The Tories in Bournemouth: Heseltine defies Cabinet critics on Post Office sell-off
Thursday 13 October 1994
Risking deepening the split in the Cabinet, the President of the Board of Trade made it clear he intends to press for privatisation of the Post Office to be agreed by a Cabinet committee within the next fortnight, when he reports to Cabinet colleagues on the results of a consultation period.
He has the powerful backing of Kenneth Clarke, the Chancellor, for 51 per cent of the Post Office to be sold off. Douglas Hurd, the Foreign Secretary, also has been persuaded by Mr Heseltine to support a majority flotation.
But the Prime Minister and other senior Cabinet colleagues are wary of such a radical step. They include David Hunt, Chancellor of the Duchy of Lancaster, and Tony Newton, Leader of the House, who are advising consolidation, to rebuild the Government's popularity before the general election. Mr Heseltine repudiated their caution in a bravura performance: 'There are those who tell me that the best way for the Tories to win the next election is to slow the pace, to ease the pressure to opt for the quiet life. I disagree,' he said.
The Chief Whip, Richard Ryder, has told the Cabinet that there are seven potential Tory rebels, enough to wipe out the Government's 14-seat majority. The Ulster Unionists have threatened to oppose the Government, with Labour and the Liberal Democrats, if a majority sell-off is proposed.
This could force Mr Heseltine to accept a compromise, for privatisation, but with the Government retaining a majority shareholding until a later flotation.
The Treasury is arguing that such a compromise would inhibit the ability of the Royal Mail to compete commercially with other delivery services. But Mr Heseltine made it clear he was still opposed to the least radical option raised in the Post Office green paper, proposing commercialisation without privatisation, which is supported by Labour.
His close friends said he was helped by the right-wing Portillo supporters in the hall who cheered the privatisation plans, when Mr Heseltine had feared there might be heckling from grass-roots Tories who are worried that privatisation could force village sub-post offices to close.
Mr Heseltine devoted one fifth of his speech to reassuring Tory voters that privatisation would not destroy the sub-post offices. He emphasised that the main aim was to privatise Royal Mail services, not the sub-post offices, which were already available for sale.
Flourishing a copy of Dalton's Weekly, advertising post offices for sale, Mr Heseltine said the only change he wished to implement for the sub-post offices was to lift the constraints on them selling more services. That was supported by the Federation of Sub-Postmasters.
'We are determined to maintain universal delivery at a standard price wherever you live. We have given an explicit pledge to maintain a nationwide network of post offices. These would be strictly enforced by a tough independent regulator,' he added.
The Royal Mail was losing market share to private and foreign competitors and wanted to fight back, said Mr Heseltine, who won a standing ovation.
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