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Geraint Davies (Croydon, Central): Is the hon. Gentleman pledging that, if elected, the Conservatives would privatise the Post Office completely or that they would subsidise through taxpayers' money the second delivery that he does not want to cut?
Mr. Whittingdale: I am delighted to welcome the hon. Gentleman's conversion to the cause of privatisation. Part of the problem, which I shall explain to him, is the Government's failure to give the Post Office full commercial freedom. That is the view not only of the Opposition but of the National Audit Office, which reported last week that the absence of private shareholders might limit pressure to improve its efficiency and that the DTI might be more concerned with protecting the Government's dividend than with introducing greater competition. The latest figures show that the Post Office has recorded operating losses of £100 million, but the Government still refuse to say whether they intend to take a dividend out of the Post Office this year. Perhaps the Secretary of State will answer that question at least.
The Post Office has also complained that its present status—half in the public sector and half out—is unsatisfactory and has contributed to its problems. I should point out to the hon. Member for Croydon, Central (Geraint Davies) that, in evidence to the Trade and Industry Committee not so long ago, the chief executive of the Post Office said exactly that. The Post Office itself feels that, although it is still in Government ownership, it lacks the freedom that it needs. Ministers might be
unwilling to take responsibility for its performance, but they have not hesitated to interfere in its operation at every turn.
Mr. Colin Challen (Morley and Rothwell): Perhaps the hon. Gentleman made it clear in the first 45 seconds of his speech, which I apologise for missing, that his party would privatise the Post Office 100 per cent. That seems to be his party's position. If he did not say that, will he clarify matters?
Mr. Whittingdale: I remind the hon. Gentleman that the previous Conservative Government introduced proposals, which I supported, to privatise the Post Office. I regret, however, that we were unable to implement them because of opposition from the Labour party. The Secretary of State has criticised the previous Conservative Government for not giving the Post Office full commercial freedom, yet his party consistently opposed Conservative proposals to give it the commercial freedom that it needs.
Mr. John Gummer (Suffolk, Coastal): Before my hon. Friend moves on from his point about Government interference in the Post Office, will he draw the House's attention to the fact that, although the Government interfere in a way that is largely deleterious, they have not interfered to help the Post Office take a lead in, for example, environmental matters? Rather, they have left it to become one of the worst-lagging businesses in this country in respect of matters such as clean air.
Mr. Whittingdale: Both sides of the House acknowledge that my right hon. Friend is an expert on the environment, and he is absolutely right. When it has suited them, Ministers have denied any responsibility for the Post Office's operation and pretended that it has nothing to do with them while interfering in its management and making life more difficult for those who are trying to run a business.
As evidence of how the Government have interfered in the Post Office's operation, I cite the fact that at Trade and Industry questions at the end of last year the Secretary of State chose to announce that she had sacked its chairman, Dr. Neville Bain. She did so without having warned either the Post Office or, I understand, Dr. Bain.
Dr. Bain's temporary replacement, whose appointment was announced last week, has said that the organisation is now in a "perilous state", and that the business model does not work. Yet it is hard to see how even someone of Allan Leighton's obvious talent will sort out that problem on the one day a week that he is contracted to work as chairman of the Post Office.
The management is entirely right: part of the answer must be Consignia's getting its costs down and its productivity up. Doing that, however, will mean making hard decisions, while also confronting long-established working practices. Many in the work force accept the need for change, but many do not.
Mr. Whittingdale: Let us find out which camp the hon. Gentleman is in.
Geraint Davies: I thank the hon. Gentleman for giving way a second time.
The hon. Gentleman talks of interference. In a world in which the Post Office had been privatised, would he superimpose the requirement for RPI minus X in terms of price and the requirement for universality in terms of public service? Would he also allow cherry-picking by private sector competitors? Does he agree with the NAO report's conclusion that there is an inherent tension among those factors?
Mr. Whittingdale: If the hon. Gentleman looks at the NAO report, he will see that it expresses some concern about the appropriateness of RPI minus X. What is certainly clear is that even if the Post Office were in the private sector, it would still have a quasi-monopoly, at least for the foreseeable future. It would therefore need to be regulated in the same way as other privatised utilities, and I would expect the universal service obligation to remain. The NAO report, however, specifically identifies as part of the problem the fact that the Post Office is not in the private sector, and has been retained as a wholly state-owned corporation. There is no doubt that that has contributed to its problems.
One of the Post Office's greatest problems, though, is the appalling industrial relations performance that has afflicted it over the past few years. As I have said, last year nearly 63,000 days were lost through industrial action in the Post Office—more than were lost in the rest of the economy put together. That is undoubtedly one of the main reasons for its failure to meet its performance targets.
Mr. Henry Bellingham (North-West Norfolk): Is not one of the key reasons for the industrial relations problem the catastrophically low morale among those who work in the Post Office, such as postmen? They feel very let down by the Government, which is one reason that they are so depressed about things.
Mr. Whittingdale: I agree that morale in the Post Office has not been helped, especially given the announcement of 30,000 redundancies two weeks before Christmas. That inevitably cast gloom over many who work in the Post Office, as I saw when I visited my local delivery office. I am sure that my hon. Friend would see much the same if he paid a similar visit. The fact is that the performance of the Post Office has continued to deteriorate steadily over the past few years.
Mr. Bob Blizzard (Waveney): Does the hon. Gentleman feel that his proposals for privatisation would improve morale in the work force?
Mr. Whittingdale: I certainly think they would improve the performance of the Post Office, as has happened in Germany and Holland and, indeed, in other privatised utilities. The important thing is to improve performance and increase efficiency. I cannot believe that the hon. Gentleman will defend the Post Office's failure to meet its delivery targets, and the fact that in each of the last three years it has fallen ever further below them.
The Post Office's current performance is unsatisfactory. In some areas, especially in London, one in five letters fails to arrive on time. Postwatch, which the Government set up as a consumer body to monitor the Post Office, estimates that up to 1 million letters go missing each week. However, instead of working with the management
to improve performance, the Communication Workers Union is now balloting its members about an all-out strike in the Post Office in pursuit of a pay claim. I hope that the Secretary of State agrees that further industrial action is the last thing the organisation needs, and that she will take the opportunity that the debate provides to condemn unreservedly any possibility of a Post Office strike.
Mr. George Osborne (Tatton): Does my hon. Friend realise that Labour Members are being asked to vote for an amendment that congratulates the Government on
- "encouraging partnership between employers and unions"?
Mr. Whittingdale: If they do, the amendment is curiously worded. My hon. Friend is right. There are nine days before the CWU announces the result of the ballot. When I was interviewed on breakfast television this morning, I heard the deputy general secretary asking his members to give him the authority to call a national strike in pursuit of a pay claim.
Mr. Michael Connarty (Falkirk, East): The hon. Gentleman appears to be moving in a dangerous direction. Is he saying that if he were in power, he would ban strikes when people wanted a decent pay settlement from a private sector industry?
Mr. Whittingdale: I understand that the hon. Gentleman is sponsored by the CWU, and I am therefore not surprised that he tries to defend it.
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