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Mr. Byers: I know that my hon. Friend has been a vigorous campaigner on a number of issues, including the need to retain post offices in her constituency. However, for the first time, the Government will provide a mechanism to protect post offices. Access criteria will be laid down, also for the first time. The regulator will have a responsibility to regulate and ensure that those criteria are met, and the five-year strategic plan, once more for the first time, will contain requirements about preservation of the network.

Clearly, I cannot guarantee that every post office will be safeguarded and preserved by the procedures that I have described. As the hon. Member for Tiverton and Honiton said, a post office may become non-viable for other reasons. For instance, it may not be able to sell goods and services over and above the post office provision supplied on site. However, we are putting in place the commercial freedom that will support the network, a mechanism to protect offices, and access criteria. Moreover, the new technology to be introduced will make post offices far more attractive than at present. That combination will put the network in a stronger position than it has occupied to date.

Mr. David Heath: Will the access criteria apply to places from which the sub-post office has disappeared? Will there be a mechanism for people to identify holes in rural areas in which there should be a post office? That would be useful to the many rural areas in my constituency that lost their sub-post offices over the years and where it has proved difficult to get them back.

Mr. Byers: We will produce access criteria later in the year. We will have in mind a national figure within which

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to provide the Post Office network. Some parts of the country may be able to say that a post office is needed in their community, and the criteria will provide that opportunity. There will be plenty of debate about that matter if we win a slot in the Queen's Speech and put a Post Office Bill before the House for debate at doubtless great and interesting length.

I welcome the opportunity to concentrate on the post office network in the opening exchanges of this debate. The Government have a strong case on the network. We have put procedures in place to safeguard the network and have introduced technology to provide new opportunities in future. The new commercial freedom that we are giving the Post Office will allow it to invest in the network where it thinks it strategically important to do so. The network serves a valuable function, not just commercial but social. We recognise that, and the White Paper takes steps to ensure that we can be proud of the network. The amendment in the name of my right hon. Friend the Prime Minister reflects our pride, and I commend it to the House.


Mr. Deputy Speaker (Sir Alan Haselhurst): I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

Appropriation Act 1999

Protection of Children Act 1999

Trustee Delegation Act 1999

Post Office

Question again proposed, That the amendment be made.

5.17 pm

Mr. Peter Lilley (Hitchin and Harpenden): I congratulate my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) on securing a debate on an important matter and on effectively and forcefully drawing the attention of the House and the country to the risks that face our sub-post offices.

It is unusual on Opposition days for Opposition Members to praise hon. Members on the other side of the Chamber, but I offer one cheer to the Secretary of State for Trade and Industry for his White Paper on the Post Office. I applaud the White Paper because I believe that it will inexorably lead to full privatisation of the Royal Mail. That would benefit the Post Office, customers, employees, the taxpayer and the whole country. I offer only one cheer, however, because the Government stop short of privatisation; they pretend that what they are doing will not lead there; and they disguise the full import of their changes.

In his statement on the White Paper, the Secretary of State said:

Those words seemed strangely familiar, and I remembered that when I was Secretary of State for Trade and Industry--or President of the Board of Trade as I now

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realise I then was--I had the task of weaning my party from a commitment to maintain the Royal Mail in public ownership. I used almost exactly the same words then to reassure those who were not in favour of moving rapidly in that direction. Labour Members should not be fooled; it is clear that Members on the Treasury Bench intend--probably before their pledge has expired--to move towards the sale of equity in the Post Office to the private sector. Conservative Members would welcome that, but Labour Members obviously would not relish it.

Those Members who are not enthusiastic about the privatisation of the Post Office may put some faith in the fact that the Government will retain 100 per cent. of the shares of the new company. They may think that that retains the essential features of nationalisation--that the organisation does not have to operate as a purely commercial entity, pursuing such dreadful objectives as the maximisation of profits, but that it can pursue political and social ends. They would be mistaken. Under company law, a limited company of the type that is to be established will have to behave commercially--as is made clear in the small print of the White Paper. Directors would not be able to pursue political objectives, even if asked to do so by their principal shareholders--the Government.

The Government can set social and political objectives through the regulator. It is right and proper that there should be a regulator governing the monopoly and the universal service obligation. However, it is not necessary to retain 100 per cent. ownership of the company for regulation to operate in that fashion. A private entity could be just as easily regulated as a publicly owned one. The only consequence of retaining 100 per cent. ownership is that the Government retain the conflict of interest between ownership and regulation. We would never allow the privately owned electricity companies to own the regulator; that would lead to a conflict of interest. Surely, it is sensible for the Government to get out of ownership and to stick to regulation. They should hand over ownership to the private sector in this case--as we did in other cases where there was a potential conflict between ownership and regulation.

The decision to retain 100 per cent. of the shares of the company in Government hands means that the Government forgo the most attractive benefits of privatisation. Above all, the company is not free to raise extra risk equity capital; nor is it able to make its 200,000 staff into employee owners by giving them shares in the company--as I hope that we shall do, if we are able to complete the process that the Government have begun. I can think of nothing better than for every employee of the Post Office to have a stake in the success of the company that they serve--most of them to the great satisfaction of the British people.

I have every confidence that the process unleashed by the Government will ultimately lead to the full privatisation of the publicly owned aspects of the Post Office--at least of the Royal Mail. However, an important part of the Post Office service is already in the private sector: the 18,000 sub-post offices are private businesses. They are privately managed, privately owned and privately run. Their future is in jeopardy as a result of the changes that the Government have made to the Horizon project.

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Those sub-post offices are crucial. They are crucial not just to the elderly, to disabled people or to young mothers, who have to collect their benefits from them, but to the whole community which they serve in the other ways that their function makes possible. They are now vulnerable; one third of their business comes directly from the contract with the Department of Social Security. In addition, a substantial chunk of their business comes from footfall--people who come in with no money, cash their benefit order, and then spend some of the money in the shop. That happens in few other shops or enterprises.

Mr. Lindsay Hoyle (Chorley): The right hon. Gentleman seems to have a problem with his memory. Is he aware that most closures of rural post offices took place under the previous Government?

Mr. Lilley: As far as I know, rural post offices have been closing at a rate of roughly 200 a year for as long records have been kept. The Conservatives wanted to prevent them from closing at a rate of thousands a year, which is clearly in prospect as a result of the changes the Government have now put in train--either that, or massive subsidies will be required to keep them open. I am not the only one who thinks that. The National Federation of Sub-Postmasters has said that the decision to make it compulsory to have payments of benefits made direct into a bank account

on the network of sub-post offices.

The reason for the decision to cancel aspects of the Horizon project became apparent at yesterday's hearings, when the current and two previous Chief Secretaries to the Treasury gave evidence together on the subject. The decision represents a Treasury victory: the Treasury has secured a long-desired goal, which is the sacrifice of the sub-post offices to achieve a short-term cut in the cost of delivering benefits.

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