Post Office (Hansard, 9 February 1994)

§ 4. Mr. Hain
To ask the President of the Board of Trade when he last met the chairman of the Post Office to discuss his review of its future.

§ The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine)
I met the Post Office chairman on 18 January and discussed a number of issues relating to the Post Office review.

§ Mr. Hain
Will the President of the Board of Trade confirm the statement in a letter from the general manager of North Thames and East Anglia Post Office Counters that the Post Office has agreed targets with the DTI for hundreds of local post office closures and conversions? Does not that reveal grubby collusion between the Government and the Post Office to run down the post office network and to privatise by the back door?

§ Mr. Heseltine
The only grubby collusion is the technique that the hon. Gentleman uses to make in this House allegations that have no foundation. He will know that the vast majority of organisations in Post Office Counters are private sector organisations over which the Government have no control.

§ Mr. Hain
On a point of order, Madam Speaker. I have a letter here—

§ Madam Speaker
Order. I shall take points of order later.

§ Mr. Alexander
Was my right hon. Friend able to tell the chairman of the Post Office that privatisation would not be wholly welcomed among Conservative Members, particularly those whose constituencies contain rural areas? Was he further able to discuss with the chairman the increased commercial freedom that he seeks to enable him to operate the Post Office as a normal business and to keep the dead hand of the Treasury away from its operations?

§ Mr. Heseltine
I hear what my hon. Friend says. It is extremely difficult to see how one can give commercial freedom to the Post Office to invest public money unless 271 that money is subject to public expenditure rules. The dilemma that the Post Office faces is that overseas Governments are privatising their post offices, enabling them to compete with ours. The judgment that the House must make is how we can enable the Post Office to use its resources to fight as a major British industrial organisation—which it is—in a competitive world that is growing tougher all the time.

§ Mr. Robin Cook
Does not the President appreciate that the Post Office is a success story and that everything that the Government are doing is putting that success story at risk? Is he aware that the delay that he has caused over the review is causing confusion to management; that the Treasury demand for an even bigger share of the profits is robbing management of the money for investment; and that, as a result, the Dutch public post office is now picking up business in Britain? When will the Government start backing British business instead of creating openings for foreign business?

§ Mr. Heseltine
If that is an example of the new thinking of the Labour party, I can understand why the hon. Member for Dagenham (Mr. Gould) has announced his resignation from the House. Of course the Post Office is a success story. The issue is how we enable it to be more successful. How do we enable it to face the fact that the Dutch are privatising their post office to enable it to compete here?

§ Mr. French
May I congratulate my right hon. Friend on the care and thoroughness with which he is conducting his review of the Post Office? He is quite right to resist quick solutions. It is more important that the eventual answer should be the right one. In reaching his decision, however, will he bear fully in mind the formidable international competition that the Post Office faces?

§ Mr. Heseltine
I am well aware of the growing international competition—and, indeed, the competition from a range of other service providers in this country—which has been eating into the Post Office's market in recent years. We are certainly concerned to ensure the health of the rural post office network and have been looking, and will continue to look, at a number of ways in which we can open up the increasing market for rural post offices. I was delighted that we were recently able to take the decision to enable them to sell fishing licences.