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Mr. Mandelson: My hon. Friend is right: Conservative Front Benchers barely know what time of day it is--they are so busy fighting among themselves, like ferrets in a sack--let alone the views of their own Back Benchers. She is also right to say that it behoves politicians--members of the Government--to listen to what the public are saying, which is that they want a successful Post Office. They want it to face stronger and tougher competition, and they want that spur to efficiency and
innovation which any commercial organisation needs--they are going to get it--but they also want the Post Office to continue to make a vital contribution to the social life and cohesion of this country.
Both those things will be achieved by the measures to be introduced by the Government. I have absolutely no doubt that the public will not only be content with what we have announced, but want the Post Office to go from strength to strength, even if that means making further changes to its structure and organisation. We are at the beginning of the process, not the end.
Mr. Edward Leigh (Gainsborough):
Will the right hon. Gentleman acknowledge that two principal difficulties, which have been flagged up in previous reviews, face commercial freedom in the public sector? First, how can the Post Office be a genuinely commercial organisation when it does not have complete freedom to set its own EFL--its dividend to its only shareholder? Secondly, how can it engage in fair competition with its domestic competitors when--uniquely--it will not be allowed to go bust? Surely those are distinctive obstacles to practical commercial freedom in the public sector.
Mr. Mandelson:
The hon. Gentleman might just as well say that he favours privatisation. In his view, public is bad and private is good. The sooner every public service is dragged kicking and screaming into the private sector, the better it will be for him. In my judgment--the measures that I have announced support my contention--it is possible for an organisation to enjoy considerable commercial freedom while remaining in the public sector, as the Post Office does. Other organisations--BNFL, for example--enjoy similar status. It exercises considerable commercial freedoms, but remains in the public sector.
I do not disguise from the hon. Gentleman the fact that we are trying to create a new public policy model of public enterprise through these changes. This is not old-style nationalisation or new-style privatisation, but something completely new and different. To coin a phrase, the approach belongs to the third way of political thinking in this country. [Interruption.] Not for a moment do I expect Conservative Members even to begin to understand what on earth we are talking about, because they are so locked into the past. They have not a single idea or shred of new analysis to contribute to thinking for the future, which is why they are over there and we are over here.
Mr. Tony Colman (Putney):
I join my hon. Friends in strongly welcoming my right hon. Friend's statement on the commercialisation of the Post Office. The decision will be welcomed outside the House by customers, senior Post Office management and the unions. May I draw his attention to an on-going dispute at the Putney sorting office, which has continued for five years? I hope that he will join me in urging senior management and unions at the Post Office to settle those problems as soon as possible, in their new commercial freedom.
Mr. Mandelson:
One thing is clear, not only in Putney, but right across the Post Office organisation and its network: the Post Office will not succeed in realising the opportunities that we are creating for it if management and work force do not work closely together, united in their commitment to making these new commercial freedoms a success for the Post Office and for consumers.
Many people will stand aside and judge how committed the work force and the management of the Post Office are, and with what skill, ingenuity and imagination they are able to bring about the full realisation of the opportunities that the Government are creating for them. In the light of that, we shall need to consider what further changes and restructuring of the Post Office may be necessary.
Mr. John Bercow (Buckingham):
Is the Secretary of State aware that, on the strength of this morning's advance press briefing, Mr. Nick Butcher, the managing director of DHL, said that, if he were an executive in the Post Office, he would be very disappointed, because its ability to develop a strategy that would allow it to be a force in the next decade and beyond is being strangled?
Does the right hon. Gentleman not understand that, by giving way to the Communication Workers Union, to the Minister of State, the hon. Member for Makerfield (Mr. McCartney), and to the unions' sponsor and spokesman, the hon. Member for Hull, West and Hessle (Mr. Johnson), he will come to be regarded not as a mighty Minister, but as a mere dithering minnow around the Cabinet table?
Mr. Mandelson:
The hon. Gentleman is on form. I heard the observations of the manager to whom the hon. Gentleman referred, but he is not a executive of the Post Office, and does not speak on its behalf. I should prefer to wait to hear what the chairman and board of the Post Office have to say. I very much hope that they will strongly welcome the measures that I have announced.
Mr. Harry Barnes (North-East Derbyshire):
Does my right hon. Friend remember the arguments that used to go on in the Labour party about public ownership? Some wanted to move quickly towards it, while others developed the theory of the inevitability of gradualness. I hope that the Government are not developing a mirror image of that approach, bearing in mind the ideas on privatisation expressed by the Conservatives. Arguments have been made about possible shareholdings in future. I hope that the Government are not engaging in that and opening the door in the direction that the Opposition want to go. Many would support commercial freedom within public ownership, but would question moving further.
Mr. Mandelson:
I hear what my hon. Friend says. Nobody is trying to move gradually. On the contrary, we are trying to give a sense of urgency to the changes that the Post Office needs to undertake if it is going to catch up and compete with the best in Europe and the world.
That is the challenge that lies before the Post Office. We shall keep its performance under review. If it rises to the challenge, seizes the opportunities that we have created and does well in the form that we are creating, it can look forward to a long and happy future in that form. However, if it does not perform or if there are additional opportunities that we believe the Post Office should take for its success and for the benefit of its customers, we
shall not hold it back. We want to move with the Post Office towards its continuing success. We shall keep under review every aspect of its operation.
Mr. Edward Garnier (Harborough):
The Secretary of State said that the Post Office board would be accountable. To whom, and how?
Mr. Mandelson:
The Post Office board is appointed by the shareholder--the Government. It will be accountable to Parliament through the Secretary of State.
Mr. Lawrie Quinn (Scarborough and Whitby):
We have had quite a few consultations locally when post offices have been forced to close, not because they have failed to deliver, but because private sector interests have decided to walk away from their business. An important part of my role has been to engage and involve the local community in consultations about the future of their post office or sub-post office. I am glad to say that we have succeeded in reinventing local post offices. Will there be any changes to the consultation process to give local people wider involvement in building a new Post Office for the future?
Mr. Mandelson:
The measures that I have announced this afternoon will lead to greater investment in and strengthening of the local post office network, resulting in improved services to ordinary people in every part of the country. I attach importance to what consumers of postal services are saying. That is why we are strengthening the Post Office Users National Council. The regulator will have a duty to make sure that consumers' views are properly tapped and taken into consideration in the future development of the Post Office.
Mr. Edward Davey (Kingston and Surbiton):
May I have the Secretary of State's assurance that the model of commercial freedom that he has announced today will be sufficiently flexible to allow local managers to pay the postmen and women working in places such as my constituency, which is a high-cost area, sufficient wages to recruit and retain them in order to reduce staff turnover and improve mail delivery performance? Will it be sufficiently flexible to allow investment in the new state-of-the-art sorting centre needed in Feltham to improve mail delivery performance in my constituency?
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