Post Office chiefs hit at sell-off 'confusion'

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POST OFFICE chiefs attacked the Government yesterday over its delay in deciding whether to privatise it and said that if it was sold off it should remain intact.

Giving evidence before the Commons trade and industry select committee, Michael Heron, Post Office chairman, said the delay was unsettling customers and preventing forward planning.

Michael Heseltine, President of the Board of Trade, had been expected to announce the results of a review of the Post Office's future ownership early in the new year. But there is still no publication date.

Mr Heron refused to be drawn on whether he favoured privatisation, but said if the business was sold off its three divisions - Royal Mail, Counters and Parcelforce - should be kept together.

MPs were told that breaking up the network could put up to 5,000 rural post offices at risk, undermine the commitment to a universal delivery system at uniform prices and allow private operators to 'cream' off profitable services.

Mr Heron told MPs: 'The delay as to what is going to happen in the future is beginning to worry me. If it goes beyond the first half of this year it will be difficult.'

Irrespective of its ownership the Post Office urgently needed full commercial freedom to expand, widen its range of services and enter joint ventures, he said.

Bill Cockburn, Post Office chief executive, said if this did not happen the business would 'fall backwards into a spiral of decline'.

The two executives also criticised the severe financial restraints imposed on the Post Office. Its contribution to government finances through its external financing limit will rise from pounds 68m this year to pounds 181m in 1993-94.

Alan Johnson, general secretary-designate of the Union of Communication Workers, which represents Britain's 180,000 postal workers, claimed Mr Heron's evidence showed that Post Office management was only 'lukewarm' over privatisation.

The Department of Trade and Industry denied that the review was delayed. 'The Post Office has been around for 350 years, so it is important that we get this right rather than rushing to a hasty decision,' a spokesman said.