Post Office Exclusive Privilege (Extinction) Bill

– in the House of Commons at 5:06 pm on 12th January 1988.

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Photo of Mrs Teresa Gorman Mrs Teresa Gorman , Billericay 5:06 pm, 12th January 1988

I beg to move, That leave be given to bring in a Bill to extinguish the Post Office exclusive privilege of conveying letters. I am not seeking to privatise the Post Office, although that may be no bad thing. I am not seeking to limit or control it. I merely want to see alternative letter deliveries permitted. The Post Office will not lose a single postman or pillar box — all I am asking for is competition. If confession is good for the soul, competition is good for industry.

We should look at what happened when we removed British Telecom's monopoly on the production of telephones. Five years ago we were all using standard telephones, which we stirred up with a finger, however arthritic the finger or however difficult it was for elderly people. Today we are on the brink of having pocket-size, portable, push-button telephones for everyone. That is the kind of magic which competition achieves in industry. It refreshes the parts which monopolies and Socialism do not reach.

The refreshing quality of the Government is their willingness to tackle some of the antique institutions of our economy. The monuments to Herbert Morrison's ghost — the old nationalised industries — are all being modernised and given a shake up. Surely a privilege which was granted by Charles II in the 1660s should not survive into the 1990s.

It is a happy chance that today Lord Young has chosen to define in his White Paper the new focus of his Department's activities for the rest of the Parliament. Paramount among those is to encourage competition and to tackle restrictive practices. I can think of no better or more appropriate starting point than the Post Office. We all know that it is hopelessly flawed.

We are all fond of our local postman who struggles through all kinds of weather and past the dogs to get the letters to our letter boxes, but behind him or her in the sorting office all the old Micky Mouse restrictive practices are going on — the practices which practically brought Fleet street to its knees. That is why our first-class letter post has deteriorated so badly and why we have to endure the annual Christmas threat of a Post Office strike. I am sure that the Post Office management would welcome competition, because it would help to bring its own unruly labour force into line.

A doubt expressed to me on this subject is that if we allowed competition into delivery of letters, urban Britain would get quick and cheap postal services while rural areas and offshore islands would lose out. Let me assure the House that that theory is completely without foundation. The private sector delivers milk and newspapers to the most remote corners of our country without the need for monopoly milkmen or paperboys. Nor do we need to worry about the cost of delivering those letters. The cost of a bar of chocolate is exactly the same in the Orkneys as it is in Orpington. In other words, when the private sector is in charge it is not worth the trouble to make an exception and to charge more for long distances.

Another doubt that is raised is whether the existing commercial delivery services, such as TNT and Postplan plc, are interested in delivering letters. That really does not matter. I do not know whether they are or not. When there was a strike in the Post Office in 1971, within a few days 562 contractors up and down the country had applied for licences to deliver letters. With even more remarkable speed they formed a network that they called the association of mail services, and they covered the whole country. That happened despite the fact that competition had been suppressed for more than 300 years.

I believe that the Government have the power under the Post Office Act 1969 to suspend the Post Office monopoly or reduce the minimum charge currently imposed by law from £1 to say 5p. No special legislation is needed to do that.

All hon. Members are in the House as a result of a competitive process. Democracy involves alternatives, and all hon. Members nominally support the right of the public to political choice. A monopoly such as the Post Office is an exclusive privilege to supply a service without competition and is therefore undemocratic.

If the Labour party is opposed to deregulation of the post, is it also opposed to competition in other areas where we take competition for granted? Would it approve of a state monopoly in the provision of shoes, trousers, biscuits, cars or other types of service? The Socialists do not dare to reveal their true colours on this issue because, if they did, they would face public ridicule and electoral humiliation. Instead, they seek to defend the remaining pockets of monopoly trades union privilege on the orders of their trades union paymasters. That is the only possible reason for opposing my Bill.

Photo of Mr Dave Nellist Mr Dave Nellist , Coventry South East

In opposing the Bill, I wish to begin by placing on record my thanks for the help that has been given to me by my comrade, my hon. Friend the Member for Falkirk, East (Mr. Ewing), and to say at the outset that we intend to divide the House. I also thank my right hon. Friend the Member for Chesterfield (Mr. Benn), a former Postmaster-General, for his assistance.

The Post Office letter monopoly has existed for almost 400 years. Recently it was confirmed in the Telecommunications Act 1984, which set a lower limit of £1 per letter on the charge for private delivery. The operation of a national planned and co-ordinated service with universal rates of delivery has made British postal services the envy of the world. That was admitted by the Institute of Economic Affairs, one of the organisations which briefed the hon. Member for Billericay (Mrs. Gorman). That is a Right-wing body, which recently confirmed that the Post Office comes out well on international comparison.

The Post Office has been profitable for at least 10 years. It has contributed £400 million to the Treasury during that period and its after-tax profits to April 1987 were £131 million, not least because of the work and effort put in by postal workers throughout the country, as a result of which productivity has risen by 20 per cent. over the past five years. That is why the fat cats in the City of London and the so-called learned institutes such as IEA and the Adam Smith Institute are awaiting with glee the pickings from the next round of the Prime Minister's sale of the century, which is being trailed today by the hon. Member for Billericay.

A year ago, the Right-wing Centre for Policy Studies advocated the phased privatisation of the Post Office. Since then, the Post Office has been split and reorganised into four separate businesses, resulting in managers being bigger fish in smaller ponds. The eyes of the Right are firmly on Girobank and the counter services, not only because those businesses are worth £86,000 million, but because the counter services occupy valuable and profitable high street sites in every town and city in the country.

Despite the Prime Minister's election promises that the royal mail was safe from privatisation, the pressure is clearly building up from the Right wing, and it will have to be met by a national campaign by postal workers, supported by other trade unionists inside and outside the industry, to defend our publicly-owned service from the privateers and the vultures of the Right of society.

The Post Office has 100,000 letter boxes, 28,000 vans, and 45,000 delivery staff on our streets every morning. In the few days before Christmas they delivered 100 million items each day, which is more than twice as much as all its competitors deliver in a year. There has been an enormous growth in the past five years in the delivery of mail — about 25 per cent. since 1982. Sir Bryan Nicholson predicts a further 6.5 per cent. growth in this financial year. The fact that there were 91 strikes between April and November last year is the result of continued attacks by management on all aspects of the working conditions of postal staff. In my view, and in the view of other London Members, postal staff were justified in campaigning before Christmas for a reduction in their 43-hour working week; it was done not only for their own benefit but to increase the number of full-time staff, to reduce the number of casual staff and to make a dent in the horrific levels of mass unemployment that we have had in the past nine years under a Tory Government.

The Bill is about lifting the letter monopoly. It would have dramatic effects on rural communities. In my view —I suspect it is the view of most hon. Members—mail is a social service, especially in this era of divided and elderly families. Servicing rural areas, particularly the outlying areas, is inherently unprofitable at 18p a letter. The present inter-city traffic subsidises letters between smaller towns and villages and outlying areas to the tune of £130 million a year which is the cost of subsidisation; that is 6 per cent. of the turnover of the royal mail. If the letter monopoly went, the universal post and stamp would inevitably go. Letters to people living outside cities would cost as much as three or four times the present rate. The 75p letter could become a reality. The Tories prate on about the supposed benefits of competitive pressures. Those pressures would inevitably force the abandonment of door-to-door delivery for all areas and the introduction of collection boxes in small towns, and villages, and on the high streets. The cities would not be immune either. Even in central London, without the Post Office letter monopoly, the level of competition facing the Post Office would mean that it would need the same number of offices and delivery staff to provide its services. But if the volume of traffic went down, the pressure would force charges to rise.

The gainers would be the Rupert Murdochs of this world, with his firm TNT. They wait like vultures for the pickings of big business and the big City trade. The losers would be the millions who do not live in urban areas, and the thousands of postal workers, whose jobs would be put in jeopardy.

The hon. Member for Billericay says that rural postal services would not suffer. But higher postal charges for those living outside the big cities would act like an additional local tax. The Right wing that supports the arguments of the hon. Member for Billericay, such as the Institute of Economic Affairs, argues that people living in rural areas should not expect to have better treatment than those who live in cities. It says that people choose whether to live in rural areas, with long drives to their doors, or to live in accessible urban blocks of flats. Some commuters who live 20 or 30 miles from London may take that decision. I thought until today that the Tory argument was in favour of the preservation of rural communities, and not only because most of their seats are in those areas. The pressure that will be put on those who do not live in rural areas by choice but were born and brought up there will be the responsibility of those who vote for the Bill.

According to The Economist, courier services are springing up in London like weeds. There is Postplan, Link Up, Business Post Ltd, and Metro Associates. In November I drew to the attention of the House the fact that there is now one in Coventry called Coventry Couriers. On 10 November I asked for a statement from the Department of Trade and Industry. I have waited in deafening silence for that statement. Coventry Couriers is a cowboy business which charges 10p an item, breaking the 1981 legal monopoly under which such letters should not be delivered for a charge of less than £1 per item. The firm charges £1 but offers a 90 per cent. discount if people pay their bills straightaway. It is operating under that margin of legality under thus so-called law and order Government.

I have here some letters delivered by that firm. One about immunisation was delivered to my two-year-old daughter, Charlotte, from the area health authority in Coventry on 12 December. I have letters from various local firms such as estate agents and stationers. The franking is designed to look exactly like Post Office franking so as to give a veneer of respectability to the service. That firm is living like a leech off the pressure on the area health authority to cut its costs because of the £1·5 million cut in its budget.

If this is a Government of law and order, what action is the Department of Trade and Industry taking about these illegal operations? Why have there not been prosecutions? Why does the DTI not stop these people breaking the Tories' own rules? The Tories seem to have a pathological hatred of publicly-owned industries. They denigrate them. Then, after privatisation—and it takes a warped imagination to come out with such a phrase—we are all expected to believe that BT is now magic : those were the words of the hon. Member for Billericay.

The Tories feed on the fact that nationalised industries in the last 40 years were saddled with debts and lavish compensation payments. Because all the old managers were still in charge, the miners said in the late '40s, "We are a new broom with old bristles." Nationalised industries may be state owned, but they are still managed by people who are inherently against public ownership. I believe that Sir Bryan Nicholson falls into that category. Such people are not there to defend publicly owned industries and to extend them but to prepare them for privatisation. Those industries have failed in private hands, as we saw in the case of power, coal, steel and transport. Yet we, the taxpayers and the working people, are being saddled with their debts and compensation payments.

There is an alternative. We could restore the image of nationalised industries and give credence to our forefathers and mothers who campaigned in the Labour movement for public ownership by having genuine public ownership. Those who work in the Post Office and in other nationalised industries, together with the trade union movement representing the wider population and the Government, should organise the industries on a tripartite basis to provide not for the pirates and the privateers whom the hon. Member for Billericay represents, but for the whole population, including the rural communities which my hon. Friends and I represent. I urge the House to reject the Bill.

Question put, pursuant to Standing Order No. 19 ( Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):

The House divided: Ayes 118, Noes 202.

Division No. 128][5.23 pm
Aitken, JonathanHolt, Richard
Alexander, RichardHowell, Rt Hon David (G'dford)
Alison, Rt Hon MichaelHughes, Robert G. (Harrow W)
Amos, AlanJanman, Timothy
Arbuthnot, JamesJones, Gwilym (Cardiff N)
Ashby, DavidJones, Robert B (Herts W)
Atkinson, DavidKing, Roger (B'ham N'thfield)
Baker, Nicholas (Dorset N)Knight, Greg (Derby North)
Banks, Robert (Harrogate)Knowles, Michael
Beaumont-Dark, AnthonyLawrence, Ivan
Bellingham, HenryLloyd, Sir Ian (Havant)
Bennett, Nicholas (Pembroke)Lord, Michael
Bevan, David GilroyMcCrindle, Robert
Blackburn, Dr John G.Macfarlane, Sir Neil
Body, Sir RichardMacKay, Andrew (E Berkshire)
Bonsor, Sir NicholasMcLoughlin, Patrick
Boswell, TimMcNair-Wilson, M. (Newbury)
Bottomley, Mrs VirginiaMarland, Paul
Boyson, Rt Hon Dr Sir RhodesMarshall, John (Hendon S)
Braine, Rt Hon Sir BernardMarshall, Michael (Arundel)
Brandon-Bravo, MartinMeyer, Sir Anthony
Brown, Michael (Brigg & Cl't's)Miller, Hal
Bruce, Ian (Dorset South)Mills, Iain
Buck, Sir AntonyMontgomery, Sir Fergus
Budgen, NicholasMudd, David
Burns, SimonNelson, Anthony
Carlisle, John, (Luton N)Paice, James
Chapman, SydneyPattie, Rt Hon Sir Geoffrey
Clark, Dr Michael (Rochford)Porter, David (Waveney)
Clark, Sir W. (Croydon S)Powell, William (Corby)
Conway, DerekRaffan, Keith
Coombs, Anthony (Wyre F'rest)Raison, Rt Hon Timothy
Coombs, Simon (Swindon)Redwood, John
Curry, DavidRhodes James, Robert
Davis, David (Boothferry)Riddick, Graham
Day, StephenRost, Peter
Devlin, TimRowe, Andrew
Dickens, GeoffreySackville, Hon Tom
Dicks, TerrySayeed, Jonathan
Dover, DenShelton, William (Streatham)
Fallon, MichaelShepherd, Richard (Aldridge)
Fookes, Miss JanetSims, Roger
Forth, EricSmith, Tim (Beaconsfield)
French, DouglasSpicer, Sir Jim (Dorset W)
Gale, RogerStewart, Allan (Eastwood)
Gardiner, GeorgeTapsell, Sir Peter
Gill, ChristopherTaylor, Ian (Esher)
Glyn, Dr AlanTaylor, John M (Solihull)
Gorman, Mrs TeresaThorne, Neil
Gow, IanTownend, John (Bridlington)
Gower, Sir RaymondTownsend, Cyril D. (B'heath)
Grant, Sir Anthony (CambsSW)Tracey, Richard
Greenway, Harry (Ealing N)Vaughan, Sir Gerard
Grylls, MichaelWalker, Bill (T'side North)
Hayes, JerryWard, John
Hicks, Mrs Maureen (Wolv NE)Watts, John
Wheeler, JohnYeo, Tim
Widdecombe, Miss Ann
Wiggin, JerryTellers for the Ayes:
Winterton, NicholasMr. David Wilshire and
Woodcock, MikeMr. David Evans.
Adams, Allen (Paisley N)Garrett, Ted (Wallsend)
Allen, GrahamGodman, Dr Norman A.
Alton, DavidGolding, Mrs Llin
Anderson, DonaldGordon, Ms Mildred
Archer, Rt Hon PeterGrant, Bernie (Tottenham)
Armstrong, Ms HilaryGriffiths, Win (Bridgend)
Ashdown, PaddyGrocott, Bruce
Ashton, JoeHarman, Ms Harriet
Barnes, Harry (Derbyshire NE)Hattersley, Rt Hon Roy
Barron, KevinHaynes, Frank
Battle, JohnHeffer, Eric S.
Beckett, MargaretHinchliffe, David
Beggs, RoyHogg, N. (C'nauld & Kilsyth)
Benn, Rt Hon TonyHolland, Stuart
Bennett, A. F. (D'nt'n & R'dish)Home Robertson, John
Bermingham, GeraldHood, James
Bidwell, SydneyHowarth, George (Knowsley N)
Blair, TonyHowell, Rt Hon D. (S'heath)
Blunkett, DavidHowells, Geraint
Boyes, RolandHoyle, Doug
Bradley, KeithHughes, Robert (Aberdeen N)
Brown, Nicholas (Newcastle E)Hughes, Sean (Knowsley S)
Bruce, Malcolm (Gordon)Hughes, Simon (Southwark)
Buchan, NormanHume, John
Buckley, GeorgeIllsley, Eric
Caborn, RichardIngram, Adam
Callaghan, JimJones, Barry (Alyn & Deeside)
Campbell, Menzies (Fife NE)Jones, leuan (Ynys Môn)
Canavan, DennisJones, Martyn (Clwyd S W)
Carlile, Alex (Mont'g)Kaufman, Rt Hon Gerald
Clarke, Tom (Monklands W)Kilfedder, James
Clay, BobKinnock, Rt Hon Neil
Clelland, DavidKirkwood, Archy
Clwyd, Mrs AnnLambie, David
Cohen, HarryLamond, James
Cook, Frank (Stockton N)Leadbitter, Ted
Cook, Robin (Livingston)Leighton, Ron
Corbett, RobinLewis, Terry
Cousins, JimLitherland, Robert
Cox, TomLivingstone, Ken
Crowther, StanLofthouse, Geoffrey
Cryer, BobLoyden, Eddie
Cummings, J.McAllion, John
Cunliffe, LawrenceMcAvoy, Tom
Dalyell, TamMcCartney, Ian
Darling, AlastairMacdonald, Calum
Davies, Ron (Caerphilly)McFall, John
Davis, Terry (B'ham Hodge H'l)McKay, Allen (Penistone)
Dewar, DonaldMcKelvey, William
Dixon, DonMcLeish, Henry
Dobson, FrankMcNamara, Kevin
Doran, FrankMcTaggart, Bob
Douglas, DickMcWilliam, John
Dunnachie, JamesMadden, Max
Dunwoody, Hon Mrs GwynethMahon, Mrs Alice
Eadie, AlexanderMarek, Dr John
Eastham, KenMarshall, David (Shettleston)
Evans, John (St Helens N)Marshall, Jim (Leicester S)
Fatchett, DerekMartin, Michael (Springburn)
Faulds, AndrewMartlew, Eric
Fearn, RonaldMaxton, John
Field, Frank (Birkenhead)Meacher, Michael
Fields, Terry (L'pool B G'n)Meale, Alan
Fisher, MarkMichael, Alun
Flannery, MartinMichie, Bill (Sheffield Heeley)
Flynn, PaulMichie, Mrs Ray (Arg'l & Bute)
Forsythe, Clifford (Antrim S)Millan, Rt Hon Bruce
Foster, DerekMitchell, Austin (G't Grimsby)
Fraser, JohnMolyneaux, Rt Hon James
Fyfe, Mrs MariaMoonie, Dr Lewis
Galbraith, SamuelMorgan, Rhodri
Galloway, GeorgeMorley, Elliott
Garrett, John (Norwich South)Mowlam, Mrs Marjorie
Mullin, ChrisSpearing, Nigel
Murphy, PaulSteinberg, Gerald
Nicholson, Miss E. (Devon W)Stott, Roger
O'Brien, WilliamStraw, Jack
O'Neill, MartinTaylor, Mrs Ann (Dewsbury)
Orme, Rt Hon StanleyTaylor, Rt Hon J. D. (S'ford)
Patchett, TerryTaylor, Matthew (Truro)
Pike, PeterThomas, Dafydd Elis
Powell, Ray (Ogmore)Thompson, Jack (Wansbeck)
Primarolo, Ms DawnTurner, Dennis
Quin, Ms JoyceVaz, Keith
Randall, StuartWall, Pat
Redmond, MartinWallace, James
Rees, Rt Hon MerlynWaller, Gary
Reid, JohnWalley, Ms Joan
Robertson, GeorgeWareing, Robert N.
Robinson, GeoffreyWelsh, Michael (Doncaster N)
Ross, Ernie (Dundee W)Wigley, Dafydd
Rowlands, TedWilliams, Rt Hon A. J.
Ruddock, Ms JoanWilliams, Alan W. (Carm'then)
Sedgemore, BrianWilson, Brian
Sheerman, BarryWinnick, David
Sheldon, Rt Hon RobertWise, Mrs Audrey
Skinner, DennisWorthington, Anthony
Smith, Andrew (Oxford E)Wray, James
Smith, C. (Isl'ton & F'bury)Young, David (Bolton SE)
Smith, Rt Hon J. (Monk'ds E)
Snape, PeterTellers for the Noes:
Soames, Hon NicholasMr. Harry Ewing and
Soley, CliveMr. Dave Nellist.

Question accordingly negatived