§ 5. Mr. David Stewart (Inverness, East, Nairn and Lochaber)If she will make a statement on the decision to grant commercial freedom to Consignia. [25549]
§ The Secretary of State for Trade and Industry (Ms Patricia Hewitt)Commercial freedom for Consignia, which is provided by the Postal Services Act 2000, was widely welcomed on both sides of the House as well as by management and unions. That freedom is essential to enable Consignia to improve its services and performance.
§ Mr. StewartWill my right hon. Friend raise in future discussions with Consignia the issue of rural areas in which the post office is not just a business, but a community centre where postmen and women both deliver the mail and act as social workers? Does she share my view that with commercial freedom comes social responsibility?
§ Ms HewittYes I do, and that is precisely why the 2000 Act places on the regulator the primary duty of ensuring that the universal service obligation is maintained. My hon. Friend the Minister for E-Commerce and Competitiveness and I have already discussed with Consignia the steps that need to be taken to maintain not only the delivery service in rural areas, but the rural network. That will prevent avoidable closures, and we are investing substantial sums in it.
§ Mr. Peter Lilley (Hitchin and Harpenden)Is not the unique achievement of this Government and this Secretary of State driving Consignia—the Post Office—into sustained and substantial deficit for the first time? Does she have any view as to why that has happened? There can be only two reasons: either sales have fallen or costs are out of control. Which is it?
§ Ms HewittThere is a simple reason for Consignia's current state of affairs: the complete failure of the Government of which the right hon. Gentleman was a member to deliver commercial freedom to the Post Office when it started to ask for it 10 years ago. If it had been given commercial freedom when it should have been—when management and unions wanted it—it would have been able to begin the necessary restructuring instead of delaying that until now.
Alongside that is the fact that the growth in volume of mail and parcels has been dropping off, not least because of e-mail. The Post Office and Royal Mail in particular have high fixed costs that they simply do not have the income to cover. That is why management and unions must work together. They need to create an effective partnership to deliver a much better service to their customers and much better conditions to their workers.