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Kali Mountford (Colne Valley): Earlier in the debate, the Minister for E-Commerce and Competitiveness mentioned yesterday's Select Committee meeting. When questioned, the big four banks admitted that doing business through the post offices and universal bank, and new basic bank accounts, was very good for them and would extend much further a banking system that had been retrenched in recent years. Would that not help the post offices?

Mr. Waterson: I think it would if that were genuinely the case, but I have formed the same impression as the hon. Member for Twickenham—that this is not the sort of business the banks really want, or would seek if they were not being put under intense pressure to help the Government out. Once they get wind of the fact that the

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Government are trying to cajole people into going for the bank rather than the post office option, the matter may well be reopened by the banks themselves.

We should remember that the regulator was established by this very Government, as an independent regulator. We should also remember that two aims featured in all the detail of the Postcomm proposals. The first is improving services for consumers. As I said earlier, in many respects Consignia—the Post Office as it currently is—is not fulfilling even its current service requirements. The second, although it does not seem to be seen in this way, is safeguarding the future of the Post Office, or Consignia.

In its briefing, Consignia says:

The only issue between it and the regulator seems to be the pace at which the market is to be opened. The regulator takes the view that competition will encourage efficiency and innovation. That has certainly been true in other countries where postal services have been opened up, and in other parts of our own national life and economy.

Mr. Mark Lazarowicz (Edinburgh, North and Leith): Now that the hon. Gentleman has returned to the subject of the Postcomm proposals, and given his signal failure to answer the question posed by the hon. Member for Orkney and Shetland (Mr. Carmichael), may I put the question in another way? I accept that, as a member of an Opposition party, he is entitled to say, "We do not answer questions now; we will wait until we are in government". In the case of these proposals, however, he can do something. He, like anyone else, can put his views to Postcomm. Has the Conservative party put its views on the proposals to the regulator, and if so, what was the content of its representations?

Mr. Waterson: If I thought about it, I would be rather flattered by the desire of hon. Members on both sides—albeit with similar accents; hence my initial difficulty in identifying the hon. Gentleman—to know our policy. It cannot have escaped his attention that barely a year ago we lost a general election, but let me remind him that we are firmly on record as saying that we are in favour of competition, although for better or worse the Ministers here today will have to deal with Postcomm's recommendations. I should add that many of the submissions from Consignia and from the union that oppose the Postcomm proposals seem pretty threadbare intellectually.

Despite all the problems, the Post Office had one priceless asset that could not be destroyed even by inept management, bolshie unions or interfering Ministers—the brand. The names of the Post Office and the Royal Mail were recognised throughout the country and the world. They were up there with Coca-Cola and Microsoft. So the Post Office decided to destroy the brand at a stroke by renaming itself Consignia—at a cost of £2 million, to boot. Now even the chairman of Consignia and the Secretary of State admit that it was a mistake. In an article in the Daily Express only yesterday, the Secretary of State made the same point again. It is inconceivable that Ministers did not give their approval to the name change.

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We have heard pious words of concern from the Secretary of State, who seems finally to have woken up to the dire problems facing the Post Office. As she said in yesterday's Daily Express:

I am sorry to upset the hon. Member for Morecambe and Lunesdale (Geraldine Smith), but the Secretary of State also said:

She also mentioned the possibility of a pay rise, and her great new idea to save the Post Office from its losses of £1.5 million a day:

on the doorstep. That should make all the difference.

Little did Post Office managers or workers or the British public realise that while the Secretary of State was uttering pious sentiments about improving the Post Office, she was secretly planning to flog it off to the highest bidder.

Earlier this year, my noble Friend Baroness Miller pressed DTI Ministers in another place. In reply to her question on 21 March about whether there were negotiations on selling Consignia to TPG, which operates the Dutch post office, Lord Sainsbury said:

In answer to a subsequent question from Lady Blatch he said:

The following week, reports surfaced about the TPG group's interest in Consignia, and on 26 March the Secretary of State replied to a written question from my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) as follows:

She could not have been clearer.

Unfortunately it emerged later that that answer was not strictly accurate and that Lord Sainsbury had been even less accurate. He had to admit to the Lords on 30 April:

Of course, we must give Lord Sainsbury the benefit of the doubt and assume that he is right to say that he knew nothing about those negotiations. However, it is equally clear that detailed talks on selling Consignia—our Post Office—to the Dutch post office took place for some eight months.

Mr. Page: My hon. Friend seems to be making a very serious allegation. Is he saying that the Secretary of State for Trade and Industry gave a less than full answer to his question, which could be described as misleading and economical with the truth?

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Mr. Waterson: I am sure that my hon. Friend is not trying to put words in my mouth, but the phrase

is pretty uncompromising. As I said, we now know that serious and detailed discussions took place for some eight months. Even if the Dutch post office is now out of the frame, one wonders about other negotiations that might involve selling Consignia to Deutsche Post or to any number of other interested organisations.

The sad truth is that the Government cannot find a buyer for our Post Office. The ultimate humiliation is that, under their stewardship, no one wants to buy it. As the Post Office staggers from crisis to crisis under this Government, it will not be long before it cannot even be given away.

5.1 pm

Geraldine Smith (Morecambe and Lunesdale): I welcome the opportunity to speak in this debate, and I commend the Liberal Democrats for bringing these matters before the House. I have no doubt that the provision of postal services and the long-term viability and survival of Consignia hang in the balance. Having examined the Liberal Democrats' proposal, I can find nothing wrong with it, so I will join them in the Lobby.

The postal industry faces ever-increasing competition from various forms of electronic document transmission, a slowdown in the growth of traffic and the impending liberalisation of postal services throughout Europe, and it needs to undertake a radical review of its entire operation to meet those challenges. All who work in the industry are aware that change is inevitable; indeed, they have grown accustomed to it, given that the postal industry has been changing continuously for the past two decades. The industry would have faced such changes and challenges regardless of whether the Post Office had remained a publicly owned corporation, rather than a publicly owned plc.

The restructuring of the loss-making parcels business and the transfer of the universal parcel service back to Royal Mail is long overdue. I have every sympathy for the staff who will be affected by that change, but the initiative is nevertheless welcome. Parcelforce was split from Royal Mail under the previous Conservative Government simply in order to be sold off, and it was right to bring the two back together. Much has been said today about the radical review and restructuring of the counters network, which is being developed in close co-operation with the National Federation of Sub-Postmasters. It is critical to the prosperity and sustainability of the network, and although some of the changes will prove difficult, they are necessary.

Those are just two brief examples of the changes and challenges that the postal business has undergone for many years, and which would have occurred regardless of the operating company's status. It is important to remind ourselves that, despite the difficulties and continual changes that postal workers have faced, in terms of cost, range of services and reliability, they have literally delivered for us the best value-for-money service in Europe. Since 1993, the cost of a first-class stamp has risen by just 7 per cent. and the price of a second-class stamp has not risen at all. Given that the retail prices index has risen by 25 per cent. over the same period, that is a remarkable achievement, and a credit to British postal workers.

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I understand that Consignia is currently contemplating asking for an increase of 1p in both first and second-class postage, although it has not made a formal application. I hope that my hon. Friend the Minister for E-Commerce and Competitiveness will clarify the matter. However, I urge Consignia to apply for the increase without further delay.

The company should use the additional revenue to improve the terms and conditions of British postal workers, who are very poorly paid and work extremely unsocial hours. Hon. Members may work late into the evening, but not many of us would relish getting up at 3 o'clock in the morning to start work, six days a week.

I have been at pains to point out that many of the challenges facing Consignia have nothing to do with its move from public corporation to public limited company, but it faces a number of challenges that are a direct consequence of that change. Beyond a doubt, those are the challenges that cause me the greatest concern.

I refer, of course, to the competition proposals made by Postcomm, the postal regulator. I am not opposed to the principle that competition should be introduced into the reserved postal sector, but I certainly oppose the introduction of any competition that threatens Consignia's universal service obligation or its financial viability.

Consignia has made it clear that it would welcome the introduction of increased competition, provided that the approach adopted was the gradual and controlled approach evident across the rest of Europe, where there has been a progressive reduction in weight and price limits in the reserved or licensed sector. Consignia believes that, under that model, the impact of each successive step in the process on the system's ability to maintain the universal service can be assessed before the next step is embarked on.

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