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8.44 pm
Mr. Michael Connarty (Falkirk, East): I should like to put on record that I am sponsored by the Communication Workers Union. Its money--the amount is in the Register of Members' Interests and has been since the day I was sponsored--goes to run services in my constituency party and does not come to me in any way or form. I make no financial gain from it.
It is interesting that the hon. Member for Colchester, North (Mr. Jenkin) is registered as being a political adviser to an insurance company. There is a slight difference between being a political advisor to an insurance company that is directly commercial and being a Member of Parliament whose constituency party is sponsored by a trade union. Hopefully, Conservative Members will one day realise that and that we are not bought and sold by the money that a trade union gives us. I would say everything that I am about to say regardless of whether I was sponsored by any trade union.
I shall not follow the high level of analysis of my right hon. Friend the Member for Derby, South (Mrs. Beckett) or the high finances adequately covered by my hon. Friend the Member for Dagenham (Ms Church). I was surprised at the approach of the President of the Board of Trade. The Prime Minister put his foot in his mouth during the interview with David Frost and tripped up his hon. Friends by letting slip some little secret idea to win over the right wing of his party and thereby keep himself in office. Perhaps it was a thank you for what happened in the 1922 Committee a week or so ago. I do not think that the idea had been thought through. It was quite clear that the Secretary of State, whom I have known for a long time through his work as Secretary of State for Scotland, was not up to his brief. He made several substantial errors.
The President of the Board of Trade said that Post Office privatisation was being considered, as the Prime Minister had said. That is as far as it goes. The President of the Board of trade revealed in response to an intervention from the hon. Member for Hampshire, North-West (Sir D. Mitchell) that he, personally, was a privatiser. That was interesting: he put himself on the line. Perhaps he, too, is looking for right-wing support. If he is a privatiser, he had better not go looking for the support of people in Galloway, because he will be out on his ear--and any Member representing a Scottish constituency who tries to support Post Office privatisation will join him.
In reply to another intervention, the President of the Board of Trade said that the Post Office was a subsidised industry. My hon. Friend the Member for Dagenham pointed out that for the past 19 years the Post Office has not only been a subsidy-free service to the public--it has been much more. I should like to put a simple lesson in economics on the record so that the right hon. Gentleman can read it later. If a private company borrows money, invests it, makes a profit and pay backs the money that it has borrowed, it is not subsidised. That is called making a profit.
Of course the President of the Board of Trade is not supposed to know about such things because he is not the Chancellor of the Exchequer, who is at last beginning to make salutary comments about his party's policies in the run-up to the 1992 election and how they are costing him a great deal of money and preventing him from balancing his Budget. I believe he said that the blame for £28 billion of public sector borrowing requirement lay clearly at the feet of the Prime Minister.
The previous President of the Board of Trade, the Deputy Prime Minister, is responsible for all the comments that have been quoted. He said in response to the Select Committee report that the Government would try to reduce the Post Office public sector take to 50 per cent. through its external financing limit. Now the Government are talking about reducing the take by£925 million over the next three years, which is almost66 per cent. of profits. The Post Office has said that that leaves it nothing for investment and for all the initiatives that the Government tell us they will allow it to introduce.
The bottom line, which everybody will realise from what has been said tonight, is that postal charges are going up to pay for the Government's failures. As the President of the Board of Trade said, the Post Office cannot escape the difficulties of public sector finances. The Post Office does not have a problem with public sector finances. It is the Government who have a problem with public sector finances, and their failures will now be paid for by everyone who licks a stamp and sticks it on a letter.
Mr. Connarty:
I give way to the hon. Member for Legal and General.
Mr. Jenkin:
The hon. Gentleman should look at the history of privatisation. If he does, he will see that prices have tended to fall after privatisation. The only reason why stamp prices are having to rise is that the Post Office remains in the private-public sector. If we privatised it, it would increase its efficiency, profitability and competitiveness, and there is no doubt that it would cut prices. Indeed, because of its monopoly position, there is no doubt that the Government would want to privatise the Post Office with a K-minus formula to ensure that it did cut prices.
Mr. Connarty:
I shall return to the economics of delivering post, which is very important. I hope that Conservative Members will listen because the comments will not be mine, but those of Professor Baumol. He spoke about what he called handicraft industries, or those delivered by a human being at the point of consumption. These include the delivery of letters, and also the health service and education. The quality of the service is important, and not just the speed or cheapness of the service.
I am always amazed to hear Tory Members talk about privatisations as if they were universally successful. They may be successful for the person who gets shares, and particularly successful for those fat cat executives who receive shares at their original price and then take them up later under their share option schemes. We have been disgusted, as I hope the Tories have been--although it may be just jealousy from Tory Members--at the profit rake-offs by the so-called inadequate former executives of public sector industries. Suddenly, these people have become super-whizzkids and are worth a £1 million backhander.
The person who was in charge of the Post Office has run off to the private sector because the executive jets and money that he thought he would get following the privatisation that he was pushing for with the former President of the Board of Trade did not come off. He has had to go and earn his crust somewhere else.
I do not think that all privatisations have been successful. Hon Members should look at the shambles of British Gas. It is all very well for the Tories to talk about prices, but we should look at the structure of the business. A loss of £1.5 billion is pending, and the domestic side of the company has been split off into a company called BG Energy, with £2.6 billion assets. Meanwhile, TransCo and all the profitable overseas sectors have been hived off. The consumer will pay for those losses.
In every case in the water industry, the consumer--because of the monopoly--will end up paying in the long run. Investment has not gone into the water industry, and someone will have to pay for it. That someone will be the consumer. We will have to look at industries in the longer term before we can say that privatisation has been universally successful.
Let us look at the past attempts to privatise. The hon. Member for Gainsborough (Mr. Leigh) talked of a fantasy world where not a single vote would have been lost had the Tories privatised the Post Office before the election.I do not know what world the hon. Gentleman is living in. There were 16,000 submissions received against the proposal, while only 60 were in favour. Lo and behold, the majority of those 60 were speculators, bankers and investment companies who could sniff the profits that they could make from another rip-off of a public sector service. That is the reality.
Mr. Leigh:
Did the Conservative party lose the 1983, 1987 and 1992 elections after we had privatised57 industries?
Mr. Connarty:
It is a pity that the hon. Gentleman, who sat so close to the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), did not listen to what the Father of the House said. He said that his constituents did not want the Post Office to be privatised, and that is the reality in most constituencies around the country. The hon. Gentleman shows an absolute contempt--which unfortunately runs through his Back-Bench colleagues--for the people who put him here.
If Conservative Members do not listen, they do not deserve to be here. If the hon. Gentleman thinks that the Government can get away with sticking people's noses in it, he deserves to go, as does every hon. Member who agrees with him. One day, people will not vote on the basis of slavish adherence to their party, and hon. Members will lose their seats on the basis of their contempt for people's wishes. That democratic deficit will be righted at the next general election. That is why55 Tory Members are running for cover, including Front-Bench Members such as the Minister for Energy who has tried to explain the gas fiasco. They are running away because they know that the people are coming to get rid of them.
Let us look at some of the remarks made in previous debates on the privatisation, one of which was repeated tonight by the President of the Board of Trade. He said that this wonderful Government would not harm the sub-post offices network, which would not be challenged in the private sector. But let us look at the agenda that is beneath that comment, which was raised at the time and continues to be pushed.
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