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happened within Scotland's Post Office service. So too has investment, as the new £30 million automated processing centre using the latest technology has shown, and another is to follow. The Post Office has moved with the times and, if given proper support, will continue to do so. Freed from tough Treasury restraints, the Post Office could do much more. Financial freedom certainly seems justified. Last year, the Treasury allowed the Post Office to invest only three quarters of what it wanted to invest. That may seem bizarre for a consistently profitable organisation that has no debt and has amassed £500 million in cash. But in the curious world of the Treasury, any investment is undesirable since it contributes to the United Kingdom's budget deficit. Meanwhile, the annual dividend, which the Treasury extracts from the Post Office, currently £181 million, or virtually the whole of its net profit, is by private sector reckoning imprudently high.

Whatever guarantees are given, privatisation is bound to raise doubts and fears about the long-term future of post offices in rural areas and about the future of shops that are also sub-post offices. Those are genuine fears that the Government must address. Whatever commitment the Government make, a market-driven service will naturally pull in the opposite direction from the principle of uniform and standard delivery. It will cause uncertainties in the remote parts of Scotland and throughout the country.

It is not as if the Post Office were inefficient or out of date. It is consistently profitable, has restructured and streamlined its management, has invested in automated equipment and already operates across the boundary of the public and private sector.

I agree with the words of The Herald when it says that the role of the Post Office

"is changing and will continue to change as more and more people open bank accounts. It needs the freedom to expand and develop but the public interest will be better served if this happens within the public sector--as the public clearly wants."

Everything that I heard the Minister say earlier points to the fact that he has clearly made up his mind about what he will do. Is the consultation paper yet another consultation sham from the Government ? Will they listen to everyone and then do what they wanted to do from the beginning ? The only commitment that we had from the Minister was that he would listen to what was said to him. We in Scotland know to our cost that when the Government consult the public they do not listen. In Strathclyde, 97 per cent. of the people showed that they did not want any change in their water services, yet that was what was done. Is the Green Paper yet another consultation sham from a Government who simply do not listen to the people but most certainly do listen to their own dogma ?

I am concerned about the Scottish rural areas and the suburban post offices. This privatisation is most certainly a privatisation too far. Certain activities and organisations should be run as a public service for the public good, and this most certainly is one of them. Several hon. Members rose

Mr. Deputy Speaker : Order. We have nearly 20 minutes before the wind-up speeches and three hon. Members wish to catch my eye.


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8.55 pm

Mr. Michael Connarty (Falkirk, East) : I shall try to be brief. Unfortunately, I was unable to be present for some of the earlier speeches and, sadly, I missed the maiden speech of my hon. Friend the Member for Dagenham (Ms Church), whom I knew as the health and safety representative at a national level for the Manufacturing, Science and Finance Union. I know that I will have missed an excellent contribution, one of many that will be made, and I shall read it with interest tomorrow. However, I have heard some of the contributions to today's debate and the detail into which some hon. Members have gone and I shall not go over that ground.

The question that sticks in my mind when I think of the privatisation of the Post Office, which was opposed even by Lady Thatcher as a privatisation too far, is why the Government are going ahead with it. It makes no sense. It was described by Mr. Bill Cockburn as a cash cow for the Government. It has been milked vigorously by the Treasury in the past few years--£65 million last year and £160 million have been demanded from its profits. It is a profitable organisation working well in the public interest. Clearly the Government are still driven by an anti-public or anti -community activity ethos. They do not like things that are done by the people and for the people by organsiations owned by the people. That does not gel with their idea of how the world should be run. This is one step in which not many of their supporters will follow them.

The hon. Member for Angus, East (Mr. Welsh) talked about the 60 per cent. of Conservatives who did not support this privatisation. That means that of the 900 people who voted for the Conservatives in Monklands, about 580 would not support it. When one gets that far down, one should stop digging. The Government should stop and look before they pursue the action that they obviously want to take, as far as the public will allow--the privatisation of the Post Office. I hope that some Conservative Members will have the good sense to prevent them from doing that. Not that it would hurt me ; it would damage the Conservatives more. When they leave office, I want it to be as a result of a resounding failure. However, it will be in the interests of the public if we stop this crazy idea.

I have read some of the economics of Hayek, the great guru pushed in the Conservative party among those in the No Turning Back group--the hon. Member for Stirling (Mr. Forsyth) and others, some of whom are no longer with us because they were found out at the last election. He claimed that everything should be run according to a market model. In those days he went so far as to talk about having private prisons, and people laughed. According to the Hayek theory, one should even have private armies. That would be just one more step all the way for the Government. People laughed at the idea of private companies taking criminals to court and to prison, but that was the economic theory of Hayek and the lunatics of the ultra- right. The Government still support people who adhere to those crazy theories. Two individuals are behind the proposals. One is the President of the Board of Trade. I was told that he was Tarzan in the House. I believe that he once swung the Mace around his head. We should forget that. I have another jungle image for him : that of the snake from The Jungle Book , which says to Mowgli, "Come inside my coils ; go to sleep. It is all right- -you will be safe." The President of


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the Board of Trade is playing that role now. He is saying to the people of Britain, "Go to sleep. Don't worry ; it will be all right. The postal service will be safe in my hands." Just like Mowgli, the people of Britain should not listen to the snake behind the privatisation of the Post Office.

The other individual behind the proposals is Mr. Bill Cockburn, a Scot, I am ashamed to say, and the chief executive of the Post Office. When I and other hon. Members met him not long ago, he assured us that he was 100 per cent. behind the idea of keeping the Post Office in the public sector and fighting for commercial freedom.

There was reference earlier to people being intoxicated. Mr. Bill Cockburn is intoxicated by the smell of executive jet fuel. He has been talking to chief executives of other privatised industries, or perhaps he is attracted by the lure of share options that may make him, as it made others, millionaires while the people who work for the Post Office lose their jobs and the people who need the service lose the service.

The Government talk in the Green Paper about separating Counters, but we should examine what is happening in British Gas, which is voluntarily disaggregating its services. The Government are talking about having a retail section and closing 240 showroom outlets. They say that they will not be needed any longer. They will be amalgamated and will offer services for power or power equipment, whether involving gas, electricity or another power source.

The interesting thing about that scenario is that British Gas says that people will pay their gas bills at a post office. At the same time, the Department of Trade and Industry has set a target for the closure of Crown offices ; letters have been in the public domain for some time. The Post Office executive has written that it is on target to meet the DTI's targets for the closure of Crown offices. It is important to know that that policy was inspired by the DTI, which pays Mr. Bill Cockburn, who is an employee not of the Post Office but of the DTI. He is paid directly by the DTI ; he is on its salary books. It is important, therefore, that we realise that the people calling the tune are the same people who will end up privatising the Post Office.

The hon. Member for Tiverton (Mrs. Browning) said that the Green Paper poses no threat to local sub-post offices, but at a meeting at which I also spoke, the hon. Member for Bury, North (Mr. Burt), the Under-Secretary of State for Social Security, admitted openly to about 60 people that stopping transfer payments by giro encashment was a great attraction. He said that it was much more attractive for payments to be made by bank automated credit transfer because giro encashments cost the Treasury 44p, but bank automated credit transfer costs 4p. The Department of Social Security is immensely attracted to the possibility of people no longer encashing giros at post offices. The Government deal with automation in the Green Paper. To me, automation means a swipe machine for one's smart card and the ability to put one's money anywhere. Down the road, a deal has been struck with the private sector so that people receive their money through automation. We warned them off, we fought them and we beat them the last time that the Government talked about it, but the paying Department has it in mind that automation should be introduced. Fifty per cent. of local post offices' income comes from giro encashment. A giro encashment payment costs 44p and payments will cost 4p if they are carried out through an automated bank card or switch card, so post offices'


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income will be cut by 91 per cent. Very few local sub-post offices will survive that cut in income. The 2,700 post offices that receive a flat-rate subsidy would probably be joined by another 10,000, or the service would completely fall apart.

The proposal poses a threat to rural communities in Scotland and elsewhere. As a Scottish Labour Member who is sponsored by the Union of Communication Workers, I do not apologise for saying that. My constituency party receives £8,000 for administration as part of that sponsorship, but I receive none of that money. All hon. Members should have to declare their interests in and every single penny that they receive from private consultancies. That would square everyone's idea of how hon. Members should behave.

It can cost up to £10 to send a letter to some parts of the Western Isles or the Orkneys. At the moment, people there receive such a service for a single tariff. The Green Paper contains no guarantee that a uniform tariff will not be much higher in rural areas. A uniform tariff system could mean that a service would cost 25p in the city, but £3 200 miles away, and more than that 500 miles away. It would still be a uniform tariff system. As in the case of British Gas, there is pressure for tariffs to be linked to areas. The same pressure will arise from the privatisation of the Post Office--tariffs will be linked with distance. The system whereby there is one tariff for all first and second class letters will be broken up. A privatised Post Office would contain no guarantees that the Government will not succumb to the pressure for changes. They will succumb to that pressure because of what will be described as commercial considerations.

During my time with the Union of Communication Workers, however, I have seen a much brighter future for the Post Office. It is a potential transmitter of all sorts of mail, whether that mail is electronic or conveyed by hand. For instance, when electronic shopping is introduced goods will have to be carried to customers. Lives will be changed ; the new developments will be a boon--unless the Government say that that bright future must bring profit to some private organisation, and that that is more important than the workers or those who deserve their services.

We must stop this privatisation. I have a simple solution to the problem, and I shall continue to tell people all over the country what I have been telling them already. All summer--indeed, until the present Government are out of office--I shall tell them, "Deselect, or do not vote for, any Member of Parliament who supports the privatisation of the Post Office. That Member of Parliament intends to break up something that is precious to you, and to us."

9.5 pm

Mr. Gordon Prentice (Pendle) : I shall be brief, as I want to leave some time for my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham), who is a member of the Select Committee on Trade and Industry.

I was shocked, but not surprised, by the way in which Conservative Members sought to caricature our stance. The Minister said that we wanted to create some kind of North Korean Stalinist state ; the whole thing was bizarre and ludicrous. Some common ground exists. The Post Office must change : the Select Committee said that, the Opposition Front Bench has said it and we all believe it.


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That is where we part company with the Government, however, because privatisation--in whole or in part--is not the answer.

What do we mean by commercial freedom ? Before I deal with that, let me ask a more basic question : why are the Government undertaking this exercise ? It is ideologically driven ; it is not about improving efficiency or effectiveness in the Post Office ; it is as plain as a pikestaff that it is about raising £2 billion to finance tax cuts before the next general election.

Many speakers have reminded the House just how successful the Post Office is. According to the latest annual report, which has just been published, this year's profit amounted to £306 million. It was the 18th successive year of subsidy-free profit. The external financing limit target of £181 million was bettered ; the Post Office contributed £182 million to the Treasury coffers. Since 1981, more than £1 billion has gone from the Post Office to the public sector. As I have said, the Government's exercise will not improve efficiency or effectiveness.

Let me tell Conservative Members that the general public feel deep unease and scepticism, which was articulated earlier by the hon. Member for Macclesfield (Mr. Winterton). The wider community believes that the Government will have cause to regret this privatisation. Last year, when the automated credit transfer system posed a threat to sub-post offices, I was inundated with protests : 7,000 people in my constituency, which has an electorate of 62,000, signed petitions which I delivered to 10 Downing street. The response to the current privatisation threat will be much greater.

Those sub-postmasters and postmistresses were not only concerned about automated credit transfer ; they were straining at the leash to provide services that the Government have not hitherto allowed sub-post offices to provide. They wanted to act as agents for banks and building societies, and to sell tickets for various events. For months, we witnessed the absurd fiasco of the Government agonising over whether sub-post offices could provide fishing licences. It is the stuff of a hall of mirrors.

I shall pose another fundamental question. What on earth happened to the doctrine of the mandate ? The Prime Minister's smiling visage is on the Conservative election manifesto, "The Best Future for Britain", in which there is some mention of the Post Office, but not a word about the privatisation of it. If the doctrine of the mandate means something, surely this threatened legislation should be stopped in its tracks when it reaches the other place.

Some of my hon. Friends, including the hon. Members for Falkirk, East (Mr. Connarty) and for Birmingham, Yardley (Ms Morris), have mentioned the widespread fears that Post Office privatisation will mean only another bonanza in pay and perks for directors and grotesquely generous share option schemes. In fact, the water industry and North West Water, which is the water company in my area, was mentioned by the Prime Minister earlier today. The flotation of the water industry was under-priced by £2 billion and £5 billion of debt was written off to enable privatisation to go ahead. Yet, by common consent, it has been disastrous. Since privatisation, charges have risen by 67 per cent. Another disastrous privatisation is that of British Rail, a natural monopoly. Privatisation of it is faltering and the scales are falling from people's eyes when they see the practical effect of privatisation. The same thing will happen with the Post Office.


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Privatisation of the Post Office has been ideologically driven and it has not been thought through. The review gestated for two years during which it looked at all sorts of ways in which to make the Post Office more responsive--allegedly. It looked at breaking up the Post Office into separate functions of letter delivery, sorting and so on, and came to the not surprising conclusion that that was impractical. In fact, that idea was always hare-brained. The two-year delay in bringing forward proposals meant that the Post Office could not develop the services that it wanted. The Post Office complained about being enveloped in a fog of uncertainty and, only a few months ago, the chairman of the Post Office talked of an impending crisis. The way in which the legitimate concerns of the Post Office were swept to one side or ignored for two years spoke volumes. When the President of the Board of Trade appeared before the Select Committee, he explained away the two-year delay in reaching conclusions by saying that it was because of the complexities of the issues. It was complex only because the end gain--privatisation by hook or by crook--was the starting point. Privatisation was the name of the game, not making the organisation more efficient.

The uncertainty over the future of the Post Office was caused by anxiety about external political reaction to privatisation. That point was conceded earlier by the former Minister with responsibility for the Post Office, the hon. Member for Gainsborough and Horncastle (Mr. Leigh), when, in a fit of pique after he was sacked, he accused the Prime Minister of "political funk" because the Prime Minister had failed to grasp the privatisation nettle. Well, they have grasped it now and it will sting them. In fact, the Government's intentions--real "Alice-in-Wonderland" stuff--became clear only because of a leak from the Department of Trade and Industry, which brought the President of the Board of Trade to the House and the subsequent Green Paper before us.

Many parts of the Green Paper have not been examined adequately, such as the extent of the Post Office monopoly, mentioned on page 24, where the Government say that more detailed work will be needed to ensure that, while safeguarding the Royal Mail's monopoly, there is fair competition between it and the new entrants into the market. The Minister for Industry talked about some degree of monopoly, but he could not be more precise than that.

There is a whole range of ways in which the Post Office, within the public sector, could improve the service, as Post Office people and hon. Members on both sides who want the Post Office to be a successful and dynamic organisation want. It is bizarre that the Post Office cannot enter joint ventures and that is a point that we want to address. It is bizarre that the only trading organisation in the public sector--the Post Office--is fettered when it seeks to borrow. There is a whole series of related issues that should be developed, but not with the sword of Damocles of ultimate privatisation hanging over the head of the Post Office. It is possible for the Post Office to stay in the public sector and to deliver the service that people in here and outside want.

9.15 pm

Mr. Michael Clapham (Barnsley, West and Penistone) : As I have only a couple of minutes, I shall merely refer to the suggestions in the report by the Select


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Committee on Trade and Industry. The Minister has obviously looked at the recommendation in the report, which is that there is a need for change. However, the report does not suggest any form of ownership. If the Minister has read carefully the minutes of the evidence given by the Post Office management, he will have seen clearly that they were prepared to accept commercialisation. Their view was that if the Post Office was freed from the straitjacket of the external financing limit, it would be able to compete with Post Office services such as those in Sweden, France, Germany and Canada where the post offices are all state owned.

I urge the Minister to consider option one as the major option to go for. It would give the Post Office the opportunity to be able to raise capital on the private market. It would give it the opportunity to enter joint ventures so that it could compete with its main competitors, such as the Dutch post office, and it would allow it to continue its unique service, which is so important to rural constituencies such as mine. My constituency is made up of 21 villages and it depends on the service that the Post Office provides.

I urge the Minister to go for option one. It would give us the opportunity to keep the Post Office in the public sector and, at the same time, it would give it the opportunities that it deserves. It would also ensure jobs for the work force and the uniqueness of the service for the British people.

9.17 pm

Mr. Jim Cousins (Newcastle upon Tyne, Central) : It gives me particular pleasure to say something about the speech of the new hon. Member for Dagenham (Ms Church) who, in her contribution on this important matter, had the combination of very strong and clear thoughts and a gentle and firm delivery. That is an example to us all and I am sure that we shall hear much more from her in the House. I begin with a quotation which, I hope, will establish some common ground. In this year's annual report, the chief executive of the Post Office says :

"we have ambitions stretching beyond the UK. We have the ability to be a major player in the global postal market and a burning ambition to be the postal administration of first choice--the mailing centre of Europe . . . And we have a trump card--one of the largest and best workforces and network of sub post offices in the world"

he evidently did not visualise the separation of the sub-post offices from the rest of the network

"an asset highly valued by customers, clients and the community alike. But, unless we can respond on equal terms to the competition from other overseas post offices and be given the opportunity to offer a wider range of activities at our post offices, we could lose ground at home and abroad and head for a spiral of decline." We propose to achieve that by offering commercial freedom inside the public sector. Every Opposition Member who has spoken--they spoke for Wolverhampton, Birmingham, Neath and Falkirk-- including the members of the Liberal Democrat and Scottish National parties, has supported the idea of achieving success through commercialisation in the public sector. That would combine the trump card of public services with the commercial opportunities that the chief executive mentioned.

In the two years that we have waited for the Green Paper £100 million has been cut from the public investment programme of the Post Office and the price of stamps has


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been subject to an entirely unnecessary increase to meet the imposed EFL targets of the Government. As a consequence, the traditional pillar box mail has declined and is falling steadily. If the Government adopt the option that they endorse in the Green Paper, they will proceed to subject the Post Office to entirely unnecessary political controversy. What we propose could be achieved within the public sector and we believe that there is consensus in favour of that option.

My hon. Friend the Member for Vauxhall (Ms Hoey) made an important point when she said that the Post Office's public service is one of those great popular institutions that binds together all parts of the United Kingdom. What the Government endorse is an uncertain, twilight-zone proposal, which contains some illogical contradictions that I should like to point out in the limited time available to me. It is a fundamental error to see this privatisation--if that is how we are to regard it--as being like those of the past. The productivity gains have already been achieved and, sadly, jobs are being stripped out of the Post Office right now, at a rate of between 5,000 and 8, 000 a year. Last year, a 2 per cent. unit cost reduction was achieved in postal services. Those achievements have been made now, inside the public sector.

The fundamental point, which is not disputed by many Conservative Members who spoke in the debate, is that the Post Office service is no natural monopoly. There is no contained infrastructure that gives the Post Office some kind of superiority or exclusive access. It does not have a unique right of access to homes and businesses--it is already competing straightforwardly in those markets. There are 4,000 competitors in the parcels business from TNT down to the bike boys who we see on every street.

There is no controversy about the fact that the Post Office is already in commercial competition. The basis of the network which will keep it together and sustain it in the future--the trump card to which the chief executive of the Post Office referred--is its brand name and its good will. That would be put at risk if we separated post offices from the rest of the network and sold 49 per cent. of what was left.

We believe that the uniform price and universal delivery, which the Government claim to be non-negotiable, can be sustained in the long run in the face of competitive pressures only by a clear commitment to the Post Office as a public service, underwritten by public ownership and public control. That is our objective. The market cannot guarantee that uniform price and universal delivery. The legal guarantees that the Government promise are worthless outside public control, because if the Government intend that the Post Office should operate as a commercial organisation, they should not impose on it the unusual legal obligations set out in the Green Paper. Nor should they subject it to the internal cross-subsidy requirements, which the undertakings to deliver a standard price and universal delivery inevitably make necessary. In every other privatisation those internal cross-subsidy systems, which are essential to maintain the uniform price and universal delivery, have been the subject of specific attacks from all the regulators. That is why the Government's proposal is insecure and is a twilight zone.


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The guarantees that the Government have offered cannot be delivered. Indeed, in the Green Paper, the Government make it clear that the guarantee of uniform price and universal delivery is not the legal guarantee that they offer, but that of the letter monopoly. That creates the critical gap in the whole proposal. We simply do not know how the Government propose to deal with the letter monopoly in the future. If it is withdrawn, the uniform price and universal delivery system will collapse--and it will collapse, whatever guarantees the Government offer in legal terms.

In the Green Paper, there is no guarantee of allowing Post Office Counters to take on new business. It said that that might be possible, but some severe conditions are laid down. Tonight, there is an opportunity for the Minister to make clear how he proposes to deal with that uncertainty because it is far from clear that the bit that is left in the public sector will achieve commercial freedom. Furthermore, what will sub-post offices make of these proposals ? Are they to assume that in the future they will have the exclusive right to deal with Royal Mail and Parcelforce, or will it be possible for a 51 per cent. or 49 per cent. privatised Post Office to allow parallel networks to be created to deliver mail and parcels, bypassing the sub-post offices ?

We have been told that there will be a contract. Will there be exclusivity in that contract ? If there is no exclusivity, the guarantees to the sub- post offices become virtually meaningless. What we are offered in the Green Paper for sub-post offices is not law, only guidelines--a phrase which may prove to be famous in the history of public administration in this country- -under five restrictive conditions.

We come to the whole centre of the gobbledegook, the mishmash which the Government have created around the Green Paper--the mysterious footnote which refers us to the standard international system of national accounts, and justification for the fact that a 49 per cent. Government share ownership in the Post Office means that the Post Office will suddenly achieve commercial freedom. That is the only mechanism by which it can achieve it.

For those of us who have made the standard system of national accounts our bedtime reading, I find it odd that the Government should pick on Jacques Delors' final utterances as a means of securing commercial freedom. It is no wonder that there was a certain cry for help about that from the hon. Member for Leeds, North-West (Dr. Hampson) earlier in the debate.

If there is a dilemma here, it is a dilemma of the Government's own making. Forty-nine per cent. ownership does not give an escape because the same paragraph, which is quoted incompletely in the Green Paper to describe how the national accounts and the public sector should be drawn up, says :

"A corporation which a government is able to control as a result of special legislation should be treated as a public corporation even if the government does not own a majority of shares."

If there is a dilemma, and it is a dilemma of the Government's own making, they have not escaped from it.

In the Green Paper, there is absolutely no certainty of securing the future of Post Office services. Yet at the same time the Government propose to load the privatised Post Office--the 50 per cent. plus one share ownership Post Office--with legal obligations which no commercial company would accept.


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There is also a central mystery about what the Government intend to do with the share ownership that is left. In the Green Paper, it is not clear whether the Government will vote those shares. We are told that the Government will not routinely vote those shares but that there will be circumstances in which they will vote them. It is therefore vital that now, at the beginning of the process, the Minister makes clear how those shares are to be voted.

The answer lies in one of the Postman Pat stories. Some of us will recall from our literary activities the story entitled, "Postman Pat's Wildcat Chase ", in which Jess the cat--in this case the Government--fatally confuses Mrs. Hubbard's knitting with a woolly monster. This entire discussion about the significance of 49 per cent. plus one or 50 per cent. minus one, and about the possibility of commercial freedom in the public sector, is much the same as wondering whether we are dealing with Mrs. Hubbard's knitting or the woolly monster. Finally, when Postman Pat manages to convince Jess the cat that Mrs. Hubbard's knitting is not a woolly monster, he says,

"I'm sorry he made such a mess. I know he didn't mean any harm. He's not really a naughty cat--he was only running for his life." Perhaps the President of the Board of Trade is running for his life now : his hon. Friends will certainly be running for their lives later.

There is no majority in the country for this. The country well understands the significance of the trump card : the core public services and the good will and public support on which the future commercial opportunities of the Post Office depend. We propose to take up the cause of the public and to defend that trump card. We shall defend a public brand name that has been established over 150 years, and the public good will that is reflected in the core public services.

We shall resist this break-up. We shall not accept Government legislation introduced to dismember the Post Office's services. There is an alternative and, in a half-hearted way, it is already on the table. That is the alternative that we shall begin to argue for.

Mr. McLoughlin : Can the hon. Gentleman confirm what he said earlier --that if the Government decide to move forward with their preferred option, a future Labour Government would buy back the shares and renationalise the Royal Mail ?

Mr. Cousins : I certainly did not say that.

Mr. Peter Ainsworth rose

Mr. Cousins : Let me deal with this point first. I adopted the same formula as my hon. Friend the Member for Livingston used. When asked the question, he clearly said that we think the Government are mistaken and foolish to embark on this. We cannot predict whether they will persist in their foolishness. If they do, we cannot predict how the House of Commons will react to it. Even if the House agrees to it, we cannot be sure what precise form it will agree to. However, should the option that the Government are advancing pass into law, we would seek to re-establish public control over these core public services. That is our policy and our intention and, if I have understood matters aright, it is also the policy of all the Opposition parties represented in the debate.


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Mr. French : When asked earlier whether a future Labour Government, if there were one, would renationalise the Post Office, the hon. Gentleman's answer was yes.

Mr. Cousins : I did not say that a future Labour Government would renationalise the Post Office, or that they would buy back shares. The Government have invented those fictions. Like poor Jess the cat, they cannot distinguish woolly monsters from Mrs. Hubbard's knitting.

Mr. Peter Ainsworth : The hon. Gentleman can resort to as many formulae as he likes. It was quite clear to me, and I asked the question, that the hon. Gentleman said that a future Labour Government, should one exist, would seek to renationalise the Post Office. The hon. Member for Livingston (Mr. Cook) will be able to read that in Hansard tomorrow morning.

Mr. Cousins : My hon. Friend the Member for Livingston will be able to read all my remarks on that matter with complete comfort, because they entirely echo his remarks at the start of the debate. We return to the heart of the proposition. The central point was made, in a way, by the intervention of the hon. Member for Macclesfield. I do not know how we should regard him in the House, but he sits on the Conservative Benches. He, too, said that the public wanted and desired commercial freedom in the public sector. That is what the people of the country want. The Government oppose that, and are putting forward the twilight zone solution in which a public service will be broken in two and the Royal Mail and parcels will in future be neither one thing nor the other. Neither the markets nor anyone else will understand the balance of power in the organisation that the Government propose to create in their preferred option.

We say to the Government kindly and gently, as we always do--clearly, gently and firmly, in the style suggested to the House by my hon. Friend the Member for Dagenham--that if they persist in that, perhaps it would be time for them to go home and think once again.

9.35 pm

The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin) : I agree with the hon. Member for Newcastle upoTyne, Central (Mr. Cousins) on one thing : I pay tribute to his hon. Friend the Member for Dagenham (Ms Church) on her first speech to the House. I heard the speech this afternoon, and it was an impressive performance. She spoke with great clarity and feeling.

I notice that the hon. Lady's predecessor, one-time Labour party leadership contender, and at one time no doubt Prime Minister contender, has decided to desert the country for a country that has now privatised its post office service. I thought that that was perhaps an adequate way to start the debate.

I congratulate the hon. Lady. We all feel for her, because we all know what a trial it is to get one's maiden speech out of the way and to start to get more into the hurly-burly of the House of Commons. Of the speeches of the 10 Labour Back Benchers who spoke, there were four interesting contributions, from the hon. Members for Falkirk, East (Mr. Connarty), for Neath (Mr. Hain), for Vauxhall (Ms Hoey) and for Birmingham, Yardley (Ms Morris). I would expect them to make interesting contributions, because they are all sponsored by the Union of Communication Workers, and it is a pity that


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perhaps-- [Interruption.] --it is a pity that perhaps some of them did not declare it right at the beginning of their speech. Indeed, the hon. Member for Falkirk, East--I pay tribute to him--goes a little further and says that he gets £8,000 a year from the UCW in the Members' register.

Mr. Connarty : The hon. Gentleman does not recall accurately. I said that my constituency party receives £8,000 for its administration. I receive no personal remuneration.

Mr. McLoughlin : I apologise to the hon. Gentleman if I misquoted him, but I thought that it was worth putting those four contributions on the record.

We have had several demands today from the hon. Member for Newcastle upon Tyne, Central and others about the commercial freedoms that they keep talking about that they would like the Post Office to have. That is interesting. They often speak about commercial freedoms, but whenever the idea of extending further freedoms to the Post Office is mooted we often receive letters from leading members of the Opposition Front Bench team, saying that perhaps those freedoms should not be given.

I have one such letter from the Opposition Chief Whip, the right hon. Member for Bishop Auckland (Mr. Foster), which says : "I enclose a copy of a report from a recent issue of the Northern Echo. I do hope that you will ensure that the fullest consultations are carried out before any such proposal for the Post Office to deliver Sunday papers by the post is arrived at."

So the Opposition continually ask for extra commercial freedoms for the Post Office, but every time that more commercial freedoms are even considered or suggested, the alarm bells rise from the Opposition Benches.

Although, as we have made clear, we are seeking views, there are three cardinal things that we stand by, and on which we are not prepared to negotiate. Those commitments include a commitment to a nationwide letter and parcels service, with daily delivery to every address in the country. I say to my hon. Friend the Member for Tiverton (Mrs. Browning) that that involves delivery on six days to every home.

We are committed to a uniform and affordable price structure under which it will cost the public the same to post a letter no matter where it is posted or to where it is sent throughout the United Kingdom. We are also committed to a nationwide network of post offices, and we need no lectures from the Opposition about the importance of that. Some of my hon. Friends who represent rural constituencies have a number of post offices in their areas and we strongly feel that they should be given the extra commercial freedoms set out in the Green Paper.

Our postal services are operating in a world of rapid change. They must adapt if they are to thrive as businesses in the face of growing competition and if they are to continue to meet the needs and demands of their customers. A policy of standing still will not preserve our postal services, nor will it protect the jobs that the hon. Member for Neath and other hon. Members spoke so much about. It will simply ossify them and condemn them to gradual decline. Our postal services recognise the need to change while maintaining and improving their standards of service and preserving the three non-negotiable commitments to which I have referred.


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Mr. Hain : If the Minister is so keen on change and on meeting the competitive demands that are undoubtedly bearing down on the Post Office, why do the Government not give commercial freedom now instead of waiting the 18 months or so that will be needed to put a Bill through Parliament-- if it gets through Parliament ? Why not give commercial freedom now so that we can take on the Dutch and the others ?

Mr. McLoughlin : We have made it fairly clear that we are consulting on the options. It is important to move forward with the right proposals and I am surprised that the hon. Gentleman condemns that.

As I have said, our postal services are operating in a world of rapid change and must adapt if they are to thrive as businesses in the face of growing competition. The fact that we are addressing those issues and charting a way forward for the Post Office is greatly welcomed, certainly by people to whom I have spoken. The changes facing our post office network, the largest retail network in Europe, are of course different from those confronting Royal Mail. Most services that are available in post offices are now available elsewhere and new shopping habits have evolved with the shift from smaller retailers to larger stores. To enable our post offices to respond positively to that challenge, the Government have decided to allow Post Office Counters greater commercial freedom within the existing structure. That will allow our post office network to provide a wider range of services on behalf of new and existing private sector clients. Moreover, new technology offers the opportunity to automate much of the routine clerical work which, like bindweed, is strangling the business. The Government have made it clear that they intend to bring those changes rapidly to fruition. The hon. Member for Falkirk, East attacked British Gas, which has signed a contract with the Post Office to enable people to pay gas bills at the Post Office without charge. I thought that the hon. Gentleman would have welcomed that rather than condemn it. I certainly think that most customers and constituents welcome it.

Mr. Connarty : The Minister seems to have a paranoia this evening. I think I said that, while it had been decided that people could pay their gas bills through post offices, the irony was that the Post Office and DTI target was to close post offices throughout the country.

Mr. McLoughlin : The hon. Gentleman is wrong again. Many closures occur because no one is willing to take on the franchise. The hon. Gentleman is talking about the conversion programme for Crown post offices. As the hon. Member for Gordon (Mr. Bruce) said, although there is sometimes controversy on the announcement of changes, the service that is provided by the people who take over the franchise greatly improves and that is to the benefit of local consumers and townspeople. We shall not take any lectures from the Opposition on that.

I have no doubt that the Opposition are full of good intentions when they talk about giving greater commercial freedom. But no Labour Government have ever done that and I doubt that when the call comes to punch a future Labour Government will be able to do it--if Labour were ever elected to govern. We often talk about intent but the reality of government is different from the reality of opposition. I remind the Opposition of what the last Labour Chancellor of the Exchequer said at a Labour party conference. He said :


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"I am going to negotiate with the IMF on the basis of our existing policies, not changes in policies, and I need your support to do it. But when I say existing policies' I mean things we do not like as well as things we do like. It means sticking to the very painful cuts in public expenditure on which the Government has already decided. It means sticking to a pay policy which enables us, as the TUC resolved a week or two ago, to continue the attack on inflation."

It is easy when in opposition to forget the responsibilities of Government. Labour Members are so dismissive of the past.

The hon. Member for Vauxhall said she did not believe that we would stick by any of the commitments we have given, such as a universal tariff and a free service for the blind. That was the sort of argument Labour Members used when we privatised British Telecom. What has happened since ? There has been massive investment in telecommunications, there are more telephone boxes and, even more incredible, they actually work. We will listen to no lectures from them about providing and improving universal services. Every time they talk about such matters, they are wrong. We have taken the correct action and improved the service to the consumer. In addition, the companies that we have privatised have become world leaders and have attracted a large amount of new business.

My hon. Friend the Member for Leeds, North-West (Dr. Hampson) served on the Select Committee and he told us of some of the arguments put and points raised during its consideration of the report. My hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), who has great knowledge of these matters, asked a number of questions. In effect, he asked me to pre- judge the Government's consultation exercise. He also made a number of suggestions about ways in which he wanted us to go further. I want to reflect carefully on his speech and include it in our consultation exercise. He made a number of recommendations that we may wish to follow at a later stage. I assure him that I have taken on board some of his points.

Mr. Cousins : The hon. Member for Gainsborough and Horncastle (Mr. Leigh) described the offer of new business for Post Office Counters as mealy-mouthed. He said that the Government were imposing conditions by saying that the market was well served by the private sector, by questioning whether the involvement of Post Office Counters would create market power and by saying that there was a need to ensure that third parties were not discomfited. Is the Minister saying that he is taking the hon. Gentleman's point seriously ?


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