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7.37 pm

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alan Johnson): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"welcomes the fact that the Government will be introducing a Bill to modernise the Post Office; notes the contrast with years of Tory inaction, that left the Post Office to decline; welcomes the reduction of the External Financing Limit and the ability to borrow which will boost the Post Office's ability to invest for the future, welcomes for the first time the clear commitment of the Government to a network throughout the United Kingdom of post offices which will be automated, and to introduce for the first time criteria for access to Post Office services; welcomes the fact that for the first time the Universal Service Obligation will be guaranteed in legislation; welcomes the study by the Performance and Innovation Unit which is looking at the future of the network; and notes that the policies of the Opposition would undoubtedly lead to the decline of the Post Office."

The Government are deeply committed to the protection of postal services for all customers now and in the future. That is why we published in July our White Paper "A World Class Service for the 21st Century", which will be presented to the House as a Bill in the near future.

As the hon. Member for Totnes (Mr. Steen) said on a point of order, much has already been said in the House on our plans for the Post Office. Only last Wednesday, in what could be called a sub-office of this Crown office, I replied to the fourth debate on the post office network this Session. It might be helpful, however, if I repeat the steps that the Government are taking not only to secure access for customers to postal services but to equip the business for the challenges that it faces in the communications market of the 21st century.

Mr. Oliver Letwin (West Dorset): Why, does the Minister think, have we had those four debates? I hope that he recognises that the issue is of the profoundest concern to many millions of our constituents.

Mr. Johnson: I do indeed recognise that. I have said time and again that no one believes more than I do in the strength of the network and its importance to rural and urban areas. I merely pointed out that we are having something of a rerun of the same debate.

We are committed to establishing a framework to enable the Post Office to develop to its full potential by providing the greater commercial and financial freedom that the business needs to tackle the triple challenge of globalisation, liberalisation and new technology, while ensuring that we retain the vital social obligations that make the Post Office such an important detail in the social fabric of our country.

Over the past seven years, the challenge from overseas competitors has become ever more intense. At least six overseas postal administrations have established offices within a few miles of the House to entice British companies to print and post abroad. For years, overseas

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postal administrations have exploited the fact that the Post Office has been operating with one hand tied behind its back, with negligible commercial freedom; with no ability to invest other than from retained profits; with large chunks of those profits siphoned off by the Exchequer; and with its future under constant review since 1992.

The Post Office must have the freedom to compete in the radically changed postal market while continuing to provide services such as articles for the blind, post buses and its other social obligations, which are vital to the communities that it serves.

Mr. Barry Jones (Alyn and Deeside): I appreciate the response that my hon. Friend gave in last week's debate in Westminster Hall and I am grateful for the informative material that he has given me as briefing in response to my constituents' queries. Postmasters in Queensferry, Golftyn, Wepre, Caergwrle and Saltney Ferry have been to see me or written to me about their concerns. I am grateful for what my hon. Friend has done, but will he meet a small deputation of postmasters from my constituency later in the year?

Mr. Johnson: I can never resist an invitation from my right hon. Friend. I will meet his constituents, just as I will go to East Anglia the week after next to meet sub-postmasters in that area and to the south-west the week after for the same reason. I understand the concerns on this issue, some of which have been expressed by Opposition Members.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy): The Minister will be relieved to hear that I do not intend to invite him to my constituency or to the constituency of Ceredigion, where the issue is equally important. On a serious note, the Minister mentioned competitiveness, but how will depriving a sub-post office of 40 per cent. of its income make it more competitive? His response last Wednesday offered no cheer to those in that position.

Mr. Johnson: I obviously cannot visit every constituency and talk to all postmasters, but I will tell local sub-postmasters and mistresses that they should be wary of opportunism by politicians that undermines the network and creates the very circumstances that we are all trying to avoid.

Mrs. Angela Browning (Tiverton and Honiton): I visited post offices in Wales in September and if the Minister finds it too onerous to get around the country to visit them, I should be happy to share that responsibility with him.

Mr. Johnson: That is not worthy of a response. It is obvious that I need to stay in the House to deal with the countless debates that we have on the Post Office.

Fiona Mactaggart (Slough): I thank my hon. Friend the Minister for what he has already done for the Crown post office in my constituency. It was closed, to the great frustration of the 450 businesses on the Slough trading estate, and I hope that he can continue with his good offices to bring the Post Office and Slough trading estate together to ensure that the people and businesses in my constituency, which he knows so well, get the post office service that they deserve.

Mr. Johnson: I thank my hon. Friend for her comments, and I will do everything that I can to protect

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postal services in Slough, where I was a postman for 15 years. Our plans to enable the Post Office to compete in the 21st century are set out in the White Paper. We have put forward a package of reforms that will maintain and improve postal services in this country and enable our Post Office to become a major global player while it is retained in public ownership.

The record of the previous Government was lamentable. In July 1992, the Conservative Government announced that they would sell off Parcelforce and review the status of the rest of the business. By April 1997, having spent £1.5 million in consultancy fees, the Conservatives' manifesto said that, if elected, they would sell off Parcelforce and review the status of the rest of the business. They had promised in their 1992 manifesto to introduce a regulator and a number of other initiatives but, like the millennium wheel, they failed to start when they promised, and then just went round in a huge circle.

Mr. Jim Cunningham (Coventry, South): Does my hon. Friend agree that the Post Office's situation today was largely created by the Conservatives and that, instead of criticising him because he cannot visit every constituency, the hon. Member for Tiverton and Honiton (Mrs. Browning) should visit them all herself to apologise for the high development costs that the Conservatives caused?

Mr. Johnson: I thank my hon. Friend for those important remarks. In the early 1990s, the Labour party joined the Post Office trade unions and the British public to oppose vigorously the then Government's plans to break up and privatise the business. We argued for commercial freedom in the public sector. In the face of overwhelming opposition, the Conservatives eventually abandoned their plans but decided that, if they could not privatise the Post Office, they would plunder it.

Mr. Patrick McLoughlin (West Derbyshire): Will the Minister give way?

Mr. Johnson: I give way to an hon. Member who knows all about those issues.

Mr. McLoughlin: The Minister mentioned the millennium wheel, but perhaps he should remember that the Prime Minister opened it a month ago, and it is not yet working. It is not likely to be working for another two months.

Mr. Johnson: I am sure that we will be selling tickets for the millennium wheel over post office counters very soon.

Responding to criticism of the fact that the Post Office had had to hand over £1 billion in 10 years to Government under the external financing limit, the right hon. Member for Henley (Mr. Heseltine), then President of the Board of Trade, announced in March 1995:

"I am prepared to agree that, in future, we will aim to set the EFL at about half the Post Office's forecast post-tax profit. I hope to make progress in this direction this Autumn".

A few months later, that pledge was ignored and, instead, the EFL was increased to cream off a further £1 billion over the following three years.

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The Post Office touches people's lives like no other industry and is part of the country's infrastructure like no other business. It delivers to 27.5 million addresses six days a week. It collects from hundreds of thousands of pillar boxes seven days a week, and 28 million people each week use its network of sub and Crown post offices.

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