HC Deb 12 February 1992 vol 203 cc964-5
6. Mr. Hain

To ask the Secretary of State for Trade and Industry if he will make a statement about the Post Office's negative external financing limit for the year 1992–93.

Mr. Leigh

A negative external financing limit of £66 million has been set for the Post Office for the year 1992–93.

Mr. Hain

Since 1979, the Post Office has contributed more than £1 billion in negative external financing limit payments, at 1991 prices, cutting back on investment and milking the customer. Would it not be far better for the Government to end these punitive and ridiculous double tax payments—the Post Office already pays corporation tax—thus allowing it to concentrate on improving the quality of service to customers rather than pursuing abolition of the second delivery in towns and putting restrictions on rural services such as insisting that people have letter boxes at the bottom of their gardens or, in some cases, making people go to village centres for their letters? Should not the priority be investment to improve the quality of services?

Mr. Leigh

Let us put the matter into perspective. [Interruption.] I am sorry, I am only trying to answer the question. We are talking about an organisation which has a turnover of £4 billion. It is not unreasonable that, from that, it should give its only shareholder—the Government—a dividend of £65 million per year. If we did not require that dividend, which is spent on hospitals, schools and much else, we would be able to cut only about 1p off the 24p cost of a first-class stamp. This year, the Post Office has a £340 million capital investment programme. The first and second-class delivery services have shown a marked improvement over the past two or three years. The Post Office is a successful and profitable organisation, and I hope that the Opposition wish it to remain so.

Mr. Bellingham

Is my hon. Friend aware that the rural sub-post office is at the heart of the rural community and that it plays an essential role in west Norfolk? Will he do what he can to ensure that as many Government services as possible are available at post offices? For example, why cannot every rural sub-post office have a vehicle relicensing facility?

Mr. Leigh

We are anxious to protect the rural post office network and one of the main purposes of the citizens charter is, through the process of competition, to improve quality and choice within the constraints of an affordable uniform tariff. Therefore, I can assure my hon. Friend, who represents a rural constituency, that we have very much in mind the needs of rural post offices and we shall look with interest at any requests that they make to us for extending their liability to sell other services.

Mr. Wigley

Does the Minister accept that it is feared in rural areas that a move towards privatisation would lead to services that require subsidies being axed, which would be a body blow to those rural areas and their opportunities for economic development? Can he give any assurance about the future of such services in rural areas?

Mr. Leigh

I have already given such an assurance. I have said that the Government are committed to the maintenance of the uniform tariff structure, about which people in rural areas are concerned. That is the commitment that we have given and by which we stand.

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