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The name change has certainly helped to foster the poor morale that I mentioned. The problem of poor morale results partly from the lack of direction in the business. Many people who work in the organisation are confused about where it is going. Many Conservative Members, including my hon. Friends the Members for Poole (Mr. Syms) and for West Derbyshire (Mr. McLoughlin), have made that crystal clear. The chief executive of the Post Office appeared before the Select Committee and talked in dire terms of redundancies totalling 30,000. No wonder there has been an adverse effect on morale. Morale is plummeting: it is on a downward escalator. Things might be improving slightly, then another announcement is made and morale takes a further tumble. That is the story I have heard from all the people who work for the Post Office in my constituency.
In a constituency such as North-West Norfolk, rural sub-post offices play a vital role. It was a treat to hear the Opposition Deputy Chief Whip, my hon. Friend the Member for West Derbyshire, speak in the Chamber, because he does not often do so. He made an excellent speech. Like me, he represents a constituency with a large number of sub-post offices and he was right to point out that they are often the lifeblood of villages. As my hon. Friend the Member for Poole pointed out, people go into post offices to obtain and share information and to engage in social discourse. Those post offices form part of the rural tradition.
In many villages in my constituency, pubs and others shops have closed. Village crafts, such as the those practised by the blacksmith, have disappeared. The problems go on. All too often, the village is left with just a shop and a post office. Now those sub-post offices, which are the very lifeblood of our villages, are being closed in huge numbers, and many others are hanging on by their fingernails.
Last year, as my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale), the shadow Secretary of State for Trade and Industry, pointed out, 547 small sub-post offices closed. A number have closed in my constituency, but many more are hanging on by the skin of their teeth. I am afraid that many will close in the future unless action is taken.
For many sub-post offices, lottery terminals are a lifeline. However, those terminals will not be enough if Labour continues to go along the mad route towards automated credit transfer. The Conservative Government considered the ACT of benefits payments carefully and we decided that the price of introducing it would be too great to pay. As my hon. Friend the Member for Maldon and East Chelmsford rightly pointed out, £400 million- worth of business goes into the sub-post offices as a result of benefit payments. People go to the post office to draw their benefitunemployment benefit, their pension or whatever it might beand they spend the money in the village shop. That helps to generate sales for the sub-postmaster or sub-postmistress, and that extra spending power is crucial to the viability of village shops.
Time and again, sub-postmasters and postmistresses have told me that the introduction of ACT will lose them the benefits that they derive from paying people in cash. They believe that its introduction will be an absolute disaster for their businesses. I do not understand why, in the face of all the evidence, the Government are determined to push this proposal through.
Not only are the Government determined to push the proposal through: they have said on several occasions that the universal bank will provide the answer to a number of the problems that post offices face. However, we have not seen any progress on the development of the universal bank and there has not been a proper response to the report of the performance and innovation unit. We have not had any further information since the Government statement of about six months ago that suggested that subsidies would be available to small rural post offices.
Rural constituencies face a huge crisis in agriculture and a chronic loss of jobs in the rural economy. In the two years before the outbreak of foot and mouth disease, 42,000 farmers went out of businesses. Employment is being lost in more and more businesses in the agriculture sector, and many rural constituencies face a serious crisis. Those with a strong livestock sector face devastation, and even in constituencies such as mine and that of my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), where there are predominantly arable- based businesses, the story is one of depression in the farming community. The loss of jobs in other industries is also having a big impact, but the rural post office often keeps the fabric of such communities together. None the less, hundreds of post offices in East Anglia face closure.
I listened with great interest to the Secretary of State for Trade and Industry to try to find a glimmer of hope for the future and some consolation to which the hard-pressed sub-post offices in my constituency could cling. However, it was a lame speech full of attacks on the previous Conservative Government. Sub-post offices need direction and leadership. They are facing a critical period in their history and, as my hon. Friend the Member for Poole pointed out, the people running them are not appointed or employed by the Post Office. Many of them are small entrepreneurs and small business people who have put a lot of their savings into the businesses. They are at a crossroads, and they are looking for strong leadership, direction and a common-sense approach to their problems.
If the Government do not listen to what many Members representing rural and indeed urban constituencies are saying, to what the National Federation of the Self-Employed and Small Businesses is saying, to what
Mr. Colin Challen (Morley and Rothwell): I am pleased to take part in this debate because the first Adjournment debate of the year was the one that I introduced on the subject of competition in postal services.
I wish to set the debate in an objective context, and I shall not engage in the hypocritical bluster that the Conservative motion represents. The last two to three years have brought mixed fortunes to postal services around the world, and not just in the United Kingdom. In the United States, the postal service, which remains in the public sector, has in 2001 posted a loss of $1,680 million whereas only two years previously it had reported a profit of $363 million. In New Zealand, where the post office is in the private sector, the earnings per share plummeted from 62.7 cents in 1996 to just 17.5 cents in 2001. In Sweden, to which my hon. Friend the Member for Chorley (Mr. Hoyle) referred, the postal service is now heavily in debt.
In Holland, the privatised post office appears to be doing well, although we have heard something about the cost in terms of service delivery. In Germany, the post office also appears to be doing well but, even there, more than 50 per cent. of it remains in public ownership. In Japan, the Government are considering privatisation under their new, right-wing Prime Minister. However, a local newspaper said that, before they do that, the state should make the postal service profitable, so that it would have a strong equity base for the private sector to take over. There is an irony, indeed. They should make it profitable and keep it public.
Clearly our recent unfortunate experience is not unique, but there is no room for complacency. Nor is there any room for simplistic solutions, such as ideologically driven privatisations. If we study the Conservative motion carefully, we see that Conservatives are rather coy about privatisation. In fact, the contributions of Conservative Members show that they are extremely coy about it. They would presumably like to see the Post Office wholly privatised, but they do not have the guts to confront the British public over that again after their disastrous and destabilising attempts at privatisation failed back in 1994.
Perhaps we should ask the Conservatives again: "Yes or no? Will they privatise the Post Office?" I do not take silence as assent, but, if they had such a policy and they thought it was successful, perhaps they should launch it now because that might give them a slight chance of winning over public opinion in time for the next general election. The fact that they do not perhaps shows that they have no confidence in their policy, which they are keeping under wraps.
The reasons why the Post Office should not be privatised were set out clearly in an Opposition day debate on 12 July 1994 when my right hon. Friend the Member for Livingston (Mr. Cook) moved the Labour motion. It recognised that the best way of maintaining services, not least in rural areas, which most Conservative Members represent, was by keeping the Post Office as a cohesive whole, capable of delivering an equal service to all residents and businesses in the United Kingdom. That motion was, of course, defeated.
At least one or two Conservative Members were honest enough to admit that what they wanted was the 100 per cent. privatisation of the Post Office. The hon. Member for Cotswold (Mr. CliftonBrown), who was then the hon. Member for Cirencester and Tewkesbury, was clearly fed up with the possibility that the then Government's privatisation proposals would not move fast enough. With views like that, I am not surprised that he has been promoted to the Opposition Front Bench. Also contributing to that debate was the hon. Member for Tiverton and Honiton (Mrs. Browning) who said that the second delivery was
Clearly the subtext of today's debate is that the Conservative party still wants the complete privatisation of the Post Office, yet it just cannot find the words to say it. It is wrong now, just as it was wrong eight years ago. There are sound reasons why the Post Office should remain a publicly owned business. My right hon. Friend the Member for Neath (Peter Hain) set out some of those reasons in 1994, and his arguments still stand. They show that the impact of privatisation in the Post Office will inevitably lead to profitable work being creamed off, leaving all the costs to be picked up by what is left of the privatised Post Office.
The effect of that will be fairly obvious to all hon. Members. I shall start with sub-post offices. Despite closures over the past decade or two, we still have one of the highest ratios of sub-post offices to population anywhere in the world, but now, because of the much-hyped pressures of competition, a banker is advising the board of Consignia that up to half of those sub-post offices will have to go. I am sure that it is easy for the big cheeses at bankers UBS Warburg to recommend that; I doubt whether any of them use sub-post offices.
Perhaps the bankers will respond by saying that in Sweden, where the system is being radically changed, vast improvements under privatisation are materialising. Sweden has something like 1,200 sub-post offices compared to our 18,000 or 19,000. In Sweden, many of the functions performed by sub-post offices are also to be delivered at 3,000 new outlets, in petrol stations and the like. In Sweden, that may be deemed appropriate; in this country, it would be entirely wrong. Such an approach would rapidly lead to the attainment of UBS Warburg's prescription, which is to close half the sub-post offices in this country. That is what privatisation means and it is what Conservative Members support, but they cannot bring themselves to say it.
Another alleged benefit of privatisation in Sweden is that its post office now delivers mail to up to 25 per cent. more remote locations than it did when it was in public ownership. We should remember, however, that in this country the Post Office delivers to 100 per cent. of remote locations, although once again recent press reports suggest that Consignia is trying to wriggle out of that obligation for such places as the outer Shetland Isles. We know why: it is the benefit of getting ready for liberalised, privatised markets.
I mentioned what the hon. Member for Tiverton and Honiton said about the second post being a bit of a luxury. Under the pressures of liberalisation, we shall not have to worry about that any more. Recent press reports claim that the 9.30 am target for deliveries has already slipped to 10 am, and worse is to come. A spokesman for Consignia has been quoted as saying: