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Post Office Regulator

4. Mr. Tony Lloyd (Manchester, Central): If she will make a statement on the role of the Post Office regulator. [33792]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): The creation of Postcomm was part of the package of greater commercial freedom that we introduced in the Postal Services Act 2000. As my hon. Friend knows, the Act provides that Postcomm's primary duty is to exercise its functions to ensure the provision of a universal postal service.

Mr. Lloyd: Does my right hon. Friend agree that the most remarkable feature of Opposition Members'

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comments is their failure to refer to the "strike" in investment in the Post Office that lasted for so many years, which has left Consignia far too weak to function as an efficient business? Could not the regulator's recommendations damage Consignia's ordinary operation so severely that the Government's guarantees of a universal postal service would be rendered null and void?

Ms Hewitt: As my hon. Friend knows, the Postal Services Act—for which he and I and all Labour Members voted—writes the universal service obligation into law. That means a delivery every working day to every address in the United Kingdom, and a collection every working day from post boxes throughout the United Kingdom, at a uniform and affordable price.

It is the regulator's primary duty to ensure that a universal service is delivered. Of course Postcomm will have to ensure that its decisions on market opening, which will be designed to give customers more choice and a better service, are framed in such a way that that service is indeed delivered.

Mr. David Cameron (Witney): When the Secretary of State speaks to Postcomm, will she stress the need for a proper service in rural areas? Is she aware that many people in the countryside of my west Oxfordshire constituency are finding that mail is delivered later and later? How can the closure of post offices possibly help that? Will the right hon. Lady ensure that a universal service is provided early each day for people living in the countryside?

Ms Hewitt: The hon. Gentleman makes an important point about the importance of reliable mail deliveries and good post offices in rural communities. The service being provided by the Royal Mail in some rural as well as some urban areas is not good enough. That is why management are talking to unions about restructuring, which is necessary to deliver a much more efficient and reliable service to customers in rural areas and everywhere else in our country. The hon. Gentleman will be aware that we have very substantially slowed down the rate of closure of rural post offices, and that we have put in place the necessary funding to enable communities that would otherwise not be served to keep their post offices in operation.

Mr. John Grogan (Selby): Does my right hon. Friend agree that there is a strong case for Postcomm to extend the six-week consultation, given that its proposals are far ranging, go much further than those in the rest of Europe and will, in a matter of weeks, open 40 per cent. of our postal services to competition?

Ms Hewitt: It is essential that Postcomm carries out a full consultation on its proposals. I have no doubt that it will do so and that it will take account of the views that my hon. Friend has expressed.

Dr. Vincent Cable (Twickenham): Does not the Secretary of State agree that the rapid introduction of competition and the inevitable cherry-picking of the Post Office business will make carrying the financial burden of the universal service obligation much more onerous? Would it not be fair and economically sensible for the new private operators to make a financial contribution to the universal service obligation through a charge or levy? As that is not allowable under the present legislation,

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will the right hon. Lady discuss with the regulator how the anomaly could be corrected to put the universal service obligation on a sound and permanent footing?

Ms Hewitt: I refer the hon. Gentleman to the excellent report that was recently published by the National Audit Office. It sets out clearly the double risk: that if competition is introduced too rapidly to the market the universal service will be jeopardised; and that, without adequate competition, Consignia will not have the necessary incentives to restructure its business and improve its service. At the moment, the regulator and the company completely disagree about the effect of market opening on the business. Therefore, the most urgent priority is for the regulator and the company to arrive at a common analysis of the implications of market opening, so that Postcomm can make decisions to ensure that its primary duty of maintaining the universal service is achieved.

Aerospace Industry

5. Mr. George Osborne (Tatton): What recent discussions she has had with the aerospace industry about the after-effects of 11 September. [33793]

The Minister for Industry and Energy (Mr. Brian Wilson): We have been in close contact with the aerospace industry since 11 September and will continue to work with it to help it to deal with the impact of the attacks and thereby to ensure a strong future for the industry.

Mr. Osborne: I thank the Minister for his answer. He will be aware of the loss of 1,000 jobs at BAE Systems at Woodford on the edge of my constituency, which brings to an end the production of whole passenger planes in this country. The local MPs whose constituencies have been affected have genuinely appreciated our discussions with the Prime Minister, the Secretary of State for Defence, and last but not least, the Minister himself yesterday. Does he agree that it is vital for Britain's manufacturing base that we maintain a civil as well as a military aerospace industry, and how does he propose to foster that?

Mr. Wilson: I am grateful for the hon. Gentleman's comments. I agree that it would be serious if this country lost its civil capacity, which is why I regret British Aerospace's decision on Woodford. As I told the hon. Gentleman yesterday, I am happy to discuss specifically the future of Woodford with British Aerospace and to emphasise the point about maintaining that diversity of production. There are positive aspects—some airline traffic is returning—and there is no doubt that this is a world-class industry or about the skills at Woodford and other places that are being adversely affected. We must work as closely as possible with the industry to maintain the capacity and the skills base so that we are in a position to take advantage of the upturn when it comes.

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Valerie Davey (Bristol, West): Was the Department's decision to grant BAE Systems a licence to export a military air traffic control system to Tanzania in any way affected by the after-effects of 11 September?

Mr. Wilson: I understand that the decision was thoroughly considered in line with consolidated criteria. It is a free-standing decision and it is not affected by the other matters that we are discussing.

Mr. Andrew Turner (Isle of Wight): I welcome the Secretary of State's decision on the air traffic control system, which has retained jobs in my constituency. Is the Minister willing to visit east Cowes, where 650 jobs at GKN Westland have been lost—on that subject, I look forward to meeting him on 12 March—and to help people there to boost manufacturing output on the island? In particular, will he consider restoring assisted area status to the Isle of Wight?

Mr. Wilson: Although we cannot do away with the overall impact of 11 September, I often find that significant progress can be made by taking each problem on merit and considering amelioration and various solutions. That has been my experience in a number of areas in which the aviation and aeronautical industries are particularly important. If I can make any significant contribution to improving the position on the Isle of Wight, I am prepared to do so. In principle, I am happy to visit the hon. Gentleman's constituency.

Steel Industry

6. Helen Jackson (Sheffield, Hillsborough): What recent discussions she has had regarding the UK steel industry. [33796]

The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson): My right hon. Friend the Secretary of State for Trade and Industry, Ministers and officials have had discussions with key organisations representing the steel industry about a variety of issues in recent months. The latest focused on the proposed US action to impose additional import duties and quotas on a wide range of steel products.

Helen Jackson: Does my hon. Friend agree that the steel industry is no longer an old, dirty smokestack industry, but one for this century that is at the cutting edge of technology and at the core of this country's manufacturing sector? For those reasons, we welcome the Government's support for the industry and, in particular, the national metals centre in South Yorkshire and the work on America. Does my hon. Friend recognise that the industry's strength lies in the people whom it employs? Will she give continuing support for their training, their skills base and, indeed, their pay in the current circumstances?

Miss Johnson: I very much agree with my hon. Friend on the importance of new technological developments and the way in which the national metals technology centre will bring together industry, science and academia to create a unique network and facility for UK metal producers, fabricators and users. That shows how we are moving forward. As my right hon. Friend the Secretary

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of State said when she announced the funding for the centre, we shall ensure that the metals industry is equipped to be a world-class competitor for years to come.

Mr. Simon Thomas (Ceredigion): Has the Minister read the story in this morning's Western Mail revealing that the company controlled by Lakshmi Mittal, the Labour party donor, has already cost Allied Steel and Wire £5 million of business? Allied Steel and Wire employs 1,300 people in this country—1,000 of them in Cardiff—while Ispat employs fewer than 100. What advice would the Minister give to Allied Steel and Wire workers? Would it be to write to the Prime Minister to intervene on their behalf with Mr. Mittal? Or would it be to have a quick whip-round for Labour party coffers?

Miss Johnson: The advice that I would give the hon. Gentleman is to read Monday's press release from the Iron and Steel Trades Confederation general secretary, who said that the allegation made by the Tories and Plaid Cymru that the Prime Minister had put the interests of Romanian steel workers before those of UK steel workers was "ludicrous and cheap". He went on to say that he had explained the situation to the hon. Member for East Carmarthen and Dinefwr (Adam Price), who neglected to check the comments that had been made before going public with the allegations. The general secretary said—

Mr. Simon Thomas: Answer.

Mr. Speaker: Order. The hon. Gentleman should let the Minister reply. He asked the question: he should give her courtesy.

Miss Johnson: The general secretary of the ISTC went on to conclude in the press notice that matters had not been checked before the allegations were made public. The hon. Member for East Carmarthen and Dinefwr is reported to have apologised, but the general secretary went on to say that he was "dumbfounded" that the allegations continued to be made.

It is clear that Corus has cited general trading conditions as the reason for the pay freeze, rather than competition from firms in eastern Europe. The UK has an excellent productivity record.

Paul Flynn (Newport, West): Is it not true that steelworkers rightly reject Plaid Cymru's malign fantasies? No one from that party took part in the negotiations last year, when Corus told my right hon. Friend the Prime Minister, the trade unions and MPs representing steelworks areas that nothing that anyone could do or say would alter the company's decision to mutilate and butcher the Welsh steel industry. Instead of turning this tragedy into a political football, should not Plaid Cymru Members join the Welsh Assembly and the Government in trying to heal the wounds, especially at a time when Corus is dripping a bit of extra acid into them?

Miss Johnson: As I said, the UK steel industry has an excellent productivity record. It has experienced difficult trading conditions in recent years, but the problems are not confined to the UK. We are part of a global economy, and no country can insulate itself from world economic events. The Government and Ministers are making every effort to work with Corus to ensure that the major problem

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facing the industry—the threatened events in the US—is dealt with and tackled in an effective manner. We believe that the issue that needs to be addressed is that, unlike the industry in the UK and the EU, the US industry is trying to export problems to the rest of the world. The US needs to grasp that nettle. Imports are not the cause of the problem.

Mr. John Whittingdale (Maldon and East Chelmsford): I am genuinely sorry that the Minister has been the one to draw the short straw in having to answer this question. However, the UK steel industry is suffering from overcapacity, and there have been 6,000 job losses. Will she say what possible benefit the industry will receive as a result of the support given by the Prime Minister and the Secretary of State for the purchase of a Romanian steel company by a company that is not based in Britain and which employs fewer than 100 people in this country?

Miss Johnson: The Prime Minister made it clear—as did his letter—that it is a market opening in Romania for British industry. I am sure that the hon. Gentleman recognises that both that and the restructuring that is under way in the Romanian economy are important for British industry. In trying to trivialise those matters, is he not losing the thread of the argument that what we are about in the UK is promoting British business and British jobs, whether at home or abroad?

Mr. Whittingdale: The hon. Lady describes it as "British industry", but on what definition can a company with less than 0.1 per cent. of its work force in Britain possibly be described as British? Is she aware that British steel manufacturers have already said that a revitalised Romanian industry is bound to make it harder for British steel companies to compete? Is not that why the last Conservative Government lobbied against LNM being allowed to take over Irish Steel? Is it not the case that there will be no benefit to Britain from this takeover—other than a return for favours given to the Labour party?

Miss Johnson: The Prime Minister dealt with a number of those issues yesterday, when I am sure that the hon. Gentleman was in this place. The LNM group gives London as its headquarters address, and a number of UK-registered companies are part of the group.

Turning to the real issue for the UK steel industry at present—Opposition Members seem to have a problem focusing on that real issue, unlike Labour Members—the industry faces concerted unilateral US action on steel imports that would create fresh barriers to transatlantic trade and fresh distortions in the global steel industry. That is the real issue facing the UK steel industry.

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