Trade Secretary outlines financial measures to help Consignia

Trade Secretary Patricia Hewitt outlined a package of financial measures designed to help Consignia fund its restructuring programme. She said the company, which earlier announced 17,000 more job losses, would be allowed to use #1.8 billion of reserves. The Government did not intend to take any money from the company in dividends during its three-year recovery plan and would fund the Post Office network's historic losses.

Ms Hewitt said thousands of postmen and women faced an "anxious and difficult time" because of the "very painful" decisions to cut staff. But the Government would do everything possible to find new work for anyone forced to leave their jobs under the emergency measures.

The Trade Secretary announced that the Queen had agreed in principle to a name change back from Consignia to include Royal Mail.

Shadow trade secretary John Whittingdale told MPs the figures announced by Consignia were "truly shocking". A highly successful business had been turned into a financial disaster, he said, urging the Government to admit its part in the rapid decline.

:: Transport Select Committee chairwoman Gwyneth Dunwoody said she expected members to be replaced with "more amenable" MPs in a shake-up. She has been a thorn in the Government's side over issues including Railtrack administration and London Underground's part-privatisation.

Commons Leader Robin Cook confirmed it was necessary to "put the Transport, Local Government and the Regions committee on the same footing as the department that now exists in Whitehall. I am sure when we do so, we will do so in way that ensures continuity of scrutiny of the department." But Mrs Dunwoody said: "If we are now dissolved and we no longer exist then frankly that will be a great loss in my own view and if it is replaced by a committee which perhaps is slightly more amenable, I shall not be surprised."

:: Mr Cook was questioned on comments seen as veiled criticism of the "spin" culture and support for state funding for political parties. He reiterated his proposal, made to the Parliamentary Press Gallery, for a new deal between politicians and the media. "Part of that deal says that the Government should cut out the spin and cut down the packaging and that the media should concentrate more on reporting content and substance rather than the Westminster village gossip."

:: Data protection laws that hinder MPs will be altered, Mr Cook said. He would address "first of all the rather bizarre argument that we should not be empowered to pass on to any third party what a constituent says to us in our surgery. This does seem to be a topsy-turvy world because constituents come to our surgeries in order that we then tell somebody about their problems. Secondly, to remove from those we write to on behalf of the constituent any impediment for them to reply frankly and openly about what they may know about the constituent's case."

:: The Government supported its drugs watchdog after it ruled a vision-saving drug should be issued on a limited basis by the NHS. Mr Cook said not all National Institute of Clinical Excellence recommendations achieved "political and public approval" but added: "I still believe the principle is sound and is right."

:: British terrorist suspects being held in the United States military camp at Guantanamo Bay are not being mistreated, the Government said. Officials who recently visited the camp said all seven al Qaida suspects were in "satisfactory physical health". "The officials saw no visible sign of mistreatment," said Foreign Office minister Mike O'Brien.

:: Ministers were accused of acting in "panic" by Nigel Waterson, for Tories, over attempts to promote competition and modernise insolvency laws. He protested over a timetable motion allowing MPs two days to deal with the Enterprise Bill's remaining stages. Consumer and competition minister Melanie Johnson dismissed his complaints, insisting many of the amendments were minor and technical.

:: The Government came under pressure from Labour's Alice Mahon (Halifax) and Alan Simpson (Nottingham S) to stop the US using British warning stations at Fylingdales and Menwith Hill to develop a missile defence system after it withdrew from the Anti-Ballistic Missile Treaty. Mr Cook said should the Government receive any request to use the stations and "should the Government reach a view on it I am quite sure it will be matter debated and explored in this House".

:: Ministers were urged to find a way of extending a state aid scheme for the coal industry amid warnings of "imminent mass redundancies". Plaid Cymru's Adam Price (Carmarthen E and Dinefwr) told Ms Hewitt: "Management of Betws colliery in my constituency are meeting with your officials this afternoon to inform them of imminent mass redundancies … in the absence of continuation of support." She said: "We are looking at all the options and will discuss the issue with management before final decisions are made."

:: The Government has effectively imposed a "poll tax" on low income earners by making the last owner of a car liable for the cost of destroying it, claimed Dr Vincent Cable (Lib Dem Twickenham) during exchanges on the controversial European Union End-of-Life Vehicle Directive.

Industry and environment minister Brian Wilson said the Government was still analysing the implications of the new rules on car disposal which have been agreed by all EU governments and were due to become British law last April.

:: More than 84,000 violent or abusive incidents against NHS staff in England were reported during 2000-1, according to a survey of NHS trusts and health authorities. Health Minister John Hutton said there were also 108,743 reported accidents involving staff during the same period.

:: Legislation to reform the structure of the NHS, including the abolition of Community Health Councils, cleared Parliament and awaits Royal Assent to become law. Peers accepted, without a vote, a Commons decision to overturn a Government defeat in the Lords, which would have replaced CHCs with similar, district-based Patients' Councils. The National Health Service Reform and Health Care Professions Bill, will see the replacement of CHCs in England by a series of hospital-, area- and nationally-based bodies.

:: The Government was accused by Tory David Wilshire (Spelthorne) of neglecting burdens on business and swallowing unions' agenda "hook, line and sinker". He said plans to review Employment Act provisions had plunged the business community into "despair", adding: "The Government has finally given up trying even to pretend that it is seeking to relieve the burden on British business." But Ms Hewitt dismissed this as "complete rubbish".

:: MPs appealed to the Government to let people decide the outcome of wind farm applications in Wales for themselves. Plaid Cymru's Simon Thomas (Ceredigion) and Liberal Democrat Roger Williams (Brecon and Radnorshire) urged ministers to let the Welsh dictate their own planning matters after the final go-ahead was given to Britain's biggest onshore wind farm, the Cefn Croes project in the Cambrian mountains.

Energy Minister Brian Wilson said the application was decided by the Government because the transmission system of England and Wales "operates as one. Therefore it was more appropriate to see that on an England and Wales-wide basis."

:: New guidance on legibility of instructions on medicine packs and bottles is being prepared by Government advisers the Committee on the Safety of Medicines. Junior health minister Lord Hunt of Kings Heath said it was "engaged in work at the moment in recommending additional guidance for manufacturers".

:: MPs fed up with spotting mice in Parliament will have to wait a little longer to see a cat prowling the corridors of power. Mr Cook rejected a call by Ulster Unionist Roy Beggs (Antrim E) for a Commons cat on the basis that it would "rapidly become spoilt, overfed and compete with us for the use of the sofas in the library".

IN PARLIAMENT TODAY: Parliament is not sitting as MPs take a constituency Friday off.

IN PARLIAMENT ON MONDAY: Defence Secretary Geoff Hoon and his ministers respond at question time. The Enterprise Bill is set to clear its remaining stages through the House. The Lords debates the Sex Discrimination (Amendment) Bill's third reading and the Education Bill's report stage.

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TELEGRAPH (UK) 14th June 2002
HEWITT PLEDGES HELP FOR CONSIGNIA JOBLESS

Post Office

Sub-Section:Politics

THE Government yesterday promised to find new work for anyone forced to leave their job at Consignia as part of its plans to help restructure the company. The move follows a decision by the company to axe 17,000 jobs. Patricia Hewitt, Trade Secretary, told the Commons that the Government would fund the Post Office network's historic losses and it would be allowed to use pounds 1.8 billion of reserves. However, the Tories were amazed at the moves. John Whittingdale, the shadow trade secretary, said the figures announced were "truly shocking". He told MPs that a highly successful business had been turned into a financial disaster. He said the Government should admit to its part in the rapid decline. Miss Hewitt spoke of the thousands of Consignia workers who faced a difficult time because of the "very painful" decisions to cut back staff. She said the Queen had agreed in principle to a name change back from Consignia to include Royal Mail. Miss Hewitt said she hoped the company would be turned around to show a profit. "The company is now set on a course for renewal and recovery," she said. "It will not be easy but it is essential if we are to have a Royal Mail that the workforce can be proud of and that delivers the service that customers deserve." Early indications suggested that the job losses could be achieved through voluntary redundancies and redeployments within the company, she said. "We will of course do everything that we can through Job Centre Plus and other agencies to help people who leave the Royal Mail to get new jobs as quickly as possible." Commenting on the proposed name change, she said: "I do not think any of us will mourn the passing of the name Consignia." Mr Whittingdale said: "It is an extraordinary achievement to have turned a highly successful business into a financial disaster when turnover has gone on rising and it is protected from any competition." He said the ultimate responsibility had to be with the Government, which remained the sole shareholder and had been "interfering in its management on a daily basis". Mr Whittingdale said the money invested in gilts by the Post Office had traditionally been regarded as a payment to the Treasury. "So in essence the Government is giving the money back to the Post Office and that will require clearance under the European Commission provisions for state aid." Vincent Cable, the Liberal Democrats' trade and industry spokesman, raising the competition issue, said: "In the current dire position of the Post Office it would be totally inappropriate for private sector companies to come in to the business and cream off the remaining profits." Martin O'Neill (Lab, Ochil) said voluntary redundancies and early retirement might be possible in areas with high staff turnover but in isolated places it would be more difficult. John Redwood (C, Wokingham) wanted to know when the Post Office would be back in profit, while John Cryer (Lab, Hornchurch) said it was difficult to see how the universal delivery service could be maintained on the back of thousands of "swingeing redundancies". In the Lords, Lord Dearing (Crossbencher), a former Post Office chairman, said: "This is probably the saddest day in the history of the Post Office." Lord Clarke (Lab), a former deputy general secretary of the Union of Postal Workers, said: "It is a Labour Government that has destroyed the British postal service." He warned: "It is quite likely that the cream of the postal service workers will go because they have the longest service. They will take redundancy and leave the postal service that much poorer when they go. I hope every effort will be made to keep them in."