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Post Office

[Relevant documents: The Twelfth Report from the Trade and Industry Committee, Session 1998-99, on the 1999 Post Office White Paper (HC 94) and the Government's response thereto (Session 1999-2000, HC 50).]

10.28 pm

Mr. Nick Gibb (Bognor Regis and Littlehampton): I beg to move,

That the Postal Privilege (Suspension) Order 1999 (Revocation) Order 1999 (S.I., 1999, No. 2863), dated 19th October 1999, a copy of which was laid before this House on 20th October, in the last Session of Parliament, be revoked.

The motion seeks to annul the statutory instrument laid before the House by the Government in October, which revokes their earlier statutory instrument, laid before the House in July, which would have reduced the Post Office monopoly from £1 to 50p. In July, that was the Government's policy, and the Opposition have moved the motion to enable the Government to stick to their policy.

This is a classic example of the Government's approach of saying one thing and doing another. They said that they wanted to liberalise the postal delivery market, but the reality is a continuation of the status quo. The motion is therefore designed to help the Government to say one thing and do that thing. It is designed to help new Labour to stand up to old Labour. So often, we hear the language of the free market of deregulation from the Government but the reality is anti-business, increasing regulation and distrust of the free market. Traditional Labour is always there but, tonight, with our help, new Labour can assert itself by voting with us to overturn the Government's latest pusillanimous U-turn. We are seeing the Government's stamp of weak authority.

The Government have got themselves into a deep mess over their plans for the Post Office. On 8 July, the Secretary of State, with great bravado and flourish, announced his Post Office White Paper, which, he said,

"sets an agenda for the Post Office . . . for the 21st century. Today's announcement is good news for the Post Office . . . because it can now build for the future with real confidence."--[Official Report, 8 July 1999; Vol. 334, c. 1175.]

In that same spirit of bravado, the right hon. Gentleman, on that same day, laid the order reducing the Post Office monopoly from £1 to 50p.

The White Paper states:

"The Government believes that greater competition will bring benefits to the consumer. At present competition is restricted to items costing £1 or more. The Government will take a major first step towards liberalisation by halving the monopoly currently enjoyed by the Post Office to 50p . . . The Government is committed to further liberalisation of the market."

That was the Government's position on 8 July.

Mr. Ian Bruce (South Dorset): Does my hon. Friend link this to the Government's big and shouted campaign about rip-off Britain, which they seem to want to abandon? They got the Minister of State, Cabinet Office to make an announcement and then they shifted him out of his job. Now they are ripping off Britain with the order that is before us.

Mr. Gibb: My hon. Friend is absolutely right.

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The order means that the British consumer will not be able to benefit from the liberalisation of the postal market that would, in the long run, inevitably reduce prices. So much else of rip-off Britain is a consequence of the Government. The extreme increases in petrol and diesel duties are adding to the cost of supermarket space, and they did nothing in the Seattle round last week to seek to reduce the tariffs on imported goods and services for which consumers are paying.

There we have it. On 8 July, the Government were determined to give the Post Office commercial freedom, and as a quid pro quo were reducing its monopoly from £1 to 50p. That was the considered opinion that the Government had carefully reached. That was the right thing to do to enable the Post Office and its competitors to respond to the fast-changing postal delivery market without jeopardising the Post Office's universal service obligation. The internet means that there are new methods of communication and more household deliveries as people order goods by the internet and by e-mail.

The proposed changes that the Government announced in July were welcomed by the Mail Users Association Ltd., which said that, while the Government's recognition that greater competition would bring benefits to the consumer was welcomed, it was reassured that the proposed halving of the monopoly to 50p was seen as a major first step towards liberalisation.

Mr. Michael Fabricant (Lichfield): Is my hon. Friend aware that the Post Office has nothing to fear? The 1999 Trade and Industry Report on the Post Office White Paper weighs exactly 176 g. Is he aware also that, even if the monopoly were reduced to 50p, the Post Office would still have the monopoly to deliver that report, as 50p allows postage of up to 200 g?

Mr. Gibb: That is right.

Even this first step of reducing the monopoly would not have had a huge impact on the Post Office. As it admitted, only 6 per cent. of Royal Mail's traffic lies between the £1 and 50p tariff. The Post Office anticipated losing only about a third of that market, so just 2 per cent. of the market would be lost by reducing the monopoly from £1 to 50p.

In evidence to the Select Committee, the Department of Trade and Industry's civil servants revealed that

"Ministers determined it was very important to signal a liberalisation of the marketplace and that is what the move to 50p is all about . . . to signal that more competition in a liberalised marketplace will be in the best interests of the consumer, the UK economy and . . . the Post Office."

They went on to say in their evidence:

"That is the judgment which Ministers have reached."

What happened to that judgment? The first cracks appeared on 27 July, when the hon. Member for Derby, North (Mr. Laxton) and a number of his colleagues prayed against the statutory instrument of 8 July. There followed the summer of discontent--[Interruption.] They are all my own lines. In the run-up to the Labour party conference, there was the real risk of defeat for the Labour leadership, and the Secretary of State in particular.

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The Communication Workers Union wanted the 50p proposal dropped. Derek Hodgson, the general secretary of the CWU, was quoted as saying that, if the Government

"don't back off, they have got a fight on their hands and they have got a fight that they can't possibly win."

The Guardian of 29 September summed up what happened next. It reported:

"Last-minute negotiations between union leaders, party managers and ministers continued last night over the wording of motions that are scheduled to be put to delegates today. However, the indications were that government compromises would prevent a head-to-head conference row. In the most surprising change of policy, trade secretary Stephen Byers' White Paper plans to reduce the Post Office's monopoly on letter delivery from £1 to 50p . . . will now be referred to the new Post Office Regulator."

There it is. Despite all the reforms to the Labour party by Neil Kinnock and despite the new Labour project, it is business as usual, with Labour's trade union paymasters determining not only Labour party policy but, more seriously, the policy of the British Government.

Mr. Fabricant: I am grateful to my hon. Friend for giving way again. I am a little surprised that he is so surprised about the power of the trade unions. Does he not realise that the right hon. Member for Holborn and St. Pancras (Mr. Dobson) is depending on the trade unions for his selection as the Labour candidate for mayor of London?

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. May I remind the House that the matter is before us only until 11.30 pm? Such interventions certainly do not help.

Mr. Eric Forth (Bromley and Chislehurst): It was a clever point.

Mr. Deputy Speaker: Order. I assure the right hon. Gentleman that it was far from clever.

Mr. Gibb: My hon. Friend the Member for Lichfield (Mr. Fabricant) made what I considered a fairly valid point. Furthermore, the Labour party is depending on millions of pounds of trade union money to fund its general election campaign.

Who is the Minister spearheading the U-turn caused by blackmail from the Communication Workers Union? He is none other than the newly appointed Minister and former general secretary of the CWU, the hon. Member for Hull, West and Hessle (Mr. Johnson).

Perhaps we should be grateful to the CWU. Mr. Hodgson, the general secretary, said that he was prepared to allow the monopoly rate to be set by the Post Office regulator. Thank you, Mr. Hodgson, for allowing the Government that concession. We now see who is running Post Office policy.

Later in the debate, we will hear the Minister give his reasons for the Government's U-turn. I bet that he will not say, "Oh, we had to change our policy because of pressure at the Labour party conference from the trade unions." Despite the masses of press coverage of the row, despite statements from Derek Hodgson and despite the fact that everyone knows it to be the case, the Minister will find another reason to put to the House. The excuse that he will give will be that the Select Committee on

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Trade and Industry recommended the change of policy in its report published on 14 September. That is what he said on television this afternoon, and no doubt it is what he will say tonight.

As the Minister for Science, Lord Sainsbury, said in the other place,

"We take seriously the advice of the Trade and Industry Committee; and I hope that noble Lords would not suggest that we do otherwise."--[Official Report, House of Lords, 29 November 1999; Vol. 607, c. 708.]

So, let us stand by for the Minister to use that as his reason--and remember, Mr. Deputy Speaker, you heard it here first.

If the Minister gives such a reason, it will be extremely odd, because, some nine days after the Trade and Industry Committee report was published, he was quoted in The Times of 23 September as saying:

"We will look at what the Trade and Industry Committee says but we have already made the order on the monopoly. The reduction is a crucial part of the package of reforms for the Post Office."

So, he was still defending the reduction in the monopoly--nine days after the report was published, but six days before that crucial meeting at the Labour party conference.

Also on 23 September, the Minister wrote to every Labour Member of Parliament stressing the importance of reducing the Post Office monopoly to 50p, saying:

"the reduced monopoly level cannot be extracted without unravelling the entire package".

It is absolutely clear that the Select Committee report had nothing whatever to do with the U-turn. I therefore trust that the Minister will not insult the House by saying that that was the reason. We know that it is not the reason, he knows that it is not the reason and every Labour Member of Parliament knows, too.

The Minister might claim that, although he had a copy of the Select Committee report for nine days, he had issued a rebuttal to the press of its main recommendations despite not having read it in full, and that, when he read the report, at the same time as the Labour party conference, he saw the light and urged his Secretary of State to change the policy. If that is so--it beggars belief--he will be the first Minister of this Government to read a Select Committee report 15 days after publication, instead of the usual 15 days before.

If the Minister insists that the Select Committee report was his reason--if he claims that it is now Government policy to adopt all Trade and Industry Committee recommendations--perhaps he will explain what he is doing about the following concern in the Committee's 13th report on small businesses and enterprise:

"We have noticed a regrettable habit of relatively prosaic ministerial announcements being dressed up in Ministerial Statements and their accompanying Press Notices with potentially misleading figures."

Will he now recant all the misleading figures given by his Secretary of State since he took office? The reports also states:

"We . . . have grounds for complaint at the apparently scant regard the department pays to its evaluation of its own schemes".

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Let us consider the Trade and Industry Committee's 14th report on the Electronic Communications Bill, which says:

"We are particularly concerned . . . that the order necessary to bring

in

part I of the Bill . . . should not be subject to any parliamentary procedure. We recommend that . . . Parliament should have the opportunity to debate and vote on the issue."

Despite what the Minister said on Second Reading, is he to announce that he will allow Parliament to vote on the implementation of part I because it is a recommendation of the Trade and Industry Committee?

The Government's behaviour over this issue is risible, and it is being exposed. For purely internal Labour party reasons, the Government have made a mockery of their policy on the Post Office. The result of revoking the 8 July order will be that Britain will have a Post Office monopoly as extensive as Portugal and Greece, and the UK market will be less liberalised than postal markets throughout Scandinavia and northern Europe, and Italy and Spain.

The views of the private sector package delivery companies can be summed up by TNT, which has said:

"If the UK . . . does not rapidly deregulate its postal market, along with other postal operators, the Post Office will be unable to cope with competition when liberalisation is imposed by Brussels."

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