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Mr. Deputy Speaker: Order. The hon. Gentleman's intervention is far too long. It is not an opportunity to make a speech.

Dr. Cable: My hon. Friend's intervention helpfully reminds us that the worries about the Post Office network are widely dispersed. They are prevalent in rural areas, especially rural Wales--which is the worst affected--rural Scotland and Cornwall, but they are also prevalent in inner-city areas.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alan Johnson): As I recognise that the hon. Gentleman will be in a scrum later this evening, may I take up the point about a quote by the managing director? It was a quote, not by the managing director, but by the chief executive of the Post Office. The leader of the Liberal Democrats said at Prime Minister's questions:


That was absolutely inaccurate and wrong, and I believe that the chief executive of the Post Office will be informing the right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) about that. As for the accurate quote from the newspaper, the chief executive has made it clear that he was setting out to the journalists the available options, and saying that there would be a danger to the network if we could not provide new work or provide a subsidy.

Dr. Cable: I am sure that we are grateful for the clarification and I am sure that The Observer, which printed that quotation, will feel suitably contrite.

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However, I am glad that the Minister has mentioned that exchange in Prime Minister's Question Time because, when the leader of my party challenged the Prime Minister on that point, he raised the specific issue of a subsidy. I do not have the words with me, but it was something to the effect that subsidies were the kind of silly idea that the Liberal Democrats would come up with. I am glad that, in the past two weeks, the Government have advanced to accepting that subsidy is a necessary element in the picture. Naturally, I would want to press the Secretary of State, but he was unwilling to give way today.

The fundamental issue is whether the subsidy will be a relatively small amount, doled out to a handful of cases that fail to meet the access criteria, or whether we are talking about the £400 million lost income, and whether the bulk of that lost income will now be recycled back into the Post Office. I believe that hon. Members from all parties must persist in asking that key question, which has never been answered.

There are many technical issues in the Bill, but tonight we are dealing with the key issues. I should like to discuss the role of the consumer council. The Bill takes a step forward in giving the consumer council more authority, but there is a considerable oddity in that the consumer council will not be allowed to engage in activities to protect consumers outside the remit of the regulator. Therefore, competitive market activities such as registered mail are not subject to consumer protection in the same way as other activities. Equally, the consumer council would be severely constrained in what it can say critically about operators in the market--commercial as well as the Post Office itself. Therefore, there are big question-marks hanging over how far the commitment to consumer protection is followed through in the legislation.

There are positive elements the Bill; I do not want to be churlish about it. We shall certainly support those elements when they are discussed in Committee. However, big question marks remain over the network, the underlying financial position of the Post Office and the disciplines to which it will now be subjected.

7.19 pm

Mr. Martin O'Neill (Ochil): I would not say that the speech by the hon. Member for Twickenham (Dr. Cable) was characteristically gloomy, but the glass seemed to be more half empty than half full in his eyes. When he was discussing the various charges, he did not take proper account of what one would expect to be the improvement in the fortunes of the Post Office as a consequence of its foreign acquisitions in the past 12 to 15 months. The Post Office's international aspect will become increasingly important. It will develop through foreign activities and it will retain its markets if it smartens up its act.

I hope that we shall be able to find the money to help the network. Taking £400 million out of it always meant that there would be difficulties. Not all the difficulties relate to the nature of the arrangements. The future of many small post offices, especially in rural areas, has been left hanging by a thread. Other post offices in urban or deprived areas have lost many of the transactions that make up the main element of their revenue because of the fall in unemployment. A consequence of the improvement in the employment situation and the reduction in the number of people receiving benefits has been a change in the fortunes of the postal network. Many of the difficulties are not related to the alleged decline in the economy.

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The absence of anything constructive from the Conservatives has been significant. They say that they do not know--

Mr. Alan Duncan (Rutland and Melton): Where has the hon. Gentleman been?

Mr. O'Neill: I have listened to speeches for a long time and I well remember that in 1992, when the hon. Gentleman was still somewhat inebriated by his election to Parliament, the Conservatives were elected to end the Post Office's monopoly. There was no talk of privatisation then; they came to power committed to ending the monopoly.

When the hon. Gentleman winds up, perhaps he will tell us whether the Conservative party will end the monopoly. In the Netherlands, the model is one of privatisation, but on the basis of a monopoly. In contrast, in Sweden, the post office is still state owned, but it is state ownership with competition. I believe that competition in postal services is desirable and I want the regulator to consider that. I do not want to rehearse all the arguments on that point, but I wish to make my position clear.

I am happy with the balance of the proposals. Over several years, my colleagues on the Select Committee on Trade and Industry have examined the issues. When the Minister was a trade union officer and came before us, we used to complain about the way in which the Post Office was run, the poor industrial relations and its absence of commercial awareness and sensitivity. In many respects, our criticisms have been met by the unions and by the management. Recent industrial relations agreements have removed many of the concerns that we expressed and we have the prospect of the management introducing substantial changes with the guaranteed co-operation of the unions.

We were not prepared to support Government investment in the Post Office when there was no guarantee that that investment would be realised because of the obduracy at times of certain sections of the work force. I foresee the disappearance of such obduracy and I am pleased that the Post Office will have access to funds.

We would have heard different arguments if the Post Office were to be given even greater access to borrowing facilities. People would have said that the Government were too free with their money. It is only correct that a business of this character must be flexible in its operation while having the opportunity to borrow. However, it should borrow not on the basis of soft loans, but on the basis of realistic market rates. That is the suggestion being made.

I would like to ask my hon. Friend the Minister about the arrangements for the sale of shares. An interpretation of clauses 54 to 56 suggests that the meaning of the term relevant subsidiaries is vague. Does it refer to the core United Kingdom business or does it include other businesses and services? Does it mean that the sale of businesses, such as German Parcel and other foreign acquisitions, of services, such as catering, or of equities in Post Office Counters would be subject to the discipline of a parliamentary debate? That point is critical. I know that it may be explored in Committee, but it would help to have the matter resolved now. The vagueness and inadequacy of the definitions in clauses 54 to 56 suggest that certain share deals could be transacted without proper parliamentary scrutiny.

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It is important that we afford the Post Office the opportunity, if appropriate, to sell off parts of its business. However, that must be subject to proper scrutiny. That would also help us to work through the financial difficulties that the hon. Member for Twickenham explained so lucidly. To carry with them everyone who supports the deal, the Government should make the position clear beyond peradventure at the earliest possible opportunity. We do not want people to be unduly suspicious about the disposal of assets.

I am also somewhat concerned about the Crown Post Office network. It is not clear whether it would be subsidised by anything other than the Post Office. There are a number of towns in which the Crown post office is central to the commercial life of the town. For example, I know what problems would result if the post office in Alloa, the main town in my constituency, were in danger. A large proportion of its work is the paying of benefits. There are 600 Crown post offices, so we need clarity on this issue, too. If one retail outlet can be the flagship for the postal network, it is the Crown Post Office. It has access to funds and the deals that might be struck. I hope that those funds can then percolate through the system to smaller rural post offices.

I have repeatedly said in the House in debates on the Post Office that one of the most exciting developments is to bring the retail services of the Post Office on-line as soon as possible. In particular, it should take advantage of the opportunities afforded by e-commerce in all its forms. We hear much pious talk about having on-line computer facilities available in libraries. Frankly, many of the people who are excluded from the e-commerce revolution never go into libraries, but they go into the post office or the shop at the end of the street. They have just as much right to have access to e-commerce even if they do not have computers or interactive television. Even if it is only a question of putting on a bet, they should be entitled to do that if the appropriate facilities are there.

This is a substantial Bill. It needs fine tuning, but it is ridiculous for the Tories to rant on about the need for amendments. I give the Bill unqualified support. It has been the subject of years of consultation and discussion and I am pleased that my hon. Friend the Minister will reply to the debate, because so much of the Bill is due to his authorship and support.


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