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Mr. Alan Duncan (Rutland and Melton): We have had a lively debate. Such is the enthusiasm of hon. Members on both sides of the House that the number who wanted to speak reduced us to a 10-minute rule.

Having studied the Bill in detail, the best we can say is that it is better than nothing but not as good as it could have been. At its worst, it is a timid and potentially deceitful Bill--deceitful in respect of the structure chosen and the consequences that Ministers claim will arise from it.

The fact is that the proposed structure is not a full public limited company. As my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) said, it is a hybrid structure that is full of conflicts and contradictions. It enjoys the pretence of commercial freedom, but the relationship that the Post Office will be compelled to have with the Government will continue to be more akin to that of a nationalised industry than to that of a freely owned company operating in the open market; it will always look to the Government for permission to act.

The financial disciplines applying to the company will be contradictory. It will operate in an artificial climate of financial discipline: there will be no openly quoted share price, which would otherwise govern its financial strictures; nor will it borrow in quite the same way as other plcs in the open market. At its worst, the result could be a sort of mini-National Enterprise Board, like that of the 1970s.

Let us imagine that, in a great venture, having been seized with the sort of vision for which every hon. Member who has spoken today has asked, the Post Office decides to enter into a share swap with another communications company, perhaps an overseas company. Some shares from the 100 per cent. Government-owned company are given to that overseas company and some shares from that company are given in return. The end result, lo and behold, is the British Government publicly owning shares in a foreign communications company.

Such a bizarre structure cannot endure. It would be absurd if one Minister in one office at the DTI had to decide whether or not the Post Office could borrow money, while another Minister in the office next door--behind the Chinese wall--decided whether or not to refer some merger to the Competition Commission. The structure is untenable--a crazy pretence.

The Bill is designed to deceive. I do not believe that the Government are intent on keeping the structure in the same form as it is created. Either old Labour will build it up until it resembles the National Enterprise Board that I described, or new Labour will do what it always does--go a long way against the wishes of Labour Members and take a dramatic step towards privatisation. I believe that the latter is more likely. My hon. Friend the Member for South-West Hertfordshire (Mr. Page) lampooned that duplicity well in his contribution.

There is massive suspicion about the future of the Post Office network. Although Labour Members have done their best to disguise it, many of them share our anxiety. The root of our concern is the future of the Post Office network in rural and urban communities after the introduction of automated credit transfer. The Secretary of State said that there would be no deductions from those who subsequently draw money in cash after the introduction of ACT. I welcome that statement as far as it went; however, it does not tackle our anxieties.

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Last year, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) asked the Secretary of State for Trade and Industry

He received the following reply:

    The contractual arrangements between the Benefits Agency and Post Office Counters Ltd. are commercially confidential, as are the contractual arrangements between Post Office Counters Ltd. and certain retail banks under which customers of those banks can access their accounts at post offices.--[Official Report, 26 July 1999; Vol. 336, c. 93W.]

That directly contradicts the Secretary of State's comments today.

The right hon. Gentleman did not fully answer a question that initially received no answer. He let a tiny patch of daylight into the magic and trickery without giving a full answer. As my hon. Friend the Member for Worthing, West (Mr. Bottomley) rightly said, what matters is the future of the income of the network of post offices, which rely so much on the payment of benefits. To that question, answer came there none. If there is no adequate post office income, from where can people get their cash? The Secretary of State's guarantee that there will be no deductions from money that is paid in cash is not a guarantee to protect the Post Office network

Mr. Connarty: Earlier, Conservative Members gave a clear commitment that they would privatise the Post Office. What guarantee would a privatised scheme give to sub-post offices? A commercial free market gives no guarantees to any enterprise.

Mr. Duncan: The hon. Gentleman shows that he does not understand the kernel of the issue. My right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) dealt with that point in his speech. If the hon. Member for Falkirk, East (Mr. Connarty) was not prepared to listen to my right hon. Friend, I pity him.

There is much suspicion about the alleged savings that introducing ACT will make on fraud. Community post offices know who their customers are. Fraud tends to be caused by the mistaken issue of a book, not by the transfer of cash to the book holder.

I shall dwell briefly on the speech that my right hon. Friend the Member for Hitchin and Harpenden, the former Secretary of State for Social Security, made. When in government, he had an impeccable track record of designing a system that would have protected the rural network. He openly described the way in which it would have worked. He made a devastating critique of the Bill's structure and said that its philosophy was, "make us modern, but not yet." He also said that the universal service obligation can be fulfilled through regulation; it does not require state ownership. That is the answer to the question of the hon. Member for Falkirk, East.

My right hon. Friend explained the conflict between commercial and Treasury priorities, which will permanently bedevil the structure for which the Bill provides. He was open when he said that as Secretary of State for Social Security, he was advised that the introduction of ACT would destroy community post offices and lead to minimum savings and maximum disruption.

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On the back of that and his experience in government, my right hon. Friend asked the Minister whether he had received similar advice or any guidance that might in any way match what he was told. I hope that the Minister replies, as the answer is bound to be yes; but that is part of the deceit of the Bill and of Government policy, which are designed to destroy the Post Office network without admitting what will happen. Government policy is already destroying many post offices: the value of their business is plummeting because of the doubt and the danger that they face. My right hon. Friend undertook a forensic dissection of the likely new payment arrangements and the Minister will have to answer many questions in Committee.

The hon. Member for Falkirk, East recalled the Stand By Your Post campaign in his constituency and stood by it, but he should reconsider his view as he supports a Government who are ratting on that campaign and causing untold damage to our network. The hon. Member for Ochil (Mr. O'Neill) wants the Post Office to be able to have an international vision. I agree, but it will be able to have such a vision and act on it only if it has genuine commercial freedom, not the fake commercial freedom in the Bill.

May I divert for a moment to pay my compliments to the hon. Member for Ceredigion (Mr. Thomas)? Like hon. Members on both sides of the House, I congratulate him on the quality and the generosity of his maiden speech, which was confident, amusing and took us on a vivid tour of his constituency, with all its rural quality. He and I can find common ground in that we represent constituencies of fields, not concrete. Perhaps we can find further common ground in taking pleasure in new Labour coming fourth in his by-election.

I listened closely to the contributions of the hon. Members for Strathkelvin and Bearsden (Mr. Galbraith), for North-West Norfolk (Dr. Turner), for Putney (Mr. Colman), for South Ribble (Mr. Borrow) and for Forest of Dean (Mrs. Organ), who hopes that her constituency can be part of a trial of much of what a future Post Office might do. However, she was offered a trial in Gloucestershire before--the pathfinder trial--only for it to be cancelled by the Labour Government as soon as it was announced.

Conservative Members brought a lot of experience to the debate. My hon. Friend the Member for Banbury (Mr. Baldry) put a clear case for the benefits of privatisation and my hon. Friend the Member for South-West Hertfordshire added his experience from his days as a Minister. If we are fortunate, he might be selected to serve on the Committee so that he can bring that experience more greatly to bear.

My hon. Friend the Member for Ribble Valley (Mr. Evans)--the first phase of a Ribble double this evening--went to the heart of the debate to explain the value of small post offices to local communities, which we all want to protect, and the possible consequences of the Bill. My hon. Friend the Member for Eddisbury (Mr. O'Brien) said that the Post Office needs genuine commercial freedom if it is to thrive and that the existing plc stands for "politically limited competitiveness". I agree with him. My hon. Friend the Member for West

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Dorset (Mr. Letwin) was cogent and convincing as always, but his remarks were difficult to take in on this occasion as he was rather quick.

The House is aware of a depressing aspect of the Bill: we are debating its principles on Second Reading and considering a detailed text of 93 clauses even though we know that a massive number of amendments will be tabled. That has already happened with the Utilities Bill and it is fast becoming a pattern. In his opening remarks, the Secretary of State said, "I know the number of amendments we plan to table", but he has not made them available to the House. A massive raft of amendments that will make dramatic changes are already in the pipeline, but they are not before us to help us to decide whether we agree with the Bill's principles.

Whereas we all accept that a number of amendments are bound to be put down in Committee--after all, that is what the process is for--to have them ready now, before Second Reading, and for the right hon. Gentleman not to come absolutely clean about them is disrespectful of the process in which we are all engaged.

We on this side of the House want proper commercial freedom for the Post Office. We want it to be able to thrive in a world of increasing competition and global corporate competition. We want to see it free to enter into those sorts of relationships into which genuine plcs are free to enter.

The structure before us is a mess. It is a pretence of a structure. It will not give the managers the freedom and initiative to do what they really want to do, to build up their businesses.

We also want to defend rural post offices, which undoubtedly are under threat. We value them. If the Government really were honest about this, they would have accelerated the process of designing the access criteria so that at this stage we could see what is planned to protect the rural network that the Government say they wish to defend. In the absence of those access criteria, the suspicion that we have in so many areas will grow.

There are many things that we could debate further about whether the Post Office should become a bank. However, at this stage, on Second Reading, we see before us a Bill which is a hotchpotch hybrid. It does not give the commercial freedom to the Post Office that the Government pretend. Our reasoned amendment gives all the reasons for our wishing to criticise what is in the Bill. I hope that, if the Bill goes as far as Committee, we shall manage to improve it.

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