Post Office

HC Deb 21 January 1999 vol 323 cc1013-5

8. Mr. Bob Laxton (Derby, North)

When the Government intend to publish their White Paper on the future of the Post Office. [65198]

The Secretary of State for Trade and Industry (Mr. Stephen Byers)

My right hon. Friend the Member for Hartlepool (Mr. Mandelson) said in his statement to the House on 7 December on the future of the Post Office that a White Paper would be published early in the new year. Work is proceeding with the intention of publishing the White Paper as soon as possible.

Mr. Laxton

I welcome my right hon. Friend to his new job. The Post Office is a little disappointed that the White Paper has not already been published. The Dutch and German post offices have been gobbling up companies in Europe pretty rapidly. I very much welcome the Post Office's decision to buy into German Parcels. That will greatly assist its future in Europe. To be specific, will the White Paper allow the Post Office the greatest possible commercial freedom? Will the new regulator have sufficient powers to ensure that the Post Office improves on its excellent service to businesses and the community?

Mr. Byers

I thank my hon. Friend for his words of welcome. The Post Office is not disappointed with the time scale in the White Paper. It is closely involved in discussions about the White Paper and is fully aware of the issues that we wish to address. On 7 December, my predecessor made it very clear that we want a new future for the Post Office. We want to lift the cloud of uncertainty that was created by the previous Government and ensure that it is no longer starved of investment. We are in the process of doing that and the Post Office is already using its new freedoms. For example, it acquired German Parcels at the beginning of this year. The consumer will also benefit from the proposed cut in the price of a second-class stamp—the first cut in many years—which will be welcomed by tens of thousands of people who use second-class mail. This is the future for the Post Office. We are delivering on our promise and supporting the Post Office, instead of neglecting it as the Conservatives did.

Mr. Stephen Dorrell (Charnwood)

I welcome the Secretary of State to his new responsibilities. Will he explain why he thinks that taxpayers should continue to be involuntary risk-bearing shareholders in the Post Office? Will he also explain why he thinks it is in the interests of the Post Office that it should be denied access to the capital markets to allow it to participate in the consolidation of postal services around Europe to which the hon. Member for Derby, North (Mr. Laxton) referred?

Mr. Byers

I thank the right hon. Gentleman for his words of welcome. As a former Treasury Minister, he will know very well that the financial regime under which the Post Office operated under the previous Government was—

Mr. Dorrell

Not as good as it could have been.

Mr. Byers

The right hon. Gentleman is absolutely right. We are now tackling those deficiencies. That is why we have restricted the external financing limits which ensured that the bulk of the profits made by the Post Office went back to the Treasury. We are now allowing the Post Office to keep a far bigger proportion of its profits so that it can invest in the future. Taxpayers have an interest because they are the consumers. We want a Post Office offering high-quality services at affordable prices and we now have a regime to achieve those objectives.

Mr. Martin O'Neill (Ochil)

I welcome my right hon. Friend to the Front Bench and congratulate him on his involvement in negotiations regarding the Post Office in his previous role. Can he confirm that the recent acquisition of German Parcels and the circumstances surrounding it necessitated a degree of commercial confidentiality that is consistent with commercial freedom? Opposition Members must realise that the new Post Office will behave in a different way, but, at the same time, there will be processes involving the regulator, which will entail a degree of accountability and transparency consistent with its new freedoms.

Mr. Byers

My hon. Friend makes an important point, with which I agree. We need to put in place a proper system of liberalisation and tough regulation for the new Post Office. The White Paper will address those issues, but Opposition Members must acknowledge that, because we are in a new relationship with the Post Office, we shall need to respect commercial confidentiality; otherwise, we shall make the Post Office vulnerable to foreign competition. Opposition Members may want that, but we certainly do not. We want a Post Office that will be a partner in change, not the victim of change. That is what we want and we have now put in place the regime to ensure that it happens.