HL Deb 09 November 1998 vol 594 cc506-8

3 p.m.

Lord Ezra asked Her Majesty's Government:

When they will reach a conclusion about the future of the Post Office.

Lord McIntosh of Haringey

My Lords, work on the Government's review of the Post Office has proceeded well. In accordance with its terms of reference the review has considered public sector option for giving the Post Office greater commercial freedom while continuing to provide a universal postal service under a uniform tariff structure with a nationwide network of post offices. We hope to announce our conclusions shortly.

Lord Ezra

My Lords, I thank the noble Lord for his reply. Does he recall that the Post Office has been under continuous review since 1992? Does he agree that despite countless government documents, Select Committee reports and independent surveys the state of the Post Office remains undecided? Is he also aware that the Post Office faces growing competition nationally and internationally, including the challenge of new technologies in which it has very little resource to invest because the Government take up to 90 per cent. of its profit? In those circumstances, can the Minister indicate, bearing in mind the rumours that the Government have now decided to transform the Post Office into an independent publicly owned company, whether an announcement will be made about this very shortly, and without further delay for consultation?

Lord McIntosh of Haringey

My Lords, I am aware of the fact that the Post Office has been under review for six years, only 25 per cent. of which has been under the present government. Even so this government have set manageable terms of reference for the review to ensure that it covers a limited number of options in the public sector. But the general complaint that the noble Lord makes about delay and the effects of uncertainty is undoubtedly justified. I cannot go further than I have done in saying that we hope to announce our conclusions shortly. I do not know the distinction between that and "very shortly".

Lord Dearing

My Lords, I welcome the assurances that the Minister has given. I declare an interest as a former postman of sorts and a Post Office pensioner. Can the House be told whether one of the objectives of the Government is to enable the Post Office to invest to the extent necessary to maintain a first-class competitive service?

Lord McIntosh of Haringey

My Lords, in response to a very distinguished ex-postman, one of the principal objectives of the review that is being carried out is to ensure that the Post Office has the necessary commercial freedom to invest. To return to the second question of the noble Lord, Lord Ezra, we are very well aware of the prospects of increased competition, both nationally and internationally.

Baroness Miller of Hendon

My Lords, given the report in the newspapers today that the Secretary of State for the Department of Trade and Industry is considering an independent publicly owned corporation and the success of the privatised British Telecom, despite the unfounded doom and gloom of the party opposite, does the statement by the Minister today indicate that the Government have changed their mind and now realise that commercial businesses are best run from boardrooms staffed with experienced businessmen who are free from the shackles of Whitehall?

Lord McIntosh of Haringey

My Lords, apart from the political incorrectness of the noble Baroness's reference to "businessmen", I hope she will accept that I answer for the Post Office rather than British Telecom. I read the article in the Daily Mail today. I make two comments upon it. First, there were in effect four-and-a-half options considered by the review. Consideration has been given not only to the option of an independent publicly owned company but also to the possibilities of a minority share sale, a public sector trust and increased scope to raise extra finance without major institutional change. Those are the options that the review is considering, and Ministers will take a view in due course. My second observation on the article is that it is quite false for the Daily Mail to seek to drive a wedge between the Secretary of State for Trade and Industry and other members of the Government. There is no justification for that.

Lord Clinton-Davis

My Lords, does my noble friend agree that the House has just heard an assertion from the noble Baroness—put in the nicest possible way—that the Government should make up their mind, but that when in power her party singularly failed to do anything of the kind for a very long period of time and in fact ran away from the issue?

Lord McIntosh of Haringey

My Lords, perhaps one of the difficulties faced by the party opposite when in power was its insistence in having decisions made by "businessmen" in the boardroom.

Lord Peyton of Yeovil

My Lords, is the noble Lord aware that indecision is becoming slightly infectious and that the Government themselves have caught a dose of it? Does the Minister accept that it would be very unfortunate if, as a result of the everlasting review, the Post Office was forced to rely on the Treasury as its banker?

Lord McIntosh of Haringey

My Lords, I am interested that the implication behind the noble Lord's first question is that any indecision was on the part of his government rather than the present Government. I thought I had made clear that in a much shorter time this Government had reduced the number of options being considered and therefore had made life that much easier for the Post Office in its day-to-day work. It is true that the longer term solution for the Post Office must be a degree of financial security to enable it to make investment plans over a period of more than one year. Direct support in the public sector without any change whatsoever was not one of the options before the review.

Lord Monkswell

My Lords, bearing in mind that the postal service was nationalised over 200 years ago and, as such, has been an international model for all postal services, can my noble friend confirm that it is one of the most efficient services in the world and that perhaps the current arrangements will be another international model that can be deployed throughout the world?

Lord McIntosh of Haringey

My Lords, my noble friend is right that the Post Office has risen as a public sector organisation but it is not alone in believing that the existing arrangements, which involve hand-to-mouth financing and a very high level of uncertainty about its capital investment programme, cannot continue for ever.

Forward to