was overturned by his Cabinet colleagues ?

Is not the real explanation for today's bungled statement that the President wanted to put on a macho display of political virility for the electorate and the Tory Back Benchers ? In view of his climb-down, will he in future take the advice of another blond, Zsa Zsa Gabor, who said that, in her extensive experience, "Macho men ain't mucho" ?

Mr. Heseltine : That was a rather pathetic intervention when we first heard it from other Opposition Members, and it got no better when repeated by the hon. Gentleman.

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Mr. Nicholas Winterton (Macclesfield) : Although I am a Conservative Member who is deeply unhappy about the fragmentation and privatisation of the Post Office--which could be a privatisation too far--I congratulate my right hon. Friend on his statement and the fact that he has decided to publish a Green Paper.

Will my right hon. Friend give me two assurances in that regard ? First, will he assure me that he will listen to the comments that are made about the Green Paper and that, if those comments are overwhelmingly opposed to the proposals, he will drop them ? Secondly, will he give me a cast-iron assurance this afternoon that the 49 per cent. that he intends the Government to hold under one of his proposals will be held by the Government ad infinitum ?

Mr. Heseltine : My hon. Friend is, as he says, a Conservative, and so am I. One of the responsibilities of being a Conservative and being in government--a responsibility not shared by the parties opposite--is that every so often one has to take decisions. Sometimes they are lonely, but they can often be right. It is important to show a degree of leadership when one can see the way that the world is going, perhaps even in advance of public opinion and understanding. It is important to have regard to the overall health of the industry and the national interests that are deeply ingrained in the future potential of the industry. We will listen very carefully to the consultation that will take place. We will certainly look at what commitments may be necessary and for how long in respect of whatever level of Government shareholding there may be.

My hon. Friend generously said that he welcomed the Green Paper and the consultation process. He will know that, throughout the process, we have listened to his views, as well as those of many of my colleagues. That is one of the reasons why today we have provided what is not essentially an economic answer, but a wide political, social and economic answer.

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