Girobank (Hansard, 17 May 1989)

§ 4. Mr. Tony Lloyd
To ask the Chancellor of the Duchy of Lancaster if he will make a further statement on the future of Girobank.

§ Mr. Newton
As I stated in answer to my hon. Friend the Member for Colne Valley (Mr. Riddick) on 20 April, the Post Office board accepted a conditional offer by the Alliance and Leicester building society for Girobank, and I endorsed its decision. Detailed negotiations between the two parties are continuing with a view to completion as soon as possible in the coming weeks.
The regulatory authorities will need to be satisfied and my consent will be needed before a sale can take place.

§ Mr. Lloyd
Does the Chancellor appreciate the very real fears of those who work in Girobank that the regional offices, particularly the headquarters of Girobank in Bootle which has more than 3.500 employees, could be jeopardised by the takeover? What discussions has he had with the building society to ascertain its plans for the future and what can he say today to assuage the fears about job losses?

§ Mr. Newton
Yes, I appreciate that uncertainty necessarily gives rise to some anxiety and I am anxious that the matter should be resolved as soon as possible. I have not had direct discussions with the building society. The Post Office is selling Girobank, subject to my consent. As I have told a number of Opposition Members, including the hon. Member for Bootle (Mr. Roberts) on a number of occasions, it seems unlikely, to put it mildly, that anyone would wish to buy Girobank without being interested in preserving and developing one of its major assets—the centre of Bootle.

§ Mr. Barry Field
Does my hon. Friend agree that the Alliance and Leicester is a good organisation to bid for Girobank because it has a history of innovation, particularly in setting up a successful financial company? Does he also agree that it is far better for free enterprise to run the Girobank, rather than the pot pourri of Parliament, the Civil Service and the Post Office?

§ Mr. Newton
In a word, yes.

§ Mr. Allan Roberts
Has the Alliance and Leicester building society given any indication whether it has the £50 million required for investment in Girobank's future? Will that money be forthcoming? Will there still be a need for a second centre, probably in the north-west of England, as currently proposed by the Girobank? What talks are taking place between the Alliance and Leicester and the Girobank work force prior to the sale? Will the Minister give an undertaking that if he gives his ministerial consent he will make that announcement in a statement to the House and not in a written answer?

§ Mr. Newton
On the last point, I cannot add to what has been said to the hon. Member by my right hon. Friend the Leader of the House in a letter. I have repeated the information in a letter that I am writing to the hon. Gentleman today. With regard to the contingency centre that is proposed for Wigan, I have made it clear that I cannot commit a prospective purchaser of the Girobank to any particular proposal at this stage. Talks with the unions, particularly on the issue of timing, are a matter for the Alliance and Leicester in the light of its other discussions. As for the hon. Gentleman's first question, I would not like to put any particular figure on what we would expect the Alliance and Leicester to invest—that, too, would be a matter for its own judgment.

§ Mr. Henderson
I wish to raise a more serious matter relating to the sale of Girobank, and one which is wholly contrary to Government policy and the public interest. Is it true that the Co-operative Bank made an offer for Girobank substantially and significantly above the conditionally accepted offer of £130 million made by the Alliance and Leicester, and if so, what explanation can the Minister give for the sale of Girobank at a knockdown price?

§ Mr. Newton
I know of absolutely no basis for the hon. Gentleman's suggestion. It is certainly the case that a number of expressions of interest were received, in some instances amounting to actual bids. Those, of course, were commercial in confidence and have been treated as such.