Call: Hewitt

Postal workers and Consignia management have been urged to avoid a national strike over pay and conditions.

During Trade and Industry questions in the Commons on Thursday the government called for Post Office workers and unions to come to a deal and avoid a walk-out.

The Communication Workers Union is seeking a five per cent pay rise for 145,000 Royal Mail workers and has rejected a two per cent offer, plus the chance of another 0.5 per cent if targets were met.

"I continue to urge management and unions to sit down with the help of mediation and settle this pay dispute as quickly as possible," said trade and industry secretary Patricia Hewitt.

The minister also argued that industrial relations in the Post Office had been significantly improved from the 145,000 days lost to strikes under the Conservatives.

Tory backbencher Richard Page argued that "the best thing to do is to set it free and privatise it".

Hewitt said the problems the Post Office were suffering from was due to "drift and decline" under the last Conservative government.

"We have delivered what the Post Office needs," she said. "I am confident, Mr Speaker, that the changes that the Post Office needs are being made by the government, by the management and by the unions."

Trade minister Melanie Johnson fended over a series of questions from Conservative benches on the row over Tony Blair lobbying the Romanian government for a steel industry buy-out on behalf of Labour Party donor Lakshmi Mittal.

John Whittingdale, the shadow trade and argued there was no benefit for Britain in the takeover.

"At a time when the steel industry is suffering from over-capacity, what possible benefit the UK steel industry will receive from the support of the prime minister for a company that is not based in this country?" he asked.

The minister accused Whittingdale of trivialising the issue.

"What we are about in the UK is promoting British jobs whether at home or abroad," Johnson said.

Simon Thomas of Plaid Cymru said the company at the centre of the row had cost a Welsh steel manufacturer £5 million.

"What advice the minister would now give to Allied Steel? Would one option be a whip round for Labour Party coffers," he asked.

He had neglected to check his facts, Johnson replied and his remarks were ludicrous and cheap she said.