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Mr. Edward Davey (Kingston and Surbiton): Will the hon. Gentleman give way?
Mr. Collins: I have no intention of giving way to the hon. Gentleman; we have heard quite enough from the Liberal Democrats on these matters.
It is deeply disappointing to hear from the Government that they believe that new clause 1 will provide the solution to the difficulty that they themselves have created. I agree with my hon. Friend the Member for West Chelmsford (Mr. Burns) that the Secretary of State is increasingly resorting to short-term temporary subsidies to get himself out of short-term political difficulties. This week, the consensus in the national newspapers has been that the Secretary of State's announcement on a subsidy scheme for the coal industry was designed simply to keep minds open until after polling day in the general election.
Mr. Deputy Speaker: Order. We are debating the Bill's Third Reading, not what is happening in the coal industry.
Mr. Collins: The suspicion, Mr. Deputy Speaker, is that the subsidy in this Bill has precisely the same short-term purpose--merely to keep post offices open until after polling day, after which the Secretary of State will not be interested.
If rural post offices are dependent on Treasury funding, they will be mindful of the fact that Treasury funding under this Government has not been sufficient to keep our police stations open or our roads and village schools maintained. The same Treasury, with the same Ministers providing the same funding formula, will supposedly keep open our local post offices. The result, once again, will be a betrayal by the Government.
In last week's debate, I asked the Secretary of State whether he could guarantee to match the one third of income to be lost by Mrs. Hilary Pavitt, the postmistress at Kent's Bank post office at Grange-over-Sands. He refused to give that guarantee then. Nothing that he has said today leaves me with any greater indication that she will get the resources that she needs. The Bill is a short-term political fix from a Secretary of State who is in a lot of short-term political fixes at the moment.
11.6 pm
Mr. Edward Davey (Kingston and Surbiton): It is shocking that the hon. Member for Westmorland and Lonsdale (Mr. Collins) criticised the Liberal Democrats for not supporting a Conservative motion which asked this House to applaud the record of the last Conservative Government. Under that Government, approximately 3,000 post offices in the network closed. There was no way this party would support such a motion, because it was hypocritical and did a lot of damage to the current campaign to persuade the Government to change their mind and defend the post office network. The Conservatives do pensioners no favours with their hypocrisies, and we will not support such statements.
Before coming to this House, I was a management consultant for a company called Omega Partners, which did a lot of work in the postal service industry. I visited 40 postal administrations and worked for 12 of them. I wrote a paper, co-authored with a company called Pricewaterhouse, for the US Congress on how one could commercialise, deregulate and liberalise postal markets.
That study looked at the experience of post offices internationally and how they could commercialise and gain commercial freedoms, as the Bill seeks to provide for the British Post Office. It was clear that post offices had managed to enter the modern world, take on modern management theory and develop and modernise their postal services while remaining in the public sector. To that extent, I welcome the Bill, which retains the UK Post Office in the public sector.
However, the commercial freedoms that are being given to the Post Office in the Bill are limited. Countries such as New Zealand, Finland and Sweden have enabled the management of their post offices to invest, develop modern technology, have freedoms to manage their work forces more effectively and provide the consumer with a better-quality service at a lower price. They have been able to do that far more ambitiously than this rather timid Bill proposes.
When the New Zealand post office was given its commercial freedom, it was allowed four long-term lines of credit with private sector banks. These were not guaranteed by the state; therefore, they did not score in what used to be called the public sector borrowing requirement.
Mr. Alan Johnson: I just wondered whether the hon. Gentleman had noticed in the course of his investigations that New Zealand Post no longer delivers to the door in rural areas; and that, despite paying a charge of $80 a year, rural customers still have to collect their mail from the nearest post office.
Mr. Davey: I am well aware of that, but the Minister does not give the full story. He may not know that I have visited New Zealand Post twice and I have spoken to the former chief executive, a Mr. Elmar Toime, who is actually a citizen of Australia. He explained that situation when I questioned him on that very point. He said that those circumstances affected a small handful of farms on the south island of New Zealand that were hundreds of miles from the postal network. In other words, New Zealand Post faces totally different geographical and topographical conditions.
Mr. Deputy Speaker: Order. It is very interesting hearing about New Zealand. I have relatives there and it is nice to hear how they are getting on. However, on Third Reading we should perhaps not be going into such detail. It is necessary to mention only that there are good things and bad things about New Zealand and then move on.
Mr. Davey: I totally agree with you, Mr. Deputy Speaker; I am in danger of being a post office anorak. However, my point was about capital investment, which goes to the heart of the Bill. The experience of other countries, such as New Zealand, shows that long-term lines of credit that have not been guaranteed by the state have enabled other postal administrations to develop real commercial freedoms to invest significantly and develop their services.
Those postal services have blossomed, and the only reason we have not taken that route in this country has nothing to do with a tiny number of very remote farms having to collect their post at the end of long lanes, but is connected with Treasury rules that are constraining the development of a potential new type of corporation. New Labour's modernisation programme has not seen fit to modernise the Treasury. The prehistoric, dinosaur thinking of the Treasury has not changed one bit to enable the sort of development that has taken place in other western democracies and allowed them to modernise their public services. That is why the Bill has not lived up to the billing that the Government gave it, and that is a great shame. If the Government had given the Post Office those unguaranteed long-term lines of credit, with no bail-out from the state, it would have enabled the development of a real entrepreneurship within public sector ownership. It is a shame that the Government have not taken that approach.
Subsidies have been an issue in the debate tonight. In many ways, total nonsense has been talked about subsidy, because there have always been subsidies in the Post Office. The whole system of uniform pricing and uniform tariffs incorporates subsidy, and the idea that there was no subsidy under the Conservatives is nonsense. There were vast subsidies paid between one post office network system and another, between delivery in one city and delivery in another, and between delivery in urban areas and delivery in rural areas. Of course those subsidies existed. The Bill means that they will continue, but in a different form.
The question is not whether subsidies are paid to maintain a universal postal service in the country--I am sure that all hon. Members would agree that such subsidies are needed; the question is one of transparency. Under the Conservative Government, the subsidies were totally opaque. New clause 1 has brought a degree of increased transparency, although I wish that it made matters clearer. As my hon. Friend the Member for Weston-super-Mare (Mr. Cotter) said, the question of subsidies is still far too opaque, but at least it is clearer than it was under the ancien regime of the former Conservative Government.
It is amazing that Conservative Members should criticise subsidies now. Subsidies existed under the previous Conservative Government, who were not prepared to acknowledge them. They wanted to try to hide them and pretend that they did not exist.
Mr. Leigh: Does not their acceptance of the universal service and universal tariff shout from the rooftops the fact that the previous Conservative Government, like every other Government, accepted the principle of cross-subsidy in the Post Office?
Mr. Davey: That was exactly my point, but the question is whether a Government are willing to make those subsidies more transparent. This Government are going down that road, and the previous Government did not. I think greater transparency in subsidies would assist public policy development.
Finally, I am worried that the Bill does not protect sufficiently the ordinary post offices in my constituency. Under the Conservative Government, post offices in Kingston, Tolworth and Surbiton were closed. The Bill will cause some of the retail outlets that took over some of those post offices' responsibilities to close as well.
That would be a great shame. People will be put out of business. Pensioners will have to take long bus journeys into town to collect their pensions. That will reduce the services available to my constituents, and I sincerely regret that the Government are going down this route.
The Government should be modernising by trying to assist the Post Office to take on contracts from the banks. The Bill does not do that, and it fails to give real commercial freedom to the Post Office. It is therefore a missed opportunity.
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