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8.8 pm
Sir Edward Heath (Old Bexley and Sidcup): I make it clear at the beginning that I am concerned with the Government's policy, and that is what concerns my constituents, my supporters and my former supporters. They are concerned about what the Government are doing about specific problems. I am not concerned about the Opposition, because I do not want them in power. What has reduced the public's esteem of the House is the fact that the two sides spend all their time throwing mud at each other. That is not what the people want. They want a thorough examination of the Government's policy and a thorough explanation from the Government of why they are carrying the policy through and what they think the results will be.
My right hon. Friend the Secretary of State spent the first half of his speech dealing with privatisation, and accused the Opposition of dogma. The real dogma lies in believing that privatisation can be extended to everything. The country realises that that cannot be substantiated.I agree with many of the tributes that he paid to the industries and firms that have been privatised. That is good. But that does not mean that privatisation can be stretched to every activity in the community. There are many activities for which a Government should take responsibility and organise and provide finance. That is the only safeguard for the community if a Government do that.
Now we hear talk about the privatisation of prisons.I am strongly opposed to that. That is a facility in the community for which a Government must take responsibility. We have already seen some of the consequences of that particular action. It is said that the police can be privatised. I think that it is an absolute horror that it should even be mentioned as a possibility.
One must accept that, in a large sphere, privatisation has been successful, but one cannot then go on to deduce that every activity should be privatised. When I say that I am concerned about the future of the Government, it is because the people do not believe that everything can be privatised--the Post Office, for example. I am against what is proposed because my constituents are against it, and I want to be re-elected. I want a Conservative Government again. There is no doubt that my constituents are against it. The Secretary of State admitted that the people are against it. The Government should recognise and respect that. Why are people against it? Because for them the Post Office is something more than just an activity.
I do not represent an agricultural area, so I do not have the acute anxieties that hon. Members who represent agricultural areas must have, but I have a dormitory constituency in which sub-post offices are not just a service that is dished out, as people at the top think, but a way of life. It means much more to people in their
activities than just using stamps, drawing pensions and so on. I ask my right hon. Friend to recognise that. The people are against privatisation. Let our Government recognise that and accept that we have to win the next election. I am talking quite brutally about votes. I want votes. What is wrong in saying that? I know when my constituents are against a particular item and when I shall not get their support if my Government insist on going on with such items.
I can support the Government's amendment, because the last phrase is so worded that I can read into it that the Government intend to do nothing. That is satisfactory.If my right hon. Friend feels that he can come along after the next election, if he is re-elected, and say that the Government promise to think the whole thing over, well and good. We could then have another vote and another debate.
Mr. Leigh:
My right hon. Friend makes a very moving appeal that we should listen to public opinion. I presume therefore that he agrees that we should listen to public opinion that tells us that 60 per cent. of people are opposed to a single European currency, so we should abide by it.
Sir Edward Heath:
My constituents will support a single European currency. [Laughter.] There is no point in my hon. Friend laughing and being so arrogant as to think that he knows what my constituents will do.Of course he does not. What is more, 82 per cent. of British industry wants a single currency, and we shall get a single currency. I apologise to my hon. Friend.
Why are people so opposed to the privatisation of the Post Office, apart from the fact that it is part of their way of life? The Secretary of State said that 49 per cent. of it will not go into private hands. What do my people say about that? They say that with 49 per cent., the Government cannot control anything. Whoever gets it will do whatever they like. We have seen what has happened to 49 per cent. holdings in the past. After a period, they just disappear. Look at what happened to BP, where we always had a 51 per cent. holding, to ensure that BP did what we believed was in the national interest. Then it was reduced to 49 per cent., and then it was wiped out. People know that, and the plain fact is that they do not trust anybody who says, "If it is completely privatised, it will carry on."
Great emphasis has been placed on the 19,000 post offices, but how many will remain? I use a sub-post office, outside Cathedral close in Salisbury. My constituents use them. What undertaking is there that we shall have them? None whatever. That is why people are so strongly opposed to any complete privatisation that goes ahead in the way that has been discussed. I ask my right hon. Friend to recognise that fact. I shall certainly tell my constituents, because I get many letters on the subject, that I am absolutely opposed to privatisation. They know that already, and I shall do my utmost to stop it. We have too many privatisations at the moment, and they are all on the basis of the same dogma. People want to keep the Royal Mail.
Many people think that one can just sell off the royal yacht because it does not matter. They are completely wrong. People say that if we are to have a monarchy,
it must be treated appropriately. The royal yacht has stood this country in good stead, with royal visits all over the world. Why throw it away?
Look at Greenwich, which is one of our great glories. The Government say, "Away with it." The Secretary of State for National Heritage sent me an advertisement to take Greenwich, if I wanted to, on a 100-year lease or whatever. The advertisement was of the most vulgar kind, to which the lowest estate agent would not put his name. Why must that happen?
We now read that the royal train will be run by an American company. I am not opposed to American railways, but I believe that our royal train should be run by this country whether it is private or nationalised. People feel that things which are in our own interest and which are of historical importance, such as Greenwich, the royal yacht, the royal train and other items, should not be thrown away in the haphazard way that they currently are.
I hope that my right hon. Friend can influence the Government, so that we British can be proud of the things that are our heritage. That is completely different from spending our time attacking our allies and neighbours for what, allegedly, they are doing, because that is xenophobic, but we can rightly take a pride in the things that are of great historic importance. If we do that,the people will begin to trust us much more and will support us more in the other difficult things that from time to time we have to do.
Mr. Nick Harvey (North Devon):
This is a welcome opportunity to discuss in the House the future of the Post Office, because in his television interview the Prime Minister chose once again to throw into uncertainty the whole issue of the future of the Post Office. There is no doubt that the people of this country feel strongly about it. It is a pleasure to follow the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), because he made two valid points. His account of where public opinion lies on the issue was entirely right. There can be no doubt about that whatever. His second point, that there had been successful privatisations in some industries but that that does not prove that one would enjoy success by privatising every part of public service, is also right.
By suggesting yet again that the Post Office is a suitable candidate for privatisation, the real risk exists of undermining what is undoubtedly a genuine British success story. The Post Office needs to be able to compete in an increasingly competitive market, but it is being hampered from doing that by the uncertainty caused by the Prime Minister's latest outpouring.
The same thing has happened to the railways industry, where the Government took far too long to decide what they wanted to do. As a result of an appalling hiatus that
lasted several years, the country's train-building industry has collapsed. If we have a rail renaissance, we shall have to go to France and Sweden to buy our trains. The Government are creating in the Post Office the same degree of uncertainty that affected the railway industry, and they are inflicting the same damage.
When I hear the Secretary of State for Trade and Industry yet again tell the House that it remains the Government's policy and preference to privatise the Post Office, but that they are not doing so because there is inadequate parliamentary support for it, I am forced to conclude that the Government are in office but not in power. If they are unable get such a policy through the House, they should think again and come up with another policy.
Some time ago, in their Green Paper, the Government proposed three alternatives: to privatise, to give commercial freedom within the public sector, or to split the business up. If they are unable to press ahead with privatisation--and I hope that they have rejected the option of splitting up the business--they should try to give some meaning to the commercial freedom option.I thought that some modest progress was being made in that regard. When the former President of the Board of Trade told the Select Committee on Trade and Industry that there would be an attempt to keep the negative external financing limit at about half the projected pre-tax profit, that seemed to give the Post Office at least some basis on which to plan its business. There has, however, been the most appalling reneging on that commitment.
Let us be clear about privatisation's principal problems. The Post Office has already been split into three operating businesses: Post Office Counters, the Royal Mail and Parcelforce. If the Royal Mail, by far the most profitable of those three parts, is to be privatised, there are two obvious consequences. First, the cross-subsidisation option, which is not currently being used, would go indefinitely. I represent a constituency with many small rural sub-post offices. I talk to the people who run them and respect their role in small village communities--a far broader role than simply running a business. Such businesses are a focal point for the community.
I talk to the people who are struggling to run those small businesses. They are inadequately rewarded and remunerated for the service that they provide. The salaries, if one dares to use that word to describe the payments that they receive from the Post Office, are pathetic and insulting. When the Government take away those vast sums of money, which could sensibly have been used to ensure that small rural post offices were more viable, we will think that whole world has gone completely mad.
If the Royal Mail is to be taken out of the equation and its profit may no longer be used for cross-subsidisation, only one sensible conclusion can be drawn: the future of the rural sub-post office network is in doubt and in danger. That is the first principal objection. If the Royal Mail were taken out of the equation, the option of using the considerable revenues that it earns to improve and to build for the future of the rural sub-post office network--and of urban post offices, which also play an important role--would be gone.
Secondly, let us consider what a privatised Royal Mail would be like and what it would choose to do.In representing my constituents, I look to the example of
what has happened in the gas, electricity and water industries, to name but three. In all cases, new private operators are, sensibly and properly, beginning to develop cost and charging bases that reflect the true economic cost of doing things. That is a fact. I represent a rural constituency. Providing services in scattered rural areas is much more expensive than providing them in densely populated, urban areas. If the costs of all public services are to start reflecting that, the rural way of life will be undermined.
If the privatised Royal Mail is to continue to be under a Government obligation or regulation saying that it must be willing to deliver a letter from Penzance to the northern reaches of Scotland for the same price as it will deliver a letter from one London street to the next, what on earth is the point of privatising the Royal Mail? What great philosophical leap forward will be achieved if they tell Royal Mail what to charge, to whom to charge it and what the conditions of service will be? If we really cast the Royal Mail free and allow it to do what it pleases,my constituents will suffer. If we do not, but leave it heavily regulated and tell it exactly how to run its business, what to charge and how to do it, what is the point of privatising it?
If we allow the Royal Mail to go its own way and the competitors that we hear about start cherry-picking--to quote an expression that has been used in debates on privatisation--the more profitable business in the towns, then the viability of the business that is left will be reduced as a consequence. Perhaps the Government intend to offer certain routes, accompanied by certain amounts of subsidy. After all, that is the way in which they have chosen to approach rail privatisation. It seems that anything is possible in the ideological quest to privatise.
The Secretary of State properly made the point that Post Office Counters is largely in private hands already. In the past seven years, more than half of directly operated main post offices have been turned into franchises. In addition, about 20,000 sub-post offices are private businesses. As I have described, many of them struggle against considerable odds just to keep going and to provide the useful and broad service that I have spoken about.
The Prime Minister should be aware that his Back Benchers representing rural areas--certainly those representing Devon and Cornwall constituencies--are acutely aware of that as well. That is why some of them have been unwilling to support the ridiculous suggestion that the Royal Mail should be privatised. They understand only too clearly the damage that they will do in their constituencies and, as the right hon. Member for Old Bexley and Sidcup rightly said, to their vote on polling day.
That is not to say that the Post Office should be left exactly as it is. As we have been told, competition at home and abroad is growing. To counteract that, to respond to it effectively and to try and beat the competition, the Post Office needs commercial freedom and access to capital to make decisions and to get on with competing. We want the Post Office to develop into new sectors of business. It would make sense to allow it to join the private sector in joint ventures. That would improve the quality of service that customers receive and ensure that costs are kept low. It could help to turn a national success story into an international success story.
I understand the fact that Conservative Members, in some cases, would prefer, for ideological reasons, to go down the privatisation route. They are entitled to that
view, but when they say to Opposition Members that it is impossible to grant commercial freedom in the public sector, they are simply wrong. Examples exist in other industries in this country and abroad of post offices and many other enterprises proceeding on that basis. It may not be Conservative Members' preferred choice. I accept and respect that, but it is wrong and phoney to say that it cannot be done. It is done successfully in other industries and in other countries.
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