Post Office

Oral Answers to Questions — Trade and Industry – in the House of Commons at 2:30 pm on 5th April 1995.

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Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire 2:30 pm, 5th April 1995

To ask the President of the Board of Trade what measures he intends to take to allow commercial freedom for the Post Office; and if he will make a statement. [16453]

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The Post Office operates several businesses. We are actively engaged in widening the opportunity for Post Office Counters Ltd. and are helping to automate its services. We will announce any plans to change the present arrangements governing the remainder of the Post Office in due course.

Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire

In answer to my hon. Friend the Member for Vauxhall (Ms Hoey), in connection with Post Office commercial practices, the President said that it was impossible to have commercial freedom operating in the public sector. Would he like to explain the blinkered economic thinking behind that set of ideas?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

Absolutely. I do not understand how, if a taxpayers' guarantee stands behind a business, it can operate in total commercial freedom.

Photo of Mr John Marshall Mr John Marshall , Hendon South

Does my right hon. Friend agree that if we were to give the Post Office within the public sector greater commercial freedom it would mean greater borrowing, which would be added to the public sector borrowing requirement and would eventually lead to higher taxes?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

All those things would, of course, come within the Treasury rules, and that is something that no Government have ever been able to avoid. The House would have to answer basic questions about what it would expect me to do about Parcel Force, which is losing a significant amount of money travelling up and down the roads, in competition with private sector companies that could not survive with a financial regime of that sort.