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9.36 pm

Dr. Kim Howells (Pontypridd): Madam Deputy Speaker--[Interruption.] I am sorry, Mr. Deputy Speaker. I was so intrigued by the speech of the hon. Member for Wyre Valley--[Hon. Members: "Wyre Forest."] I mean the hon. Member for Wyre Forest (Mr. Coombs). Obviously I have valleys on the brain. Anyway, I was so intrigued by his speech that I failed to observe your arrival in the Chair, Mr. Deputy Speaker.

The comments of the hon. Member for Wyre Forest were not appropriate. We chose this topic for debate because we are interested not only in the issue of Post Office privatisation, but in what happens to the Post Office in general. The motion refers to the future of the Post Office. I am sure that, like me, my hon. Friends are genuinely interested in debating the subject: that is why we are here tonight.

I valued not just the wisdom of those of my hon. Friends who have spoken this evening--some spoke from experience--but the contribution of the Father of the House, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) and, for different reasons, that of the hon. Member for Gainsborough and Horncastle (Mr. Leigh). Both showed up the sham of the amendment. The Father of the House pointed out that the commitment to privatisation was conspicuous by its absence; indeed, he said that he would vote with the Government precisely because the amendment was vague, and pointed out that the Government were not going to privatise the Post Office. Nothing could be more damning than that. I look forward to hearing what the Minister has to say about whoever drafted the amendment: I cannot believe that he drafted it himself.

The speech of the hon. Member for Gainsborough and Horncastle was interesting. It was, at least, an honest, forthright and at times courageous statement thatthe Government should privatise the Post Office. The Government, however, are afraid to say whether they will do so.

Hon. Members' speeches have reflected in the House the public reactions of hon. Members to the Prime Minister's Frost interview in January. It is worth recalling the words of the hon. Member for Harrow, East(Mr. Dykes) who said:

"I think it would be both astonishing and unwise to revive this matter again. The post office runs perfectly well as a successful and profitable public corporation, unlike other industries which have been privatised in the past. I do not believe its privatisation would command any strong public support in the next election."

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The hon. Member for Broxtowe (Sir J. Lester) said:

"It is still an efficient post office . . . I am lukewarm, to say the least, about the case for putting anything in the manifesto."

Such reactions are by no means limited to hon. Members. The passions aroused by the issue of Post Office privatisation are shared widely throughout the United Kingdom. The Prime Minister recognised that when, in the same Frost interview, he said:

"We are democrats and if we can't get something through Parliament then we can't do it."

That quotation has the hallmarks of the Prime Minister's peculiar syntax, but I use it anyway.

Why on earth has the Prime Minister announced that he wants to have another shot at the privatisation of the Post Office? Is it because the Government have yet to find an ideological successor to the privatisation programme of his predecessor in the 1980s?

Mr. Stephen Day (Cheadle): Will the hon. Gentleman give way?

Dr. Howells: No, I am sorry but I do not have time.

Are we to view that announcement as part of the legislative programme outlined in last year's Queen's Speech which Conservative central office described as

"pushing forward radical policies for the millennium"?

I am glad that the Government Whip, the hon. Member for Plymouth, Sutton (Mr. Streeter), agrees with that.To privatise or not to privatise is the totality of the Tory vision for Britain.

The hon. Member for Harrow, East said that the Post Office runs perfectly well as a successful and profitable public corporation, and we must all agree. The evidence is irrefutable. Last year, it made £472 million profit. The Government certainly agree with him. That is why the Chancellor announced last November that the Government were requiring the Post Office to provide an additional £400 million for the Treasury coffers during the next three years. They will milk the Post Office, not for £532 million as the previous President of the Board of Trade, now the Deputy Prime Minister, said last May, but for £925 million.

If it works, why fix it? That was a question that the consultancy, London Economics, examined in its critique of the Government's Green Paper on the future of the postal service. It concluded:

"Privatisation itself is not a fundamental driver of efficiency improvement. Competition, effective regulation and a determination to restructure the business when necessary matter more."

Why do not the Government understand that? The British people do. That is why they trust the Post Office. Polling evidence, which has been quoted by hon. Members on both sides of the House, tells us that they believe it to be efficient, safe, competitively priced, community based and accountable and, through its Crown post offices and sub-post offices, it constitutes a functioning social centre in most communities. As my hon. Friend the Member for Wigan (Mr. Stott) reminded us so forcibly, the British people perceive it as being staffed by individuals who know and care about the communities that they serve.

The Post Office is one of the great popular institutions, binding together all parts of the United Kingdom. The Government must know that countries such as ours do not

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hang together without some form of social and cultural cement, be it a common history of opposition to tyranny or an affection for institutions as diverse as the Queen's Christmas message or the theme tune from "EastEnders". We hear endless homilies from the Government about how important it is for the British people to recognise the strength that we have in unity. It is curious that they seem unprepared to consider the possibility of strengthening this great national institution.

People trust the Post Office. They trust postal staff and, in particular, they trust postmen and postwomen.If anybody wants proof of how far the public trust them,I challenge the Government to try to make a lovable children's cartoon hero out of Private Pension Adviser Albert and see how he gets on in the television ratings against Postman Pat.

The Post Office brand name is invaluable to it. Its red vans and office signs are among the best known of all liveries in the world. It guarantees good and reliable service, uniform prices and universal delivery. No matter what the Government might promise to convince us that they are interested in protecting those guarantees, the public do not believe it, and with good reason.

By international standards, the Post Office is very efficient and its services are competitively priced. If it is given sufficient powers by the Government, it will be capable of meeting all its commercial challenges from home and abroad. Will the Government give it those powers? On the contrary. When the Chancellor announced his intention to levy the extra £400 million on Post Office profits, he was levying a new tax on the public through the inevitable increase in stamp charges. Why did he decide to do that? Because the new levy makes sense only if it is interpreted as an attempt to sabotage the image of the Post Office as a profitable concern--in other words, to blacken its name in the eyes of the public. It is the softening-up process for privatisation.

From the same briefing document to which the hon. Member for Gainsborough and Horncastle referred, the Association of International Courier Express Services and DHL made no secret of the fact that they are, as they put it,

"extremely conscious of the value of the universal service provided by the Royal Mail"

and none of the Government's proposals for extending competition in the postal services seeks to undermine that service. Why should they? Those organisations, which represent 95 per cent. of the United Kingdom's express distribution industry, also represent the commercial interests of some 60,000 employees. That is 60,000 households that know the value of the service that the Post Office provides. Those organisations demand not that the Government should start to dismember the Post Office or bleed it to death but that they should get their act together on examining and strengthening the rules of competition so that the express distribution companies have an equal opportunity to compete.

Their aspirations are not a world apart from those expressed by the Post Office chief executive, Mr. John Roberts, and his managers in the aftermath of the Chancellor's November announcement. They are as acutely aware as the private operators of the challenges posed by the European Commission's draft directive and,

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more worrying, the draft notice on the implementation of proposals and timetables for the liberalisation of postal services in the European Union. Through the media grapevine, they have made it abundantly clear that the Chancellor's increases in the negative external financing limit are likely to mean that they will be damaged in their attempt to meet those challenges.

If the indirect extraction of capital is too great, it will leave little funding for the Post Office's investment programme and the competitiveness of the Post Office will be affected. That in turn could have an adverse effect on the quality of service and give the Government the perfect excuse for arguing that the only way for the Post Office to compete successfully is through privatisation. That is happening at a critical time for Post Office Counters. A huge modernisation programme is about to be implemented there under the private finance initiative. If any project demands a secure and consistent business climate, it is that one, but it is not likely to enjoy such a climate because the Prime Minister's statement has nothing to do with improving the performance of postal services.

The Government have decided to privatise the Post Office through a secret agenda and not openly. I have no doubt whatever about that. That is why the Government's amendment is so weak and inconclusive. The Prime Minister is considering, once again, the privatisation of the industry for one reason only: he needs to throw his own right wing--many of whom have been represented here tonight--some red meat occasionally, and the latest lump of red meat is this reheated bit tonight. He will not be able to look to the Post Office for support, as I do not think that Mr. John Roberts will take the same line as his predecessor. He has made it clear that he wants to get on with the job that he is paid for: making this a successful, efficient and profitable business. Judging by the Post Office's financial results, it seems that it has been doing that job well.

This is a case of the worst sort of political interference in the affairs of a healthy and forward-looking company. The Post Office is asking questions that are generated by the commercial realities of national and international competition, but it is receiving nothing more by way of a reply from the Prime Minister than the whine of internal party conflicts on the Conservative Benches.

Why do the Government bother when the best that the Prime Minister could come out with on Post Office privatisation in his fateful interview with Sir David Frost was:

"I would like to have seen it but there was no parliamentary majority for it . . . We will look again and see if it is a subject for the next Parliament when we come to look at the manifesto."

Talk about hedging his bets. That statement is the worst sort of mischief-making. There is no courage in it,no determination. It is a tease. Will he or won't he? What he will do is remind everyone that this clapped-out Government have only one agenda: to cling to power by persuading their rebellious right-wing to troop through the Division Lobby. If that means sacrificing a first-class postal service, so be it, says the Prime Minister. That is why I commend the motion to the House.

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