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Postal Services (Liverpool)
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Jamieson.]
10.1 pm
Maria Eagle (Liverpool, Garston): I am pleased to be able to deal with the issue of postal services in Liverpool at such a timely moment, as the decisions that will affect the quality of that service must shortly be made by the Post Office board under the overall policy direction of the Government.
I pay tribute to the men and women who work for the Post Office. May I narrow down my tribute and pay particular tribute to those who work for the Post Office in Liverpool and in the precincts of this House? I know from personal experience in both places how effectively they work, and that they often work under extreme pressure.
The Royal Mail prides itself on its ability to collect a letter anywhere in Britain and deliver it as quickly as possible anywhere else at a fixed price. If one purchases a first-class stamp, the letter is often delivered by the following day. That outstanding quality of service may be threatened in Liverpool by the Royal Mail's plans to remove the sorting of mail away from the city to Warrington.
That is part of the Royal Mail's £64 million investment programme to enable it to meet global and European challenges to its domestic markets. The investment is a welcome indication of the Government's commitment to ensuring that the Royal Mail in the public sector can compete with the best and face the challenges of the new millennium with cutting-edge technology, and with confidence that it can provide a top-quality service to its customers.
I am no Luddite, but I have a quarrel with one aspect of the strategy announced by the Royal Mail in June 1997, and that is what I wish to highlight in this debate. To do so, I must first outline the plan as it affects Liverpool.
In so far as it relates to the Royal Mail's north-west and north Wales region, the plan involves transferring processing from three mail centres, five outward vouching offices and three centres for bulk mail handling to new mail centres and a new regional distribution centre. The Royal Mail envisages a new Warrington mail centre replacing Crewe and Liverpool mail centres, a new Chester mail centre replacing the current Chester mail centre, five outward vouching offices in the Wirral and north Wales, and a new Crewe regional distribution centre replacing Brunswick Dock, Westhoughton and Lostock bulk handling centres.
However, ever since the announcement of those proposals, there has been a strong feeling in Liverpool that the Royal Mail is wrong to move more than 900 jobs to Warrington if they can be retained in Liverpool. I remind the House that Liverpool has an unemployment claimant count of 9.4 per cent., with male unemployment at 13.7 per cent.--one of the highest rates in the country.
The Government and the European Union recognise the relative deprivation. Liverpool is a European objective 1 area, which is a recognition of the fact that it is one of the poorest regions in Europe. The Government have also acknowledged the economic and social disadvantage that is clear for all to see in the city, and have granted Liverpool the status of an employment zone.
My constituency benefits from Government funding for regeneration through two single regeneration budget partnerships at Speke-Garston and Netherley valley. Many other regeneration initiatives throughout Liverpool are backed with Government money. Only last week, the Government approved an estates renewal challenge fund application for £43.78 million to assist in the regeneration of the public sector housing stock in Speke-Garston.
Mr. Eddie O'Hara (Knowsley, South):
Does my hon. Friend recall that, only two weeks ago, she and I were at Ford's factory in Halewood congratulating the workers on being awarded the contract for Jaguar car production, which carries with it £43 million-worth of Government investment? The factory is located between our constituencies. It is a tragedy that such a good news story for Merseyside has been cancelled out by the Post Office's plans for the sorting office.
Maria Eagle:
My hon. Friend must be psychic, because I was just about to make that very point.
The Pinehurst estate in the north of Liverpool has also benefited from the estates renewal challenge funding that was announced last week. As my hon. Friend said, Ford's Halewood plant has received £43 million of assistance from the Department of Trade and Industry, and I should like to commend the Minister on his role in that. Many of my constituents work at Halewood, although the plant is in my hon. Friend's constituency. That assistance will enable Ford's decision to build the baby Jaguar on Merseyside to be realised. The Department has also been actively involved in promoting business on Merseyside in other areas. It puts its money where its mouth is, to the tune of millions of pounds.
The Government have also given £13 million of extra money to repair rundown schools in Liverpool. I could use the whole of my speech to give examples of similar Government initiatives. Liverpudlians applaud the Government's concentrated effort to tackle the legacy of unemployment and poverty that long-term decline and 18 years of Tory destruction have left us.
Why should a major publicly owned concern such as Royal Mail, which should be expected to take its social responsibilities seriously, so blithely counteract the Government's good work and threaten to remove 900 jobs at a stroke? It should not, but I accept that operational decisions such as where to site new mail centres should be made by the Royal Mail and the Post Office board and not by the Minister. His role is to set overall policy guidelines, and I know that he would not be swayed to intervene by the facts that I have mentioned alone, although I have no doubt that he is sympathetic to my point of view. However, it should interest him to know that the business planning, evaluation and comparisons of alternative options on which Royal Mail based its decisions were fundamentally and seriously flawed. He should want to put the matter right.
While the work force and local Members of Parliament have campaigned on this issue, it has emerged that there is indeed a site in Liverpool that is better than the Warrington site chosen by Royal Mail for the new mail centre. It is at Speke-Garston, on the old Northern airfield site, soon to be launched as the Estuary business park in my constituency.
Mrs. Louise Ellman (Liverpool, Riverside):
Does my hon. Friend agree that, as the independent consultants'
Maria Eagle:
I could not agree more with that.
As my hon. Friend has said, it is not a matter of conjecture that the decision is strange. Like many of my hon. Friends, I have had the benefit of seeing an analysis by the business consultants PA, carried out on a like-for-like basis and using the same evaluation and modelling techniques as Royal Mail to appraise options. PA has not sought to add factors that would make Speke look better than Warrington; its role has been purely to check the rigour of Royal Mail's own option appraisal. Had Royal Mail done a rigorous job itself, one would have expected PA's analysis to result in the same conclusions as those of Royal Mail.
PA, using the same modelling techniques as Royal Mail, produced a very different result when it analysed the various sites. It disagreed with some of Royal Mail's assumptions about travel times to the rail hub for outward mail, and I must say that I agree with its worries. It does not take 40 minutes to travel from Speke to the rail hub at Warrington, as Royal Mail assumed in its analysis. Moreover, although we are often told that the Warrington site is adjacent to the rail hub, it is actually three miles down a road that is unsuitable for heavy goods vehicles, and is often congested. "Adjacent" is therefore a somewhat misleading description, and certainly a relative term.
Furthermore, PA could not fathom Royal Mail's rationale for sending all the mail to Warrington to be sorted, and then sending it back to Liverpool to be delivered. That clearly would adversely affect transport costs and distribution time targets.
It is no small matter, either: 60 per cent. of the mail to be handled at the new centre--whether it is built at Warrington or at Speke--originates from Liverpool, and half that mail is then returned to Liverpool to be delivered there. Meanwhile, only 27 per cent. of the overall volume originates in Warrington. Speke has 14 per cent. more volume returning to it than it originates. Surely it is important to sort the mail closer to where it is posted and to be delivered, if possible, than to transport it to a site by a rail hub that is not needed and then return it to its original point. I for one fail to see how that can be efficient.
I have referred to a few of the detailed points in the analysis, but, as my hon. Friend the Minister will know, there are many more. Let me summarise the full findings of the PA report.
The report shows that a mail centre in Speke is operationally as viable as a Warrington centre; it shows that land is cheaper in Speke, and that there is room for expansion; it shows that a Speke mail centre is cheaper to operate than a Warrington mail centre; it shows that 60 per cent. of the total mail to be processed at the new centre originates from Liverpool, so mail arrival times must be better in Speke than they are in Warrington; it shows that Speke has 14 per cent. more volume returning to it than
it originates; and it shows that a Warrington mail centre will increase travel and subsistence costs for Royal Mail by £3.6 million over three years.
Using Royal Mail's own modelling techniques and data, PA has shown that the Speke site is £3.7 million less expensive to run--on a non-reoccurring account cost basis--than the Warrington site, and worth £4 million more in net present value terms. The report is a devastatingly effective document, and I commend it to the Minister. It raises serious questions--which I hope he will address tonight--about the quality of the Royal Mail analysis in respect of other decisions, and its use of public money in implementing them.
The PA report was commissioned by the Communication Workers Union nationally, in response to the CWU Merseyside amalgamated branch's request for back-up. I commend that local branch. Those who see Liverpool as a place bypassed by the modern world of industrial partnership and stuck in the past of industrial relations might have predicted that, faced with the threat of 900 job losses, the local branch would have responded by downing tools and walking out. Instead, the branch has conducted itself in a most exemplary manner, and has shown itself to be a fine example of a modern trade union. It has taken its campaign to the people of Liverpool, the Royal Mail, hon. Members and the Government, but it has ensured that its members kept working, and has constructively looked for a viable, alternative plan.
The union backed its judgment by producing a devastatingly effective piece of business planning which the national union commissioned on its behalf. That was done despite the worry about the future which I know that those working at Copperas hill have felt for the past eight months.
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