Orders of the Day — Postal Services Bill

Part of the debate – in the House of Commons at 7:19 pm on 15 February 2000.

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Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee 7:19, 15 February 2000

I have listened to speeches for a long time and I well remember that in 1992, when the hon. Gentleman was still somewhat inebriated by his election to Parliament, the Conservatives were elected to end the Post Office's monopoly. There was no talk of privatisation then; they came to power committed to ending the monopoly.

When the hon. Gentleman winds up, perhaps he will tell us whether the Conservative party will end the monopoly. In the Netherlands, the model is one of privatisation, but on the basis of a monopoly. In contrast, in Sweden, the post office is still state owned, but it is state ownership with competition. I believe that competition in postal services is desirable and I want the regulator to consider that. I do not want to rehearse all the arguments on that point, but I wish to make my position clear.

I am happy with the balance of the proposals. Over several years, my colleagues on the Select Committee on Trade and Industry have examined the issues. When the Minister was a trade union officer and came before us, we used to complain about the way in which the Post Office was run, the poor industrial relations and its absence of commercial awareness and sensitivity. In many respects, our criticisms have been met by the unions and by the management. Recent industrial relations agreements have removed many of the concerns that we expressed and we have the prospect of the management introducing substantial changes with the guaranteed co-operation of the unions.

We were not prepared to support Government investment in the Post Office when there was no guarantee that that investment would be realised because of the obduracy at times of certain sections of the work force. I foresee the disappearance of such obduracy and I am pleased that the Post Office will have access to funds.

We would have heard different arguments if the Post Office were to be given even greater access to borrowing facilities. People would have said that the Government were too free with their money. It is only correct that a business of this character must be flexible in its operation while having the opportunity to borrow. However, it should borrow not on the basis of soft loans, but on the basis of realistic market rates. That is the suggestion being made.

I would like to ask my hon. Friend the Minister about the arrangements for the sale of shares. An interpretation of clauses 54 to 56 suggests that the meaning of the term relevant subsidiaries is vague. Does it refer to the core United Kingdom business or does it include other businesses and services? Does it mean that the sale of businesses, such as German Parcel and other foreign acquisitions, of services, such as catering, or of equities in Post Office Counters would be subject to the discipline of a parliamentary debate? That point is critical. I know that it may be explored in Committee, but it would help to have the matter resolved now. The vagueness and inadequacy of the definitions in clauses 54 to 56 suggest that certain share deals could be transacted without proper parliamentary scrutiny.

It is important that we afford the Post Office the opportunity, if appropriate, to sell off parts of its business. However, that must be subject to proper scrutiny. That would also help us to work through the financial difficulties that the hon. Member for Twickenham explained so lucidly. To carry with them everyone who supports the deal, the Government should make the position clear beyond peradventure at the earliest possible opportunity. We do not want people to be unduly suspicious about the disposal of assets.

I am also somewhat concerned about the Crown Post Office network. It is not clear whether it would be subsidised by anything other than the Post Office. There are a number of towns in which the Crown post office is central to the commercial life of the town. For example, I know what problems would result if the post office in Alloa, the main town in my constituency, were in danger. A large proportion of its work is the paying of benefits. There are 600 Crown post offices, so we need clarity on this issue, too. If one retail outlet can be the flagship for the postal network, it is the Crown Post Office. It has access to funds and the deals that might be struck. I hope that those funds can then percolate through the system to smaller rural post offices.

I have repeatedly said in the House in debates on the Post Office that one of the most exciting developments is to bring the retail services of the Post Office on-line as soon as possible. In particular, it should take advantage of the opportunities afforded by e-commerce in all its forms. We hear much pious talk about having on-line computer facilities available in libraries. Frankly, many of the people who are excluded from the e-commerce revolution never go into libraries, but they go into the post office or the shop at the end of the street. They have just as much right to have access to e-commerce even if they do not have computers or interactive television. Even if it is only a question of putting on a bet, they should be entitled to do that if the appropriate facilities are there.

This is a substantial Bill. It needs fine tuning, but it is ridiculous for the Tories to rant on about the need for amendments. I give the Bill unqualified support. It has been the subject of years of consultation and discussion and I am pleased that my hon. Friend the Minister will reply to the debate, because so much of the Bill is due to his authorship and support.