Rt Hon Lord Lilley

    Supplementary Oral Questions on the financial state of Consignia.

    Mr. Peter Lilley (Hitchin and Harpenden): Is not the unique achievement of this Government and this Secretary of State driving Consignia–the Post Office–into sustained and substantial deficit for the first time? Does she have any view as to why that has happened? There can be only two reasons: either sales have fallen or costs are out of control. Which is it?

    Ms Hewitt: There is a simple reason for Consignia‘s current state of affairs: the complete failure of the Government of which the right hon. Gentleman was a member to deliver commercial freedom to the Post Office when it started to ask for it 10 years ago. If it had been given commercial freedom when it should have been–when management and unions wanted it–it would have been able to begin the necessary restructuring instead of delaying that until now.

    Alongside that is the fact that the growth in volume of mail and parcels has been dropping off, not least because of e-mail. The Post Office and Royal Mail in particular have high fixed costs that they simply do not have the income to cover. That is why management and unions must work together. They need to create an effective partnership to deliver a much better service to their customers and much better conditions to their workers.

    17 Jan 2002 : Column 420