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Mr. Mandelson: I am grateful to my hon. Friend for his remarks. I recall what Conservative Ministers said and what they subsequently did in relation to the Post Office, which is why the British public felt so betrayed by the Conservative party in office.
My hon. Friend is right about the right hon. Member for Wokingham. I do not know whether he is coming or going in his response. I checked what the right hon. Gentleman said about the Post Office only this summer. He said:
The right hon. Gentleman continued:
The right hon. Gentleman made the case for "liberalising the Post Office" and "introducing greater competition" into the Post Office. All this I propose in my statement. He asked for a policy that
What lack of imagination is there in the statement that I delivered? The right hon. Gentleman describes it as "fudge", but now that he gets the whiff of a Tory party leadership contest in the air, he is lurching further to the right in order to re-heat the old privatisation nostrums of a failed Conservative party.
Mr. David Chidgey (Eastleigh):
We broadly welcome the statement. We have long argued from these Benches for greater commercial freedom for the Post Office, and at last such a policy is being set out by the Government, which we welcome. However, there is a danger that the main issues have been fudged. I see from the statement that there is still a need for Government approval of borrowing. We will want to examine that closely in the White Paper.
We agree with the reduction of the external financing limit to £207 million, but it is a bit rich to call that commercial freedom. The Government's demand for a dividend of 40 per cent. is beyond the wildest dreams of any commercial operator of which I have ever heard. Reducing the Post Office's investment capital will make the Post Office fight for its now open market share with at least one hand tied behind its back.
When the Government open up the Post Office's monopoly to the market, what action will they take to ensure that our Post Office has access to the other national delivery service contracts in Europe and around the world? The quid pro quo is important.
The Secretary of State said that sub-post offices were vital to communities, and I agree. Can he confirm that the Benefits Agency and Post Office Counters computerised switchcard service will be put in place to provide essential income and service support for the Post Office? Is he taking action to overcome the problem of the reduced number of post offices that can issue motor tax certificates? He must be aware that only 3,000 post offices out of 19,000 are allowed to issue motor tax certificates. What action is he taking to persuade the Driver and Vehicle Licensing Agency to open up the net to more post offices?
The right hon. Gentleman must be aware of the number of branch offices being closed in small communities around the country by the major clearing banks. What action is he taking to press the clearing banks to transfer over-the-counter banking services to sub-post offices, to give them another line of business to make them more viable?
Mr. Mandelson:
The Post Office is already undertaking, in co-operation with banks and building societies, a number of pilot projects of exactly the kind that the hon. Gentleman suggests. We strongly support that. It is the way forward for post offices, and they will receive every encouragement from us to continue.
I share the hon. Gentleman's concern about sub and rural post offices. It is clear that, if we were pursuing the right hon. Member for Wokingham's policy of privatisation, we would be placing a major axe over the future of large swathes of our sub and rural post offices. If we were to embark on privatisation now, we would create enormous uncertainty. It would be enough to make many sub-postmasters and sub-postmistresses throw in the towel. They would have no idea what the future would
bring. The certainty and confidence to enable the Post Office to plan for the future are essential elements, and are characteristic of these proposals.
The hon. Gentleman referred to the Government's approval for large investment projects. It is reasonable for the Government, as shareholder, to have some residual power of approval. It will give the Post Office considerably more latitude than it has had before, or than it expected from this package of measures.
The hon. Gentleman made a good point about a quid pro quo for the Post Office to buy into or obtain equity shares in post offices in other European countries. That is important, and we must consider carefully what further structural changes should be made to enable the British Post Office to do that. Other European national post offices have made considerably more progress along those lines than we have, and I regret that. We are playing catch-up.
On the Horizon project, the Government are committed to providing a modern, secure, convenient and cost- effective means of paying benefits to customers. That is what the benefit payment card has been designed to achieve, and that remains our objective. It is true that we have been concerned about the substantial delay suffered by the project, and we are monitoring its progress. I hope that it will be able to catch up, and that it will be brought to a proper conclusion and completion in due course.
Mr. Bob Laxton (Derby, North):
I welcome my right hon. Friend's statement. It will be particularly welcomed by the public, who have expressed their fondness for the Post Office and their keen desire for it to remain in the public sector. It will be much welcomed by sub and rural post offices, as it will give them a sense of stability, and will enable them to continue in business. It will also be welcomed by the Post Office and its work force.
I listened with interest to the entirely predictable comments of the right hon. Member for Wokingham (Mr. Redwood). I noted with rye amusement his comment that he had been unable to deliver a majority in favour of the privatisation of the Post Office. Although the Conservatives were in government, he was obviously yet again in the minority.
The limit on joint ventures is being lifted. It currently stands at £20 million. Will that limit be removed totally, so that there is no cap on it, or will it be increased? Although much has been made of the external financing limit and the arrangements by which the Treasury sucks money out of the Post Office, when the Trade and Industry Committee examined this issue, it found that there was no methodology or formula for the process. It seems that, under the last Government, if the Treasury had a shortfall, it picked a figure out of the air, and decided to rip it out of the bottom-line profits of the Post Office.
One thing that will be ensured now, irrespective of the issue--
Madam Speaker:
Order. The hon. Gentleman is not the only one to have offended in questioning Ministers on statements; most Back Benchers, on both sides of the House, regularly offend in this regard.
Let me tell the House, for the umpteenth time, that hon. Members should not themselves make statements; they should ask the Minister questions. So far, I have heard only one direct question to the Secretary of State. I want those who are rising now to put direct questions.
Secretary of State, will you respond to the question that has been put so far?
Mr. Mandelson:
I will, Madam Speaker--although it is difficult to hold back hon. Members in their enthusiasm for the measures that I have announced.
Madam Speaker:
Their enthusiasm can be expressed to the media outside the Chamber. In the Chamber, hon. Members ask questions of the Government.
Mr. Mandelson:
I was going to make precisely that point, Madam Speaker. There is a waiting Press Gallery to receive hon. Members' comments outside the Chamber.
Let me answer the specific question asked by my hon. Friend the Member for Derby, North (Mr. Laxton) about the way in which the Government will approve investment projects submitted by the Post Office, although I thought that I had covered it in my statement. Let me make it clear that approval will be given for normal investment cases put up by the Post Office. My hon. Friend is right to suggest that the £20 million ceiling will be removed.
The Post Office will be obliged to demonstrate commercial robustness in the projects that it submits, and we shall expect them to be in line with the strategic plan that will already have been agreed between the Government and the Post Office board.
Mr. Richard Page (South-West Hertfordshire):
The Secretary of State does not have the excuse of a small majority for such a weak and pusillanimous statement. May I remind him that his party refused to support the then Government when they wanted to present proposals to help, privatise and liberalise the Post Office? Does he not know that the Post Office needs hundreds of millions, if not billions, of pounds of investment, and that his drip-feed of £100 million a year will not be enough? He knows about foreign competition; when will he setthe Post Office free? We did it for British Telecommunications, and look at the success of what we did. Why does the right hon. Gentleman not do the same for the Post Office?
"The Government needs to think globally. The Post Office needs to form worldwide alliances, joint ventures and businesses"--
that was in my statement.
"The Opposition would give a fair wind to proposals that free the Post Office to invest abroad--
that was in my statement--and that the Government
"should start to prise open the Post Office monopoly".
Very wise words, and that is exactly what I am doing.
"allows the Post Office to expand abroad"--
I agree with that--claiming that the business was "stultified" by the Government's "lack of imagination".
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