Letter Post (Hansard, 31 March 1988)

§ Mr. Kenneth Clarke

The Monopolies and Mergers Commission's report on the letter post service of the Post Office in the head post office areas of Glasgow, Belfast and Cardiff and in the numbered London postal districts (Cmnd. 9332) was published in September 1984. The report made 78 recommendations covering quality of service, financial control, costing and forecasting, mechanisation and manpower and industrial relations. Of the 78 recommendations, 76 were accepted by the Post Office. The Commission was also asked to include in its report a view on whether the Post Office was pursuing a course of conduct which operated against the public interest. It concluded that it must suspend judgment on this since so much depended on what was achieved in the following years.

The Post Office has now produced its three-year report on progress in implementing the MMC's recommendations and I am placing copies in the Library of the House. The Post Office reports that it has implemented the great majority of the 76 recommendations it accepted.

There are still certain recommendations where further work is required, several of which the Post Office declared at the outset would take longer to implement, and my Department will continue to monitor progress. The Post Office reports eight recommendations as still undischarged. One of these recommendations, that the Post Office should seek to increase post code usage to 70 per cent. of all mail, has been accomplished since the Post Office reported on progress in September. Of the remainder, three concern the establishment of standard times and costs and a productivity scheme based on standard times. This is an area in which the Post Office has experienced many industrial relations problems, but I am glad to say the work measurement scheme is now proceeding well and I understand that the new bonus scheme introduced as part of the agreement concluded between the Post Office and its unions in December on a shorter working week will form a better basis for the introduction of a full standard-based scheme.

The other recommendations which remain undischar-ged concern quality of service, the introduction of a 593W computerised system for manpower statistics, the computerisation of the system for recording and notifying weights of airmail bags and the replacement of sorting machines at the Post Office's foreign section with modern equipment. While there has been an improvement in quality of service since the report was made, both in the intra-London service and nationally, it is disappointing that the Post Office has continued to fail to meet its targets. As the Post Office comments in its progress report, a factor in this has undoubtedly been the high level of unofficial industrial disputes in recent years. On the other recommendations, although there are plans for their implementation, it is disappointing that the introduction of the new systems and machinery required has been so long delayed.

There are also several recommendations recorded as discharged, particularly those relating to the introduction of better costing information for management, on which, while I acknowledge that the Post Office has done much towards carrying out the MMC's recommendations, further long-term work remains to be done. I shall continue to monitor progress in all these areas.

I do, however, acknowledge and welcome the significant progress that has been made over the three years since the MMC reported, particularly in the introduction of mechanisation and improved working methods. It was largely because of failure to implement recommendations in these areas made in its 1980 report on the inner London letter post that the MMC was led to conclude that it should suspend judgment on the question whether the Post Office was operating against the public interest. I also acknowledge the Post Office's creditable track record over the period in terms of price control, growth in business, profitability and employment creation.