Thursday, July 8, 1999 Published at 18:38 GMT 19:38 UK
PO plans 'not stealth privatisation'
The government will continue to own all Post Office shares
The government has unveiled its "radical" proposals for the Post Office, but promised they did not mean privatisation by "stealth".
The proposals would allow the service to "offer a world-class service for the 21st century", he said.
Under the proposals, the Post Office's exclusive right to deliver letters and parcels will be cut from those costing less than £1 to those priced 50p and under from April 2000.
The plans were the most radical set of reforms since the modern Post Office was created in 1969, he continued.
But Mr Byers denied the measures were privatisation by "stealth".
The government will continue to own all the shares in the organisation, a move designed to reassure trade unions and backbench Labour MPs that there are no plans to privatise the service.
Primary legislation would be needed to transform the Post Office into plc and it would also be needed to sell off its shares, he said.
"We intend to provide commercial freedom while maintaining the Post Office in public ownership."
The white paper would give the Post Office "the freedom to grow and the means to succeed", he said.
The white paper would lay down in law a commitment for a universal service so the cost to send a letter would in the UK be the same regardless of distance.
It will also see a reduction in proportion of profits the Post Office pays to the Treasury.
Shadow Trade Secretary Angela Browning called the white paper a "dog's breakfast", being a "mucky compromise" between old and new Labour.
Colin Breed for the Liberal Democrat said the proposals were "balanced and rather timid".
The Communication Workers' Union fears the proposals could herald another battle over privatisation following its successful campaign against the previous Conservative government's sell-off proposals.
But its General Secretary, Derek Hodgson, said: "We do not believe a Labour government would contemplate selling shares in the Post Office and I look forward to this being confirmed."
Analysts believe this move could lose the Post Office up to 5% of its domestic business, cutting £100m from its profits.
The Post Office has been increasing its commercial activities in the past year but is keen for more freedom to compete against overseas rivals.
Post Office Chairman Neville Bain welcomed the proposals, saying: "This is a decisive first step in the right direction towards real commercial freedom.
"It provides a clearer way forward, enabling us to develop our services and tackle more effectively the growing competition all around us."
Mr Bain said the balance of the white paper looks broadly right but its consequences for the Post Office's finances overall were difficult to predict.
But he said rural services were a "genuine matter for concern".
The new Post Office Regulator would have the task of laying down minimum service standards.
Dr Begg also said that the future of rural services lay firmly in the hands of people who live in such areas.
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