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Mr. Forth: Has my hon. Friend noticed that the former trade unionist, who is now the Under-Secretary, is entitled the Minister for Competitiveness? Does my hon. Friend not find that a little mystifying? Following his forensic and skilful analysis of what has gone on, it would appear that the Under-Secretary is in fact the Minister for Trade Unionism and Uncompetitiveness. Does my hon. Friend agree that, if we are to have open government, the Minister's title should be changed?
Mr. Gibb: My right hon. Friend makes a good point. The Minister's title is almost an oxymoron, given his track record during his short term in office.
The explanation given by TNT about the liberalisation of the market being required by Brussels in the years to come was the key reason given in the White Paper for the liberalisation and the reduction in the monopoly. Paragraph 11 states:
Government policy towards the Post Office is in complete disarray: as well as the damage to the Post Office, to customers, to business and to Post Office employees caused by the U-turn, we have the chaos of the Government's stewardship of the Horizon project and their decision to abandon the benefit swipe card, which would have enabled claimants to continue to be paid at post offices. As they know, that decision will cause a 30 per cent. drop in the income of average independent sub-post offices. How much more incompetence can the post office
network take? In the interests of liberating the postal market and preparing our Post Office for survival in a new, competitive era, I urge the Government to rethink their U-turn and join us in voting for the annulment of this weak and damaging statutory instrument.
Mr. Deputy Speaker:
Order. I remind hon. Members that the time limit for the debate is 11.30 and short speeches would be appreciated.
Mr. Martin O'Neill (Ochil):
I find it rather strange that the Conservatives, who consider this a matter of some importance, cut 15 minutes off the debate by having a second vote on the business that we dealt with previously--especially when so many Conservative Members want to speak.
As an exercise in humbug, the speech of the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) takes some beating. Those of us who were Members of the House before the general election well remember the Conservative Government's attempts to introduce the privatisation of the Post Office, and they had to retreat in the face of the refusal of 13 of their own people to support it. [Hon. Members: "Narrow majority."] That is true but, had they wanted to, they could have achieved a majority for a reduction in the monopoly. They did nothing about it. If this issue is so important for the Conservatives now, why was it not important when they had the power to act? They chose not to act, so we need no lessons from them.
Equally, we need no lessons from the Conservatives about the danger to rural post offices, given the opportunities that they had to arrest the decline when they were in power. What is more, a side effect of agreeing to the motion would be an immediate 6 per cent. cut in the volume of post, which would obviously affect local post offices' business and result in further closures.
Mr. Fabricant:
Will the hon. Gentleman give way?
Mr. O'Neill:
No, I will not. [Interruption.] Because I want to make time.
Mr. Fabricant:
We have 40 minutes.
Mr. O'Neill:
The hon. Gentleman might be fortunate in catching the Chair's eye and may get an opportunity to speak. I shall carry on.
My colleagues on the Select Committee and I were clear in our mind that it would be pointless to introduce a regulatory regime to the Post Office while denying it the opportunity to pass judgment on the first issue of competitiveness, which was being introduced as part of the liberalisation of our postal system. It was also abundantly clear that, if we are to have a regulatory commission, one of its main roles should be considering questions of this nature and deciding whether 50p is the right figure. Some might have argued that we should have gone further. I am not clear about that.
Last week, I talked to former employees of TNT who are now working for the nationalised Dutch Post Office, which has 40 per cent. public ownership and no monopoly. The Select Committee also spoke to the
publicly owned Swedish postal service, which does not have a monopoly. There are a number of contradictory examples across Europe. It is wrong to vest in civil servants sole responsibility for the determination of the market in this area. I think that the Government are correct.
I envisage that there will be a reduction in the monopoly, but by what measure I am not sure. The Post Office should be competed against to make it more efficient. I do not oppose the order, but it would be foolhardy to introduce it now. The Government are sensible to withdraw the order. It is the responsibility of Government to use the Select Committee system to pause and reflect, and they took that opportunity. It could be argued that the Minister came to a conclusion much quicker than some of his colleagues have done in the past.
Mr. Forth:
Given his position of influence and knowledge, can the hon. Gentleman tell us why the Government changed tack so dramatically during the summer?
Mr. O'Neill:
They changed tack because they recognised that other factors were involved. The major factor was the recognition that the regulatory system should be given the first responsibility for making recommendations of this nature, and that it was not right to give that responsibility to civil servants.
A number of people made statements in opposition to the monopoly, and some do not want the break-up of the monopoly, certainly not until the European Union proposals come into effect and the directive is introduced. I am sure that the right hon. Member for Bromley and Chislehurst (Mr. Forth) recognises that the European Union is making a constructive contribution to the liberalisation of postal services across the continent, and that that will result in a more efficient postal system, which I am sure is what he wants.
Mr. Owen Paterson (North Shropshire):
Will the hon. Gentleman give way?
Mr. O'Neill:
No, I am sorry. I shall finish now, because other hon. Members want to speak.
The Government's U-turn is a correct move to make.
Mr. Gibb:
Does not the hon. Gentleman find it slightly odd that, nine days after the Government received a copy of his Committee's report, they were still defending the cut in the monopoly from £1 to 50p? The first we heard of any decision to accept the Select Committee's recommendation was on 29 September, during the Labour party conference.
Mr. O'Neill:
The process of decision making in government is a mystery that few of us are exposed to at any time. There is little consolation in being on the Government Benches when it comes to dealing with such matters.
I think that the Government were correct to change their mind. The Select Committee report gave them the opportunity to pause and reflect, and I think that they came to the correct conclusion. As a consequence, once the regulator has looked into the matter, there will be a better consideration of what the level of monopoly should
be. When we get that, we will be able to move on and have a better, more liberalised postal service that will be capable of competing internationally, as the hon. Member for Bognor Regis and Littlehampton said.
Dr. Vincent Cable (Twickenham):
We should consider this matter on its merits. It is patently clear that the Government have made fools of themselves. However, the position that they have ended up with is sensible on economic grounds, regardless of the views of the trade unions.
I shall try to deal with some of the basic economics of the Post Office. I believe in competitive markets and liberal economics. Let us apply that to this case. The first question is this: what would be the implications for the Post Office of reducing the monopoly amount to 50p? According to the estimate that I have been given--I should be grateful if the Minister clarified this--about £1 million will be taken out of Post Office business. That takes into account the dynamics of the market; the sum may be less. It seems fairly clear, however, that a substantial amount of Post Office business will be lost, with all the implications that that involves for the Post Office network.
Mr. Christopher Chope (Christchurch):
Will the hon. Gentleman give way?
"The disciplines of increasing competition and independent regulation in its home market should have the additional benefit of strengthening the Post Office and improving its competitive position in the European market and beyond, as liberalisation extends and the markets are opened up."
Of course those were the Government's words in July, not today.
10.47 pm
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