HC Deb 23 November 1994 vol 250 cc579-81
1. Mr. Dowd

To ask the President of the Board of Trade what plans he has for the commercial future of the Post Office.

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine)

The Post Office operates several businesses. We are actively engaged in widening the opportunities for Post Office Counters and we are helping to automate their services. We will announce any plans to change the present arrangements governing the remainder of Post Office activities as appropriate.

Mr. Dowd

Despite the Secretary of State's failure to convince all his own Back Benchers, let alone the British people, of the need to privatise Royal Mail, will he confirm that he will not allow his personal pique or vanity to sabotage a prosperous future for the Royal Mail within the public sector? If he cannot give such an assurance, will he make way for those who can?

Mr. Heseltine

I doubt very much whether the Post Office would want me to make way for the Labour party as it will remember that, faced with the dilemmas that I face, it was the Labour party's decision to cut the capital expenditure programmes of the Post Office by 30 per cent.

Sir Wyn Roberts

Will my right hon. Friend comment on the decision of the Union of Communication Workers to take industrial action against what they call back-door privatisation?

Mr. Heseltine

I believe that industrial action against back-door or front-door privatisation is extremely unwise. I understand that my right hon. Friend the Member for Conwy (Sir. W. Roberts) is concerned about the possible use of industrial action to frustrate the opportunities for the management of the Post Office to transfer individual post offices from the public to the private sector. Where such post offices have been so transferred, that has been extremely successful.

Ms Hoey

Can the Secretary of State tell us very simply why he will not allow the Treasury rules to be changed—the changes could receive all-party agreement and be put through the House very quickly—to give the Post Office the commercial freedom that everyone knows it needs and deserves?

Mr. Heseltine

Because we are following the precedent of the Labour party in power which managed to cut the capital programmes of the Post Office by 30 per cent. If that was not enough, Labour cut the Electricity Generating Board capital programmes by 25 per cent. for exactly the same reason. In power—something Labour has now forgotten all about—Labour faced the same disciplines that we are facing.

Mr. Page

Now that the plans to privatise the Royal Mail have been dropped and, with them, the removal of commercial restrictions on the Post Office, does my right hon. Friend agree that instead of the taxpayer receiving the money and benefit from the sale of the Post Office and the Royal Mail and the annual income from corporation tax, the taxpayer may well have to find money to finance investment and pay to fight increasing commercial competition?

Mr. Heseltine

Those arguments are very powerful and they are the underlying arguments that have enabled the Government to privatise industry after industry, to turn state-run monopolies into world-class companies and to set a pace-setting programme across the entire world which Governments of all political persuasions are now copying.

Dr. John Cunningham

Why does the right hon. Gentleman walk up a blind alley on the future of the Post Office? Does he not recognise that the British National Oil Corporation—until it was dismantled by the right lion. Gentleman and his colleagues—operated successfully outside the public sector borrowing requirement and that, until recent weeks, British Nuclear Fuels also operated successfully outside the PSBR until he brought it back within the PSBR?

Presumably, if the right hon. Gentleman believes that the Post Office cannot be successful in the public sector, he is condemning not only the Post Office but British Nuclear Fuels plc, too. Why does he not seek, with his hon. Friends and with the Opposition, an agreed way forward which will guarantee success for the Post Office and for Britain? That course is open to the right hon. Gentleman—why does he spurn it?

Mr. Heseltine

For precisely the reason that the Labour party could find no way of doing that when it was in office. If it is so simple, why did the Labour Government cut investment programmes by 30 per cent.?

Mr. Tredinnick

Will my right hon. Friend indicate what competition the Post Office faces, particularly from abroad, and will he say something about the fate of the letter post and whether it is declining?

Mr. Heseltine

My hon. Friend raises the right questions. Increasingly, private sector American and Australian owned companies are competing with the Royal Mail. The fax machine and the bike boys are eating into its marketplace. A proliferation of private sector companies which are subject to the disciplines of their balance sheets are competing with the Post Office. As the whole House knows, it is extremely difficult to impose on a public sector organisation the disciplines necessary to ensure that taxpayers' money is not used unfairly to compete with the private sector. Plenty of Opposition Members who have British private companies in their constituencies would be the first to complain if they felt that those companies were being subjected to unfair competition.