§ Lord Juddasked Her Majesty's Government:
What evaluation they have made of the relative merits of running the Post Office and the railways primarily as public services with appropriate business disciplines or primarily as businesses which provide a public service; and what was the outcome of any such evaluation.
§ Lord McIntosh of HaringeyMy Lords, the Post Office is a public limited company wholly owned by the Government. Network Rail will be a private regulated utility with members rather than shareholders. Both are legitimate structures appropriate for the specific circumstances.
§ Lord JuddMy Lords, I thank my noble friend for that very precise reply. Does he agree that on this issue, and more widely, there is a cultural crisis in this country because the primary purpose of the private sector is to produce profitability and a good return to shareholders and the primary purpose of public services is cost-effectively to provide the best possible public services? There is not much evidence of success in a happy marriage between the two. Can my noble friend assure the House that the Government will give this matter attention and give a strategic lead? If good use is to be made of the Chancellor's Statement this week—which we all applaud and welcome—we must promote a concept of public service as one of the highest callings and vocations in the nation?
§ Lord McIntosh of HaringeyMy Lords, I rather feared that this was a philosophical question and that my noble friend would not be satisfied with practical answers. The Post Office has the structure it has because it had to be rescued from the worst possible form of public ownership—in other words, with no commercial incentives whatever. Network Rail will have the structure it will have because it has had to be rescued from the worst possible form of privatisation.
§ Lord Mackie of BenshieMy Lords—
§ Lord EzraMy Lords, if my noble friend will wait a moment. I served for many years successively in the public and the private sectors, and I agree with the noble Lord, Lord Judd, that the prime motivation in the public sector was the concept of service and in the private sector profitability and efficiency. Do the Government consider not only in relation to the Post Office and the railways—to which the noble Lord, 1224 Lord Judd, referred—but also in relation to health and education into which so much more money has been put, that they have managed to find a way of reconciling these two motivations?
§ Lord McIntosh of HaringeyMy Lords, I believe that that is the implication of what I said in the first instance. There are different structures for these two forms of rescue. They are legitimately different in the sense that there are different requirements of them. But it is true that in both cases we must marry the advantages of business experience and responsibility to customers with the ideals of public service, to which my noble friend, Lord Judd, referred.
§ Lord Campbell of AllowayMy Lords, could I ask the noble Lord, apart from appropriate business disciplines, whether the Government are in any way concerned with the continuous provision of public services?
§ Lord McIntosh of HaringeyMy Lords. I am not sure that I understand that question. Public services will have to continue to be provided. I do not know what I am supposed to be concerned about.
§ Baroness Turner of CamdenMy Lords, can my noble friend tell the House what arrangements have been made in relation to the Post Office for consultation with appropriate organisations? During a recent debate on Consignia we were assured that consultations would proceed.
§ Lord McIntosh of HaringeyYes, my Lords and consultations are proceeding. Consignia—or, as I prefer to call it, the Post Office—will continue to perform the functions which were set out for it in the Postal Services Act 2000. It has Postcomm as a very powerful regulator to ensure that it maintains the universal service obligation, to regulate its prices and to promote greater competition.
§ Lord EltonMy Lords, does the Minister think that the decision by the Post Office—as it is now called—to charge both the sender and the recipient of mail if it is received at a time which is consistent with doing a job such as noble Lords do in this House, is a sign that the rescue he referred to has succeeded?
§ Lord McIntosh of HaringeyMy Lords, I suspect an element of that is the management of the Post Office flying a kite. No such charges have been agreed.
§ Lord Mackie of BenshieMy Lords—
§ Lord Stoddart of SwindonMy Lords, does the Minister understand—sorry, no do come in. You had difficulty with one of your own members before.
§ Lord Mackie of BenshieMy Lords, such kindness and courtesy is a feature of this House. Will the 1225 Minister admit that all the time that the Post Office was a public service it provided a good public service and paid money to the Treasury every year?
§ Lord McIntosh of HaringeyMy Lords, that was partly the trouble. Yes, it did provide a good public service but also through its external financing limits far too much money from its surpluses were paid over to the Treasury with the result that there was long-term under-investment in the kind of mechanisation—to put it no higher than that—which was necessary for the Post Office to compete in the longer term. The freeing-up of those gilts, which was in the Secretary of State's announcement, is essential for the future survival of the Post Office.
§ Lord Stoddart of SwindonMy Lords, I am glad that I allowed the noble Lord, Lord Mackie, to precede me because I am very sympathetic towards the question that he asked. Is the noble Lord aware that people cannot understand why the Post Office, which ran a magnificent service for 150 years at a very cheap price and with absolute service to every part of this country, now has to open itself to competition? Is it not a fact that the reason for this problem is that the Post Office was reorganised in the way it has been reorganised to allow competition into the service in accordance with the single European market and the Single European Act? Is that not the problem?
§ Lord McIntosh of HaringeyNo, my Lords, it has nothing to do with the Single European Act.
§ Earl FerrersMy Lords, will the Minister give us an assurance that there will not be two levels of delivery, depending on whether people have made a pre-payment? If that were the case, Nos. 25, 27 and 29 in a street could receive a delivery at seven o'clock, while Nos. 26, 28 and 30 could receive one at nine o'clock. That does not sound efficient, does it?
§ Lord McIntosh of HaringeyMy Lords, the noble Earl, Lord Ferrers, simply repeats the question asked by the noble Lord, Lord Elton. There are no firm plans to charge anyone at any time of the day. The matter is being considered by the Post Office.
§ The Lord Privy Seal (Lord Williams of Mostyn)My Lords, we are now into the ninth minute.