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Consignia

– in the House of Lords at 2:39 pm on 30th April 2002.

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Photo of Lord Dearing Lord Dearing Crossbench 2:39 pm, 30th April 2002

asked Her Majesty's Government:

Whether in their reported talks with the Dutch group TPG their interest lay in the sale of all or part of their shareholding in Consignia or in a partnership between the two concerns.

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, Consignia's discussions with TPG were about exploring whether a merger of its postal activities with the Dutch group would be commercially beneficial to the company. It was not however possible to reach common ground. If the merger had gone ahead, it was likely to have involved an exchange of the share capital in Consignia plc by Consignia Holdings plc for shares in the merged entity.

Photo of Lord Dearing Lord Dearing Crossbench

My Lords, I am grateful to the Minister for that Answer. Is it part of the Government's policy for Britain to emerge with a British-led major enterprise in the competitive postal market that is now emerging in Europe? Does he agree that a natural candidate from Britain for that position is the Post Office, alias Consignia?

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, clearly the Government would like to see Consignia become a major international player. Consignia already has, through acquisition, entered into several overseas markets. Obviously, the company is in difficulty at present and in March it announced the first phase of its renewal plan to turn the company around. Once the UK market is further liberalised—obviously, the timing of that is a matter for Postcomm—Consignia will need to become more efficient and give better customer service. That is, of course, an essential requirement if it is to become an international player.

Photo of Lord Razzall Lord Razzall Liberal Democrat

My Lords, does the Minister agree that, were he to confirm that he regards the Post Office as part of the essential fabric of our society—I say the "Post Office" deliberately and not "Consignia"—he would be speaking for all noble Lords and, indeed, for the country? Does he also agree that the precedent of the purchase by Enron of Wessex Water provided a sad example of the concerns that people would have were the Post Office to fall under the wrong control? If he agrees with that, will he also be prepared to agree that, whatever happens to the control of the Post Office and Consignia, the universal service obligation will be maintained?

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, clearly the Post Office is part of the essential infrastructure of the country. Ministers made it very clear to the Post Office that, were there to be a merger, it would have to be in the public interest both in terms of the workforce and consumers. As the regulator, Postcomm has as its first obligation to maintain the universal service obligation, and that, of course, would remain in place.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, does the Minister recall that on 21st March my noble friend Lady Blatch and I asked him whether there had been any negotiations between Consignia and a foreign company? His reply on that occasion was that he did not know of any. However, can he now say for the record whether, had he known then what he knows now, his answer would have been simply "yes"?

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, I believe that a number of questions were raised on that occasion, which remains vividly in my mind. I believe that the answer now is "Yes, there were merger discussions". However, as I explained then, I was not aware of those discussions at the time.

Photo of Earl Russell Earl Russell Liberal Democrat

My Lords, further to the Minister's answer to my noble friend Lord Razzall, can he say how far he believes that a serious competitive enterprise is compatible with the delivery of a universal service?

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, I believe that they are compatible. If one looks across Europe, one can see examples of where that takes place. I see no reason why, in liberalising the market, it should not be possible to maintain a universal service obligation, as has happened in other countries.