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Mr. Byers: I thank my right hon. Friend for his warm words of support for the proposals, which build on much of the good work that he carried out as Secretary of State for Trade and Industry. The Leader of the House, my right hon. Friend the Member for Derby, South (Mrs. Beckett), was also Secretary of State for Trade and Industry, and as she chairs the Cabinet Committee dealing with future legislation, I hope that, when it comes to the need to find a parliamentary slot for primary legislation, she will be persuaded by the strong case made by my right hon. Friend the Member for Hartlepool (Mr. Mandelson).
However, progress can be made without primary legislation. We can introduce further liberalisation through an order, and we can develop the powers of the regulator through secondary legislation, although not with the full range of rights and responsibilities that we shall ultimately provide. Thus some steps can be taken.
On the important point of commercial freedom, I confirm that the mechanism referred to by my right hon. Friend remains unchanged. The procedure that he agreed when he was Secretary of State remains in place. In addition, the criteria that will be used when considering borrowing for investment will have just three aspects: it will have to be consistent with the strategic plan, commercially robust, and pose no undue risk to the taxpayer. I hope that that clarifies the position for my right hon. Friend.
Mr. Colin Breed (South-East Cornwall):
First, may I add my thanks to the Secretary of State for his courtesy in providing a copy of the statement at 12 o'clock for us to see?
I broadly welcome proposals which, for some time, the Liberal Democrats have been promoting and calling for--a balance between providing greater commercial freedom and continuing to maintain, into the foreseeable future, the Post Office within public ownership.
I agree with the comments on the delays that could be involved. Clearly, if three Secretaries of State have had a hand in the matter, there will already have been considerable delay in bringing forward the proposals. If we are to wait any length of time before legislation comes before the House--clearly, opportunities have already been lost--new opportunities that may be open to the Post Office will not be taken advantage of, so it is essential that there are no further delays.
It is a balanced package, but it is also rather timid. For example, greater commercial freedoms are available now--they are certainly greater than before--but they are nowhere near as great as they could, or even should, be. On the borrowing limits that are being provided, £75 million may seem a lot of money, but, for a business that is turning over some £7 billion, it cannot be seen as a particularly huge borrowing requirement. If a business that was turning over £7 billion was likely to go bust by borrowing £75 million, something would clearly be wrong. Therefore, the borrowing limit that might be available to the Post Office of £75 million per year is not excessive.
May I make two other points--[Hon. Members: "Where is the question?"] May I question two other points? The question of Crown post offices is rather confusing.
They are to undertake 15 per cent. of the business and some new ones may open, but am I to understand that some could close and that there may be consolidation--some Crown post offices that are currently open may close?
In terms of the other post offices, for so long, small sub-post offices have been confined to the back of newsagents and other small stores, stuck in a corner next to a cupboard, where there is hardly any promotion. If post offices are to have new facilities and new services, and are to promote themselves in a new way, can we see a return to high street post offices with proper sign posting, to which people can go without meandering through books, knickers and everything else to buy their stamps? Post offices should be prominent on our high streets, not concealed in small stores.
I hope that, in that way, the Post Office will become a proud institution again, ready to serve its public with new services and new facilities, and will not again seek to hide itself in other places.
Madam Speaker:
Order. Before the Secretary of State responds, I remind him that I heard only one question, so I hope that he will not take long to answer. I remind the House and any Member whom I call that I want a direct question to the Secretary of State. Many hon. Members are trying to get in on the statement. I want brisk questions and brisk answers, please.
Mr. Byers:
I am tempted to say that, for some customers, having to go through books and knickers might be a unique selling point for the future of the Post Office network, but, on the specific question that I did hear, which was in relation to the £75 million approval, it is not a limit. A total of £75 million can be borrowed without approval. Over and above that, there can be increased borrowing, but it will require Government approval.
An arrangement was arrived at between my right hon. Friend the Member for Hartlepool and me when I was Chief Secretary to the Treasury. We agreed that nearly £300 million should be used to acquire German Parcels after the 7 December statement. That is a good illustration of how a useful alliance for a purchase acquisition can be progressed. It was a good example of how, with a fair degree of haste, because it was an important commercial decision, we could provide £300 million, or thereabouts, to allow an acquisition to take place. That will still be the case, but we will put it on a firmer footing. The post-tax dividend will be reduced; £75 million will be allowed without approval; and, over and above that, amounts of more than £75 million will be subject to Government approval. I think that that is a balanced way forward.
Mr. Tony Benn (Chesterfield):
Is the Secretary of State aware that the statement that he has made today--which had all been fully released, as usual, by spin doctors and in broadcasts--will be seen by many people as stage 1 of the privatisation that the Conservative party wants; that the Post Office is the cheapest, most efficient, most popular and most advanced post office in the world; that it is a world-class post office; that, on its own, it invented the giro and introduced the national data processing service; and that the Post Office's greatest enemy has been the Treasury? From the very beginning, the Treasury has claimed that economic investment in the Post Office
Given the recent statements, which indicate deep hostility to the public sector--that has been noticed by people--is the Secretary of State aware that it is not hard to believe that this is the first stage of full privatisation of the Post Office? He cannot rely on people being persuaded by the arguments that he has made today; as an old Postmaster General, they are not very persuasive to me.
Mr. Byers:
There are no grounds for complacency on the Post Office. It is currently providing an excellent service--I made that point in my initial statement--but, in a dramatically and rapidly changing world, the status quo is simply not an option for the Post Office. There will have to be change, modernisation and reform. Under the proposals that I have outlined today, the Post Office will become a plc, but one that is under public ownership. That meets the manifesto commitment on which I stood, and on which my right hon. Friend stood in the 1997 general election: greater commercial freedom for the Post Office, coupled with liberalisation, but within public ownership. That is exactly what the White Paper delivers.
If, at any future date, there is a desire for the sale of shares, the matter will have to come back separately to the House for a debate and decision, when hon. Members on both sides will be able to vote on it. Today, we are delivering on our manifesto commitment to commercial freedom under public ownership. That is the way forward for the Post Office, as outlined in the White Paper.
Mr. Edward Leigh (Gainsborough):
Unlike the right hon. Member for Chesterfield (Mr. Benn), may I warmly congratulate the Secretary of State on taking this historic first step on the route to privatisation? When I was working in the Department of Trade and Industry for my right hon. Friend the Member for Henley (Mr. Heseltine), old Labour Members were united in their opposition to such a step. Now, by his statement, the Secretary of State has converted them. Will he confirm that the statement goes far further than the previous Government's plans--we were talking about making only the Royal Mail a plc, whereas the Government propose to make the entire Post Office a plc?
Will the Secretary of State also confirm that there is no business of that type anywhere in the world that has not sought, and is not seeking, international strategic alliances? Therefore, is it not inevitable that some shares will have to be sold? It would be much fairer to the House if he would confirm that now.
Finally, as the Secretary of State has done so much to burnish his radical Thatcherite credentials, would he like to join the No Turning Back group of Conservative Members?
Mr. Patrick McLoughlin (West Derbyshire):
Just say yes.
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