HL Deb 30 June 1994 vol 556 cc52-3WA
Lord Trefgarne

asked Her Majesty's Government:

What are their plans for Postal Services.

The Minister of State, Department of Trade and Industry (Lord Strathclyde)

My right honourable friend the President of the Board of Trade is today publishing a Green Paper on the future of postal services. It sets out the challenges and opportunities facing the Post Office businesses and the Government's response to them.

We have one of the best postal services in the world. The Post Office and its employees have responded well to the challenges of recent years. But enormous changes are taking place in the markets in which the Post Office operates. If the Post Office businesses are to seize the opportunities and respond to increasing competition, while providing further improvements in the service to customers, then more fundamental changes are required. In its recent report on the future of the Post Office, the Select Committee on Trade and Industry said "What is undoubtedly true is that the Post Office cannot be retained in its present form". The Government agree. The status quo is not an option.

As my right honourable friend the President of the Board of Trade made clear in his statement in the other place on 19th May, the Government's consideration of those issues is subject to three vital and non-negotiable commitments. These are the maintenance of a nationwide letter and parcel service with daily delivery to every address in the United Kingdom, a uniform and affordable structure of prices, and a nationwide network of post offices.

The Government propose to retain the current structure of the nationwide network of post offices, keeping Post Office Counters in the public sector. They believe that the present partnership between Post Office Counters, at the hub of the network, and the private sector business people who run sub-post offices (which represent over 19,000 of the nearly 20,000 post offices), works well and should continue. The Government intend to maintain and strengthen the business and the network by allowing them to take on new areas of work, building on their existing activities. It also proposes that there should be significant investment in the automation of many of their clerical routines, in particular benefit payments.

As for Royal Mail, the Government accept that, to survive and prosper, the business needs greater commercial freedom to seize new opportunities and to meet greater competitive challenges in the communica-tions market. The Green Paper sets out the options which the Government are considering to achieve this.

The Government's preferred option is a new partnership arrangement under which the Royal Mail, together with Parcelforce, would be jointly owned by the Government, the public, sub-postmasters and employees, with the Government retaining a stake of 49 per cent. of the shares. Any further sale of shares by the Government would be subject to Parliamentary approval. Under this option, the Government would guarantee the three non-negotiable commitments through legislation.

The Green Paper discusses the issues of regulation and competition in the postal sector, and describes how greater competition and choice would be progressively introduced for customers. It also discusses consumer representation, the position of the Post Office's employees and sub-postmasters and VAT, as well as the Royal associations which the Post Office has traditionally enjoyed.

The Government are inviting comments on the Green Paper by 30th September.